for conducting steam, heat, water, oil, electricity or any property, substance or product capable of transportation or conveyance therein or that is protected thereby, including the value of all franchises, rights, authority or permission to construct, maintain or operate, in, under, above, upon, or through, any streets, highways, or public places, any mains, pipes, tanks, conduits, or wires, with their appurtenances, for conducting water, steam, heat, light, power, gas, oil, or other substance, or electricity for telegraphic, telephonic or other purposes; all trees and underwood growing upon land, and all mines, minerals, quarries and fossils in and under the same, except mines belonging to the state. A franchise, right, authority or permission specified in this subdivision shall for the purpose of taxation be known as a "special franchise." A special franchise shall be deemed to include the value of the tangible property of a person, copartnership, association or corporation situated in, upon, under or above any street, highway, public place or public waters in connection with the special franchise. The tangible property so included shall be taxed as a part of the special franchise. No property of a municipal corporation shall be subject to a special franchise tax. (Sec. 2, subd. 3, Tax Law, as amended by Special Franchise Tax Law, L. 1899, ch. 712.)

Source: 1 R. S., ch. XIII, title 1; sec. 2, as amended by L. 1881, ch. 293.

The above definitions of "land," "real estate" and "real property" must be limited in their application to the purpose of taxation.

Machinery taxed as real estate in certain cases.- Machinery used in the manufacture of gas and electricity and connected with mains and wires carrying gas and electricity may be taxed as real estate under Subd. 3, Sec. 2, of the Tax Law, although not annexed to the freehold. Herkimer Co. Light & Power Co. v. Johnson, 37 App. Div. 257 (1899). But this does not apply to feed wires, conduits and connections of a company supplying electricity to its customers where the lighting company had no interest in the property through which the switches and cables are laid, the latter being situated on private property within the house line, and the corporation having no right to use the property except in connection with a contract to supply electricity. People ex rel. Edison Co. v. Feitner, 99 App. Div. 274 (1904); aff'g 45 Misc. Rep. 12.

Where a corporation is the owner of real estate used for manufacturing purposes, and annexes thereto machinery used for the same purpose, even though the latter can be removed without material injury to the buildings, it should be assessed as realty and not as personalty. People ex rel. Nat. Starch Co. v. Waldron, 26 App. Div. 531 (1898).

Intention of parties sometimes governs.-When a railroad company operating a subway in the City of New York is exempt from taxation under Section 35 of the so-called Rapid Transit Act (Chapter 4, Laws of 1891, am'd by Chapter 729, Laws of 1896), on its machinery, equipment and appurtenances, the exemption not applying, however, to its real property used in connection with the road, it was held, that, notwithstanding the heavy machinery used in connection with the subway road was affixed to the real estate, it might, for the purpose of taxation be considered as personal property, if that was the intention of the parties. People ex rel. I. R. T. Co. v. O'Donnell, 202 N. Y. 313 (1911).

Personal property defined.-The terms "personal estate" and "personal property" include chattels, money, things in action, debts due from solvent debtors, whether on account, contract, note, bond or mortgage; debts and obligations for the payment of money due or owing to persons residing within this state, however secured or wherever such securities shall be held; debts due by inhabitants of this state to persons not residing within the United States for the purchase of any real estate; public stocks, stocks in moneyed corporations, and such portion of the capital of incorporated companies, liable to taxation on their capital, as shall not be invested in real estate. (Art. I, sec. 2, subd. 5, Tax Law, formerly numbered subd. 4, in Tax Law of 1896.)

Source: 1 R. S., ch. XIII, title 1, sec. 3; ch. 371, L. 1851, sec. 1; ch. 392, L. 1883.

STATUTORY DEFINITIONS OF REAL PROPERTY AND PERSONAL PROPERTY LIMITED

The words "real property" and "personal property" in the Tax Law have a statutory meaning separate and distinct from

the ordinary or even generally accepted legal definition of the terms, for example: By a fiction of the law, a mortgage though ordinarily known as personal property may for the purposes of Article XIV of the Tax Law be known as "real estate." "Special franchises" though partaking of the character of personal property are under subd. 3, sec. 2 of the Tax Law known as "real estate." Unless property sought to be taxed comes under the provision of subd's. 2 or 3, sec. 2 of the Tax Law it is not subject to taxation. People ex rel. Lemmon v. Feitner, 56 App. Div. 280; 167 N. Y. 1.

