text:
    The People ex rel., Hecker-Jones-Jewell Milling Company, App’lt, v. Edward P. Barker et al., Commissioners, etc., Resp'ts.

      (Court of Appeals,

      Filed October 8, 1895.)

    1. Taxes—Foreign corporation—Certiorari.
    Iq the absence of the adoption of an erroneous theory of assessment, the court of appeals will not, upon certiorari, review and reverse the determination of the assessors in making an assessment for taxation upon the property of a foreign corporation used in its business in this state, as to the true amount for which the corporation should be assessed, where there is some evidence to support such determination.
    8. Same—Amount invested in this state.
    Where a foreign corporation purchases property here, pays cash for a portion of it and promises to pay the balance at some future day, the amount still due upon the property is to be deducted from the value of the property in order to ascertain the sums invested in this state.
    ■3. Same—Corporate stock.
    Stock, issued by a corporation in payment for property, is not a debt incurred by the corporation.
    Appeals from orders of the general term of the supreme court in the first judicial department, made which affirmed orders of -special term dismissing writs of certiorari.

      John M. Bowers, for app’lt; David J. Dean, for resp’ts.

       Aff’g in part and rev’g in part, 67 St. Rep. 775.

   Peckham, J.

The above relator obtained two writs of certiorari under chapter 269 of the Laws of 1880, for the purpose of reviewing the action of the above defendants in assessing the relator for all sums invested in its business in this state in the years of 1893 and 1894, a separate writ having issued for each assessment. The defendants were commissioners of taxes and composed the board ■of taxes and assessments of the city and county of New York, and they made an assessment in each of the above years against the relator which is a foreign corporation having money invested in this state, such assessment being based upon the provisions of the act chapter 37 of the Laws of 1855, one section of which reads as follows: “All persons and associations doing business in the state of ¡New York as merchants, bankers or otherwise, either as principals or partners, whether special or otherwise, and not residents of this state, shall be assessed and taxed on all sums invested in any manner in said business the same as if they were residents of this state, and said taxes shall be collected from the property of the firms, persons or associations to which they severally belong.” The relator disputes the-validity of each assessment. The defendants, in 1893, assessed the relator at a certain sum, after deducting that portion of its indebtedness which they decided had been incurred in this state in the purchase of property herein, and in 1894 they made an assessment without deducting any of the indebtedness of the relator whatever. The relator claims that the defendants, in 1893, did not deduct all its indebtedness which had been incurred in the purchase of property within this state, and that if they had done so, there would have been no assessment made against it here. It also claims that the assessment of 1894 was void because of the refusal of the defendants to make any deduction whatever for any indebtedness. The reason for the difference in the two assessments is based by the defendants upon the decision of this court in People ex rel. Thurber- Whyland Co. v. Barker et al. reported in 141 N. Y. 118; 56 St. Rep. 586.

That case was decided here subsequent to the assessment of 1893 and prior to that of 1894. The defendants were of opinion that the decision in question covered this case and obliged them to assess the relator without making any deduction for any indebtedness whatever, even though such indebtedness, or some portion thereof, were incurred in the purchase of the assets in this state, for which assessment of 1894 was made.

Prior to the time for finally making the assessment for each of the two years 1893 and 1894 respectively, the relator rendered to the defendants a verified written statement of the condition of the company as of the second Monday of January in each of such years. The statement of 1893 shows that the total gross assets in all parts of ethe world then belonging to the relator amounted to $4,615,326.07, and from that sum it was claimed should be deducted the amount assessed against it for its real estate, being $415,300, and the sum of $2,500,000 for bonds issued by it, and also $2,567,000 for further indebtedness incurred by it in the course of its business, thus claiming a total deduction for indebtedness (including the assessment for real estate) of $5,518,300, or almost a million dollars of debts over assets, and reducing the assessment of course to nothing.

It does not appear that any receiver of the company has been appointed or applied for, or that any proceedings have been taken or were contemplated for the winding up of what by this statement would appear to be a hopelessly insolvent concern. The-president' of the company was examinad in regard to the assess-merit of 1893, before the commissioners, and he testified that the company was organized August 27, 1892, less than seven months prior to the making of this statement. The president further testified that the nominal capital was five millions of dollars, two millions of preferred and three millions of common stock.' That $2,000 in cash were paid into the treasury for 20 shares of its capital stock at par, and that sum was paid out for corporation expenses. He was unable to state whether in issuing the stock at the time the company was organized it acquired anything beyond the tangible assets of the firm or parties whose property was purchased. The first meeting of the directors was held August 27, 1892, and at that meeting its bonds secured by mortgage were issued, and eight hundred and twenty of them of one thousand dollars each were sold for cash at par, and the money brought into Hew York and deposited in the bank with which the company did business, and was subsequently used for the purchase of merchandise used by the company. The question was then asked of him: “And the rest of the capital stock and the balance of the bonds were issued in exchange for real and personal property ? and he answered “Yes.”

From this statement of 1893, and from the examination of the president of the company, it appears that all but $2,000 of its capital stock of $5,000,000, and the $2,500,000 of its bonds had been issued in exchange for property, real and personal, between the 27th day of August, 1893, and the second Monday of Januuary, 1894, the cash for the $820,000 of bonds issued having been used for the purchase of merchandise. Further than this it appears that $2,567,000 of further indebtedness had been incurred upon its notes for borrowed money, loans to it on collateral and on bills for merchandise. This would make about $10,000,000 invested by the relator within this short period and yet it makes a statement that its total gross assets existing on the second Monday of January, 1893, amounted to but $4,615,326.07. Ho explanation is vouchsafed for these seemingly most unfortunate investments. It might, perhaps, be thought there was a mistake in the record from which I have quoted, and that the stock had in fact never been issued to any such amount. The statement for 1894 would seem to show there was no mistake of that nature, for it is there stated that the entire share capital, except the twenty shares already spoken of, and the entire issue of bonds, except the 820 sold for cash, were exchanged for property. Ten millions of investments in five months, and at the end thereof less than five millions left! In January, 1895, its relative condition was about the same; its gross assets had shrunk from $4,615,326.07 to $3,466,919, being considerably over a million of dollars, but its indebtedness was less by $1,046,500.

And yet this (seemingly) insolvent corporation is paying interest on its bonded indebtedness and dividends upon its stock These facts call for explanation. There is no doubt that the astute and able counsel for the city would have made the effort to obtain it had not the defendants proceeded upon the theory as to the tax of 1894 that the amount of indebtedness was in any aspect immaterial and the amount of assets in this state was sufficient for an assessment for 1894, which would be fair if no deduction for indebtedness were allowed. As to the assessment for 1893, in which there was some allowance for indebtedness, the relator claims that the entire face value of three of the items entering into that assessment, viz., for machinery and tools, office furniture and horses and trucks, making a total of over $800,000 should have been deducted in addition to the amount already allowed by the defendants for indebtedness incurred for the purchase of assets in this state. The decision of the defendants in this regard as to what amount of indebtedness was actually incurred in the purchase of the assets in this state in 1893 was made upon a question of fact, in regard to which the evidence on the part of the relator was by no means of that clear convincing character which could leave no doubt as to the fact. The assessment itself depended also upon the different kinds of property making up the assets of the relator in this state, and it was not made at all plain as to what the real and true value of such assets was. We do not feel called upon to review and reverse the determination of the defendants as to the true amount for which the relator should be assessed for the year 1893. There was evidence to support their determination, and that is sufficient for us. It is not plain that any erroneous theory of assessment was adopted.

The orders of the special and general terms will, therefore, as to that assessment, be affirmed.

We are now brought to the consideration of the assessment for 1894, founded upon Thurber- Whyland Company case above referred to.

We think an erroneous use has been made of the decision of this court in.that case, and that the assessment now before us for 1894 must be-set aside. Upon another examination of the subject carried on by the defendants, commissioners, a more thorough investigation may be made, so far as it shall appear necessary, for an accurate assessment against the relator for all sums invested by it in this state.

■ The question is as to the true construction to be given those words of the statute which provide that all persons non-residents of the state and doing business herein “shall be assessed and taxed on all sums invested in any manner in said business the same as if they were residents of this state,” etc. What is meant by the words “sums invested in any manner in said business ? ” The inquiry must of course be confined to the meaning of the words as used in this statute and for the purpose of an assessment upon such sums for taxation.

