Haight, J.
The commissioners of taxes and assessments for the city of Hew York originally assessed the property of the relator for the purpose of taxation for the year 1894 at $17,860,712. Hpon review that assessment was vacated and set aside and a reassessment ordered by this court. (146 N. Y. 304.) Thereupon the commissioners of taxes reassessed the property of the relator for that year at the sum of $15,526,800. The relator then instituted proceedings by cer
tiorari to review the assessment so made, and upon the return of the writ an order was entered appointing a referee to take evidence upon all of the issues in the case and to report to the court his findings of fact and conclusions of law with all convenient speed. The referee so appointed, after taking the evidence submitted by the parties, made his report to the court, containing findings of fact and conclusions of law, which conclusions were to the effect that the reassessment of the relator’s property was erroneous and illegal and should be wholly vacated and set aside. The case was then brought to a hearing before the Special Term upon the evidence returned in the referee’s report, and the further evidence of a mortgage made on the 26th day of November, 1890, between the Manhattan Railway Company and the Metropolitan Elevated ■Railroad Company of the first part, and the Central Trust Company of New York of the second part, and after such hearing the court made a final order, containing specific findings of facts, in which some of the facts found by the referee were approved and others were not, and concluded by confirming the assessment made by the commissioners and dismissing the writ. Thereupon an appeal was taken by the relator to the Appellate Division, which resulted in an order reversing the order of the Special Term and vacating the assessment.
The chief controversy arises out of the claim of the relator that the items for open accounts, $6,217,939.79, and land damages, $8,814,423.33, should be stricken from the amount of its assets and that there should be added to the amounts allowed by the Special Term as deductions from the relator’s assets the following items:
New York first mortgage bonds........... $8,500,000.00
New York debenture bonds................ 1,000,000.00
And Manhattan bonds .................... 1,127,112.00
Making a total of................... $10,627,112.00
The first question which it becomes necessary to consider has reference to the power of the court upon this review. As we have seen, the case was referred to a referee, not to hear,
try and determine, but to take the evidence and report to the court, with his findings and conclusions. The findings of the referee, therefore, do not become the findings of fact in the case unless they are approved by the Special Term. In this case the Special Term made findings of fact with reference to the disputed items, at variance with the' findings of the referee. The findings of the Special Term thereupon became the findings in the case that were brought up for review in the Appellate Division by the appeal that Avas taken from the order of the Special Term. The Appellate Division has reversed the order of the Special Term, but in the order entered it has not stated that the reversal was upon the facts. This is a special proceeding involving a trial of an issue of fact, the commissioners claiming that the company has taxable assets of great value, and the relator that it has none. Section 1361 of the Code of Civil Procedure, in making provision for a review of special proceedings, provides that “ The proceedings upon an appeal, taken as prescribed in this title, are governed- by the provisions of this act, and of the general rules of practice, relating to an appeal in an action, except as otherwise specially prescribed by law.” Section 1338 provides for a revieAV in the Court of Appeals of judgments entered in actions and that upon an appeal to that court “from a judgment, reversing a judgment entered upon the report of a referee, or a determination in the trial court; or from an order granting a neAV trial, upon such a reversal; it must be presumed that the judgment Avas not reversed, or the new trial granted, upon a question of fact, unless the contrary clearly appears in the record body of the judgment or order appealed from.” Under these sections Ave are required to assume that the order of the Special Term was not reversed upon the facts, but that the reversal was upon some error of law.
(Matter of
Chapman, 162 N. Y. 456;
Wetmore
v.
Wetmore,
162 N. Y. 503;
People ex rel. Manhattan Ry. Co.
v.
Barker,
152 N, Y. 417;
Matter of
Keefe, 164 N. Y. 352.)
Considering the facts, therefore, to be as found by the Special Term, Ave proceed to inquire whether there were errors of
law presented which justified a reversal. It is not contended that any improper basis was adopted in determining the amount of the taxable assets of the relator. The questions raised have reference to the items which should or should not be included in making up the value of the assets.