Corporate franchises.- Prior to the Special Franchise Tax Law (ch. 712, L. 1899) corporate franchises were not assessable as personalty or realty. People ex rel. Coney Is. & Brooklyn R. R. v. Neff, 15 App. Div. 585 (1897); People ex rel. Man. Ry. Co. v. Com'rs, 146 N. Y. 304 (1895); People ex rel. Consol. Tel. etc. Co. v. Barker, 7 App. Div. 27 (1896); People ex rel. Brooklyn City R. R. v. Neff, 19 App. Div. 590; aff'd 154 N. Y. 763 (1897); Same ex rel. Edison Co. v. same, 19 App. Div. 599 (1897); People ex rel. Consol. Gas Co. v. Feitner, 78 App. Div. 313 (1903).

But since the passage of that law the franchises of public service corporations are now included in the definition of real property. (See chapter on Special Franchise Tax Law, Part 2, infra.)

Good will.-Good Will is not included in the definition of personal property under the Tax Law, and is therefore not taxable as such for local purposes. People ex rel. Cornell Steamboat Co. v. Dederick, 161 N. Y. 195 (1900); People ex rel. Patterson, Gottfried & Hunter v. Wells, New York Law Journal, Dec. 5th, 1903; People ex rel. Brokaw Bros. v. Feitner, 44 App. Div. 278 (1899).

"PERSONAL PROPERY SITUATED OR OWNED WITHIN THIS STATE"

Section 3 of the present Tax Law requires that personal property must be "situated or owned within this State" in order that it may be taxable. The words in the original statute were "personal estate within this state." The words "or owned" were added to the Tax Law of 1896 and in interpreting this section resort should be had to subd. 5, sec. 2 of the Tax Law in which the definition of personal property is held to include debts and obligations due to residents no matter how secured or where such security should be held.

The earlier cases under the Revised Statutes are not entirely harmonious or clear as to the taxation of personal property outside the state.

In the case of People ex rel. Hoyt v. Com'rs of Taxes, 23 N. Y. 224 (1861), the rule of exemption of personal property situated in another state owned by a resident of this state, was applied to tangible property, but the Court intimated that personal property, whether tangible or intangible, had no situs except the domicile of the owner, and that this being dependent upon a fiction of law yielded whenever the legislative intent was plain that the legal fiction should not operate. Notwithstanding this decision, the same court in People ex rel. Pacific Mail S.S. Co. v. Com'rs, 58 N. Y. 245 (1874) decided that ships at sea and outside of the state, but registered in the state and belonging to a domestic corporation had its legal situs and were taxable here. In a later case between the same parties it was held that to entitle one to an exemption for property outside of the state, the change of location or residence must be permanent and positive. People ex rel. Pacific Mail S.S. Co. v. Com'rs, 64 N. Y. 541 (1876).

The Hoyt case was cited with approval in People ex rel. Jefferson v. Smith, 88 N. Y. 577 (1882) and the rule extended to intangible property, the court there held that property of

a resident in the form of mortgage securities in the hands of an agent in another state, and permanently invested without the state, was not taxable in this state. An amendment to the statute followed the decision in the Jefferson case and Chapter 392 of Laws of 1883 made taxable all debts and choses in action due to residents, wherever situated. This change was retained in the present Tax Law.

Decision under the Tax Law.-Notwithstanding the change in the present Tax Law and in the Tax Law of 1896 from the language of the Revised Statutes, there has been no advance in attempting to tax property outside of the state, even though in some cases, the property was only temporarily outside of the state on taxing day. While the earlier cases that arose since the Tax Law of 1896 would seem to hold this class of property liable to taxation, the more recent cases and majority opinions in the later cases have been inclined to hold to a strict construction of the law and to the taxation only of such tangible property as may be within the state on taxing day. Intangible property, wherever situated, belonging to domestic corporations is held to be taxable within the state. Bank accounts may or may not be taxable within the state dependent on the permanency of the deposit.

In one of the earliest of these cases arising under the Tax Law People ex rel. Kursheedt Mfg. Co. v. Feitner, 32 Misc. 84 (1900), the Court at Special Term held that personal property temporarily outside the state on the second Monday of January was taxable if it could be proved that it had once been within the state. This case does not seem to have been appealed. It would appear to be in conflict with the Pacific Mail Steamship case supra. This property would apparently escape taxation at the place where it was situated, as well as in the jurisdiction where it belongs.

In the case of People ex rel. United Verde Copper Co. v.