of and as the leasehold interest, like personalty, the purchaser could recover possession in ejectment. This remedy by judgment against the leasehold interest, which carries the actual possession, . is not, therefore, inappropriate in fact for such an interest, whatever it may theoretically be according to the distinctions maintained in law of a mixed character of property, and denominated a 'chattel real.' It may be, as we think it has been in these acts, for all practical business purposes, deemed to be land, and subjected to the specific remedies or actions in rem, as other real estate. And when so treated and proceeded against, we shall not run into the error and confusion of selling, or supposing we sell, the fee of the land, which may not, as in this case, be taxable. But while we call and treat the leasehold as land, and proceed in rem against it to judgment, and sell it, it is nevertheless but the right of possession and enjoyment of the land under, during, and according to the lease. The leasehold estate is doubtless but a real chattel, and would pass to the executor or administrator, and such would be the character of mere fixtures for mere purposes of trade, etc. Van Ness v. Pacard (1829) 2 Pet. (U. S.) 137, 7 L. ed. 374. But still the legislature may, and in this case has, as we think, impressed it with the character of land for the purposes of assessing and collecting taxes. It should be against the leasehold interest as land that the judgment should be rendered. That, and that alone, is liable to sale, and should be sold under the judgment, and not the fee of the land, which here was not taxable. Even if the fee were taxable, and payable by a different owner, it is easy and practicable to assess the fee estate and the leasehold estate separately, obtain separate judgments, and make separate sales of the several interests. It is not so simple and easy of appraisement and valuation as the whole would be together, yet it may be done. The distinction between the two estates is made in law, and pre

served in administrations, wills, deeds, and in levies and sales on executions. We see no sort of difference in preserving and enforcing it in taxation, nor of treating the leasehold by the same remedies as the land in the enforcement of the payment of the taxes."

Similarly, in Carrington v. People (1902) 195 Ill. 484, 63 N. E. 163, it was held that a leasehold interest in canal lands belonging to the state was subject to taxation.

Likewise, it has been held that a leasehold interest in lands held for school purposes was subject to taxation. State ex rel. Sioux County v. Tucker (1893) 38 Neb. 56, 56 N. W. 718.

Under a statute authorizing the lease by the county board of supervisors, of lands held by the state in trust for school purposes for the benefit of the inhabitants of a township, and which provided that after the lease the lands should be liable to be taxed as other lands were taxed, the leasehold interest of a lessee in those lands was subject to taxation, and, in case of default in the payment of the tax assessed thereon, could be sold. Street v. Columbus (1898) 75 Miss. 822, 23 So. 773; Sexton v. Coahoma County (1905) 86 Miss. 380, 38 So. 636.

In Bentley v. Boston (1884) 41 Ohio St. 410, it was held that lands vested by the United States in the state, to be used exclusively for school purposes, were subject to taxation after a lease for ninety-nine years, renewable forever, as the property of the lessee, under a statute providing as follows: "Lands held under a lease for a term exceeding fourteen years, belonging to the state or to any religious, scientific, or benevolent society, or institution, whether incorporated or unincorporated, and school and ministerial lands, shall be considered, for all purposes of taxation, as the property of the persons so holding the same, and shall be assessed in their names."

Similarly, in Zumstein v. Consolidated Coal & Min. Co. (1896) 54 Ohio St. 264, 43 N. E. 329, it was held

that, under the statute, the fee in wharf property belonging to a municipality, when leased for more than fourteen years, was not subject to taxation; but that the interest of the lessee was taxable.

