120 N.Y.S. 528 | N.Y. App. Div. | 1909
It is assumed by the parties to the record that the net earnings rule defined in People ex rel. Jamaica Water Supply Co. v. Tax Commissioners (196 N. Y. 39; 128 App. Div. 13) is the proper method of valuing the relator’s special franchise, but errors are alleged in the application thereof to the facts shown.
(1) It is urged that the actual value of the tangible property should have been considered, rather than its reproduction-cost. Some of the property was practically indestructible by use, and
(2) It is alleged that three pieces of real estate were not in active use and were not revenue producers at the time the original tax was stated. The findings of fact show that such real estate was used by the relator in the operation of its railway. A consideration of the several properties, the purposes for which they were acquired, their use immediately before, at the time and after the tax was stated, fairly justify the findings.
(3) It is urged that the franchise tax was erroneously deducted from the earnings in determining the net earnings. Such deduction was not improper. (See Jamaica Water Supply Co. Case, supra.) Upon a motion for a reargument of that case (197 N. Y. 33), .the Court of Appeals has determined that a franchise tax paid may be deducted from the earnings.
(4) An item “ Injuries & damages $31,013.68 ” was included in the expenses and deducted from the earnings, and it is claimed that such payments, must have arisen from the wrongful acts of the relator and its servants and that," therefore, it is against public policy to allow the same. It does not appear that these moneys were paid on account of any wrongful act of any officer or employee of the company. A company operating a railroad, under the most careful management, must have many claims against it for injuries and damages. They are necessary incidents to operating the road. There is no evidence that these moneys were paid on account of the company’s employing defective machinery or incompetent servants, or for its other wrongful or negligent acts. The payments for such purposes, except where facts shown require otherwise, are properly treated as ordinary disbursements incident to the business. This item is not shown to be extraordinary.
(6) The Jamaica Water Supply Co. case establishes that a public service corporation, with reference to its. property which will become worthless by use and must be replaced, is entitled to set aside each year from its earnings a reasonable sum to provide for its replacement. This is outside of the ordinary' annual expenses for maintenance, renewals and repairs. The relator actually expended
A careful consideration has been given to all the evidence and to the objections urged against the order and no prejudicial error is found therein.
The appeal by the relator brings up for review some alleged errors in computations made by the referee which in the view we take of the case could not substantially change the result. The computations by the referee may not have been exact upon either side, but in their entirety bring no substantial prejudice to either party.
Considering the manner in which the case was submitted to the referee and the Special Term and the questions there presented for decision, we find no error to the substantial prejudice of either party. The determination should^ therefore, be confirmed.
Determination unanimously confirmed, without- costs.