76 Vt. 154 | Vt. | 1904
The defendant village is authorized to provide a supply of water for fire, domestic and other purposes, and to sell and furnish water for domestic and other purposes toi persons or corporations within or without said village. No. 201, Acts 1878; No. 283, Acts 1894; No. 196,. Acts 1898. A part of the defendant’s water system, including its reservoir and aqueduct, lies in the town of Derby.. The land for the reservoir was acquired under the right of eminent domain. The defendant uses the water for fire protection and other municipal purposes, supplies it to its inhabitants for domestic purposes at a certain compensation, and sells to- one inhabitant enough to- run a small motor for manufacturing purposes. The defendant also supplies the
The only general provisions exempting property from taxation are those contained in V. S. 362. The first, seventh and ninth subdivisions of this section contain the only provisions that exempt property solely on the basis of ownership. The owners napied in these provisions are the State, the United States, colleges, academies and other public schools, and cemetery associations. Other provisions exempt property because of the use to which it is put, and among these is the first clause of subdivision seven, which exempts property “granted, sequestered or used for public, pious or charitable uses.” The defendant’s claim, of exemption is based upon two grounds; first, that the property of a municipal corporation is exempt by implication; second, that this property is devoted to a public use, and is therefore expressly exempted.
It will be noticed that as to some of the owners mentioned in section 362 the statute does not create the exemption, but merely declares it. The United States is exempt because of Federal supremacy.. The State is exempt because of its sovereignty. Municipal corporations are not men
But the plaintiff contends that any implication of this character that might otherwise have existed is cut off by the provision of section 360, that all real and personal estate shall, except as otherwise provided, be set in the list. It is argued further, that inasmuch as owners necessarily and impliedly exempt are included in the list named, the omission of municipal corporations is equivalent to. a legislative declaration that the property of such corporations is taxable unless otherwise specially exempted. It is said that if the Legislature had intended that the property of municipal corporations should be exempt because of their relation to the State, it would have mentioned them in connection with the State.
These considerations alone will not suffice to deprive municipalities of any implied exemption to which they may otherwise be entitled. General statutory provisions like those referred to are treated as having reference only to such property as the law considers the subject of taxation. For instance, if the State had not been mentioned as exempt, the sweeping provision cited would certainly not have been held to require the taxation of its property. The most express language would be needed to. overcome the presumption that the State does not tax itself. It is certain that there is also, an implied exemption in _ favor of municipal corporations, but the extent of that exemption is open to inquiry.
It is doubtless true that the implied exemption in favor of the State is absolute and unlimited, but it by no means follows that the exemption in favor of municipal corporations is of equal scope. The municipality is an agent of the State, but it is often something more. It is frequently permitted to hold property for purposes which
It has been repeatedly said in general discussions that property owned by a municipal corporation cannot be taxed without express statutory authority; that the nature and purpose of taxation are such as preclude the idea, of its being made a burden upon public property ; and that tax laws will not be held applicable to municipal holdings unless the language positively requires it. These statements are doubtless made with reference to the general rule that a municipal corporation does not and cannot hold property except for public use. They certainly have failed to1 control when the courts have met with exceptional cases where the ownership was municipal and the use distinctly private. It will be well to refer to some of these cases, that we may guard against giving general statements of this character an undue effect in the further discussion.
In West Hartford v. Com’rs. of Hartford, 44 Conn. 360, one of the cases most relied upon by the defendant in support of its main contention, the city bought a larger tract than' was needed for its reservoirs because it could trade most advantageously upon that basis, and the part not used for the reservoirs was held taxable. In Inhabitants of Wayland v. Com’rs. of Middlesex, 4 Gray 500, another case specially relied upon by the defendant, the municipality acquired the fee of the land needed for its aqueduct, and it was said with reference to this, that “if the land was valuable for and used for purposes other and distinct from' those of the aqueduct, the property so used, to the extent it was SO' used, would be
It is doubtless in recognition of this class of cases that most writers treat the rule as requiring not only municipal ownership but appropriation to a public use. We are satisfied that under the doctrine of implied exemption as applied to municipalities, the ultimate test is not municipal ownership but public use; so that this doctrine gives the defendant no greater right than it has by our statute, and the question whether the use is public will be controlling under either branch of its claim.
