292 N.Y. 156 | NY | 1944
Lead Opinion
[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *158 This action was brought by a taxpayer against the Village of East Rochester, its Mayor and Trustees to enjoin the defendants from proceeding with the construction of a public utility service for the generation and transmission of electricity for light, heat and power to said Village and to *160 its inhabitants, from expending Village funds and from borrowing money upon Village credit for such purposes.
The intervening plaintiff Rochester Gas Electric Corporation is engaged in the production, distribution and sale of electricity in the Village of East Rochester and in other neighboring places. It is a taxpayer of the Village and has a substantial capital investment in an electric plant and system which is presently used in serving the public in said Village and in contiguous territory. The intervening plaintiff Despatch Shops, Inc. is also a taxpayer of the Village and requires, in carrying on its business of manufacturing and repairing railroad cars, equipment and supplies, more than twice as much current as the rest of said Village uses for all purposes. It is presently served by Rochester Gas Electric Corporation.
Proceeding under the authority of article 14-A of the General Municipal Law, the Trustees of the Village on September 8, 1939, enacted an ordinance which set forth: a proposed method of constructing "a plant and system for the generation, furnishing and transmission of electrical energy for municipal, domestic, residential, commercial and industrial uses"; the maximum cost, $360,000, and cost as estimated by the Board of Trustees, $350,000; a plan for financing the project with $360,000 of bonds, bearing interest not exceeding 6% per annum, to be issued on the faith and credit of the Village, to mature in annual installments of $18,000 each, and for the payment of the principal and interest of which taxes will be levied each year if funds are not available for such payment in revenues from the project. The ordinance also fixed the method of furnishing the public utility service to the community.
The Village Clerk, with the advice of the Village Attorney, then prepared an abstract of the ordinance concisely stating its purpose and effect, and the Village Board of Trustees fixed December 8th for the holding of a special election at which the proposal was to be submitted for the approval or disapproval of the electors. The ordinance and notice of its submission were then published in a local newspaper, designated by the Board of Trustees, once each week for six consecutive weeks beginning October 27, 1939. A special election was held on *161 December 8, 1939, and a majority of the qualified electors of the Village cast their votes in favor of the proposal.
Counties, cities, towns and villages were granted power to establish, own and operate public utility services by section
When this statute was enacted in 1934, section 90 of the Village Law (L. 1927, ch.
The question whether one statute absorbing or incorporating by proper reference provisions of another will be affected by amendments made to the latter, is one of legislative intent and purpose. Here the special purpose of the ordinance and the inclusion of provisions which so adequately afford opportunities for public discussion lead to the conclusion that the Legislature did not contemplate the inclusion of procedural changes subsequently made in the general provisions for the enactment of ordinances. Accordingly, the subsequent amendment of the Village Law requiring a public hearing before enactment of ordinances is not to be read as having been incorporated as one of the procedural requirements of section
The General Municipal Law, section
Before its amendment by Laws of 1943, chapter
Despatch Shops, Inc., questions the constitutionality of the ordinance on the ground that it is subject to possible taxation for a municipal plant which "is to be built to serve the exclusive *164 interests of others without any benefit whatsoever to the Despatch Shops." We find no support for this contention in fact or in law.
Despatch Shops, Inc., is the largest single taxpayer in the Village. It has consumed very large quantities of electric current in its manufacturing business, fluctuating from 1,000,000 k.w.h. per annum to 6,000,540 k.w.h. per annum. The generating plant proposed to be constructed by the Village will not be of a capacity large enough to supply the demands of the Village and of its inhabitants, including the maximum demands of Despatch Shops, Inc. The estimated cost of constructing the public utility service, including the generating plant and distribution system, which has been approved by the voters of the Village is less than $360,000. The capacity of the proposed generating plant is 1,350 k.w. It would require the construction of a generating plant of about 5,000 k.w. capacity, at a cost of approximately $900,000, to generate sufficient electric current to supply the Village of East Rochester and its inhabitants, including Despatch Shops, Inc., with their full requirements for all uses.
