70 A. 250 | N.H. | 1908
Lead Opinion
The Enfield Village Fire District is a public corporation created by the legislature for the promotion of the public welfare. It was organized in 1873 under the general law then in force authorizing its creation (G. S., c. 97), and it thereby became a body politic and was invested with certain limited governmental *523
powers. Its essential character as a governmental agency, as contradistinguished from a private corporation, is as apparent as though the territory and the inhabitants of which it is composed had been specially designated by the legislature as a town. While its territorial boundaries are within the town of Enfield, it is, like a school district similarly situated (Union School District v. District,
In 1903, the legislature by special act (Laws 1903, c. 221) authorized and empowered the defendant to establish water-works "for the purpose of introducing into and distributing through said fire district an adequate supply of pure water in subterranean pipes, for extinguishing fires and for the use of its citizens and for other purposes." It was also authorized to acquire by purchase or by the power of eminent domain streams and ponds, and to build canals and reservoirs for its water-works. The act did not specifically define the territory within which this power might be exercised. So far as the acquisition of the property is concerned, it was not expressly limited to the territory of the district, or to that of the town of Enfield. By section 4 of the act it was provided: "The purchase of real estate and water rights already made by said fire district, the authority voted for the issue of notes or bonds for construction of the said water-works, and the vote of the town of Enfield exempting such notes and bonds from taxation are hereby ratified and confirmed, and all the property of said fire district used in the construction and operation of its water-works shall be exempt from taxation." Before the passage of this act the defendant purchased certain land and water-rights located in the town of Canaan, which it now uses for the supply of water to its water system, and the question, which is presented by an amendment of the original case (Canaan v. Enfield District, ante, 8), is whether this property is subject to taxation by the town of Canaan. It is apparent the legislature of 1903 intended to authorize the district to acquire real estate in Canaan, and in fact ratified and confirmed the acquisition of such property.
In behalf of the plaintiff, it is claimed that the exemption authorized in section 4 only applies to property of the defendant situated in the town of Enfield. It is argued that, though the language used is broad enough to include land situated in other towns owned by the defendant, the intention of the legislature found from the competent evidence bearing on the subject does not warrant so broad a construction. In support of this contention, the case of Newport v. Unity,
In that case it was held that real estate used for water-works *524 and owned by Newport, but situated in Unity, is not exempt from taxation by Unity, under section 2, chapter 55, Public Statutes, which provides that "real estate . . . is liable to be taxed, except houses of public worship, . . . schoolhouses, seminaries of learning, real estate of the United States, state, or town used for public purposes, and almshouses on county farms." The question decided in that case is not precisely the same as the one presented in this case. In that case the element of a special exemption was wanting. Immunity from the tax burden was sought under the general statute of exemptions. But if the theory of the decision is sound, it affords much support to the plaintiff's contention, that the legislature did not intend to exempt other property of the defendant than that situated in Enfield. One ground upon which that decision was based is that before 1867, when the section above quoted was first enacted, there was no statutory exemption of the real estate of towns from taxation; that at that time towns had no general authority to purchase land beyond their limits; and that "if there were, at the time of the revision of 1867, no statutes authorizing towns to purchase real estate outside their limits, it seems plain that the statute is not necessarily to be construed as exempting such property from taxation. The legislature could not have had it in mind. Hence, when they subsequently authorized towns and cities to acquire for public purposes lands in other towns, it cannot be justly presumed that they intended such property to be exempt from taxation." If it is conceded that when the legislature authorizes a town to acquire land in another town for public purposes, a general statutory exemption of public property is not intended to apply to such extra-territorial property, it may be argued with some degree of plausibility that the legislature of 1903, by general words of exemption, did not intend to exempt the defendant's property located in Canaan. If the words of the exemption had been "the real estate of the district used for public purposes," in analogy to the general language used in section 2, chapter 55, Public Statutes, which the court held in Newport v. Unity did not apply to land located without the town of Newport, the intention to exclude the Canaan property from its operation would not have been more apparent. If the comprehensive language of the general law, exempting the real estate of towns "used for public purposes" from taxation, relates only to real estate located within the territorial boundaries of the town, similar language used in a special act creating a water district might reasonably be restricted to land in the town in which the district is located, in contradistinction to land of the district located in another town. It seems to be important, therefore, to consider whether the reasoning by which the decision in Newport *525 v. Unity was reached is logically sound as an authoritative exposition of the legislative intention relative to the exemption from taxation of town property used for water-works purposes when located in another town.