We will first consider the items which the relator claims should be deducted from the amount of the assets found to belong to it. The three items above referred to "may properly be considered together. The Special Term finds as follows :
“ 22nd. Prior to the second Monday of January, 1894, the Manhattan Bailway Company had paid for the franchise to operate an elevated railway in certain streets and avenues in the city of ¡New York, to the ¡New York Elevated Bailroad Company and to the Metropolitan Elevated Bailway Company, in addition to other sums agreed to be paid for the same purpose, the sum in cash of one million and fourteen thousand dollars (§1,014,000).”
27th.
“
That of the said eleven million six hundred sixty-three thousand and thirty-five dollars ($11,663,035) of the mortgage bonds of the Manhattan Bailway Company, at least one million one hundred twenty-seven thousand one hundred and twelve dollars ($1,127,112) represented the payment specified in the foregoing 22nd paragraph of one million and fourteen thousand dollars ($1,014,000), by the said Manhattan Bailway Compan
y for franchises
to operate elevated railways in certain streets and avenues in the city of ¡N"ew York to the ¡New York Elevated Bailroad Company and to the Metropolitan Elevated Bailway Company, the bonds so representing said sum having been issued for cash at ninety per cent of their par value.”
29th.
“
That the liability of the Manhattan Bailway Company, created by certain promises to pay the eight million five hundred thousand dollars ($8,500,000) of mortgage bonds of the ¡New York Elevated Bailroad Company and the one million dollars ($1,000,000) of debenture bonds of the same company contained in said leases and said merger agreement hereinbefore referred to, was directly incurred in
tho purchase
and
acquisition of the frmichises
of the said ¡New York Elevated Bail-
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Haight, J.
The commissioners of taxes and assessments for the city of Hew York originally assessed the property of the relator for the purpose of taxation for the year 1894 at $17,860,712. Hpon review that assessment was vacated and set aside and a reassessment ordered by this court. (146 N. Y. 304.) Thereupon the commissioners of taxes reassessed the property of the relator for that year at the sum of $15,526,800. The relator then instituted proceedings by cer
tiorari to review the assessment so made, and upon the return of the writ an order was entered appointing a referee to take evidence upon all of the issues in the case and to report to the court his findings of fact and conclusions of law with all convenient speed. The referee so appointed, after taking the evidence submitted by the parties, made his report to the court, containing findings of fact and conclusions of law, which conclusions were to the effect that the reassessment of the relator’s property was erroneous and illegal and should be wholly vacated and set aside. The case was then brought to a hearing before the Special Term upon the evidence returned in the referee’s report, and the further evidence of a mortgage made on the 26th day of November, 1890, between the Manhattan Railway Company and the Metropolitan Elevated ■Railroad Company of the first part, and the Central Trust Company of New York of the second part, and after such hearing the court made a final order, containing specific findings of facts, in which some of the facts found by the referee were approved and others were not, and concluded by confirming the assessment made by the commissioners and dismissing the writ. Thereupon an appeal was taken by the relator to the Appellate Division, which resulted in an order reversing the order of the Special Term and vacating the assessment.
