First Department, September, 1911.

[Vol. 146. of 1909, chap. 22), which provided: "When no nomination shall have been originally made by a political party or by an independent body for an office, or when a vacancy shall exist, it shall not be lawful for any committee of such party or independent body authorized to make nominations or to fill vacancies, to nominate or substitute the name of a candidate of another party or independent body for such office, it being the intention of this chapter that when a candidate of one party is nominated and placed on the ticket of another party or independent body, such nomination must be made at the time and in the manner provided for making original nominations by such party or independent body.”

Three candidates for the office of justice of the Supreme Court had been nominated by the Republican party. Subsequently the same candidates had been nominated by a committee of the Independence League. Objections to the certificate of nomination executed by said committee were filed with the Secretary of State.

It will be seen that the names of these candidates would have appeared upon the official ballot in the ticket of the Republican party, and any elector desiring to vote for them would have had the opportunity to so vote by marking the voting space opposite these names upon said ticket. They had been nominated by the Independence League, and as candidates of said league their election would have been advocated by said league, and its adherents instructed how to cast their votes for them. But the right to nominate was held so important, the right to appear upon the ticket of the Independence League so essential, that a statute denying said right was held void. It seems to me that the reasoning of the opinion cited applies to the matter at bar. "The fact is plain that the legislative provision is solely intended to prevent political combinations and fusions, and this is the very thing that I insist there is no right to prevent or hamper."

Political parties are recognized in the Constitution (Art. 2, § 6). They are recognized in the election laws. The official ballot itself is not of the Massachusetts form where all candidates are grouped under the title of the respective offices, but provides for separate party tickets, for convenience spread side

App. Div.]

First Department, September, 1911.

by side on one piece of paper. Heretofore all candidates of the party appeared upon the ticket of the party. By the law in question, if fusion exists, this is not so. A party ticket is not complete. An elector desiring to vote the whole ticket must grope his way through a large ballot to find his party's nominees. He may not notice the words "See column" which are to be printed in the same type as the names of candidates and so vote it as a complete ticket. There is no nomination, for the candidate's name does not appear where it should upon his party ticket, but upon some other. As the purpose of the law is obvious, I think this matter is controlled in principle by the Callahan Case (supra).

I dissent, and vote to affirm the order appealed from.

Order reversed, with ten dollars costs and disbursements, and motion denied, with fifty dollars costs, as matter of law and not in the exercise of discretion.

In the Matter of the Application of SAMUEL S. KOENIG, Respondent, for Relief against J. GABRIEL BRITT and Others, Constituting the Board of Elections of The City of New York, Appellants.

First Department, September 28, 1911.

See head note in Matter of Hopper v. Britt (ante, p. 363).

APPEAL by the defendants from an order of the Supreme Court, made at the New York Special Term and entered in the office of the clerk of the county of New York on the 21st day of September, 1911, granting a peremptory writ of mandamus.

Terence Farley and Abram I. Elkus, for the appellants board of elections, etc.

D-Cady Herrick, for the Democratic State committee.

A. S. Gilbert, for the petitioner.

INGRAHAM, P. J.:

This appeal was argued with the case of Matter of Hopper v. Britt (146 App. Div. 363) and presents the same question pre

Third Department, September, 1911.

[Vol. 146.

sented on that appeal. For the reasons stated in the opinion in that case the order appealed from must be reversed, with 'ten dollars costs and disbursements, and the application denied, with fifty dollars costs.

MCLAUGHLIN,

MILLER and DOWLING, JJ., concurred;

CLARKE, J., dissented.

Order reversed, with ten dollars costs and disbursements, and motion denied, with fifty dollars costs, as matter of law

and not in the exercise of discretion.

THE PEOPLE OF THE STATE OF NEW YORK ex rel. BROOKLYN HEIGHTS RAILROAD COMPANY, as Lessee of the BROOKLYN CITY RAILROAD COMPANY, Respondent, v. STATE BOARD OF TAX COMMISSIONERS OF THE STATE OF NEW YORK, Defendant. (Assessment of 1905.)

THE CITY OF NEW YORK, Intervenor, Appellant.

Third Department, September 28, 1911.

Tax-special franchise tax

assessment not covering tangible propnet earnings rule accumulation for improvement of plant.