We have seen that the defendant’s plant is designed and used to supply its inhabitants with water for domestic purposes; and our next inquiry is, whether this is a public use within the meaning of the laws relating to' taxation. We have no cases bearing directly upon this question, and not many that will be specially helpful in its determination.
In Middlebury College v. Cheney, 1 Vt. 336, and in Willard v. Pike, 59 Vt. 202, 9 Atl. 907, there is some discussion of the question of public use as related to colleges and academies. The first case was ejectment for land in Albany which the defendant claimed under a tax title. The plaintiff contested this title upon two grounds: first, that the
Here the defendant is a municipal corporation, and its use of property is public in a different sense. Its functions are ordinarily such as justify the condemnation of whatever property may be necessaiy for their exercise. It is undoubtedly true that the furnishing of water to> the inhabitants of a village for domestic purposes is a public use within the meaning of the law of eminent domain; and the defendant contends that this determines the character of the use as regards the right of taxation. This view is supported by Inhabitants of Wayland v. Com’rs. of Middlesex, above cited, but the weight of authority is against it; and Mr. Cooley considers it settled that the meaning of the term in the two uses is not the same. So- this test will not be accepted as determinative.
On the other hand, the plaintiff says that the property would have been taxable in the hands of a private company which had acquired the right and was distributing the water
It is true that in considering the liability of municipal corporations for their negligent acts, a distinction is made between acts done in the performance of their governmental duty as agents of the State and those voluntarily undertaken for corporate gain as well as for the public good. Welsh v. Village of Rutland, 56 Vt. 228; Weller v. Burlington, 60 Vt. 28, 12 Atl. 215; Wilkins v. Rutland, 61 Vt. 336, 17 Atl. 735; Bates v. Rutland, 62 Vt. 178, 20 Atl. 278; Buchanan v. Barre, 66 Vt. 129, 28 Atl. 878. These cases certainly determine that the use is private as distinguished from municipal, but they cannot be taken as a conclusive determination that the use is private within the meaning of the laws relating toi taxation.
In supplying water for domestic purposes, the municipality is acting both for the public 'good and for corporate gain. Serving this double purpose, the property may be subjected to' liability as private, or protected from liability as public, according to the nature of the demand. The individual suffering from negligence, and the municipality seeking revenue, approach the question upon different lines. When the municipal owner disputes the 'right of its sister municipality to1 tax the system1, it is no answer to' say that the use is so far private as to permit a recovery of compensatory damages. In Com. v. McKibben, 90 Ky. 384, 29 Am. St. 382, the reasoning of the New York court in the negligence case of Bailey v. The Mayor of New York, 3 Hill, 531, 38 Am. Dec. 669, was re
In this case, as in cases generally, the water is supplied for domestic purposes in connection with a provision for fire and other municipal purposes; and the defendant contends that, whatever the holding might be in the case of a system devoted wholly to domestic use, this additional use of a system- required for the performance of a municipal duty will not subject the property to- taxation. It is said that the main purpose of the system is to meet the needs of the municipality, and that its use for domestic purposes is only incidental to the municipal use. It is true that the work of distribution is done in connection with the performance of strictly municipal duties, and in part by way of a more complete utilization of a strictly municipal expenditure. • But it is clear that the use is not incidental in the sense in which the term, is applied to the supplying of water for manufacturing purposes from a surplus properly taken but not needed for present use. The authorization combines the two uses, and the works are designed and constructed, and the supply secured, with reference to both. There is no- contemplation of a time when the supplying of domestic needs shall cease because of the increased demand for other purposes. The use for domestic purposes is treated as incidental in State v. Conover, 42 Atl. 838, (N. J. L.), but we are not content to- rest the decision upon this ground.