The case of the Thurber- Whyland Company held that a foreign company having assets in a foreign state could not invest some of its capital here and rightfully claim a deduction from such sum invested of all its indebtedness. That company admitted an investment there of at least $750,000, and its total indebtedness was over $1,200,000, consisting of open accounts and of bills payable. There was no claim set up as to the right specially to deduct the specific indebtedness arising upon the purchase of the very assets in New York in regard to which the assessment had been made. Very possibly language was used in that case in the course of the opinion which might be capable of a construction broader than was called for by the facts appearing in that record. If so, it would be another illustration of the truth and importance of the principle which makes it necessary to construe .the language used in judicial opinions strictly with reference to the facts which exist in the case which is decided. It was statedin that case that the court was of opinion that the act didnot contemplate the deduction of debts from the sum invested in this state by non-residents. As then applied, the language was appropriate, although it might well have been more definite and precise. That company had assets at its home office enough to permit a deduction of all indebtedness asserted, and there was no claim that was argued that any of it had been incurred in the purchase of property in this state which formed the basis of the assessment. Under such circumstances we held, and we think, properly held, that the place for the deduction of general indebtedness was the residence of the person or corporation, and that the sum invested here should not be diminished by a deduction of any of such general indebtedness. The question we are now to decide is what is the sum invested in this state by a foreign corporation which purchases property here and pays cash for a portion of it, and promises to pay the balance at some future day.

This relator is engaged in the business of milling in this state. Suppose it brought one hundred thousand dollars into this state and bought two hundred thousand dollars worth of wheat to be manufactured into flour, and paid for it with the hundred thous- and dollars in cash, and gave its notes for the balance. The ownership of the wheat passes to the relator by the purchase, and in that sense it can be said it owns wheat to the amount or value of two hundred thousand dollars. Has it, however under this statute invested in this state any sum beyond the one hundred thousand dollars which it paid in cash for the wheat ? Is its promise or liability to pay the other hundred thousand, a sum invested in this state by it, and is it the same as cash for the purpose of taxation? Is the fact that the company has in its possession as ostensible owner the two hundred thousand dollars in value of wheat conclusive evidence that the company has invested that sum in its business in this state, when in truth it has paid a sum amounting to but half its value, and has promised to pay the balance at some future time? It seems to us there can be but one answer to these questions. The sum invested is the sum paid and not the sum which is promised to be paid on a future occasion. It is true the purchaser has in its possession as nominal owner, wheat to the value of two hundred thousand dollars, but it cannot be said to have invested within the meaning of this statute two hundred thousand dollars in the purchase of the wheat as long as it has in fact paid but one-half that sum and has simply promised to pay the other half at a future day.

Ho part of the value of the wheat is lost to taxation by this holding; neither is the sum so lost which was brought into the state by the relator and invested in the wheat. The vendor of the wheat is taxed for the one hundred thousand dollars he has received as part payment for the same, and he is also taxed for the one hundred thousand dollars of notes he has received from the purchaser of the wheat on account of the balance due for the purchase money, and the relator is taxed the $100,000 cash it has brought into the state and invested in this wheat, and there is thus an assessment of $300,000 made between these two, the vendor and the vendee of the wheat and is all the property that is then subject to taxation. To tax the full value of the wheat in the hands of the purchaser is in the reality to tax the purchaser on its own indebtedness. Its promise to pay in the future the other hundred thous- and dollars is not a sum invested by it here until it has redeemed its promise and paid its notes. The transaction is in truth substantially the same whether the payment has been secured by a chattel mortgage on the wheat or not, although if the payment have been thus secured, the purchaser has not even obtained an unincumbered title to the wheat until the payment is made. And so long as the property purchased has not been paid in full, then the amount still due upon it ought to be deducted as not representing any sum invested by the purchaser in this state. Otherwise it is to say that the relator has invested a sum in this state by merely promising to do so at some future day. If after the purchase the wheat should appreciate, the whole of such appreciation would of course go towards swelling the amount invested by the relator in this state, and the contrary would be the case if 'it should depreciate; the indebtedness being a fixed quantity in both cases it would not be altered or affected by either event.

The same thing would happen in case the relator purchased the wheat and paid nothing for it, but gave its notes even without a mortgage for the whole amount. In such.case the relator could not be said to have invested any sum in its business, assuming of course that the wheat was worth no more than its purchase price. Instead of paying, it had simply promised to pay for it. The vendor in such case would be assessed on the notes he took for the price of the wheat instead of for the wheat itself and the relat- or would not be assessed at all.. This would be right because no more property had been created by the sale than existed before its consummation, and there would be an assessment levied for the full amount that had been levied before or which would have been levied if no sale bad been made. The relator would not have invested any sum in its business until it paid something on its notes or until the property purchased had appreciated beyond the purchase price thereof. A gift of the property would be different, In that case while the relator would not have actually taken money or brought it into the state for investment and invested it in the property, yet it would have received the property as absolute owner with no outstanding liabilities to pay for it, and being in such case the owner of the property it would answer the description of a sum invested in its business and thus be liable to assessment under the act.

This treatment of the question is not in fact to be regarded in the light of a strict deduction of debts from assets; it is construing the meaning of the statute and determining what in reality is the .sum invested by a non-resident individual or corporation under these circumstances, in the business in which he or it is engaged in this state. It is not adjusting the equities as spoken of in the Thurber- Whyland case, which we then held should be done at the place where the corporation was a resident. It is a different thing from ascertaining the general and gross assets of a non-resident to be found within the state, and from that sum deducting all its •debts whenever and upon whatever caused incurred. The nonresident corporation investing a sum of money in this stale is to be assessed for the full sum it invests here, although it may owe debts enough outside of such investment to render it insolvent. The indebtedness it has incurred in the transaction from which the purchase of the property is the result, is no part of the sum it has invested in such purchase and no assessment can be made which includes the amount of that indebtedness. But the stock which a corporation issues in payment for property is not a debt incurred by it. The strip for the stock is merely a certificate to the holder to certify as to his interest in the property of the corporation, which interest is his share of the property that remains to it after the payment of all its debts.

Oontruing the statute as we do, it follows that the assessment of 1894 cannot stand. Upon a rehearing of the case by the assessors it will be most appropriate to endeavor to learn what kind of property was obtained in exchange for the stocks, bonds and notes of the company amounting to ten millions of dollars, where it is situated, how much it is in fact worth or what has become of it and how it has to the extent claimed disappeared or shrunk in value. It is a case which indeed calls for rigid examination and investigation to learn if possible how a corporation seemingly by its prepared statements insolvent, can go on and pay interest on its mortgage debt, dividends on its stock and keep clear of all hostile steps from its other creditors.

Our conclusion is that the orders of the general and special terms in relation to the assessment of 1893, must be affirmed,with costs, and those in regard to the assessment of 1894 must be reversed and the defendants directed to make a new assessment in conformity to the facts and to the views set forth in this opinion.

All concur.

Ordered accordingly.


source: Caselaw Access Project

author: Andrews, Ch. J.

license: Public Domain

text:
    The People ex rel. Henry C. Henderson, Resp’t, v. The Board of Supervisors of the County of Westchester, App’lt.

      (Court of Appeals,

      Filed September 27, 1895.)

    1. Statute—Unconstitutional.
    A statute can be declared unconstitutional only when it can be shown beyond reasonable doubt that it conflicts with the fundamental law, and, until every reasonable mode of reconciliation of the statute with the constitution has been resorted to, and reconciliation has been found impossible, the statute will be upheld.

      2. Constitution—Senate distbicts.
    When, by the constitution, it is declared that a senate district is to consist of certain specified counties, there is established an organic relation, between the counties as they existed territorially at the adoption of the constitution and the senate districts thereby established, and a subsequent change of county boundaries by the legislature, whereby a senate district would comprise a part of two counties, would violate the constitutional plan, unless permitted by some other provision of the instrument.
    3. Same.
    When the constitution declares that the twenty-second senate district shall consist of the county of Westchester, it is a declaration that the county of Westchester as then organized, with its then existing territorial limits, shall constitute that district, and a change of territorial boundaries-of the county will change the senate district as established.
    4. Same.
    The insertion, in the section of the constitution relating to the apportionment of assemblymen and the creation of assembly districts, of the clause that “ Nothing in this section shall prevent division at any time of counties and towns and the erection of new towns and counties by the legislature,” indicates an intention to leave the legislature free to exercise the power to change the boundaries of counties and towns and to erect new towns at any time in its discretion.
    5. Same—Annexation act.
    Under the present constitution, chap. 934 of 1895, as an act of annexation, was within the constitutional power of the legislature, though it changed, as to the twenty-second senate district, the county boundaries of the district.
    6. Same.
    The construction of the annexation act, which affirms its validity as-such, but leaves the annexed territory part of the twenty-second district and of the second judicial district and department and within the jurisdiction of the board of supervisors of Westchester county for the purpose of forming assembly districts, most clearly harmonizes the provisions of the constitution relating to senate, judicial and assembly districts, and the power possessed by the legislature to divide counties and towns.
    7. Same.
    The words “in every respect and to the same extent,” found in the Annexation Act, read in connection with the context, are satisfied by construing them as referring to municipal burdens and municipal rights in which the annexed territory and its inhabitants were to share.
    8. Same.
    The voters in the annexed territory are entitled to vote for senator, member of assembly and for justices of the supreme court the same as though the Annexation Act had not been passed; but the elections in the annexed territory will of necessity be conducted under the control of the election officers "of the city and county of New York, and the returns will he made to the proper authorities of Westchester county.
    9. Same—Constitutional.
    The Annexation Act of 1895 is constitutional, hut does not operate to take the annexed territory out of the jurisdiction of the board of supervisors of Westchester county in forming assembly districts pursuant to section 5, art. 3, of the constitution, and it was the duty of the hoard at its meeting, on the second Tuesday of June, 1895, to have included the annexed territory within one of the three senate districts allotted by the Constitution to the county of Westchester.
    10. Same—Mandamus.