The opinion in that case is based to some extent upon the assumption that previous to 1867 the property of towns used for public purposes was taxable, and that the legislature of that year created the exemption having reference solely to intra-territorial property, for the reason above suggested. If this assumption is sound, it affords weight to the plaintiff's contention that, upon a strict construction, the legislature of 1903 did not intend to extend the defendant's exemption to property which, though used for public purposes in Enfield, was located in Canaan, and that the express mention of the exemption, though unnecessary, was inserted out of abundant caution. If the property in question falls within the taxable class of property, it is taxable unless it is clearly exempted by express legislative language. And the court in Newport v. Unity, holding that the public water-works of Newport located in Unity fell within the general statutory definition of ratable estate, decided that they were taxable, the same as they would be if owned by an individual or a private corporation. If the court had started with the opposite assumption, viz., that being property devoted to a public use by a town the water-works were not taxable unless specially made so by statute, the conclusion that the legislature did not intend to exempt them, though located in an adjoining town, would have been less obvious. The evidence of that legislative intent would have been less convincing, and the decision would not be an authority for the proposition that, in the absence of an express legislative exemption, the property of towns used for public purposes is taxable. By applying that doctrine to the case at bar, and adopting the rule of strict construction which is observed when the question relates to the exemption of the property of private corporations or of individuals (Portsmouth Shoe Co. v. Portsmouth, ante, 222), it might not be difficult to hold that the legislature did not intend to exempt the defendant's extraterritorial property, and hence that it is taxable. But a re-examination of the grounds of that decision, it is believed, will show that they are fallacious.
When the legislature in 1867 excepted from taxable real estate the "real estate of the United States, state, or town used for public purposes," it did not thereby introduce an innovation, and withdraw from taxation property otherwise subject to that burden. It did not create a new class of non-taxable property. It merely recognized an ancient and uninterrupted rule, which would have been as controlling if it had not been put into legislative language. *526
"It is certainly not true that all lands in the town were ever taxed, or now are. Lands owned by the town are not taxed, and yet are not exempted by any statute; the parsonage, school-lot, etc., are of this description. All buildings are to be taxed; but was it ever heard of to tax a meeting-house, schoolhouse? Were the public buildings in Exeter, Concord, Hanover, etc., ever taxed? There are and always have been exemptions, where the statute has not expressly made any. They depend on invariable usage, growing out of the reason and nature of the thing. They are more ancient than our statutes (1770), and are not repealed except by express clauses for the purpose, or by provisions necessarily and manifestly repugnant." Smith, C. J., note to Kidder v. French, Smith (N.H.) 155, 157 (1807). In Grafton County v. Haverhill,
The same principle is clearly stated in Franklin Street Society v. Manchester,
It would seem that, both upon principle and authority, the public property of towns is not taxable unless specifically made so by clear legislative language. The presumption, which has by long and universal acquiescence become a rule of law, is against its taxability. If the court in Newport v. Unity had started with the premise that public property of a town is not ordinarily included in a general taxing statute, and cannot be taxed unless specifically mentioned, it is probable that it would not have held substantially that the water-works in question were taxable because not specifically exempted from the operation of the general statute. Treating the property as taxable unless specifically exempted, authorizes a strict construction against its exemption; while viewing it as non-taxable unless specifically designated as taxable, authorizes a *528
strict construction against its taxableness. In the one case the evidence would show that the legislature did not intend to exempt it from the operation of a general taxing statute; while in the other it would show that the legislature did not intend to include it in the class of property subject to taxation. And as no property is taxable in the absence of legislative authorization (Bill of Rights, art. 28; Const., art. 5; Sunapee v. Lempster,
But it is urged that this conclusion is not unlimited, but must be confined to real estate of towns located within their respective boundaries. It is not claimed that there is any special provision of the constitution imposing such a limitation, or that there is any statute providing in terms for the taxation of extra-territorial property owned by towns. That a town may acquire property in another town for public purposes when authorized to do so by the legislature, is not seriously controverted. In fact, the present proceeding assumes that the defendant has the title to the land in question located in Canaan and is chargeable with the tax assessed thereon. Moreover, there can be but little, if any, doubt that the legislature of 1903 ratified and confirmed the defendant's purchase of the land in Canaan. This was equivalent to an express authorization, not to acquire governmental jurisdiction over a part of Canaan, but to become the owner of the land for the purposes specified. Schneider v. Menasha,
