& H. R. R. v. Woodbury, 74 Misc. 130. A right granted by a city to a railroad company to use sub-surface property but creating no fee in the soil and containing other reservations, is a special franchise. People ex rel. N. Y. C. & H. R. R. Co. v. Woodbury, 206 N. Y. 304.

What is not a special franchise.-A grant from the commissioners of the land office of land under water conveys the fee therein and a tunnel maintained upon such land is upon the relator's own right of way and is not assessable as a special franchise. People ex rel. Hudson & Manhattan R. R. Co. v. State Board of Tax Commissioners, 203 N. Y. 119; reversing 142 App. Div. 220, 143 App. Div. 26; where no fee was granted, see People ex rel. Bryan, etc. v. State Board, 67 Misc. 508; aff'd 142 App. Div. 796. But where the occupancy of a street was at all times dependent upon the public authorities, and a railroad company laid its tracks therein by grant of the city under legislative authority, it is estopped from denying its unqualified right to maintain such railroad and is liable for special franchise tax for such right. People ex rel. N. Y. C. & H. R. R. Co. v. Priest, 206 N. Y. 274; distinguishing People ex rel. Hudson & M. R. R. Co. v. Com'rs (supra). When a railroad is maintaining and operating its road upon its own right of way, and what is done therein is done by virtue of the ownership of the soil or of some interest therein, even although this right of way may be included within parallel lines upon either side thereof, constituting the boundaries of a street or highway, this right is not a special franchise, subject to taxation. People ex rel. Long Island R. R. Co. v. Com❜rs, 148 App. Div. 751; aff'd 207 N. Y. 683. Property owned by a municipal corporation, such as pump house, pipe lines and land connected with the operation of a municipal water plant, situated without the boundaries of the municipality, is not subject to taxation as a special franchise being especially exempted under the law. People ex rel. City of Au

burn v. Duryea, 59 App. Div. 488; People ex rel. City of Rochester v. DeWitt, 59 App. Div. 493, affirmed without opinion, 167 N. Y. 575. A relator deriving its rights in operating municipal property from a municipal corporation which was itself exempt, secures the same exemption and is not subject to a special franchise tax. In this case the relator was specially exempted by the laws of 1900, Chapter 616. People ex rel. Interborough R. T. Co. v. State Board of Tax Commissioners, 126 App. Div. 610; affirmed 195 N. Y. 618. A tunnel under a public street between two buildings, situated on opposite sides of the street belonging to a department store is not taxable as a special franchise, for the reason that the tunnel was not for a public use. People ex rel. Abraham v. State Board of Tax Comm'rs, 67 Misc. 471. Mere permission by a city official to connect pipes with the city water mains does not constitute a special franchise and is not taxable as such. People ex rel. Cooper Glue Factory v. Tax Comm'rs, 143 App. Div. 174. Where the property which is claimed to constitute a special franchise was originally situated upon private property which was subsequently taken to form part of a public highway, the right to use the highway is not derived from the legislature or some other public body and does not constitute a special franchise. People ex rel. Retsof Mining Co. v. Priest, 75 App. Div. 131; People ex rel. Harlem River & Portchester R. R. Co. v. State Board of Taxes and Assessments, New York Law Journal, April 24, 1910; People ex rel. N. Y. C. & H. R. R. Co. v. Woodbury, 203 N. Y. 167. A bridge over a river, the abutments of which rest on land owned in fee and hence is not immediately connected with a special franchise is not taxable as such. People ex rel. N. Y. Č. & H. R. R. Co. v. Woodbury,

206 N. Y. 304.

Scope and constitutionality.-No better exposition of the nature and scope of the Special Franchise Tax Act can be had

than is found in the unanimous opinion of the Court of Appeals delivered by Vann, J., in People ex rel. Metropolitan Street Railway Co. v. Tax Commissioners, 174 N. Y. 417 (reversing 79 App. Div. 183). Judge Vann says:

"The statute in question authorizes the assessment or valuation, for the purpose of general taxation, of all special franchises by a state board of tax commissioners appointed by the governor. (L. 1899, ch. 712.) The general franchises of a corporation is its right to live and do business by the exercise of the corporate powers granted by the state. The general franchise of a street railroad company, for instance, is the special privilege conferred by the state upon a certain number of persons known as the corporators to become a street railroad corporation and to construct and operate a street railroad upon certain conditions. Such a franchise, however, gives the corporation no right to do anything in the public highways without special authority from the state, or some municipal officer or body acting under its authority. When a right of way over a public street is granted to such a corporation with leave to construct and operate a street railroad thereon, the privilege is known as a special franchise, or the right to do something in the public highway, which, except for the grant, would be a trespass.