      Mandamus is properly granted to compel the hoard of supervisors of Westchester county, which then failed, to perform this duty.
    Appeal from order of the general term of the supreme court in the second judicial department, which affirmed an order of special term directing the issuance o£ a peremptory writ of mandamus, requiring the board of supervisors of Westchester county to re-asseinble and divide the said county into three assembly districts, in accordance with the provisions of the constitution of the state of Hew York.
    The appeal was heard September 17, 1895, at a special session of the court, convened in accordance with the provision of the constitution (art. 3, § 5), that “any court before which a cause may be pending involving an appointment, shall give precedence thereto over all other causes and proceedings, and if said court be not in session, it shall convene promptly for the disposition of the same."
    On September 27, 1895, the court rendered the following decision :
    “1st. That the act, chapter 934 of the Laws of 1895, annexing certain territory taken from the county of Westchester to the city and county of Hew York is constitutional.
    “2nd. That by virtue of the act the annexed territory became, for all purposes of local government and administration, a part of the city and county of Hew York, except as otherwise provided therein.
    “3rd. That the act did not operate to change the territorial boundaries of the twenty-second senate district, established by the constitution of 1894; or to take the annexed territory out of the jurisdiction of the board of supervisors of Westchester county, in forming assembly districts pursuant to section 5 of article 3 of the constitution ; or to change the boundaries of the second judicial district, as they existed when the act was passed, or the boundaries-of the second judicial department, as established by'chapter 376 of the Laws of 1895.
    “4th. That for the- purpose of voting for senator, members of assembly and justices of the supreme court, the annexed territory is to be regarded as a part of the twenty-second senate district, and of ad assembly district to be formed bv the board of supervisors of Westchester county, and of the second judicial district.
    “5th. That the public property in the annexed territory vested under the act of annexation in tíre mayor, aldermen and commonalty of Hew York, as provided in said act.
    “6th. That it became the duty of the board of supervisors of Westchester county, at its meeting on the second Tuesday of June, 1895, to include the annexed territory within one of the three assembly districts allotted by the constitution of the county of Westchester.
    “7th. That having omitted to perform their duty, the mandamus was properly granted.
    “ The order and judgment of the general term is, therefore, affirmed, with costs to the relator.”
    Thereafter, on October 8, 1895, on the re-assembling of the court in regular session, the opinion was handed down, in which the facts, so far as material, are stated.

      William H. Robertson, for app’lt; William D. Guthrie, for resp’t; Won. B. Hornbloweo' and McOready Sykes, for app’It in People ex rel. Field v. Board of Aldermen of the city of New York; Francis M. Scott and John Proctor Claodce, for resp’ts in People ex rel. Field v. Board of Aldermen, etc.; Town of Westchester v. Haffen, and the village of Williamsbridge v. Haffen.
   Andrews, Ch. J.

This controversy involves the constitutionality of chap. 934 of the Laws of 1895, approved June 6, 1895, and which took effect the same day, annexing a portion of the county of Westchester to the county of New York. The annexed territory at the time of the annexation consisted of a town and parts of towns, and of two villages in the county of Westchester, having a population of upwards of 13,000 persons, excluding aliens, of whom about 2,500 were duly qualified voters. The act declared that the territory therein described, “with the inhabitants and estates therein, is hereby set off from the county of Westchester and annexed to, merged in and made a part of the city and county of New York and of the twenty-fourth ward of said city and county, subject to the same laws, ordinances, regulations, obligations and liabilities, and entitled to the same rights, privileges, franchises and immunities in every respect and to the same extent as if said territory had been included within said city and county of New York at the time of the grant and adoption of the first charter and organization thereof and had so remained to the passage of this act, and except as may be modified by this act, as if such territory had been included within said twenty-fourth ward by the provisions of chapter 613 of the Laws of"1873, entitled ‘An act to provide for the annexation of the towns of Morrisania, West Farms and Kingsbridge in the county of Westchester to the city and county of New York, and the several acts amendatory thereof, and had so remained up to the passage of this act.’ ” The board of supervisors of Westchester county assembled on the second Tuesday of June, 1895 (six days after the act of annexation took effect), pursuant to the requirement of section 5, art. 3, of the new constitution, to divide the county into three assembly districts, equal to the number of members of" assembly apportioned to Westchester county, and made the division of the then existing territory of the county into three assembly districts, excluding from the division the territory embraced in the act of annexation. The board of aldermen of the city of New York on the same day assembled and divided the city and county of New York into assembly districts, but in the division no notice was taken of the annexed territory, and the division was confined to the territory of the city and county of New York as it existed before the act of annexation. The result of the action of the two boards was, therefore, to leave the annexed territory unattached to any assembly district. Thereupon the proceeding was instituted to compel the board of supervisors of Westchester county to re-assemble and re-form the assembly districts by including in the division the territory taken from the county of Westchester by the act of annexation. The proceeding was taken on the view that, notwithstanding the act, the annexed territory remained a part of West-Chester county for assembly district purposes. A mandamus proceeding was also instituted in the ciiy and county of New York to compel the board of aldermen of that city to re-assemble and include in an assembly district to be found therein the territory added to the county by the act of annexation. This proceeding was based on the contention that the act of annexation operated from the time of its passage to make the excluded territory for all purposes, including the formation of assembly districts, a part of the city and county of New York. In addition to the two proceedings mentioned, actions were commenced in the county of Westchester, one by the town of Westchester and one by the villige of Williamsbridge, which town and village were included in the act of annexation, against certain officers of the street and police departments of the city of New York, who, acting under the authority of the city, had intermeddled with the public property of the town and village, to obtain an injunction to restrain them from interfering therewith. The act of annexation by its terms vests in the mayor, aldermen and commonalty of the city and county of New York all the public property in the annexed territory, and these actions were based upon the theory that the act of annexation was wholly unconstitutional and void for all purposes whatever. The mandamus proceeding against the board of aldermen of the city and county of New York has been heard and decided by the special and general terms in the first district and department, and the other mandamus proceeding and the injunction actions by the courts in the second department, and all the cases have been argued before us on appeal. The courts below have concurred in the opinion that the annexed territory should he treated as a part of Westchester county in the formation of assembly districts, and that it was the duty of the board of supervisors of Westchester county to have included it in one of the three districts in that county. The courts in the second department affirmed the constitutionality of the act, chap. 934 of the Laws ■of 1895, as an act of annexation, but held that the annexed territory is still a part of the twenty-second senate district, and that for the purpose of voting for senator, assemblyman and judges of the supreme court, it must still be considered as- a part of Westchester county. The learned judge who delivered the opinion at special term in the case arising in the city and county of New York, held substantially the same view as that of the judges in the second district. The general term of the first department did not pass upon the question of the constitutionality of the act, but limited itself to deciding the precise question presented in that case, viz., whether the annexed territory should he included in an assembly district in the city and county of New York, or in the county of Westchester. The appeals before us, taken together, cover the whole field of controversy, and they impose upon the court the duty of finally determining the grave and difficult questions presented.

The main grounds of attack upon the constitutionality of the Annexation Act are (1) that it changes the twenty-second senate district, which by the constitution was declared to consist of the county of Westchester, the claim being that no alteration in county lines can be made without changing the senate district, since by constitutional arrangement the county of Westchester with its established boundaries at the time of the adoption of the constitution of 1894 and tlm senate districts, were and must remain inseparably associated until after another enumeration; (2) that taking from Westchester county a part of its territory changes the basis of the apportionment of members of assembly made by the constitution to the county of Westchester and nullifies the requirement that each assembly district shall be wholly within a senate district formed by the constitution, because it would become impossible of execution if the act is valid. The twenty-second senate district, it is claimed, existing after the act took effect, would not be the same district defined in the constitutional apportionment, viz., the county of Westchester as then organized; (3) the act changes the lines of judicial districts and departments theretofore established, in defiance of constitutional restrictions.