But it is said that this cannot be deemed a correct statement of the legislative purpose, because it authorizes one 'town to withdraw real estate from the taxable property of another town, causing an increased burden of taxation to fall upon the inhabitants of the latter town, without any compensation therefor; that the constitutional provision of equality prohibits such a result; and that therefore it cannot be presumed the legislature has attempted to authorize it. If this contention were sound, it would afford a cogent evidentiary reason for holding that the exemption granted to the Enfield District, though broad enough to include its land in Canaan, was not intended to have that effect. A construction *530
that makes a statute unconstitutional in its operation is not to be adopted when it is reasonably susceptible of another and constitutional construction. Leavitt v. Lovering,
Nor does it follow from this result, that if the legislature should authorize the defendant to engage in purely commercial pursuits and had the power to do so, property acquired by it in an adjoining town and used by it would escape taxation. A discussion of the supposed analogy would not be useful and is unnecessary. It is sufficient to hold that when an agency of the state, like the defendant, maintains water-works for the benefit of the public, its property so used is not taxable, though in part located in an adjoining town, in the absence of express legislation making it taxable. See Opinion of the Justices,
Whether the legislature may authorize the taxation for state purposes of some municipal water-works, and exempt others or omit to include them in the designated classes of taxable property, is a question that is not germane to the present inquiry. The sole question presented is whether under chapter 221, Laws 1903, the tax assessed upon the property of the water district by Canaan is a legal tax; and that question is answered in the negative by holding that municipal water-works are not taxable as real estate unless expressly made so by statute, and that the express exemption of such property in the statute in question was merely a recognition of a fundamental principle relating to the taxability of public property that had been recognized and acted upon for a long period of time. So construed, the statute violates no provision of the constitution. Whether there may be other special statutes or charters relating to the taxation of public water-works, whose true construction might show that they are violative of the constitution, it is unnecessary to determine in the present case; for if it were conceded that there are such statutes, the validity of the statute now under consideration would not be thereby impaired. It is unnecessary to define the extent of the legislative power of imposing taxes upon public corporations in a case like this, where the effect of the statute is, not to impose a tax upon the property, but to leave it in the untaxable class of property.
In accordance with the provision of the agreed case, there must be judgment for the defendant.
Dissenting Opinion
Although I concur in the result reached in this case, and in most of the reasoning of both the chief justice and Mr. Justice Walker, I wish to dissent from so much of the reasoning as seems to imply that a municipal corporation has rights which the legislature is bound to respect, that the defendants' property would not have been taxable even if the enabling act had not contained a clause exempting it from taxation, and that the legislature could not have taxed the defendants' property in either Enfield or Canaan by special act.
BINGHAM, J., concurred in the opinion of Mr. Justice WALKER: PEASLEE, J., not having been present at the argument, did not sit.
Judgment for the defendants. *549
Addendum
By agreement of parties, the sole question for decision is the validity of the tax sought to be collected in this proceeding. The defendants contend, not only that the tax is not authorized by law, but that its assessment is expressly forbidden by legislative enactment. They are a fire district, — a municipal subdivision of the state, — organized under the general law and embracing a portion of the territory of the town of Enfield. In 1903, they applied to and secured from the legislature authority to construct and maintain suitable water-works for the purpose of distributing throughout the district an adequate supply of water for extinguishing fires and for the use of the citizens. Laws 1903, c. 221.
The first question raised is the interpretation of this act: whether it does or does not disclose a legislative intent to exclude the property taxed from the operation of the tax laws of the state. Prior to the passage of the act, the district had purchased the land in the town of Canaan which it has been attempted to subject to *533 the tax in question. Section 4 of the act expressly ratifies and confirms "the purchase of real estate and water rights already made by said fire district"; and as ratification is equivalent to prior authority, it would seem beyond question that the defendants' ownership of the real estate and water rights in Canaan was within the authority conferred upon them and was lawful. Section 4 also provides that "all the property of said fire district used in the construction and operation of its water-works shall be exempt from taxation."
