21 Haw. 679 | Haw. | 1913
OPINION OF THE COURT BY
This is an appeal from a decision of the tax appeal court for the first circuit sustaining an assessment of $250,000 upon certain property of the appellant. The property assessed consists of water rights formerly appurtenant to the ahupuaas of Waikane and Kahana and to other lands and also rights of way and sites for tunnels, ditches, dams and other works necessary for the development, transportation and use of the water referred to, all of which water rights and other property so assessed were granted and conveyed to the appellant on December 30, 1912, for the consideration of $257,500 payable $107,500 upon delivery of the conveyance and the balance in three yearly installments of $50,000 each. The assessment is contested on the ground that, as it is claimed, the property is under Act 136 of the Laws of 1907 exempt from taxation and on the further ground that on January 1, 1913, the property was of no value.
The statute relied upon provides that “Eor the term of ten years from and after January 1st, 1908, all property, both real and personal, actually and solely used in the construction, operation, maintenance of any water system, including therein ditches, tunnels, canals, flumes, reservoirs, water gates, dams and all other means of storing and distributing water, existing or established for the purpose of distributing water for sale to the general public for irrigation, agricultural and domestic purposes by any person or persons, corporation or joint stock company, who or which may establish or construct any such system after said first day of January, 1908, shall be exempt from all taxation imposed either by the Territory of Hawaii or any political subdivision thereof.” The articles of association show that the Waiahole Water Company, Limited, the present appellant,
Under these circumstances it cannot be said that the water ■ system which is being created by the appellant exists or is being established “for the purpose of distributing water for sale to the general public.” The evidence leads irresistibly to the conclusion, on the contrary, that the main purpose of the establishment of the systems is to procure water for the use of the Oahu Sugar Company and that only as an incidental matter will others be supplied.. In order to secure the desired exemption it must appear that the property is being “actually and solely
The court below found that the water rights and other property under consideration were on January 1, 1913, of the full cash value of $250,000. The evidence shows that on December 30, 1912, only two days prior to the assessment date, the appellant, with full knowledge of the estimated cost, possible difficulties, delays and other circumstances attendant upon the undertaking to transport the water from Koolau to Ewa purchased the'water rights and other property involved in this appeal for the sum of $257,500, payable in the installments above stated. This is sufficient to support the valuation appealed from and there is no evidence requiring or justifying a lower valuation. The contention that the water is of no value because the tunnels and ditches are not completed and the water is still flowing into the sea cannot be sustained. The appellant’s own estimate two days before the assessment date was quite to the contrary.
There was no illegality or error in assessing the water rights separately from the ahupuaas and other lands to which they were formerly appurtenant. By act of the parties themselves, the appellant and its grantors, the water rights were severed in ownership from the lands and can no longer be regarded, for purposes of taxation, as appurtenant to the lands. The water rights were certainly not assessed or assessable to the grantors on January 1, 1913, for on that day they were no longer the property of the grantors. Any assessment on that date to the grantors of the lands would include only the grantors’ interest in those lands and would not include interests which had been previously conveyed to others. The intent of grantors,.grantee and assessor to separate the water rights from the remaining interests in the lands’ is beyond doubt. There, was no duplication of assessments upon the same water rights.
Tbe decision appealed, from is affirmed.