It becomes necessary in considering these objections to-refer to the provisions of the new constitution. . The constitution, by section 3, article 3, divides the entire territory of the state into fifty senate districts, corresponding to the number of senators to be elected, consisting of one or more counties or of subdivisions of a county. It declares that the twenty-second senate district shall consist of the county of Westchester, and it divides the city and county of New York into twelve senate districts, bounding each of the twelve districts by streets and avenues, or by streets, avenues and public waters, except that in constituting the twenty-first senate district (one of the twelve districts) a general clause is added to the description by streets and avenues, which includes therein territory taken from the county of Westchester and annexed to the city and county of New York by the act chapter 613 of the Laws of 1873, which territory, it is saicl, had not been mapped and laid out with streets or avenues on a permanent plan when the convention prepared the legislative article. Section 4 of the same article provides that an enumeration of the inhabitants of the state shall be taken in the year 1905, and every tenth year thereafter, and directs, that the senate districts “shall be so altered by the legislature at the first regular session after the return of every enumeration, that each senate district shall contain as nearly as may be an equal number of inhabitants, excluding aliens, and be in as compact a form as possible, and shall remain unaltered until the return of another enumeration, and shall at all times consist of contiguous territory, and no county shall be divided in the formation of a senate district except to make two or more senate districts wholly in one county." The section also prohibits the division of a town, or block in a city inclosed by streets or public ways, in the formation of a senate district. By section 1 of the same article the assembly is to consist of one hundred and fifty members. Section 5 deals with the subject of apportionment of members of assembly, and prescribes the manner of constituting assembly districts in counties entitled to more than one •member. It perpetuates the single district system, and declares that each county theretofore established (counting Fulton and Hamilton counties as one county) shall be entitled to one member <of assembly. It directs that the members of assembly shall be apportioned by the legislature at the first regular session, after the return of every enumeration, “among the several counties of the state as nearly as may be, according to the number of their respective inhabitants, excluding aliens.” It prescribes the ratio for apportionment and how members shall be apportioned on remainders. The section itself makes the apportionment. It declares that, “until after the next enumeration, members of assembly shall be apportioned among the counties as followsand apportions thirty-five members to the county of Hew York and three members of the county of Westchester. The constitution does not, as In the case of senate districts, divide counties entitled to more than one member into assembly districts. It imposes that duty upon the boards of supervisors, except that in any city embracing an entire county and having no board of supervisors, the common •council or the body exercising the powers of a common council is to make the division. This latter provision, under existing circumstances, is applicable only to the city and county of Hew York. The board of supervisors of any county entitled to more than one member of assembly, or in the city and county of Hew York, the common council of that city, is required to “assemble on the second Tuesday of June, 1895, and at such time as the legislature making an apportionment shall prescribe, and divide such counties into assembly districts, as nearly equal in number oi inhabitants, excluding aliens, as may be, of convenient and contiguous territory in as compact form as practicable, each of which shall be wholly within a senate district formed under the same apportionment, equal to the number of members of assembly to which such county shall be entitledand (the section adds): “Such apportionment and districts shall remain unaltered until another enumeration shall be made as herein provided. ” It prohibits the division of a town or block in a city in forming assembly districts, and following the provisions above enumerated are the words: “Hothing in this section shall prevent the division, at any time, of counties and towns and the erection of new towns by the legislature.”

Section 1, article 6, of the new constitution, continued the existing judicial districts “until changed as hereinafter provided,” and authorizes the legislature to alter the judicial districts “once after every enumeration of the inhabitants of the state.”' Section '2 of the same article declares that the legislature shall divide the state into four judicial departments; “The first department shall consist of the county of Hew York, the others shall be bounded by county lines.” In obedience to this mandate of the constitution the legislature on the 13th day of April, 1895, two months prior to the act of annexation now in question, divided the state into four judicial departments, the first consisting of the county of Hew York, and the second “of the counties embraced within the present second judicial district,” of which Westchester county was one.

The act of annexation, as has been stated, set off from the county of Westchester the territory described therein, with its inhabitants and estates, and declared that it was annexed to and merged in, and made a'part of the city and county of New York. As a necessary consequence, it divided the county of Westchester and changed the boundary lines both of the county of Westchester and the county of New York. It preserved, however, the existing arrangements for the collection of unpaid taxes and assessments in the territory annexed, and the sale of lands therefor, and provided for the equitable apportionment and for the payment by the city and county of New York, of such portion of the debts and obligations of the county of Westchester and of the towns and villages taken from Westchester, as should be fixed by the apportionment. If the act is valid, the territory taken from Westchester county became from the time of the approval of the act on the 6th day of June, 1895, except as otherwise specified therein, for all purposes of local government and administration, a part of the city and county of New York, and it was made subject to the burdens and became entitled to the rights, privileges and immunities, “in every respect and to the same extent,” as if the annexed territory had originally been a part of that city and county and had been included in the territory annexed thereto from the county of Westchester by the act chapter 613 of the Laws of 1873 and the acts amendatory thereof.

The constitution vests in the senate and assembly the legislative power of the state (Canst, art. 3, § 1), and the power to divide counties or townsj and to erect new counties and towns, or to change their boundaries, is legislative in its character and is conferred upon the senate and assembly by the general or legislative power; and unless restrained in a particular case by other provisions or arrangements of the constitution, the time and mode of its exercise is in the discretion of the legislature. The power of the-legislature to erect new counties, although not conferred by any express grant, is implied in the prohibition in § 5, art. 3, relating-to members of assembly, that “no new county shall be hereafter-erected unless its population shall entitle it to a member.” The power is by this clause both recognized and limited. The power to divide towns or counties, or to erect new towns, was not given by any direct language in the constitution of 1846, but it was exercised in many cases by the legislature as a part of its ordinary legislative • power. We shall have occasion to refer to some provisions in the constitution of 1894, in which the existence of this-power is expressly recognized.

The act of annexation now in.question is, therefore, presumptively valid, because it is an act of legislation within the ordinary scope of legislative power, and for the further reason that the presumption of constitutionality attaches to every statute enacted by the legislature. The duty and the burden of establishing that the act of annexation is unconstitutional rests, therefore, upon the parties asserting its unconstitutionality. It needs no citation of authorities in support of the doctrine that a statute can be dedared unconstitutional only when it can be shown beyond reasonable doubt that it conflicts with the fundamental law, and that until every reasonable mode of reconciliation of the statute with the constitution has been resorted to, and reconciliation has been found impossible, the statute will be upheld.

The senate districts are established by the constitution. The whole territory of the state is by section 3, article 3, divided into senate districts upon a plan which preserves the unity of the county in their formation, no county being divided except to constitute two or more senate districts within the same county. The rule that counties were not to be divided in the formation of senate districts except in the cases specified, was followed by the convention, and it was made obligatory in all future apportionments. We think it is plain that the general scheme of the constitution was to associate senate districts with county organizations and to make them co-terminous with county boundaries, and that when by the constitution it was declared that a senate district was to consist of certain specified counties, there was established an organic relation between the counties as they existed territorially at the adoption •of the constitution and the senate districts thereby established, and that a subsequent change of county boundaries by the legislature, whereby a senate district would comprise a part of two counties, would violate the constitutional plan, unless permitted by some other provision of the instrument. The claim that the counties determine the senate districts merely in the sense that their boundaries on a certain day were used as convenient measurements for the districts ignores the constant relations between counties and senate districts which has been maintained during the whole existence of the state government. This was equally true of the large senate districts established by the constitutions of 1777 and 1821, and of the single senate districts under the constitution of 1846 and the constitution of 1894. The general principle that the apportionment of representatives in the legislature is to be made upon the basis of population has been modified to preserve the autonomy of counties and their relation to representative senate districts. There could doubtless be a more exact mathematical division of population for the purpose of legislative representation, if the boundaries of counties were disregarded. But the principle of equality in representation is to some extent subordinated to the purpose of making counties the representative territorial units in the apportionment of senators. It is not difficult to trace the origin of this system embodied in the state constitution. It has its root in the prominence given to county government and to county organizations from the earliest period of our history and to the habits and associations of the people formed under the county system. The territory of the state in colonial times was divided into counties. Under the state constitution the county has been the agency of local government and administration in county affairs. Through the counties the state collects its taxes, and through county officers the judgments of its courts have been executed. Powers of local legislation from the beginning have to a greater or less extent been exercised by county boards, and the inhabitants of a county have been accustomed to act together in public affairs and in the promotion of local interests. It was not for mere convenience, therefore, that senate districts established by the constitution were made to consist of counties. There was inserted in the constitution of 1821 a provision which has been incorporated into every subsequent state constitution, that “no county should be divided in the formation of a senate district,” a provision which, though addressed to the legislature and applicable to future apportionments only, is an emphatic formulation of the policy which has uniformly "prevailed.

We assent, therefore,, to the proposition that when the constitution declares that the twenty-second senate district shall consist of the county of Westchester, it was a declaration that the county of Westchester as then organized, with its then existing territorial limits, should constitute that district, and that a change of the territorial boundaries of the county would change the senate -district as established, because neither the whole district nor any part of it was by the general scheme to remain outside of the county organization.