The chief controversy arises out of the claim of the relator that the items for open accounts, $6,217,939.79, and land damages, $8,814,423.33, should be stricken from the amount of its assets and that there should be added to the amounts allowed by the Special Term as deductions from the relator’s assets the following items:
New York first mortgage bonds........... $8,500,000.00
New York debenture bonds................ 1,000,000.00
And Manhattan bonds .................... 1,127,112.00
Making a total of................... $10,627,112.00
The first question which it becomes necessary to consider has reference to the power of the court upon this review. As we have seen, the case was referred to a referee, not to hear,
try and determine, but to take the evidence and report to the court, with his findings and conclusions. The findings of the referee, therefore, do not become the findings of fact in the case unless they are approved by the Special Term. In this case the Special Term made findings of fact with reference to the disputed items, at variance with the' findings of the referee. The findings of the Special Term thereupon became the findings in the case that were brought up for review in the Appellate Division by the appeal that Avas taken from the order of the Special Term. The Appellate Division has reversed the order of the Special Term, but in the order entered it has not stated that the reversal was upon the facts. This is a special proceeding involving a trial of an issue of fact, the commissioners claiming that the company has taxable assets of great value, and the relator that it has none. Section 1361 of the Code of Civil Procedure, in making provision for a review of special proceedings, provides that “ The proceedings upon an appeal, taken as prescribed in this title, are governed- by the provisions of this act, and of the general rules of practice, relating to an appeal in an action, except as otherwise specially prescribed by law.” Section 1338 provides for a revieAV in the Court of Appeals of judgments entered in actions and that upon an appeal to that court “from a judgment, reversing a judgment entered upon the report of a referee, or a determination in the trial court; or from an order granting a neAV trial, upon such a reversal; it must be presumed that the judgment Avas not reversed, or the new trial granted, upon a question of fact, unless the contrary clearly appears in the record body of the judgment or order appealed from.” Under these sections Ave are required to assume that the order of the Special Term was not reversed upon the facts, but that the reversal was upon some error of law.
(Matter of
Chapman, 162 N. Y. 456;
Wetmore
v.
Wetmore,
162 N. Y. 503;
People ex rel. Manhattan Ry. Co.
v.
Barker,
152 N, Y. 417;
Matter of
Keefe, 164 N. Y. 352.)
Considering the facts, therefore, to be as found by the Special Term, Ave proceed to inquire whether there were errors of
law presented which justified a reversal. It is not contended that any improper basis was adopted in determining the amount of the taxable assets of the relator. The questions raised have reference to the items which should or should not be included in making up the value of the assets.
We will first consider the items which the relator claims should be deducted from the amount of the assets found to belong to it. The three items above referred to "may properly be considered together. The Special Term finds as follows :
“ 22nd. Prior to the second Monday of January, 1894, the Manhattan Bailway Company had paid for the franchise to operate an elevated railway in certain streets and avenues in the city of ¡New York, to the ¡New York Elevated Bailroad Company and to the Metropolitan Elevated Bailway Company, in addition to other sums agreed to be paid for the same purpose, the sum in cash of one million and fourteen thousand dollars (§1,014,000).”
27th.
“
That of the said eleven million six hundred sixty-three thousand and thirty-five dollars ($11,663,035) of the mortgage bonds of the Manhattan Bailway Company, at least one million one hundred twenty-seven thousand one hundred and twelve dollars ($1,127,112) represented the payment specified in the foregoing 22nd paragraph of one million and fourteen thousand dollars ($1,014,000), by the said Manhattan Bailway Compan
y for franchises
to operate elevated railways in certain streets and avenues in the city of ¡N"ew York to the ¡New York Elevated Bailroad Company and to the Metropolitan Elevated Bailway Company, the bonds so representing said sum having been issued for cash at ninety per cent of their par value.”
29th.
“
That the liability of the Manhattan Bailway Company, created by certain promises to pay the eight million five hundred thousand dollars ($8,500,000) of mortgage bonds of the ¡New York Elevated Bailroad Company and the one million dollars ($1,000,000) of debenture bonds of the same company contained in said leases and said merger agreement hereinbefore referred to, was directly incurred in
tho purchase
and
acquisition of the frmichises
of the said ¡New York Elevated Bail-
road Company to maintain and operate its lines of elevated railway in certain streets and avenues in the city of New York, and its indebtedness respecting the same was contracted for such purpose.”
38th. “ That of its total indebtedness of $21,907,590.35, $9,500,000 was incurred by the relator in
the, purchase of its franchises,
as determined in the foregoing 29th paragraph, and $l,127,112/or
a like purpose,
as determined in the foregoing 27th paragraph.”