The Village may borrow only $372,462.22 before reaching its debt limit and will reduce this margin to $12,462.22 by the proposed bond issue. It cannot build a plant of sufficient capacity to supply all of the requirements of the Village and its inhabitants, including the industrial uses of Despatch Shops, Inc.
All of these requirements are now being supplied by the plaintiff-intervener Rochester Gas Electric Corporation, with which the proposed utility service will compete in the sale of electrical energy in the Village. From this source Despatch Shops, Inc., is procuring its electrical energy at a price considerably lower than the Village plant as projected could afford to sell such power. Thus it was that, in preparing the plans and specifications for the plant, the trustees of the Village felt warranted in concluding that Despatch Shops, Inc., under present conditions would not be a customer of the local plant.
There is no suggestion either in the ordinance or in the proposition approved by the electors, or any legal requirement anywhere, that Despatch Shops, Inc., will not be permitted to purchase power from the municipal plant. The ordinance is *165
therefore not open to constitutional attack on grounds of discrimination, unless it may be said that no municipality may build a municipal public utility unless the utility is of sufficient capacity to supply all of the needs of its inhabitants. Whatever the capacity of such a plant may be, the remedy for discrimination in its administration is to be found before the Public Service Commission under sections
There remains only the contention that taxation without direct personal benefit is a deprivation of property without due process of law.
The proposition approved by the electors and the ordinance provide that a sufficient tax shall be levied each year to pay the principal of and interest on the bonds as the same shall become due, to such extent as funds are not available for the purpose in revenues of such project. There is no suggestion that this tax will not be assessed against all the village taxpayers; indeed, it is the complaint of Despatch Shops, Inc., that such taxes, if needed, will be levied against all taxable property within the Village upon an ad valorem basis. Taxes so levied are not arbitrary or discriminatory merely because they are spread over such property on an ad valorem basis; nor where thead valorem tax is thus general does its validity depend on the receipt of some special benefit as distinguished from the general benefit to the community. (Memphis Charleston Ry. v. Pace,
Nor are there any facts disclosed by this record from which we may conclude that the Despatch Shops, Inc., will suffer any detriment whatsoever. The courts below have found that the proposed plant will operate upon a self-liquidating basis and that if losses should be incurred they may be met by an increase of rates. Whether such prophecy has the certitude of fact may perhaps be open to question, but a contrary conclusion would be too speculative to support the claim of unconstitutional taking of property through illegal taxation.
The judgment should be affirmed, with costs.
Dissenting Opinion
My dissent from the decision about to be made has as its basis the fact to which the Appellate Division opinion refers — that "There is no doubt that the project as passed on by the voters provides for a plant which will be sufficient to generate only power enough to furnish the same to those users in the village,other than Despatch Shops, Inc." (
In that connection it is to be noted that the statute (GeneralMunicipal Law, § 360, subd. 2), under which the respondent Village claims its power to undertake the project here involved, authorizes it to construct and operate the proposed public utility as an agency to furnish service "to its inhabitants," not to a portion thereof. The decision in effect construes the statutory phrase "to its inhabitants" as meaning that the service to be furnished may be "to its inhabitants" except a single taxpayer. In this instance that single taxpayer — although denied special benefits to be afforded other inhabitants — concededly may be called upon to pay a large portion of the principal and interest of the bonded debt to be incurred. Insofar as the project will afford to other inhabitants of the Village special benefits which are denied to Despatch Shops, Inc. — although that corporation may be called upon as a taxpayer to meet its share of the cost and maintenance of the plant — I believe the plan as now formulated will result in an unconstitutional taking of property through illegal taxation. (See Myles Salt Co. v. IberiaDrainage Dist.,
LEHMAN, Ch. J., LOUGHRAN, RIPPEY and DESMOND, JJ., concur with THACHER, J.; LEWIS, J., dissents in memorandum in which CONWAY, J., concurs.
*168Judgment affirmed.