The answer that the word “ county ” in article 3, section 3, constituting Westchester county as the twenty-second senate district, refers to that county as a political organization, and that so long as the county exists, although shorn of a part of its territory, the part remaining constitutes the district, must be rejected. The claim assumes that by the act of annexation the exscinded territory became, for senate district purposes, a part of the city and county of New York. The specific boundaries in the constitution of the senate districts in the city and county of New York by streets, avenues and public waters, with the general clause in connection with the boundaries of the twenty-first district, inserted to embrace territory in the city not capable of a description by street boundaries, do not admit of enlargement so as to include territory subsequently added to the city by the legislature, and the added territory would form no part of any senate district in the state if dissevered from the twenty-second district. But there is a broader objection to an interpretation of the constitution which would permit the legislature to take territory from one county and senate district and annex it to another senate district. It would interfere with the basis of apportionment founded upon population, upon which the convention acted, and enable the legislature at any time, by changing the boundaries of counties, to subvert the approximate equality in' population of the senate districts which it was the aim of the constitution to establish. It would place it in the power of the legislature to undo and defeat the work of the convention under guise of changing county boundaries. The constitution gave to the county of Westchester one senator and three members of assembly, and the apportionment was fixed on the basis of its then existing population. The argument assumes that Westchester county would continue until another enumeration entitled to one senator and three members of assembly, although the greater share of its population may, by an act of annexation, be transferred to another county, and although the county to which it is annexed will gain no additional representation. The consequences which might flow from the interpretation of the constitution just considered forbid its ■adoption. It would open the door for legislative interference with representative districts for partisan purposes under the guise •of changing the boundaries of counties, the prevention of which was the object of several provisions of the constitution.

Leaving out of view for the present a consideration of special clauses in the new constitution relating to the division of counties and towns, and assuming that the legislative power over the subject is that only which is embraced in the general grant of legislative power, we have on the one hand senate districts consisting of counties constituted and defined by the constitution, and on the other a general legislative power to change the boundaries of counties and towns and to erect new ones. The constitution contains no express declaration restraining the legislature from altering the senate districts established by that instrument, intermediate a decennial enumeration. It requires the legislature so to alter the districts as to produce equality as near as may be, at the first regular session after the return of every enumeration, but no power is given by express language to alter them at any other time. If the validity of the act of annexation now in question ■depends solely upon the force of the general grant of legislative power, the case of Lanning v. Carpenter, 20 N. Y. 447, is an authority against its constitutionality. That case arose under the constitution of 1846 and involved the validity of the law passed in 1854 (intermediate two decennial periods), creating Schuyler county out of parts of three counties, and the new county as formed embraced parts of two senate districts and of two judicial districts. The act was held by a divided court to be unconstitutional for the reason that the existing judicial, senate and assembly districts organized by or in pursuance of the constitution then in force, continued unchangeable until after the next succeeding enumeration and that a change of county boundaries, which should leave senate-districts not bounded by county lines, was a change in contravention of the constitutional requirement that they should consist of entire counties. It was claimed in. support of the act that the power to create a new county was vested in the legislature under the general grant of legislative power and that such incidental and temporary changes in the county boundaries of judicial and legislative districts as might result from the exercise of this power did not invalidate the act. The court rejected this view, and held that the general power must yield to the specific regulations for the formation of senate and judicial districts, and that the power of the legislature to erect a new county, if it involved a change in the boundaries of senate and judicial districts by county lines, could only be exercised contemporaneously with the return of a new enumeration. In the subsequent case of Kinne v. City of Syracuse, 3 Keyes, 110, an act changing the boundaries of the city of Syracuse, passed in 1858, by annexing territory belonging to an assembly district in that county to territory in another assembly district therein, was held to be invalid on the ground that it was an alteration of assembly districts intermediate two decennial periods, in violation of the constitution.

But the question as to the validity of the annexation act of 1895 does not arise under the constitution of 1846. The constitution of 1894 contains provisions not found in the constitution of 1846, which in our judgment materially affect the question now to be determined. When the constitutional commission of 1873 assembled these cases had been decided. The legislative article proposed by that commission divided the state into eight senate districts, as under the constitution of 1821, and apportioned the members of assembly among the counties as under the constitution of 1846. It appears from the journal of the commission that after the legislative article had been reported by-the committee having this subject in charge, on motion of a member from the seventh judicial district, whoresided in one of the counties from which Schuyler county was taken, the article was by unanimous consent amended by adding to the section relating to the apportionment of members of assembly and the constitution of assembly districts the clause: “Nothing in this section shall prevent division at any time of towns and counties to be effectual for the purpose of town and county administration.” See Journal of Constitutional Commission, p. 408. Subsequently, when the article was reported by the committee on revision, this clause was changed so as to read : “Nothing in this section shall prevent division at anytime of counties and towns and the erection of new towns and counties by the legislature,” and in this form was adopted by the people. But the plan of eight senate districts was rejected. The clause in a form slightly changed is incorporated -in the present constitution. There was no similar clause in the constitution of 1846. There can be no doubt that this provision was inserted to overrule the doctrine of the Kinne case and to relieve the legislature in the exercise of the power to divide counties and towns from the restriction imposed by the decision in that case. The power, it declares, may be exercised “at any time” It is neither restricted as to time, nor by the relation which the dissevered territory may bear to existing assembly districts. Under this power a town may at any time be taken from one county and added to another. Towns belonging to one assembly district may be divided, and the part taken away may be added to a town in another assembly district. Such changes would not violate the prohibitions that “ no-town shall be divided in the formation of assembly districts,” and that assembly districts once formed “ shall remain unaltered until another enumeration," on the construction that the assembly districts existing when a division is made remain territorially the same, notwithstanding the division. It is true that the clause is inserted in the section relating to the apportionment of assemblymen and the creation of assembly districts, and declares that “ nothing in this section shall prevent,” etc. Upon this reading is based an argument that the rule in Lanning v. Carpenter, as applicable to the change of .senate districts, remains unaffected. But we think the insertion of this clause indicates an intention to leave the legislature free to exercise the power to change the boundaries of counties and towns and to erect new towns at any time in its discretion. It is difficult to see any reason for denying this power when its exercise would affect a senate district, and for permitting its exercise in the case of the smaller unit. There is another clause of some significance in the legislative article of the new constitution, taken from the amendments of 1874; “ but the legislature may abolish the county of Hamilton and annex the territory thereof to some other county or counties.” This power could not be exercised between two apportionments without changing the lines of the 27th senate district, since after the division that district would cease to be bounded by county lines.

We are of the opinion that, under the present constitution, the act chapter 934 of the Laws of 1895, as an act of annexation, was within the constitutional power of the legislature, although it changed, as to the twenty-second senate district, the county boundaries of the district. But such effect should be given to the act as will least disturb the general plan, and this will be accomplished by regarding the annexed territory as still a part of that district for the election of a senator. The departure from the plan that senate districts shall be bounded by county lines will be temporary. Upon a new enumeration, the counties of ■New York and Westchester, as they stand at that time, will be units of division in forming the new legislative districts. It will be then the duty of the legislature, under the mandatory provisions of the constitution, to organize the senate districts out of the then existing counties, and courts in considering the constitutionality of statutes may act upon the assumption that a duty positively enjoined will be performed. This mode of reconciliation between the constitution and the statute will not interfere with the policy, so carefully guarded in the constitution, of preventing a change of representative districts intermediate two enumerations, for partisan purposes. It also gives full effect to the requirement of the constitution, article 3, section 5, that boards of supervisors in constituting assembly districts shall so arrange them that each assembly district “ shall be wholly within a senate district formed under the same apportionment.”

There are some embarrassments in regarding the annexed territory as part of the county of Westchester for the purpose of division of the county into assembly districts. Boards of supervisors in counties entitled to more than one member of assembly are, by sections 5, article 3 of the Constitution, to meet, and “ divide such counties ” into assembly districts. The annexation act took the annexed territory out of Westchester county and made it a part of the county of New York. Its corporate relation to Westchester county was changed. The framers of the constitution may not in using the word “ counties ” have had in view the case of a change of county boundaries after an apportionment and before a division into assembly districts. But, construing the word “ counties ” in this connection as meaning the territorial division existing when the apportionment was made, the difficulty may be overcome. So also upon the construction we give to the act of annexation, the inhabitants of the annexed territory will not be represented in the board of supervisors of Westchester county when it comes to form the assembly districts. So also their interests as residents of the city and county of New York may possibly at time be antagonistic to those of the inhabitants of Westchester county, and yet the senator and members of assembly from that county will be the common representatives of such diverse interests.

We are not unmindful of the difficulties in the case. But they attend any construction which may be given to constitutional provisions, on their face somewhat hostile, but which the court is bound if possible to reconcile. We think the construction of, the act of annexation, which affirms its validity as such, but leaves the annexed territory part of the twenty-second district and of the second judicial district and department, and within the jurisdiction of the board of supervisors of Westchester county for the purpose of forming assembly districts, most nearly harmonizes the provisions of the constitution relating to senate, judicial and assembly districts, and the power possessed by the legislature to divide counties and towns.

The objection to the annexation act that it violates the constitutional provision establishing judicial districts and departments, is answered by the reasoning upon which we sustain the change in the county lines of the twenty-second senate district.

