128 N.Y.S. 522 | N.Y. App. Div. | 1911
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
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.