So, under a lease of municipal property for a period of ninety-nine years, renewable forever, which provided that the lessee should pay all public taxes, it has been held that a city could levy and collect taxes against the land and the buildings thereon, as under such a lease the lessee was the virtual owner of the property, aside from the covenant to pay taxes. And this was true although the municipality was not authorized to levy the tax until at a time subsequent to the original lease. J. W. Perry Co. v. Norfolk (1911) 220 U. S. 472, 55 L. ed. 548, 31 Sup. Ct. Rep. 465, wherein it was said: "It is admitted that the lessees have expressly agreed to pay taxes due Virginia or the Federal government, regardless of the character of the estate created. And, while it is true that when the lease was made the borough had no authority to tax, both parties were charged with notice that such power might, and probably would, be conferred when increase of population made it necessary. Even if the borough could have made a valid contract of exemption in 1792, there is nothing to show that it did So. On the contrary, the provision that the lessee was to 'pay public taxes' was sufficiently comprehensive to embrace municipal taxes whenever they could thereafter be lawfully assessed on the land, or the improvements which were a part of the land. Where one relies upon an exemption from taxation, both the power to exempt and the contract of exemption must be clear. Any doubt or ambiguity must be resolved in favor of the public. St. Louis v. United R. Co. (1908) 210 U. S. 273, 52 L. ed. 1057, 28 Sup. Ct. Rep. 630. Here, there is not only no language of exemption, but a positive agreement on the part of the lessees to pay public taxes on the land. In compel

ling them to do so the contract is enforced instead of impaired."

In Hawaii it is provided by statute that the interest of any tenant or lessee of any land that is exempt from taxation shall be assessed to such tenant or lessee, in respect of the value of his interest therein. Regarding lands leased from the government it is provided that, for the purposes of taxation, the value of the leases shall be the value of the fee of the real estate demised, and that the lessees shall be assessed acRe cordingly. Waiohinu Agri. & Grazing Co. (1917) 23 Haw. 621. In this case it was contended that this provision for the taxation of lands leased from the government was invalid in that it authorized the taxation of the leasehold interest at an arbitrary valuation many times in excess of its actual value. Denying this contention the court said: "The obvious difference between a leasehold of privately owned land the value of the fee of which is assessable against the owner, and one of public land the fee of which is not taxable, affords a tangible and reasonable basis for the classification and a different method of assessment. And we think that the provision that the value of leaseholds of public lands should be taken as that of the fee of the land demised, even though it may greatly exceed the actual value of the leasehold interest, is not, under the circumstances, open to objection. The legislative power of the territory, if not restricted, would include the right to prescribe the terms and conditions under which public lands may be leased. Here, as we have seen, the pre-existing laws relating to public lands, including, presumably, the provision relating to the taxation of general leases, were expressly continued in force by the Organic Act. We are impelled to presume that the lessee took the lease and covenanted to pay the taxes voluntarily, and with knowledge that the statute expressly required that the value of the lease would be assessed for taxes as of the value of the land."

In Scragg v. London (1870) 28

U. C. Q. B. 457, it was held that land owned by a municipality, but leased to a private individual, was liable to taxation by the municipality against the lessee.

In the case of Re Canadian P. R. Co. (1903) 5 Ont. L. Rep. 717, reversing in part (1902) 4 Ont. L. Rep. 134, it was held that lands leased by a municipality to a railway company were subject to be taxed against the railway company. The court said: "The lands leased, being the lands of a municipality, do not come within the general rule of liability to taxation against the owner to which § 26 makes reference. They are governed by the exemption clause (subsec. (7) of § 7). Therefore, while occupied for the purposes of the city, or unoccupied, they are not liable for taxes under the Assessment Act; nor can taxes be recovered from the

city in respect thereof. But upon their becoming occupied by a tenant or lessee they cease to be exempt. Then they become property liable to the taxes imposed by the city, and to be paid to the city as part of the income which it is entitled to provide by taxation of property within its limits. The reason why the law declares that in the case of landsthe property of a municipality-the owners are not liable for taxes upon them while occupied or used by such owners, but that when used or occupied by a tenant or lessee they fall back into the category of property liable to taxation, is very apparent. It would be useless for the municipality to tax itself for revenue purposes. But when the land becomes occupied by a tenant or lessee, the municipality becomes entitled to treat it as his property for revenue purposes, and to tax it in his hands. For the purposes of taxation, it is his property, and if it is not to be classed as land, real property, or real estate, under § 1 (9) of the Assessment Act, why may it not be classed as personal estate, or personal property, under § 1 (10)? That subsection is made to include 'all other property except land and real estate and real property,' as defined in

§1 (9). The definition in § 1 (9) does not include leasehold interests, and so they fall within the term 'all other property' in § 1 (10)."