The words, “ in every respect and to the same extent,” found in the annexation act, read in connection with the context, are satisfied by construing them as referring to municipal burdens and municipal rights in which the annexed territory and its inhabitants were to share. The voters in the annexed territory will be entitled to vote for senator, member of assembly and for justices of the supreme court, the same as though the annexation act had not been passed. Elections in the annexed territory will of necessity be conducted under the control of the election officers of the city and county of New York, and the returns will be made to the proper authorities of Westchester county. This was the plan adopted under the annexation act of 1873, and for several years elections were conducted thereunder without confusion or difficulty.

Our conclusion is that the annexation act of 1895 is constitutional, but that it did not operate to take the annexed territory out of the jurisdiction of the board of supervisors of Westchester county in.forming assembly districts pursuant to section 5, article 3 of the constitution, and that it was the duty of the board at its meeting, on the second Tuesday of June, 1895, to have included the annexed territory within one of the three assembly districts allotted by the constitution to the county of Westchester. The board having failed to perform this duty, the maridamus was properly granted.

The judgment should be affirmed.

All concur .

Judgment affirmed.


author: McAdam, J.

text:
    Augusta G. Genet, Pl’ff, v. President, Managers and Company of the Delaware and Hudson Canal Company, Def't.

      (New York Superior Court, Equity Term,

      Filed June, 1895.)

    1. Courts—Jurisdiction.
    In an action to rescind a contract in relation to land in another state, a court of this state will not, by its decree, compel the removal of machinery from, nor the delivery of the possession of, such land.
    2. Same.
    Actions for the possession of real property must be brought in the forum rel sitae.

    3.. Same.
    The rule which subjects a contract made in one state concerning land in another state to the law of the place where the land is situated, is not confined in its operation to the formal .execution of the deed, but extends to and includes all questions as to its construction and interpretation.
    4 Same—Construction op laws.
    The true rule to follow in cases depending on the laws of a particular state is to adopt the construction which the courts of that state have given to them.
    5. Same.
    The oral testimony of witnesses, learned in the peculiar system of law to be proved, is competent, to show what the real estate is. as the result, not of one particular statute or decision, but of the whole course of exposition, interpretation and adjudication.
    6. Mining lease—Construction.
    A coal mining lease, in the state of Pennsylvania, which relates to all the coal, and whereby the right to mine and take the coal is exclusive of the grantor and the grantee agrees either to mine all the coal or pay for it if not mined, is, in legal effect, a grant in fee of the coal as land.
    Action to rescind a contract, recover possession of land and for an accounting and injunction.
    The contract in suit is as follows:
    “Memorandum of agreement made and concluded this 28th day of March, A. D. one thousand eight hundred and sixty-four (1864), between George 0. Genet and Augusta G. Genet, his wife, of the city, county, and state of New York, of the first part, and the president, managers, and company of, the Delaware & Hudson Canal Company, of the second part, witnesseth: That the said parties of the first part, for themselves, their heirs, executors, administrators, and assigns, as well as for and in consideration of the covenants and agreements hereinafter mentioned, to be kept and performed by and on the part of the said party of the second part, as, for, and in consideration of the sum of one dollar, to each of them in hand paid by the said party of the second part, the receipt whereof is hereby acknowledged, hath leased and doth hereby lease unto the said the president, managers, and company of the Delaware & Hudson Canal Company, their successors and assigns,, all the coal contained in, on, or under that certain piece or parcel of land situate, lying, and being in the borough and township of Providence, county of Luzerne, and state of Pennsylvania, described as follows, to wit: (Description of property.) Said coal supposed to be contained in the veins known and distinguished as the ‘Diamond,’ ‘Fourteen Foot,' and ‘Clark’ veins, but in any event to include all the coal that can be economically mined or taken out from the above-described premises, together with the right to enter upon and into said lands, and to dig and mine and remove said coal through or out of any shafts, slopes, or tunnels they may dig, erect, or construct upon the premises. And the said parties of the first part further hereby lease and grant to the said party of the second part, their successors and assigns, without charge, the right of way for all railroads, turnouts, switches, slopes, tunnels, mine roads, wagon roads, ditches, and drains they may find it necessary to construct across or upon said tract, with the right to erect drains upon the surface for the proper mining of said coal; also the use of land for digging all air shafts that they may consider necessary, with the right to dig the same ; and also the use of all land they may require "for the purpose of erecting repair shops or any other shops and buildings they may deem necessary for the prosecution of their business; together with land for piling coal or culm, and all other appurtenance they may require for mining, receiving, removing, cleaning, screening, dumping, storing, preparing, and forwarding the coal to be mined under this agreement ; together with the right to take without charge, by quarrying or otherwise, from the said land, all the stone, earth, ami other materials they may find it necessary to use in the erection of their buildings or in the construction of their railroad and other appurtenances. The said party of the second part shall not be held accountable under any circumstances for any damage that may be done to the surface of said land by the mining, preparing, and removing said coal. And the said party of the second part, their successors and assigns, doth hereby promise and agree to mine from said land in the year one thousand eight hundred and sixty-four not less than ten thousand tons of coal, in the year one thousand eight hundred and sixty-five not less than ten thousand tons, and twenty thousand in each and every year thereafter. It being understood that the said party of the second part is to pay for ten thousand tons in each and every year, whether the same shall be actually taken out in such year or not, and that in case the maximum quantity of twenty thousand is not taken out in one thousand eight hundred and sixty-six, or any subsequent year, interest at the rate of seven per centum per annum shall be paid b v the said party of the second part to the said party of the first part, their heirs or assigns, upon such sums as the deficiency shall amount to, said interest to be continued until the full quafitity agreed to be taken out as aforesaid shall be reached; provided, that the said party of the second part shall not have been relieved from liability to mine said coal in whole or in part, as is hereinafter mentioned ; and provided, further, that the said party of the second part shall have the privilege of taking out without charge at any time thereafter a,quantity of coal equal in amount to deficiency they may have paid for in any previous year or years. And it is further agreed that if the coal in ary of the veins shall not prove to be of a merchantable quality, or if it becomes impracticable to mine the same in consequence of extraordinary expenses in mining and cleaning said coal, or if the veins should prove to be of such quality and thickness that the coal cannot be mined and prepared for market without greater expense than is bestowed upon coal taken from the same veins in the mines of the party of the second part for the time then being, then the liability of the said party of the second part to mine, take, and pay for said coal shall cease. And it is further understood and agreed that in case the quantity of coal mined and taken out in any year shall fall below the quantity agreed to.be taken out in such year, in consequence of the unmerchantable quality of the coal in any of the veins, or in consequence of increased expense and difficulty in mining and cleaning the said coal, as hereinbefore recited, or in case the said land shall become so far exhausted as to render it impracticable or unprofitable to mine the stipulated quantity in any one year, then, in either ease, the said party of the second part are only to pay for the quantity of coal that can be safely and economically taken out.
    “And the said party of the second part agree to pay for the coal mined and taken out'in pursuance of this agreement at the rate of twelve and a half cents (12£) for every ton of (2,240) twenty-two hundred and forty pounds of clean, merchantable coal, exclusive of culm or mine waste that will pass through a mesh of one-half inch square. Payments to be made monthly, in cash, for coal mined during the preceding month, to the said parties of the first part, their heirs,' and assigns, at the pay office of the said party of the second part. The said party of the second part shall erect scales in their railroad track at some convenient point near the mines, which scales shall be mutually approved. That in weighing said coal an allowance shall be made sufficient to compensate for ice or snow that may be on the coal cars and for wet coal; and any number of pounds in the weight of a car of coal less than one hundred shalknot be counted, and any fractional part of a hundred pounds in weight of a car shall be counted as one hundred pounds in deducting the weight of a car. The account of such weight shall be open to the inspection of both parties. And it is further understood and agreed that, if the said party of the second part elect to do so, they may increase the quantity beyond that stipulated to be mined in any one year, and at their option may diminish the quality for any succeeding year or years by an amount corresponding with increase; provided, that the quantity mined shall not be less in the aggregate than is hereinbefore stipulated. And it is further agreed that, in the event of a fault occurring in the said mines, or in any of the veins of coal to be worked under this agreement, the said party of the second part may give notice of such fault to the said parties of the first part, their heirs or assigns, when they, the said parties of the first part, their heirs or assigns, may elect either to abandon the portion of the work or vein in which the said fault occurs, or to direct the said party of the second part to •drive through the said fault, paying to the said party of the second part all the expenses necessarily incurred in so doing over and above the sum of five hundred dollars ($500), it being understood that the said party of the second part are to pay the whole cost of driving through or removing any such fault, when such cost, does not exceed five hundred dollars ($500) : provided, however, that the said party of the second part shall not be required by said parties of the first part, their heirs or assigns to drive through or remove any such fault against the judgment or advice of the mining engineer of the said party of the second part, except on the following conditions, to wit: The said parties of the first part, their heirs or assigns, may make request in writing to have said party of the second part drive through or remove such fault in opposition to the advice of said mining engineer of the said party of the second part, when the said party of the second part, shall proceed in the work of endeavoring to remove such fault, and shall continue until the said parties of the first part shall decide to abandon said work, when, if the 1 fault ’ be not overcome, the said parties of the first part, their heirs or assigns, shall pay the said party of the second part the whole cost of prosecuting said work.
    “ It is further mutually understood and agreed that the term 1 merchantable coal ’ shall be understood and defined as follows, to wit: That all coal mined under this agreement shall be, with the same expense of mining and cleaning, of as good quality as the average of coal taken from other mines of and sent to market by the said party of the second part, and that it shall be subject to the inspection of the superintendent of the said party of the second part, or such other person as they may employ for that purpose, whose decision as to the quality of said coal shall be final and conclusive.
    “ And it is further agreed and understood that the party of the second part, their successors and assigns, may use and occupy the-rights and privileges hereby granted, and the openings, buildings, fixtures, and appurtenances made and constructed by them for the mining, preparing, and forwarding coal under this agreement, for the mining, preparing, and forwarding coal from any adjoining or contiguous lands, until all the lands that they desire to take coal from and that can be mined and taken out through said openings, shafts, and slopes shall be exhausted. That the party of the second part', their successors or assigns, shall have the right to rebuild, reconstruct, or remove any or all of the buildings, fixtures, machinery, appurtenances, and improvements during the continuance of this agreement, and until the coal in the adjoining and contiguous lauds that can be worked from their"openings, shafts, and slopes and tunnels shall have been worked out. The removal of buildings, fixtures, and appurtenances to be made within a reasonable time after the land shall have been exhausted. That the parties of the first part, their heirs and assigns, shall pay all taxes on lands hereby leased, and the party of the second part, their successors and assigns, all taxes on their buildings and improvements.”
    The answer admits the making of the contract, and denies all the material allegations of the complaint, and, as a second defense, defendants pleaded res judicata.

