Opinion
February Term, 1899.
Thomas F. Ward, for the plaintiff.
S.H. Newberry, for the defendants.
Under the charter of the city of Little Falls (Chap. 565 of the Laws of 1895) two assessment rolls are made in each year, one in February for the city taxes (§§ 157 and 158 of the charter, as amended by chapter 13 of the Laws of 1896), and one in August for State and county taxes. (§ 151, charter.)
It is not stated in the submission whether the assessment complained of was for city taxes, or for State and county taxes, but from the date of the assessment it is assumed to have been for State and county taxes.
It is assumed by counsel in their briefs that the question submitted is controlled by the Tax Law (Chap. 908, Laws of 1896), and that the charter of the city of Little Falls does not affect the question; and upon that assumption this case will be considered.
It is conceded by the litigants in their submission that the property described in items 1, 2, 5 and 7 of the submitted case was legally assessed to the plaintiff as real estate, and at a fair valuation. It is also conceded by the litigants in their submission that the properties described in items 3, 4 and 6 of the submitted case are "trade fixtures," and can be removed from the buildings wherein used without injury to the buildings or to the real estate whereon they are used.
By the 3d subdivision of section 2 of the Tax Law the terms "land," "real estate" and "real property" are defined as follows: "3. The terms `land,' `real estate' and `real property,' as used in this chapter, include the land itself above and under water, all buildings and other articles and structures, sub-structures, superstructures, erected upon, under or above, or affixed to the same; * * * all supports and inclosures for electrical conductors and other appurtenances upon, above and under ground; * * * all mains, pipes and tanks laid or placed in, upon, above or under any public or private street or place for conducting steam, heat, water, oil, electricity or any property, substance or product capable of transportation or conveyance therein or that is protected thereby. * * *"
By the 4th subdivision of that section the terms "personal estate" and "personal property" are defined as follows: "4. The terms `personal estate' and `personal property' as used in this chapter, 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."
It will be observed that there is no language in the 4th subdivision of section 2 above quoted which describes the property mentioned in items 3, 4 and 6, except the word "chattels," and the exact question presented is, whether the properties described in those items are "chattels" or "real estate" within the Tax Law, for if they are "chattels," they are not assessable in the city of Little Falls, but are assessable in the village and town of Herkimer, under section 11 of article 1 of the Tax Law, which provides: "§ 11. The real estate of all incorporated companies liable to taxation shall be assessed in the tax district in which the same shall lie, in the same manner as the real estate of individuals. All the personal estate of every incorporated company liable to taxation on its capital shall be assessed in the tax district where the principal office or place for transacting the financial concerns of the company shall be, or if such company have no principal office or place for transacting its financial concerns, then in the tax district where the operations of such company shall be carried on."
"The gas house above mentioned," referred to in the 3d item, stands on land leased by the owner from year to year, as is stated in the 2d item of the submission, wherein it appears that the property described in the 3d item constitutes the gas generating apparatus belonging to the plaintiff and is connected, as appears in the 5th item in the submission, with "about eight miles of gas pipes and mains" laid underground and through the streets of the city of Little Falls for the distribution of gas to the plaintiff's customers, which mains were assessed in 1898, for the purposes of taxation, as realty and valued at $10,000. By the 7th item of the submission it appears that when the assessment was made, the plaintiff owned 500 poles and 15 miles of line wire for the distribution of electricity to its customers in the city, which lines are connected with the machinery described in the 6th item. It appears by the submission that the property assessed in the 3d 4th and 6th items is on land leased by the owners to the plaintiff. The term "trade fixtures," used in the submission, does not tend to advance the argument of either litigant, nor does it aid the court to decide the question submitted, for the reason that "trade fixtures" is a term usually used to describe property which a tenant has placed on rented realty to advance the business for which the realty was leased and may, as against the lessor and those claiming under him, be removed at the end of the tenant's term. This concession would be useful in determining the rights between the plaintiff as lessee and its landlord. Neither would it aid the court to consider the cases holding what are or are not fixtures as between vendor and vendee, mortgagor and mortgagee, heir or devisee and personal representative, mortgagees and execution creditors, or between the owner of the fee and his judgment creditors, because the Tax Law has set up a standard of its own which must govern the case.