So, taxes against the lessees of Indian coal or oil lands have been upheld, being held to be on the property of the lessee. McAlesterEdwards Coal Co. v. Trapp (1914) 43 Okla. 510, 141 Pac. 794; Re Indian Territory Illuminating Oil Co. (1914) 43 Okla. 307, 142 Pac. 997.

In Granite State Land Co. V. Hampton (1911) 76 N. H. 1, 79 Atl. 25, it was held that lessees of land from a town were liable to be assessed to the extent of their interests in the land, for public improvements.

So, it has been held that the leasehold interest in lands rented from the state was subject to a special assessment by a municipality, for local improvements. Rabel v. Seattle (1906) 44 Wash. 482, 87 Pac. 520, wherein it was said: "Where local improvements are legally proposed by a municipality, subsequently to the bidding of a prospective leaseholder for the property covered by his lease, and such improvements, when made, constitute a special benefit to such leasehold interest, we believe that said interest can be subjected to an assessment to pay for the special benefits thus accruing. Before delivering a lease, all of the property in a given parcel of real estate belongs to the state; hence, at such time it is nonassessable for any purpose, unless clearly and expressly made SO by the Constitution or statute. When, however, any private individual or corporation acquires a leasehold of said property for a given period, the state ceases to be the owner of such interest during said time, but the lessee thereby becomes the owner of the rights accorded by the lease, and such rights are private property and assessable under the general rule of taxation. If the value of the right to the use of this property during, and by virtue of, the existence of the lease, is specially enhanced by reason of a local improvement not contemplated and taken into consideration by the state at the time of

accepting the lessee's bid for the lease, there would seem to be no reason, in law or right, why this interest should not be assessed, as all other private property specially benefited by said improvement. But such an assessment must be limited to the leasehold interest, and not made against the interest retained by the state." In that case it was held, however, that the improvements were made, or their construction was regularly provided for, prior to the time of the letting by the state, and that the municipality could not, therefore, assess the leasehold interest for such improvements. On this point the court said: "The effect of permitting such an assessment would be virtually to sanction a tax against the property of the state. If the state's property was about to be benefited by local improvements, it would be presumed that the additional value to be given such state property by such contemplated improvements would induce intending lessees to pay a higher rental than they otherwise would. If the bidder for a lease knew that local improvements were about to be made, but that the special benefits to be derived therefrom would be assessed upon the leasehold interest obtained from the state, it would have the tendency to deter him from bidding; or, at least, to induce him to bid less than he otherwise would. The effect would be to place the burden of the tax upon the state, and doubtless, by reason of the uncertainty of the value of the improvements and the amount of special assessments, cause the state to lose more than the amount of the tax. For these reasons, in the absence of a statute expressly authorizing such a procedure, we do not think that an assessment, made prior to the time the lease was bid for, can be enforced against the interest of a lessee of state lands."

Where property owned by a city is exempt from taxation, not necessarily by force of law, but because of the exercise of the privilege of the city not to subject to taxation its own property, the leasehold interest