    As a third defense defendants pleaded that the land described in the contract is situated in Pennsylvania, and that all the covenants in the said contract were to be performed there; and that bv the common law the said instrument in writing was a valid and executed deed of conveyance from plaintiff to defendants of all the coal contained upon, within, or under the tract of land described in it; that defendants have fully complied with all the conditions of said deed. And defendants also pleaded the statute of limitations, and that plaintiff has an adequate remedy at law.

      Georqe C. Genet, for pl’ff; Matthew Hale and Frank F. Smith,. for def’ts.
   McAdam, J.

The decision by the second division of the court, of appeals (122 N. Y. 505; 34 St. Rep. 346), authoratively settles the law of this case (Cluff v. Day, 141 N. Y. 580; 60 St. Rep. 321; Williamsburgh Sav. Bank v. Town of Solon, 136 N. Y. 477; 49 St. Rep. 840; Terry v. Wait, 56 N. Y. 91), and is conclusive as establishing in the defendants: (1) The right to use the shaft and breaker to mine coal from the surrounding lands concurrently with the mining in the Genet land. 122 N. Y. 524; 34 St. Rep. 346. (2) The right to connect the workings in the Genet land with the workings in the surrounding lands. 122 N. Y. 526, 530; 34 St. Rep. 346. (3) The right to drain water to the Mar-vine shaft, and thence pump it to the river. 122 N. Y. 527, 528; 34 St. Rep. 346. (4) The right to pile the clum on the surface of plaintiff’s land. 122 N. Y. 525; 34 St. Rep. 346. (5) The right to mine from the farm. 122 N. Y. 526; 34 St. Rep. 346. (6). The right to maintain and use the shaft, breaker, and other structures as they were in 1886, and now are.

There is nothing in the judgment or opinion of the court of appeals in the subsequent action reported in 186 IT. Y. 602 ; 50 St. Rep. 53, which in any way qualifies or limits what was actually-decided by the second division. In considering what was actually decided by the court, Judge Finch says:

“ The first cause of action failed because there was no proof,, except that offered by paroi, of the assumption by defendant of any such obligation; and the second, because whatever was done was held to be within the explicit terms of the contract itself. Thus the right to use the shaft and machinery on plaintiff’s land in aid of mining operations on adjoining lands was held to be expressly given as a present right by the terms of the instrument; the right to pile clum and waste upon the surface was found in-its express permission ; and the right of drainage through the gangways opened to other shafts to the lower point of the Mar-vine shaft, to be thence pumped out to the river, was deducted from the terms and conditions of the contract.”

The plaintiff’s right to relief depends upon whether the defendants have been guilty of acts which put an end to the contract, and entitled the plaintiff to judgment declaring the contract terminated. Most of the acts complained of are referred to in the decision cited (122 N. Y. 503; 34 St. Rep. 346), and were held to be privileges which the defendant acquired under the contract,, and had a right to exercise. The plaintiff’s right has in this manner been reduced to the allegation that the coal upon her land has been exhausted within the meaning of the contract, which has by its terms expired. As matter of fact, it clearly appears that the -coal upon the plaintiff’s land has not been exhausted, and there is no equitable ground upon which the contract can on that theory be held to be at an end. Indeed, until the coal upon the plaintiff’s land, is, in point of fact, exhausted, the contract by its terms is to continue, and this whether the defendants coal mine upon the plaintiff’s land, or entirely cease mining operations thereon. The contract expressly permits the cessation of mining on plaintiff’s land by providing that, if no coal be mined thereon', the defendants shall make to her a payment for 20,000 tons a year; and so long as they make this payment they are, under the agreement, entitled to use and enjoy the rights and privileges granted, and the openings, buildings, fixtures, and appurtenances made and-constructed for mining, preparing, and forwarding coal on plaintiff’s land, as well as for mining, preparing, and forwarding •coal from the adjoining or contiguous lands. The right to use the plaintiff’s land for .the mining of coal on adjoining and contiguous land is not limited by the agreement to any particular time. It is to continue until the coal on the contiguous land is -exhausted. It does not depend upon the amount of coal taken from the plaintiff’s land. To insert in the contract a provision that this right shall not be exercised till all the coal on plaintiff’s land is mined would be to make a new contrat for the parties and not construe the one already made. The rights assumed by the defendants were either expressly conferred by the contract or were incidental to their exercise and therefore necessarily implied. Some of the acts charged might, if wrongfully performed, furnish ground for legal action. They do not rise to the dignity of breaches which would authorize the court to declare the contract judicially rescinded. Such a determination, with a decree requiring the defendants to remove from the lands all their apparatus, etc., and to surrender the premises to the plaintiff, would, in •effect, be to enforce an action of ejectment from lands in Pennsylvania,—a jurisdiction which this court could not assume; the rule being that actions for the possession of real property must be brought in the forum rel sitae. Equity acts in personam where the parties are within the jurisdiction of the court, though the lands be in another state, but not to the extent of awarding relief more appropriately obtainable in a common law action of ejectment triable by a jury of the vicinage.

Without going further, these conclusions lead to a disttiissal of the plaintiff’s bill. But the importance of the issues presented suggests another proposition requiring notice. The defendants claim that the contract relates to coal in place, and concerns property in immovables, and that all questions touching such property and the forms of conveying it are governed by the lex situs. West! Priv. Inf. Law, § 156; Whart. Confl. Laws, § 278 ; Story, Confl. Laws, § 424. This presents the question of title under the agreement!" Blackstone, in his Commentaries (Cooley’s Bl. Comm, p. 18), says :

“ Land hath also, in its legal signification, an indefinite extent, upwards as well as downwards. 1 Gujus est solum, ejus est usque md coelum,' is the maxim of the law. Upwards, therefore, no man may erect any building, or the like, to overhang another’s land ; and downwards, whatever is in a direct line' between the surface ■ of any land and the center of the earth belongs to the owner of the surface, as is every day’s experience in the mining countries. So that the word ‘land’ includes not only the face of the earth, but everything under it or over it. And, therefore, if a man grants all his lands lie grants thereby all his mines of metal and other fossils, his woods, his waters, and bis houses, as well as his fields and meadows.”

In mining districts parties may, and frequently do, sever the ownership of the suface from that of the underlying mines. MacSwinney on Mines (page 27) says:

“ The right of property in the surface and in the underlying mines may be shown to be in different hands. Nothing is more common than to sell or demise a piece of land excepting the mines, or to sell or demise a piece of land excepting the surface. * * * In pke manner the different strata of the subsoil may be shown to be the subjects of different rights. Where the surface and the underlying mines, or the different strata of the subsoil, are differently owned, they are separate tenements, with all the incidents of separate ownership. And the mines or each stratum may be held in fee simple or fee tail or otherwise, as in ábe case of surface property.”

See, also, 2 Broom & H. Comm. 16.