The object in assessing a special franchise tax is not necessarily to produce a tax upon the intangible rights of the corporation, but to determine what the special franchise is worth. If the basis of computation be right it is immaterial whether a tax on the intangible part of the

franchise results or not.

An assessment for a special franchise tax on a trolley railroad made under the net earnings rule will not be disturbed on appeal because a holding company controlling the railroad charged it, together with other railroads, for power furnished, for management, etc., upon a car mileage basis pursuant to an agreement, where it does not appear that the railroad is paying too much for such services.

In assessing a special franchise tax on a railroad company it should be allowed the expense of maintaining a fund for keeping its plant and machinery in a good and efficient condition, and to improve its machinery in the future, if the sum be accumulated in good faith for such purposes and not to avoid taxation.

APPEAL by The City of New York, intervenor, from an order of the Supreme Court, made at the Albany Special Term and

App. Div.]

Third Department, September, 1911.

entered in the office of the clerk of the county of Albany on the 16th day of December, 1910, as resettled by an order entered on the 9th day of January, 1911, reducing the assessment of the special franchise of the relator for the year 1905.

Archibald R. Watson, Corporation Counsel [Curtis A. Peters and Addison B. Scoville of counsel], for the appellant.

George D. Yeomans [John L. Wells of counsel], for the respondent.

KELLOGG, J.:

The Special Term finds that the parties and referee proceeded upon the theory that the net earnings rule was the proper method of assessment in this case. (69 Misc. Rep. 646.) The city now alleges that because that rule produces no assessment for the intangible part of the special franchise, therefore, it is an improper rule for this case and some other rule should be adopted.

The case discloses no reason as matter of fact why the net earnings rule does not equitably apply, and, as the case was tried upon that theory, the court will not give further attention to that matter.

The object of an assessment is not necessarily to produce a tax upon the intangible rights but is to determine what the special franchise is worth, and, if the basis of computation is right, it is quite immaterial for the purpose of fairness whether a tax on the intangible part of the franchise results or not. If there is no value, there is no tax. The assessing board and the courts cannot torture facts and conditions to produce a tax the tax follows a fair and just valuation.

The assessment for the tangible part of the franchise is not adopted for determining the value of the intangible part of the franchise.

It appears that the relator and several companies are controlled by a holding company, the Brooklyn Rapid Transit Company. The holding company furnished to the other companies power from its power house, and the several companies are managed by the general officers of the holding company, and certain other expenses of the several companies are paid by that

Third Department, September, 1911.

[Vol. 146. company. By mutual agreement, such expenses are borne by the operating companies upon a car mileage basis.

It is not urged that an improper plan was arrived at between the companies in bad faith for the purpose of affecting taxation. This, apparently, could not be so, for if such a plan were favorable to some of the companies, it would be unfavorable to others and, in the end, the expenses ultimately falling upon the holding company, on account of its subsidiary companies, would be the same.

The plan must, therefore, be considered as an agreement between the companies made in good faith, and there is no evidence to show that it is unfair or prejudicial to any company. By agreement certain service is paid for at a given price and the court, for the purpose of taxation, will not question the adequacy of the consideration, unless the agreement is shown to be collusive or in bad faith.

In fact it is quite apparent that by paying for its power, supervision and the other expenses in the manner in which it does, the relator is saving considerable money on account of the various items going to make up such common expenses.

The road of the relator in Queens county is through a more sparsely settled country than the roads in Brooklyn, contributing to the expenses of power and the other common expenses, and the traffic density is much less, and it would seem to be unjust to apportion these expenses among the roads according to the mileage of the roads. As a mere matter of theory, for the purpose of increasing its taxes, we cannot say that the relator is paying too much on account of these expenses, in the absence of evidence to the contrary.

Criticism is made that expenses are charged with a certain sum as up-keep of the property and a further sum for obsolescence. It is unnecessary to refine as to what charges may be called those for obsolescence and those for up-keep of plant. It is the right and duty of a public service corporation to create a fund from the current earnings to keep and make good the machinery, appliances and such parts of its plant as from time and use require replacement. In the electrical field it is just as sure that certain machinery now in use will be superseded by better machinery and that the public service will require the