It will thus be seen that as to each of the three items of indebtedness, amounting in the aggregate, to $10,627,112, the finding is express that it was contracted by the relator in the purchase of franchises which are not taxable for town, county or municipal purposes, and, consequently, cannot be deducted from its assets under the express provision of 1 E. S. 391, sec. 9, subd. 4, as amended, Laws 1892, chap. 202, which prohibits the deduction of indebtedness incurred in the purchase of non-taxable property.
(People ex rel. Cornell Steamboat Company
v.
Dederick,
161 N. Y. 195.) It is contended that these findings are erroneous. It is true that they are at variance with the findings made by the referee, but, as we have seen, the findings of the referee as to these items have not been ratified by the Special Term, and, consequently, they constitute no part of the facts brought up for review in the Appellate Division. That court, as we have already shown, has reversed upon the law and not the facts. The facts, therefore, as found by the Special Term, are deemed to stand as the facts in the case, unless it can be held that there is no evidence in the case tending to support them. Upon that question we are required to take into consideration the history of the organization of the relator, its purpose, and • the contracts that were entered into by it, with the inferences of fact that may be drawn therefrom. Doing this, we think that it cannot be properly held that the findings are without support from the evidence. The question as to whether the indebtedness was contracted in the purchase of franchises is purely one of fact, and we find no question of law involved as to
these items upon which a reversal could properly have been founded by the Appellate Division.
The next question in controversy relates to the item of $6,217,939.79, denominated “open accounts.” The referee found the amount to be $2,023,487.57. The Special Term found that they amounted in the aggregate to the sum first named. The open accounts represent the relators expenditures upon the structure of the Metropolitan Elevated Bail-way, of the amount found by the referee, and the balance found by the Special Term was for expenditures on account of land damages paid for that company. The counsel for the relator now concedes that the amount of open accounts, as found by the Special Term, at the time stood upon the books of the company as a valid asset against the Metropolitan Bail-road Company, but as we understand its contention, it is that the Special Term erred in assessing this item at its face value, for the reason that its actual value did not exceed the sum of $166,667. Whether these open accounts were of the value of one dollar, one hundred thousand dollars, or six million dollars, was purely a question of fact for the determination of the trial court. The opinion of the Appellate Division approves of this item as found by the Special Term, and under the Constitution, which limits this court to the review of questions of law, we think we have no jurisdiction to review that determination.
The other and perhaps the most troublesome question presented for our consideration relates to the item of land damages, $8,814,423.33, of which ninety per cent, $7,932,980.99, was realized. Of this sum $4,451,993.49 was paid for land damages on the Metropolitan line, and is included in the item of open accounts. Of the balance, $3,480,987.50, $1,160,329.37 thereof was paid for rental damages of the Hew York line and $2,320,658.13 for the fee damages, so called, bn that line. It is contended on behalf of the relator that these damages do not constitute taxable assets. We are inclined to the view that this contention presents a question of law which it is the duty of this court to determine. We have presented two elements of damages: One consists of
payments made to abutting property owners on account of the relator’s interference with or use of their easements of light, air and access, while the other consists of payments made to such owners by the relator in acquiring such easements, with a perpetual right to operate its railroad in front of such abutting property. There is a difference between the two elements of damages here referred to. The operating of an elevated railroad in a street in front of abutting property without acquiring from the owners the right so to do is an interference with and a partial destruction of such owners’ easements of light, air and access. The structure is, therefore, to that extent unauthorized and illegal, and the company operating it is deemed to be a trespasser upon the right of such owners. Hence, in an action brought to recover damages for such use, the company becomes liable for all of the damages that it has caused by reason of its unlawful structure, not only for its impairment of the owners’ easements of light, air and access, but also for its interference with their privacy and their convenience. For the damages so recovered, no right or property of value is acquired by the railroad company. It is for others’ property rights destroyed and for injuries inflicted upon others that the company is compelled to make compensation in damages. Such damages, consequently, do not form a basis upon which any valid assessment can be made. It is quite different,' however, as to the damages ordinarily denominated
“
fee damages.” Such damages are awarded for rights acquired from others for all time to come, or at least during the existence of the railroad company. The rights acquired are the easements of light, air and access of the abutting property owners in the streets occupied by the elevated railroad structure, and when these easements are acquired by the company its structure becomes lawful and its right to operate' its road in front of the abutting property unquestioned.