Under the statutory definition of the word "town" (P. S., c. 2, s. 5), the defendants are exempted by general law from taxation upon their real estate used for public purposes, which would appear to include the water-works. P. S., c. 55, ss. 2, 3. But in Newport v. Unity,
But the plaintiffs contend that nevertheless the property must be taxed, because (1)the town of Canaan has either a constitutional right, or a right prior or superior to the constitution, in its corporate capacity to tax all property within its territorial limits; (2) because if this property is not taxed, the other Canaan taxpayers will in effect be compelled to contribute the amount it should be taxed toward the maintenance of the Enfield waterworks, and such enforced contribution violates provisions requiring uniformity and equality in taxation; (3) because the act is special as to the Enfield water-works, and has not general application to all municipal water-works property similarly situated. None of these considerations will support the tax in question.
First, as to the constitutional or corporate right of Canaan to tax all property within its limits. There is no such right. The case is confused by the fact that the town of Canaan appears as plaintiff. To the eye, at least, the action appears to be a controversy between the two municipalities, and to involve necessarily a right of one against the other. The right claimed is not one of corporate power, governmental or proprietary, but of the exercise of the taxing power, — "an incident of the highest sovereignty," which "resides in government as a part of itself." Phillips Academy v. Exeter,
In Hibbard v. Clark,
But while no rights of the town are infringed by the exemption from taxation of the defendants' property within the plaintiffs' territorial limits, the constitutionality of the exemption, as infringing constitutional rules of uniformity and equality and general legislation as to the individual taxpayers of the town, remains to be considered. It is argued that if this property is not taxed, the burden of the remaining taxpayers is increased; that remitting the defendants' tax of $11.87 is precisely the same as levying a tax of $11.87 upon the remaining taxpayers, and presenting the proceeds to the defendants. Morrison v. Manchester,
It is undoubtedly true that all exemptions from taxation are practically equivalent to a direct appropriation. Such is the effect of the exemption of houses of public worship, parsonages in part, and seminaries of learning. State v. Express Co.,
Though the principle relied upon is sound, the application of it as a determinative factor in this case is erroneous. So applied, it proves too much. If it establishes that the exemption is invalid in this case, then all exemptions of every kind and nature are equally invalid; for the exclusion of any property from taxation, to the extent that it is thereby relieved, must as a mathematical proposition increase the burden upon property that is taxed. The exemption of the public property of the state or any of its subdivisions must also in the same way increase the local burden upon the community where it is situated — a burden which could not by the taxing power be directly placed on such community for a non-local purpose. But the principle involved in the question of legislative power to pass the enabling act is not one of taxation, but of exemption. If the constitution requires all property within the state to be taxed, then the exemption is illegal. If it does not require the taxation of all property, the effect that may be produced by the taxation of less than all would seem to be immaterial.
The constitution is not self-executing in the matter of taxation; the details by which an equal division of the expense of protection shall be made are not prescribed by the instrument. Bill of Rights, art. 12; Const. arts. 2, 5, 6. The framers of the constitution were practical men — not theorists. To them the document was a practical instrument. While prescribing an equal division of the expense of protection, they left the scheme by which such equal division should be worked out to the legislature, being careful to provide against the taking of any part of a man's property for such expense without the assent of the legislature in article 12 of the bill of rights, and repeating that declaration with specific reference to taxation in article 28. It would seem from the reading of these provisions that no tax of any particular property or person could be justified except by virtue of an act of legislation imposing it, and that the framers of the constitution meant by an equal division of the expense of protection such a division as would be "proportional and reasonable," having due regard "for the benefit and welfare of the state" and the special injunctions of article 82 (83). The framers of the constitution must also have had in mind the existing practice in levying taxes, for they specially provided for the assessment of the charges of government "on polls and estates in the manner that has heretofore been practiced." Const., art. 6.
