The Federal Reporter with Key-Number Annotations, Volume 250: Cases Argued and Determined in the Circuit Courts of Appeals and District Courts of the United States, August-October, 1918. Page: 25
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SPENCER V. BABYLON R. CO. 25
receiver's certificates covering the property in amount sufficient to pay the re-
ceiver's compensation and all debts and liabilities incurred by him as such.
On the 13th of December, 1913, the property was so delivered to the officers of
the defendant, who have been operating the same since that time. On the
27th of February, 1914, the court passed an order authorizing the receiver to
sell receiver's certificates for the face value of $10,010.51, the proceeds of the
same to be used in part for the purpose of paying the taxes due and shown by
the report of the receiver, Hawkins, as aforesaid.
Hawkins failed to dispose of the receiver's certificates within the 60 days
required by the order, and on the 12th of May, 1914, he obtained an order
directing the defendant to show cause why he should not be given further au-
thority to sell them, or again to take into his custody the property of the
defendant. This hearing was adjourned from time to time until September 9,
1914. Meanwhile, and on the 24th of July, 1914, the village of Babylon pub-
lished a notice of sale of the defendant's property for the arrears of taxes, at
public auction, for the 15th day of August, 1914. The taxes for which the
sale was to be had covered the years 1910, 1911, 1912, 1913, and 1914, and
amounted to $846.03. On the 7th day of August, 1914, the defendant procured
an order from the District Court directing the authorities of the village of
Babylon to show cause why this sale should not be stayed, and this proceeding
was adjourned until September 9, 1914, upon condition that the taxes for the
years 1910 and 1911 should be paid, and they were so paid on the 27th of
August, 1914, to the amount of $305.79. When this last proceeding, together
with the receiver's proceeding, came on for a hearing, on September 9, 1914,
the matter was again adjourned until the 16th of October, 1914, when the
court granted a permanent injunction against the village of Babylon, forbidding
any sale for taxes levied for the years 1912 and 1913, but for some reason un-
disclosed no order was ever entered on this decision.
This being the posture of the case on January 13, 1915, the District Court
signed an order to show cause against the villages of Babylon and Amityville,
and the town of Babylon, and the county treasurer of Suffolk county, for a
permanent injunction restraining them from selling the property of the de-
fendant for any taxes during the years 1910, 1911, 1912, 1913, and 1914. This
application was made upon affidavits by the president of the defendant and
its auditor. The basis of the application was that the defendant had dis-
covered that the taxes for the years in question were improperly levied, ex-
cessive in amount, and not valid liens against the property of the defendant,
and that the receivers of the company never took any steps to review such
taxes or assessments or to reduce them. The matter remained undecided, and
on October 16, 1915, the county treasurer of Suffolk filed a notice of motion al-
leging that upon the final hearing he would pray for an order declaring that
the taxes set forth in certain earlier answering affithdavits of Tuthill and
Leslie be adjudged to be valid liens upon the property of the railroad company,
entitled to immediate payment, and for an order directing sale. On Novem-
ber 5, 1915, and following, testimony vas taken upon the validity and
amount of the taxes m question, and finally, on May 18, 1916, the court filed
an opinion (233 Fed. 803) fixing the fair valuation of the special franchise
taxes for each year up to the year 1915 at $23,000. These franchise taxes were
substantially the only taxes contested between the parties. This opinion was
followed on the 12th day of July, 1916, by an order of the court fixing the
value of the private property at a stated sum per mile and the total value of
the special franchise at $23,000. This order was based upon a reassessment
of the property, in disregard and correction of the assessments of the New
York state board of tax commissioners, and included the years 1910 to 1914,
There ensued a number of complicated proceedings looking to the enforce-
ment of this order, among them an application by Tuthill, county treasurer,
asking that the taxes of 1915 be likewise included upon the same terms.
Eventually the court, at the instance of the present receiver, Hume, undertook
to correct certain errors in the order of July 12, 1916, and to submit the taxes
of 1915 and 1916 to the same reassessment. To this end eventually two orders
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The Federal Reporter with Key-Number Annotations, Volume 250: Cases Argued and Determined in the Circuit Courts of Appeals and District Courts of the United States, August-October, 1918., legislative document, 1918; Saint Paul, Minnesota. (digital.library.unt.edu/ark:/67531/metadc38821/m1/40/: accessed May 29, 2017), University of North Texas Libraries, Digital Library, digital.library.unt.edu; crediting UNT Libraries Government Documents Department.