Where coal is severed from the freehold it may, like timber or other product of the soil, become personal property; and no one would claim that a ton of Pennsylvania anthracite coal on a wharf or in a coal yard would be regarded, for legal purposes, as Pennsylvania land. But where, as in this instance, the contract relates to coal buried in the earth, and forming part of it, and the right to it is exclusive in the grantee, it must, for legal purposes, be regarded as real estate. The proposition that the law of the place where real property is situated determines all questions relating to its transfer is elerhentary. The correct application of it to the present case, however, gives rise to differences of opinion. The theory of the plaintiff is that the instrument is an executory contract, personal in its nature, formally executed in the city of New York by the plaintiff, a resident thereof, and by the defendants, a domestic corporation ; and that it is to be construed with reference to the law of New York alone. The defendants claim that it is an executed conveyance of land, and as such governed by the lawrs of Pennsylvania. To which law, then, must reference be had to determine the character of the instrument? The rule which subjects a contract made in one state concerning land in another state to the law of the place where the land is situated is not confined in its operation, to the formal execution of the deed, but extends to and includes all questions as to its construction and interpretation. Nicholson v. Leavitt, 4 Sandf. 252, 276; Monroe v. Douglass, 5 N. Y. 447; Abell v. Douglass, 4 Denio, 305; McGoon v. Scales, 9 Wall. 23; Brine v. Insurance Co., 96 U. S. 627, 636. Not only must resort be had to the lex situs to determine the construction and legal effect of a deed, but also to determine whether the subject-matter of the instrument is real or personal. Chapman v. Robertson, 6 Paige, 627,. 630. See, also, Holbrook v. Bowman, 62 N. H. 313; Cronson v. Lumber Co., 44-Minn. 458. The question, being one of foreign law, must be determined by tire court upon the evidence presented in the same manner as any other question of fact. Code, § 942; Monroe v. Douglass, 5 N. Y. 447; Kline v. Baker, 99 Mass. 254; Ufford v. Spaulding, 156 id. 65; Concha v. Murrieta, 40 Ch. Div. 543. In Nelson v. Bridport, 8 Beav. 527, Langdale, M, R. says:

“ The rule of English law that no knowledge of foreign law is-to be imputed to an English judge sitting in a court of only English jurisdiction is undoubtedly well founded. And as cases arise in which the rights of parties litigating in English courts cannot be determined without ascertaining to some extent what is the foreign law applicable to such cases, the foreign law and its application, like other results of knowledge and experience in matters of which no knowledge is imputed to a judge, must be proved, as facts are proved, by appropriate evidence,—i. e., by properly qualified witnesses, or by witnesses who can state from their own knowledge and experience gained by study and practice, not only what are the words in which the law is expressed, but also what is the proper interpretation of those words, and the legal meaning and effect of them as applied to the case in question.”

The true rule to follow in cases depending on the laws of a particular state is to adopt the construction which the courts of that state have given to those laws. Ang. Lira. (6th ed.) § 24; Elmendorf v. Taylor, 10 Wheat. 152, 159; Bell v. Morrison, 1 Pet. 351, 360; Leffingwell v. Warren, 2 Black, 599. The reason for the rule is that the courts of every state and country must be presumed to be the best expositors of their own law and of the terms-of contracts made with reference to them ; and as Judge Story observes:

“No court professing to be governed by principle would assume the power to declare that a foreign court misunderstood the laws-of their own country.”

Judge Gray, in Kline v. Baker, supra, says:

“When the evidence consists of the paroi testimony of experts as to the existence or prevailing construction of a statute, or to any point of unwritten law, the jury must determine .what the foreign law is, as in the case of any controverted fact depending upon like testimony (citing cases) When the evidence admitted consists entirely of a written document, statute, or judicial opinion, the question of its construction and effect is for the court alone.”

See, also, Ufford v. Spaulding, supra.

Whether the proof of the foreign laws must be made to the court rather than the jury, as intimated by Greenleaf (volume 1, § 486), and incidentally in the notes to Phillips on Evidence (volume 2, pp. 433, 434), is of no consequence, as the trial here is by the court alone. The oral testimony of witnesses learned in the peculiar system of law to be proved is competent as showing what the real rule is, as the result, not of one particular statute or decision, but of the whole course of exposition, interpretation, and adjudication. Baron de Bodes Case, 8 Q. B. 250. In Trimbey v. Vignier, 6 Car. & P. 25; Bosanquet, J., expressed the opinion that, if a foreign statute has received a thorough local construction by repeated judicial decisions, a professional witness of the foreign country may be asked what is the law on that subject. This, notwithstanding the rule that the statute or written law of foreign states should be proved by the law itself. The unwritten law may always be proved by witnesses instructed therein. Francis v. Insurance Co., 6 Cow. 429; Wood, Prac. Ev. § 209. The Code of Civil Procedure (section 942) expressly provides that "the-unwritten'or common law of another state, or of a territory, or of a foreign country, may be proved, as a fact, by oral evidence.” Books of reports and judicial decisions are considered part of the unwritten or common law. 1 Cooley’s Bl. Comm. p. 63; 2 Phil. Ev. (Cow. & H. Motes) p.-485; Code, § 942. The expert testimony, when received, cannot be arbitrarily disregarded, but, like other competent evidence, must be considered and accorded that respect and probative force its character and weight require.

The second division of the court of appeals (122 N. Y. 527; 34 St. Rep. 346) held that:

‘‘The words of the contract under consideration which operate to convey the coal are that the parties of the first part ‘doth hereby release unto the said’ party of the second part ‘all the coal contained in, etc., together with the right to enter upon said lands, and dig, mine, and remove said coal;’ and the legal effect of such .conveyance was to vest in the defendant an estate in fee in the coal as a separate piece of land."

The first division of the court of appeals, in construing the same agreement (136 N M. Y. 593; 50 St. Rep. 53), held that it did not operate as a conveyance of the coal veins or strata; that its subject-matter was mineral product, not land ; and that the contract was executory in its nature. In this instance the question came up on demurrer to the complaint, so that the law of Pennsylvania was neither pleaded nor proved, and the construction placed upon the agreement was one purely of law, not depending, as now, upon expert evidence, which introduces a new element,—i. e. one of fact. The last-mentioned judgment is in no respect an adjudication upon any question of fact, and the court that rendered it seems prompt to reject the plea of res adjudicada, even with respect to its own judgment, when, upon a second part, a different state of facts is developed, Mygatt v. Coe, 142 N. Y. 78, 85; 58 St. Rep. 408; Gray v. Green, 142 N. Y. 316, 319; 59 St. Rep. 5. Mew facts may present an old case in a form requiring the application of principles so essentially different from those applied in a previous instance as to lead to results directly opposite to those arrived at in the previous record. In 122 N. Y. 505; 34 St. Rep. 346, the case came before the second division on the facts ; and, as the facts on both sides were presented, the court was not limited by the allegations of the complaint and those alone. On this trial the defendant pleads the law of Pennsylvania as a fact, and has proved it by the testimony of judges on the bench of the highest court in that state, to wit, Chief Justice Paxsox, Judges Hall and He yd RICK,—jurists who have taken part in some of the decisions of that state determining the rights of parties under what are known as “coal leases,”—and these experts agree that the particular instrument in controversy, tested by the rules of Pennsylvania law, is a conveyance in fee of the coal in place as laud, and that immediately on its delivery title to the coal vested in the defendants. They testify that the tests which determine a particular instrument to be a conveyance in fee of the coal as a parcel of land are: (a) It must relate to all the coal, (b) The right to mine and take the coal must be exclusive of the grantor, (c) The grantee must agree-either to mine all the coal or pay for it if not mined. If the instrument in question contains these characteristics, it is, in legal effect, a grant in fee of the coal as land. For the purposes of these rules, the.word “lease” is deemed an apt word of conveyance. The contract in question contains the three elements stated by the experts, and is, acccording to their testimony, clearly a grant in fee. Whether it is to be denominated a base or terminable fee—that is, an estate which ends as the coal is removed—-is of no consequence, so far as the determination of the present contention is concerned. The law of Pennsylvania as to the construction and effect of coal leases has been worked out step by step by the courts of that state in a. long line of decisions. It is not our purpose to construe these, but to accept the interpretation placed upon them by experts best qualified to judge of their legal effect and meaning. This court would hesitate to put its opinion as to the law of Pennsylvania against the weight of evidence thus offered, and on this testimony and the reported decisions produced, it finds, as a matter of fact, that the law of Pennsylvania is, as stated by the experts produced by the defendants, that the instrument sued on is a grant, and not. a mere executory contract, as asserted by the plaintiff. The-books of cases adjudged in a foreign state are presumptive evidence only of the unwritten or common law thereof (Code § 942) ; and such presumption, like any other, may be rebutted, limited,, or explained by other competent or more reliable proof. The expert evidence has been considered with reference to the reported adjudications, and no inconsistency impairing its value has been, found. Indeed, the construction placed upon the law of Pennsylvania by the jurists who testified to such law agrees with the* opinion expressed by our own second dvision, which is some evidence at least of its reliability.

The plaintiff does not seek to reform the contract, nor to compel the defendants to a more energetic performance on their part, but to terminate their rights under it, and compel them to surrender possession of the property by enforcing the performance of acts which would accomplish that result. She is not entitled to-the equitable relief claimed, and for the reasons stated the complaint must be dismissed upon the merits, with costs.

Complaint dismissed, with costs.