But we are not left entirely in the dark to speculate at this late day upon the subject, nor are we at liberty now to draw from *539
the general terms of a practical instrument the inference that the parties to the contract had in mind an impossible and impractical scheme of altruistic equality. The meaning of the instrument as to the power of legislative exemption from taxation is shown by the uninterrupted exercise of the power since its date. The fact of exemption appears from the reported decisions of this court reaching back a hundred years and by the statutes of the state going even farther back. "It is a well settled rule, that no tax shall be considered as imposed by law, in the absence of a manifest declaration of the intent of the legislature to impose it. . . . Taxation not provided, and in fact prohibited, by law is no taxation — is a purely void act." Sunapee v. Lempster,
"By the constitution (Bill of Rights, arts. 12, 28; Part II, arts. 5, 6) and the uniform practice under it for more than a hundred years, no property can be taxed except such as is declared taxable by the legislature. . . . Much property has been and still is untaxed." Carpenter, J., in Boody v. Watson,
Although real estate generally has been taxed, since the Revised Statutes of 1842. certain classes of real estate have been expressly exempted. R. S., c. 39, s. 2; G. S., c. 49, s. 2; G. L., c. 53, s. 2; P. S., c. 55, s. 2. And prior to the Revised Statutes, if not specially excluded, lands owned by the town were not taxed. "There are and always have been exemptions, where the statute has not expressly made any. They depend on invariable usage, growing out of the reason and nature of the thing. They are more ancient than our statutes (1770), and are not repealed except by express clauses for the purpose, or by provisions necessarily and manifestly repugnant." Smith, C. J., note to Kidder v. French, Smith (N.H.) 155, 157 (1807); Franklin Street Society v. Manchester,
But the meaning of the instrument is settled by the continuous and uninterrupted interpretation placed upon it for over one hundred and twenty years. The question is not now an open one. Pierce v. State,
But assume that this universal, uninterrupted interpretation of constitutional uniformity and equality in taxation is erroneous and must be reversed. As has been already said, the constitution is not self-executing in this respect. It does not authorize any officials or department to assess taxes, except by authority from the legislature. If the true construction of the constitution requires the legislature to impose taxation upon all classes of property in the state, the failure of the legislature to comply with the constitutional command would be a violation of duty imposed on it by the fundamental law. If we assume the action of the legislature to have been unconstitutional because of a failure to tax all classes of property, the unconstitutional action of the legislature in refusing or neglecting to provide for the taxation of certain classes of property would not authorize the court to invade the domain of the legislature and order the taxation of such property; for the power of taxation is included within the supreme legislative power vested by article 2 of the constitution in the senate and house of representatives. Morrison v. Manchester,
"If the language of the statute is capable of being so construed as to be consistent with the constitution, the court is bound to give it that construction. If not capable of such construction, all the court can do is to pronounce it void. This is the whole extent of the doctrine. . . . It does not authorize the addition to the statute of such words, provisions, or modifications, not therein expressed or implied, as may be necessary to render it consistent with the constitution. If it did, an unconstitutional statute would be impossible. By addition or subtraction its defects would be cured." State v. Gerry,
Taking all the legislation as to the taxation of municipal waterworks, recited earlier in this opinion, together, the legislative intent clearly expressed is that some towns owning property for water-works purposes without their territorial limits should pay taxes on the property in the town in which it is situated, and that others should not. Whether as an exercise of the taxing power such a scheme of taxation is within legislative power, is not material in this suit. So far as it may be claimed that the existing law upon the subject is unequal, if under it Newport and Littleton are required to pay taxes while Concord and Enfield are not, such inequality between different water-works towns is no concern of the plaintiff or its taxpayers. A constitutional question is not generally considered unless raised by one whose right has been invaded by the alleged breach, nor unless its decision is necessary to the determination of the case. Copp v. Henniker,
But the question, as has been said, is not one of taxation but of exemption; of the exercise, not of the taxing, but of the protective power. "An act entitled an act of taxation may be valid, although not an exercise of the power of collecting the constitutional shares of expense. The title may be an immaterial misnomer and error of form only, and the act may be an exercise of some of the other powers which provide for the common benefit, protection, and security, and which may be conveniently grouped under the name of the protective power. . . . The payment of bounties by tax exemptions, and the receipt of compulsory contributions under the protective power, though they affect the revenue, are not to be confounded with the operation of the tax power which collects the constitutional shares of the expense of protection." State v. Express Co.,
All the questions material in this case between these parties were raised in State v. Griffin,
State v. Express Co.,
There may be good reasons why Manchester, acquiring a large tract of Auburn real estate for the protection of its Massabesic water supply, should pay taxes in Auburn, and none at all why Enfield should pay anything to Canaan. The tax sued for is trifling. Subtracting all but the local tax which alone concerns Canaan, it is more trifling still. It has appeared, however, in the course of the argument, that Enfield has expended a considerable amount of money to render the supply available, and that the tax upon the present valuation is a considerable sum. It does not appear that such improvements call for any additional expenditure for highways, schools, or police; so that the practical question about which the parties have been contending with so much earnestness is not whether the Canaan local treasury shall be deprived of an insignificant sum heretofore obtained by taxation of this land, but it is whether the public using this water shall be taxed a large amount for the profit of Canaan taxpayers. These considerations may not bear directly upon the constitutional question, but they tend to show that the exemption is not an unreasonable exercise of the protective power.