So the question recurs, whether the supplying of water for domestic purposes to the inhabitants of the municipality
The acts under which water-works have been provided by municipal corporations have almost invariably^ authorized a provision for fire, sanitary and domestic purposes. This grouping of uses is evidently in recognition' of general needs
The question of public use may be tested in another way. Taxes can be levied only for public purposes. We take it that a tax levied to establish and operate this system would not be made invalid by the fact that the plant was designed to¡ meet both domestic and municipal needs. Then the supply of domestic needs is a public use within the meaning of the laws relating to- the imposition of taxes, and if so, it may properly be regarded a public use within the -rules relating to- exemptions.
The use being public in- its nature, the taking of compensation does not require that' it be otherwise treated. The manner of distribution and the difference in individual requirements are such as make the imposition of rates advisable, and the fact that the expense is thus apportioned according to the use, instead of being provided for by taxes levied equally upon all, does not make it any the less a public use. The charge is in the nature of a special assessment graduated to the benefit received.
The fact that an incidental profit may accrue to the municipality and that this may in time become available for the payment of general corporate expenses, will not subject the system to taxation as serving a private use. The use will re
But the plaintiff contends that this implied exemption of municipal property appropriated to public uses, does not apply to property located without the territorial limits of the municipality. It is said that an application of the rule that would lessen the taxable property of one municipality for the benefit of another cannot have been intended; and Newport v. Unity, 68 N. H., 587, 44 Atl. 704, is cited in support of this-view. The facts of that case were such as would make the decision applicable here, but the conclusion of the Court seems to have resulted somewhat from a consideration of various statutory provisions. But whatever effect this case may be entitled to’, it is certain that there are well considered decisions to the contrary. It has been distinctly held in several states, and we think upon sufficient grounds, that municipal property put to public use, even though located in another municipality, is not taxable, unless the Legislature so enacts. Among the cases so holding are People v. Assessors of Brooklyn, 111 N. Y. 505; Somerville v. Waltham, 170 Mass. 160.
It remains to consider whether the conclusions previously reached regarding the use of the system in the defendant village are applicable to the action of the defendant in furnishing water to the village of West Derby and its inhabitants. The municipal duty of the village of Newport as regards the maintenance of mains and hydrants is confined to its territorial limits. The municipal relation which enters into the question of domestic supply is confined to its own inhabitants. The furnishing of water to (the inhabitants of the defendant village is held to be a public use upon the ground that the
It appears, then, that the defendant is the owner of property in the town of Derby, a part of which is devoted to- private uses; an'd we have already seen that municipal property may be subjected to taxation by being put to a private use. It is not necessary to determine here what the rights of taxation may be as regards property put to both public and private uses. We cannot say upon the case before us that the reservoir and aqueduct are larger than might properly be provided for the village of Newport, having reference toi its prospective needs; and any further benefit that might properly be derived from' them would be treated as incidental. So1 these could not be listed for taxation upon any basis.
This may suggest the further question, whether the defendant’s supplying of water to' the village of West Derby for municipal and domestic purposes, although in itself a private use, should not be treated as an' incidental use of a surplus properly provided, and so be classed as a public use. The
The property is listed as real estate, and the defendant claims that it is personal property. It was held in Willard v. Pike, 59 Vt. 202, 9 Atl. 907, that the iron pipe in which water was brought from the springs to the reservoir, partly in the highway and partly in fields of various owners, was real estate. Following this case, we hold that the hydrants-were properly classed. The decision referred to was made without discussion, but was in accord with a number of well reasoned cases.
Note. This case was heard by all the Judges qualified to sit. The-above opinion was made public at the October Term, 1902, but without entry of judgment, the Court being unable to agree upon a minor point touching the validity of the list. No agreement upon that point having been reached at the October Term, 1903, a reargument of it. was ordered for the January Term, 1904. Counsel thereupon waived a reargument, and agreed upon an entry disposing of the case.