Before the passage of chapter 293 of the Laws of 1881 (amending § 2, tit. 1, chap. 13, pt. 1, R.S.), the definition of the term "real estate" contained in the Revised Statutes was deemed applicable to the statutes relating to taxation, but by that act property theretofore assessable as personality was declared to be assessable as realty. Under that and subsequent acts relating to taxation the definition of the terms "real estate" and "personal estate," as used in the Tax Law, must be defined by those laws and not by the general statutes of the State. We are of the opinion that the language in the 3d subdivision of section 2 of the Tax Law above quoted, that "all mains, pipes and tanks laid or placed in, upon, above or under any public or private street or place for conducting * * * electricity or any property, substance or product capable of transportation or conveyance therein or that is protected thereby," must be deemed applicable to machinery used in connection with the mains or wires for generating and sending forth electricity on the lines or gas through the mains. The property described in the contested items 3, 4 and 6 is designated for use in connection with these lines and mains, which are clearly designated as real estate by the Tax Law, and the property described in those items is assessable as realty in the tax district where it is situated.
A judgment should be directed in favor of the defendants holding that the property described in the 3d 4th and 6th items of the submission was rightfully assessed in 1898 to the plaintiff by the assessors of the city of Little Falls.
If it should subsequently appear that the town or village of Herkimer has any interest in the question submitted, such interest must be regarded as open and undetermined, and the judgment entered must contain a provision to that effect. ( Gray v. Daniels, 18 App. Div. 466.)
The submission does not provide for costs, and in such a case the awarding of costs is discretionary with the court. (Code Civ. Proc. § 1281; Gray v. Daniels, 18 App. Div. 465.) Under the circumstances we think costs should not be awarded to either party.
All concurred, except FOLLETT, J., dissenting; WARD, J., not voting.
Further consideration of this case leads me to the conclusion that it ought not to be decided on the submission, because all of the parties interested in the subject-matter are not before the court. It is apparent that the town and village of Herkimer, in which the principal place of business of the Herkimer County Light and Power Company is located, has the same interest in respect to the tax district in which the property of the corporation is assessable as has the city of Little Falls, and a judgment should never be rendered on a submission when it is apparent that persons or corporations are interested in the subject-matter that are not parties to the submission. ( Baumgrass v. Brickell, 7 N.Y. St. Repr. 685; Wavle v. Tuttle, 11 Wkly. Dig. 186; Hobart College v. Fitzhugh, 27 N.Y. 130; Wood v. Squires, 60 id. 191; Dickinson v. Dickey, 76 id. 602; Kennedy v. The Mayor, 79 id. 361.) The question is an important one as between the city of Little Falls and the town and village of Herkimer, and while the judgment rendered on this submission will not be binding upon the latter, yet the question ought not to be decided until the rights of all the parties interested can be presented. A judgment recovered in an amicable action, or on a submission, though it be in the nature of a proceeding in rem, is not binding on persons not in privity with the litigants and who have had no opportunity of being heard. ( Calhoun v. Millard, 121 N.Y. 69; Lord v. Veazie, 8 How. [U.S.] 251; 2 Freem. Judg. [4th ed.] chap. 13.)
This judgment may result in the Herkimer County Light and Power Company being subjected to double taxation for the year 1898. It is not stated in the submission whether the assessment complained of is for city taxes or for State and county taxes, and the court cannot infer that it relates to State and county taxes or to city taxes. In cases submitted, pursuant to article 2 of title 2 of chapter 11 (§§ 1279-1281) of the Code of Civil Procedure, the court cannot draw inferences, and can pass only on facts plainly stated in the submission. ( Fearing v. Irwin, 55 N.Y. 486; Crosby v. Thedford, 13 Daly, 150; Department of Buildings v. Field, 9 App. Div. 500; Beer v. Simpson, 47 N.Y. St. Repr. 219.)
The parties to this submission should be required to serve a copy of it on the supervisor of the town of Herkimer and on the president of the village of Herkimer so that they may have an opportunity to be heard.
The decision should be postponed or the submission dismissed, without costs to either party.
Judgment directed for the defendant, without costs.