The plaintiffs concede the validity of the exemptions of public property of the state, county, and town (P. S., c. 55, s. 2), and do not attack the exemption of houses of worship, schoolhouses, and seminaries of learning, doubtless sustainable under some branch of the protective power. Const., art. 82 (83); Warde v. Manchester,
If water-works property publicly owned is not taxable except by force of express clauses taxing it, the omission to tax it, or the exclusion of it from the tax list, cannot be a violation of legislative duty. That the furnishing of water to the citizens of Enfield as a protection against fire and for the promotion of the health of the citizens is a public service is conceded, so far as Enfield is concerned. But it is urged that this is not public property so far as Canaan taxpayers are concerned, if it is public as to residents of Enfield Fire District. This contention fails to distinguish between the ownership and the use. The distinction made in many cases as to the liabilities of municipal corporations growing out of the ownership of property has been already alluded to. But it is unnecessary to consider whether the ownership of these works by the Enfield Fire District is or not, as to all other persons, governmental and public. That the use is sufficiently public to authorize the exercise in Canaan of the power of eminent domain granted by the special act is not denied. Whether the use is public must depend upon its character — not upon whether it is viewed from Enfield, Canaan, or Concord. As to the citizen of Enfield Fire District, not only is the use public, but the ownership is public. His property may be lawfully taken by taxation to support the enterprise, and he has a share in its management through his vote. The Canaan taxpayer cannot be taxed for the support of the works, neither has he any voice in the management. It can perhaps be fairly said that as to him the ownership is private; that his relation to it is precisely what it would be if the ownership were vested in a private corporation.
Upon the question whether ownership in this sense private is material upon the question of implied exemption from taxation of property owned in one town and situated in another, the authorities are not in entire accord, although the weight of authority tends to support the defendants' contention. Sumner County v. Wellington,
The defendants are engaged in the public service in a certain district. They are bound to serve all who apply for their service on equal terms. Their service is no less public because it does not extend through the whole state. The service of transportation furnished by the Chester and Derry Railroad with its seven or eight miles of track is equally public in principle, if not in extent, with that supplied by the Boston Maine Railroad operating 1,038 miles. Whether, because the ownership of the property taxed in this case is confined to a particular subdivision of the state, such ownership is public or private as to territory not embraced therein, is immaterial. If the ownership were entirely private, such private character would not invalidate a general tax exemption granted by the legislature under constitutional power to provide for the common benefit, protection, and security.
But the plaintiffs say that if by general law the legislature might exempt all public water-works property from taxation, this exemption is invalid because it professed to deal only with the property of the Enfield water-works and not with water-works property generally. No clause in the constitution prohibiting legislation applicable to a particular place or subject is pointed out. Nothing therein contained expressly requires all legislative acts to be general in terms. If such was the requirement, not only would the particular provision be invalid, but the defendants' entire charter would be void, as well as all others of like character. The sole ground upon which this contention can stand, if at all, is that the exempting clause is "inconsistent with the equality of right which the constitution secures to all." There is no other ground for the contention. State v. Griffin,
No good reason has been found for rejecting the principles elucidated in State v. Griffin; because of the uniform interpretation placed upon the constitution since 1784, it cannot now be held that no power of apportionment in taxation was granted the legislature by the constitution. Cool. Tax. 145. As no constitutional right of the town of Canaan or its taxpayers has been invaded by the legislative direction to the assessors of Canaan to omit this property from the invoice of the town, it is not necessary to speculate upon what basis listing it for taxation by them, without legislative authority for such action, can be sustained. I agree that there should be judgment for the defendants.
