Per Oubiam :
The assessment involved property of two kinds, (1) tangible, that is, pipes and mains in the streets of the county of Queens, (2) intangible, the right to occupy and use the streets, highways and public places for the business purposes for which the franchise was granted. The assessment is $275,000. If from the total assessment of $275,000 there be deducted the value of the tangible property in streets, which the relator alleged and the court found to be $128-,779.73, the sum of $146,220.27 is the amount of the assessment of the value of the intangible property. Is such valuation correct ? The relator would test its accuracy by invoking the net earnings rule. That rule necessitates ascertainment' of gross earnings, of gross operating expenses deductible therefrom as well as a fair'and reasonable return on the portion of the capital invested in tangible property. The balance, if any, capitalized at a fair rate, represents the value of the special franchise. (People ex rel. Jamaica W. S. Co. v. Tax Commissioners, 196 N. Y. 39, 56.) To make this ascertainment it is necessary to know the value of the land to which capital is appropriated suitably for corporate purposes. Without such data computation under such rule is impossible. The defendant’s evidence is that fifty acres of land of the value of $65,000 is sufficient. Relator’s contention is that the eight hundred and forty-six acres of the value of $1,500,000 is demanded by its legitimate corporate business. If so, and there be allowed'a return thereon of six per cent, there are no net earnings to capitalize for intangible rights. It is not necessary to decide to what degree the defendants are in error, although it is clear that the limit of fifty acres is incorrect. The difficulty is that the relator affirmatively shows that some part of such land is not required for its purposes, inasmuch as the *620reason given for its acquisition furnishes no just ground therefor. The court in this proceeding should not unduly disturb the sound discretion of its directors in determining the quantity of land needed for its present wants, or those reasonably expectable. But it is stated' by relator’s engineer that all the land is necessary “ in the first place, to properly protect the source of water supply, and again to protect us against suits for damages to farms for draining the land, and probably the most important thing is to protect us against the City of Brooklyn ; ” that it was purchased by his advice for the protection and increase of the water supply of the company. But it appears that the relator had ample power to enjoin the city from taking land for such use as would interfere with its watershed, and that indeed it did restrain the city in such attempt. Hence some portion of the land held by relator is for its authorized use, and a residue, not defined or valued, is to prevent its acquisition by the city for a purpose injurious to the relator. But such act on the part of the city was not fairly apprehendible, because it would not have been legally possible. Hence the court is met with the impossibility of determining how much of the land held by relator is necessary for its corporate purposes. The defendants’ estimate is too limited. The relator’s holding is too much.' This condition of the record baffles inquiry, for the acreage with its value is a necessary factor in ascertaining the amount of a correct assessment. The relator’s ample brief instructively presents its contention as to the method of ascertaining a just assessment, but it constantly uses as an element therein the whole acreage, and thereby employs an item not in its entirety admissible for the purpose. The assessment must be deemed correct in the first instance, and the relator must show that the assessors pursued an illegal or incorrect method, or inaccurately applied a proper method resulting in overvaluation. It is considered that the relator, with the burden upon it, has failed to show error in method or result, save as hereinafter noticed. This leads to the inquiry whether the trial court was justified in reducing the assessment from $275,000 to $239,250 on account of inequality of assessment. The defendants are presumed to have assessed the relator’s property at its full value. It appears that in the borough of Queens property is assessed at eighty-seven per cent of its full value. Hence the reduction of thirteen per cent directed by the trial court was justi*621fied, and it is considered that the evidence does not show an inequality demanding further reduction.
The order in so far as appealed from should be affirmed, without costs.
Jenks, P. J., Thomas, Woodward and Rich, JJ., concurred; Hirsohberg, J., voted to affirm, with costs.
Order in so far as appealed from affirmed on reargument, without “ costs.