[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *Page 491 Both parties concede, and the courts below have held, that the validity of the so-called leases to Sharp cannot be passed upon in this proceeding. It is obvious, however, that these leases have been considered and their validity assumed by the courts below in reducing the assessment. In the absence of other evidence, effect has been given to the stipulation contained in the return of the assessors to the effect that if it should be decided by the court that the relator "has not now and is not entitled to possession and use of the premises, they would regard the sum of $200,000 as too high a valuation to be put upon the lands," and would consent that the value be fixed at $50,000.

We think this stipulation should have been disregarded. The court should have proceeded by reference, or otherwise, to ascertain the fair value of the land. In their return the assessors stated that they regarded the sum of $200,000 to be the fair value of the lands. They denied the validity of the leases and their stipulation relating to the reduction of the assessment was qualified by the condition, if the court should decide that the relator was not entitled to the possession of the land, in which event they regarded the sum of $200,000 as too high a value and would consent to its being fixed at *Page 493 $50,000. Since the court properly decided that it had no power in this proceeding to determine the validity of the leases, the occasion and purpose of the stipulation failed. It was limited by its terms to an event that has never occurred. When the court refused to pass upon the validity of the leases, the stipulation was no longer of any force. It is evident that the assessors did not regard the leases as valid, and they so stated in their return. They regarded the relator as entitled to the immediate possession of the premises, and upon that basis fixed the fair value thereof at $200,000. It was only in the event that the court should hold the contrary that they consented to a reduction to $50,000.

It appears that since this application was made, the Appellate Division has affirmed a decision of the County Court made in a proceeding to apportion the taxes for the previous year (1903) between the owner and the tenant, the Long Beach Association, wherein apportionment was denied. In that proceeding it was held that the relator here was the rightful owner of the buildings upon the premises (Matter of Long Beach Land Co., 101 App. Div. 159), and while that decision was rendered after the assessment in question was made, and is not controlling here, it throws a strong sidelight upon the stipulation relied upon by the relator and explains the purpose for which it was made.

The learned counsel for the relator further contends that the deed from the town to the relator conveyed nothing to the latter except the reversionary interest remaining after the expiration of the leases, together with the rents reserved, and, therefore, the assessment is excessive. The answer to that contention is that the relator was the owner of the land and as such owner was subject to be taxed upon the basis of the fair value thereof, notwithstanding the existence of the leases.

This situation is not changed by section 8 of the Tax Law, which provides that rents reserved in leases for a term of more than twenty-one years shall be taxable to the person entitled to receive the same as personal property. This statute was originally enacted to remedy some of the conditions *Page 494 which were created by the old manorial or Van Rensselaer leases, and which gave rise to the anti-rent war, as it was called. (L. 1846, ch. 327; City of Buffalo v. Le Couteulx, 15 N.Y. 451.) Shortly after its enactment this statute was construed by the Supreme Court, and it was stated that it might in some cases result in double taxation, but the necessity and expediency of the tax was to be judged by the legislature. (Livingston v.Hollenbeck, 4 Barb. 9; Le Couteulx v. Supervisors of ErieCo., 7 id. 249.) It is not perceived, therefore, how this statute affects the liability of the relator to pay taxes upon the real estate in question.

It follows that the order appealed from should be reversed and the proceeding remitted to the Special Term, with directions to proceed, either by reference or otherwise, to take proof as to the value of the lands in question, with costs to abide the final award of costs.

CULLEN, Ch. J., GRAY, BARTLETT, HAIGHT and VANN, JJ., concur; O'BRIEN, J., absent.

Order reversed, etc.