"The statute, which is an amendment of the General Tax Law, declares, in substance, that the right, authority or permission to construct, maintain or operate some structure, intended for public use, "in, under, above, on or through streets, highways or public places," such as railroads, gas pipes, water mains, poles and wires for electric, telephone and telegraph lines, and the like, is a special franchise. For the purpose of taxation such a franchise is made real estate and is "deemed to include the value of the tangible property of a person, copartnership or corporation situated in, upon, under or above any street, highway, public place or public waters in connection with the special franchise and taxed as a part thereof." (Sec. 2, clause 3.) This includes nothing but what is in the street, directly or indirectly, and excludes power houses, depots and all structures without the lines of the street. The taxes thus imposed are for general purposes, are collected in the same way, and used for the same objects as other taxes upon the general assessment roll.

"Prior to the passage of this act general franchises had been taxed for the benefit of the state under a valuation made by a state officer, with the sanction of the court. (L. 1896, ch. 908, secs. 182, 190; People ex rel. W. & H. Co. v. Roberts, 154 N. Y. 101.) Special franchises, however, had never been lawfully assessed either by local or state au

thority, but were made taxable property by the act before us for the first time in the history of the state. (People ex rel. Manhattan R. R. Co. v. Barker, 146 N. Y. 304; People ex rel. Brooklyn City R. R. Co. v. Neff, 19 App. Div. 590; affirmed on opinion of Cullen, J., below in 154 N. Y. 763.) The right to assess special franchises by central authority is challenged as a violation of the principle of home rule embodied in the Constitution and especially the right to assess the tangible property annexed thereto and included therein by the act, because the latter is withdrawn from the jurisdiction of the local assessors by whom it had been theretofore assessed.

"Every presumption is in favor of the constitutionality of an act of the legislature and, if the Constitution and the act can be reasonably construed so as to enable the latter to stand, it is the duty of the courts to give them that construction; still, it is none the less their duty to adjudge the statute void if it is in plain conflict with the real intent of the fundamental law, when considered in the light of history and in all its aspects. (Sweet v. City of Syracuse, 129 N. Y. 316; People ex rel. Sinkler v. Terry, 108 N. Y. 1.)

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"It (the legislature) created a new system of taxation, brought within its range a new character of property and assigned the duty of making the valuation to the state board of tax commissioners, composed of tax experts already in office, whose sole duty related to the subject of taxation, in all its phases, throughout the entire state. It made the tax commissioners assessors of this new kind of property known as special franchises, clothed them with power to compel the owners to furnish under oath, in addition to a general report containing many details, such information as they called for; authorized them to call upon the local assessors for all facts that they could furnish and to summon aid from all available sources; required them to give notice to the owner affected and an opportunity to be heard, and provided a remedy for review by the courts of every assessment as soon as it was filed. It commanded that all sums, in the nature of a tax, paid by the owner of a special franchise to a municipality for its exclusive use, should be deducted from the tax imposed for local purposes, and exempted the tangible property situated in public highways, and used in connection with the special franchise, from all other forms of taxation. (Secs. 2, 42, 43, 44, 45, 46.) The new kind of property was termed real estate, just as it might have been termed personal property, or neutral property, without changing its nature, which was such as local assessors had never dealt with.

"The statute should be considered in the light of the circumstances existing when it was passed, which were extraordinary and unprecedented. The system thus created had never been known before and, as its main subject, the act dealt with special franchises, which had never

been taxed before. Property unknown as the subject of taxation to the framers of any of our Constitutions was brought into the system, which required new methods of valuation and the exercise of functions which had never belonged to local assessors. The property was sui generis, and from its nature could not be valued by local officers. Unless it escaped taxation in the future as it had in the past, it was necessary to commit the power to other officers with new functions, wider experience and greater opportunities for observation, who would be able to grasp the new scheme of taxation as a whole. We should not be misled by the terms 'valuation' or 'assessment,' as the simple exercise of judgment, for no work can be done without that, but should compare the intrinsic nature of the functions exercised by the local assessors for time out of mind with those intrusted to the state tax commissioners, which had never been committed to any board or officer before." *

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"The function of assessing a special franchise does not in its nature belong to a county, city, town or village, for it has never been exercised by officers of such localities, but to the state, by which it is now exercised for the first time. It is not exclusively local in character and home rule applies only to functions peculiar to localities. It was unknown to our forefathers who brought over primitive home rule, to the colonists who preserved or to the founders of the state, who developed it. It is no part of local self-government as known to history, or to learned judges who have written upon home rule in the past. It did not come within the experience of former times and was not contemplated by the framers of our Constitutions. They kept purely local affairs under local control, but this is not local in intrinsic character, for the power to be exercised is not confined to the limits of one community. While some special franchises are within a single tax district, others extend through several and sometimes into different towns, cities and villages. The legislature could not make a law for each case, and in bringing the new system into operation it provided by general rule for all cases of the same general character, whether then existing or expected in the future."

Constitutionality of the Special Franchise Tax Act affirmed by United States Supreme Court.-This case was taken to the United States Supreme Court upon a writ of error. decided in the October Term of 1904, 199 U. S. 1. Brewer, in the opinion, says, at pages 35 and 39:

It was Justice

"The main contention is that this tax legislation impairs the obligation of contracts. It must be borne in mind that presumptively all