of a lessee of such property for a valuable consideration is not exempt from taxation by the city, although the city in its lease attempted to extend such exemption as an additional gratuity to its lessee. Purcell v. Lexington (1919) 186 Ky. 381, 216 S. W. 599, wherein it was said: "That the lots owned by the city of Lexington prior to 1839, or since, were not subjected to city taxation, was not due to any inability on the part of the city in its governmental capacity to levy taxes upon properties owned by it in a private capacity, nor because of any power supposed to have been vested in the mayor and council, of designating property that should be taxed, but was simply because, though taxable, it made no difference to other property owners, and all of them, in the city, whether the lots owned by the city were taxed or not, since, if taxed for the city, the city, out of revenues received from other properties, had to pay the same, and the burden remained in either event upon the owners of other property. But this immunity was immaterial only so long as and to the extent that the city's ownership was retained; and the city, in disposing of or leasing its property for a valuable consideration, as it had the right to do, could not, in addition, throw in as good measure, or as a gratuity, an exemption from taxation to its grantees or lessees. That cities must keep their valid contracts as well as others is fully recognized by all courts; so we find in the decisions from this court, as well as others, an effort, in considering all such contracts as this, to determine whether an attempted exemption was or was not a part of the consideration received by the city, or whether it was, in fact, a mere gratuity thrown in, as it were, for good measure. And this court, at least, has upheld such an attempted exemption from taxation as a part of an otherwise valid contract, only where it is for a reasonable term and there is a reasonably adequate consideration to the city therefor, and this is made clearly to appear from the contract

itself by a provision that, in the event the city thereafter should collect of the grantee city taxes, the city will refund a like amount. Otherwise an attempted exemption must be considered merely a gratuity, and not a part of the consideration, and therefore not binding upon the city."

In Luttrell v. Knox County (1890) 89 Tenn. 253, 14 S. W. 802, it was held that a lessee of stone piers owned by a county and exempt from taxation, on which he constructed a bridge, was liable to be taxed for the superstruction, as the exemption of the county did not extend to structures erected by a lessee on the exempt property.

So, improvements placed by a lessee on Indian land not subject to taxation, which under the terms of the lease could not be removed by the lessee, but must remain on and become the property of the lessor as a part of the consideration of the lease, have been held to be personal property and subject to taxation against the lessee until the lease expired. Central Coal & Lumber Co. v. Board of Equalization (1918) Okla. 173 Pac. 442.

But in People ex rel. International Nav. Co. v. Barker (1897) 153 N. Y. 98, 47 N. E. 46, affirming (1897) 15 App. Div. 628, 44 N. Y. Supp. 1126, it was held that where, by the terms of a lease of municipal property, it was required that a shed be erected on the premises, and provided that when erected it should become the property of the city, it could not be assessed for taxation against the lessee.

In People ex rel. Interborough Rapid Transit Co. v. State Tax Comrs. (1908) 126 App. Div. 610, 110 N. Y. Supp. 577, affirmed in (1909) 195 N. Y. 618, 89 N. E. 1109, it was held that a subway owned by a city, but leased to another for operation, was not subject to taxation as against the lessee under the general exemption statutes as well as under specific legislation exempting the interest of the operator of a city-owned subway from taxation. The court said:

"Subdivision 3 provides: 'No property of a municipal corporation shall be subject to a special franchise tax.' Section 4 of the Tax Law, in declaring what property is exempt from taxation, provides: '(3) Property of a municipal corporation of the state held for a public use, except the portion of such property not within the corporation.' If the city had been given power to operate this road, it is clear that no franchise tax could be charged against it. As the city can only operate it through another, it would seem to follow that the operator for the city is also exempt from taxation. The general scheme of the statute under which this subway was built was: The city bonded itself to pay for the construction of the road, which bonds, with interest thereon, are to be paid by the operation of the road, so that at the end of the lease or contract, for operation, the city will own the road free of cost. It was, therefore, necessary, in order to make the scheme available, to find a contractor who would agree to construct, maintain, and operate the road upon terms which the statute permitted the city to make. A statute declaring the property of a municipality free from taxation, which property it can only use through the services of a special contractor or lessee, confers no benefit upon the city if the contractor or lessee is to be taxed for using the property, as the amount of the tax would necessarily affect the rental which the city may receive. The statutory exception, therefore, is meaningless unless it exempts the property from taxation when applied to the only use, and in the only manner, in which the city could use it. A special franchise, as we have seen, is only taxable as real estate, and 9 of the Tax Law provides, among other things, 'when real property is owned by a resident of a tax district in which it is situated, it shall be assessed to him.' It can only be assessed to a tenant or an occupant when the owner does not reside within the tax district. If taxable, therefore, this subway, or the franchise