(Messenger
v.
Manhattan R. Co.,
129 N. Y. 502.) The acquirement of these easements, it is true, destroys in a measure the value of the abutting property, but to the extent that such value is destroyed, that of the railroad com
pany is increased. We think, therefore, that the fee damages represent property that may be assessed. The case
of People ex rel. N. Y. C. & H. R. R. R. Co.
v.
Hilts
(27 Misc. Reports, 290), which has been affirmed in this court, is clearly distinguishable from the case that wé now have under consideration. In that case the railroad was upon the surface of the ground. There was no infringement upon the easements of light, air and access of the abutting owners. Their property was damaged by reason of its proximity to the railroad, and that was all. The railroad company in that case had acquired its right of way years before, when the consequential damage to the abutting property may have been very different from what it was at the time the proceedings were instituted. Under the peculiar circumstances presented by that record this court saw fit to approve of the determination made by the Special Term ; but the question we now have under consideration relates to the fee damages of an elevated structure, an entirely different question, and one which was not considered in that case.
The Special Term, as we have seen, found that the value of the relator’s assets, after making the proper deductions, was $14,440,641.58. Also that the relator had paid an annual dividend of six per cent upon its capital stock of $29,925,200, and had a surplus besides. And, finally, that the commissioners were justified in assuming that the capital stock of the relator remained unimpaired, and that the assessable value of its assets was $15,526,800, as determined by the commissioners, and that their assessment should be confirmed. In the case of
People ex rel. Equitable Gas Light Company
v.
Barker
(144 N. Y. 94), and also in this case on the former hearing (146 N. Y. 304), this co art held that such a presumption may be indulged in. Evidence, however, may be introduced showing that the capital stock of a company is' impaired by the existence of debts, which evidence, if believed, overcomes the presumption that might otherwise exist. In this case the indebtedness disclosed by the relator consisted of mortgages, bonds and judgments, about which there now appears to be no controversy
as to the facts. It would seem, therefore, that the presumption was overcome hy the evidence, and the assessment should be made in accordance with the testimony and not based upon the presumption that" the capital stock remained unimpaired.
The Appellate Division appears to have found that the structure in the streets cost $9,823,057, instead of $8,770,587, as found hy the referee. It also found that the judgments unpaid of $744,555.35 . had been obtained for land damages, of which $248,185.11 was for rental damages and the rest was for fee damages. We fully agree with the learned Appellate Division with reference to its disposition of these items. Indeed, we do not understand them to be seriously questioned. We agree fully as to the assets, and only differ as to the deductions of the items first considered by us.
Assets as found by the Appellate Division :
Beal estate and other structures............. $5,120,216.00
Hew York equipment.................. 2,213,602.59
Suburban equipment..................... 142,175.13
Gash................... 1,382,838.00
Tools and machinery...................... 381,538.09
Structure in streets .................... 9,823,057.00
Open accounts.......................... 6,217,929.79
Land damages........................... 2,320,658.13
Total............... ............ $27,602,014.73
Deductions:
Manhattan bonds issued for
dividend scrip........... $1,488,035.00
land damages........... 8,814,423.33
Manhattan bonds not specifically appropriated........ 235,864.67
Judgments................. 248,185.11
Assessed value of real estate.. 7,323,200.00
Total deductions......................... 18,109,708.11
$9,492,306.62 Bemaining assets.
The Appellate Division could have modified the order of the Special Term or it could have reversed the order and sent the proceedings back for a reassessment. It, however, should not have vacated the assessment absolutely.
The order of the Appellate Division should be reversed and the order of the Special Term modified so as to reduce the assessment of the relator’s property to the sum of $9,192,306.62, and as so modified affirmed, with costs of this appeal to the appellants.