Blackstone Mfg. Co. v. Town of Blackstone

• Court: Supreme Judicial Court of Massachusetts
• Writing for the Court: KNOWLTON, C.J.
• Citation: Blackstone Mfg. Co. v. Town of Blackstone, 200 Mass. 82, 85 N. E. 880 (Mass. 1908)
• Decision Date: 22 October 1908
• Parties: BLACKSTONE MFG. CO. v. TOWN OF BLACKSTONE.

200 Mass. 82

85 N.E. 880

BLACKSTONE MFG. CO. v. TOWN OF BLACKSTONE.

Supreme Judicial Court of Massachusetts, Worcester.

October 22, 1908

COUNSEL

Frank Bulkeley Smith T. H. Gage, Jr., and Frank F. Dresser, for petitioner.

John R Thayer, Henry H. Thayer, and John F. Meaney, for respondent.

OPINION

KNOWLTON C.J.

The petitioner is a manufacturing corporation organized under the laws of the state of Rhode Island more than 65 years ago. Prior to August, 1904, its mills were situated in the town of Blackstone, Mass., where it owned more than 250 acres of land, which included village lots, so called, to the amount of more than 60 acres, together with a dam, canals pond, trench and fall which constituted a valuable water privilege upon the Blackstone river, that furnished power for the mills. There were dwelling houses and other buildings upon this land, about which no question arises. In 1904 a new mill was constructed in Rhode Island, a few hundred feet from the mill yard containing the old mills. A new concrete trench was extended about 20 feet into Rhode Island, at the terminus of which gates were constructed that controlled the flow of water to five water wheels by which electric power was generated and transmitted to the new mill for the operation of its machinery. The gates, the wheels, the power house and about 20 feet of the trench were in Rhode Island, and the water which produced the power was all applied to the wheels in Rhode Island. At the dam the fall was 15 feet, at the old mill yard it was 29 feet and at the new power house it was 32 feet. The assessors of the town of Blackstone taxed the property in that town, including the dam, the pond, the canals and the trench, in reference to its value as a means of furnishing power, not only at the old mills, but also at the petitioner's new power house across the state line in Rhode Island. The petitioner contends that the power is annexed to its mill in Rhode Island, and that the corporation is not taxable in Massachusetts for any value in the land or water or structures, by reason of their use or their adaptability to use as a means of furnishing power to run the mill. The principal question before us is: Where and on what principles is this property taxable.

The petitioner rests its contention largely upon the case of Boston Manufacturing Company v. Newton, 22 Pick. 22, the doctrine of which is stated in the headnote as follows: 'Water power for mill purposes, not used, being merely a capacity of land for a certain mode of improvement, cannot be taxed independently of the land.' The remainder of the headnote is in these words: 'Where a dam extended across a river, the thread of which was the dividing line between two towns, but the water power created thereby was applied exclusively to drive mills situated in one of the towns, it was held that the water power was not subject to taxation in the other town.' The opinion in the case is less than half a page in length. It barely states the proposition with which the headnote begins, and adds that the power had been annexed to the mills, which were situated wholly in the town of Waltham, and that it could not be taxed in Newton, in which were the land and water to the thread of the stream on the other side. This case has been treated as settling the law in Massachusetts that the possibility of deriving power from the water of a stream, before the water is appropriated or used for furnishing power, is not taxable property by itself alone, and that when water is appropriated and used for power, it is, as between different owners and municipalities, taxed with the property to which it is applied.

It is to be noticed in this case that the water power is dealt with only in connection with an attempt to tax it as a distinct subject, apart from the land in Newton over which the water flowed, and from the part of the dam which was in that town. The tax upon the dam, as well as that upon the land, was held to be rightly assessed. In Pingree v. County Commissioners, 102 Mass. 76, a tax upon a dam and land in Windsor, used to make a reservoir to furnish power for mills in Dalton and Pittsfield, was held rightly assessed in Windsor on their value for use in producing the power.

The reasons for the decision in the case first mentioned, although they are not stated in the opinion, are found in legislation relative to the erection of mills, which has been in force in Massachusetts from early colonial times. Rev. Laws, c. 196. Massachusetts and other New England states are generally a hilly, and in some parts a mountainous region, diversified with numerous streams of water, which often have a great fall in running a short distance, and furnish frequent opportunities for the use of water power in a variety of industries. In the early days these opportunities were far more numerous than the persons who were in such circumstances that they could profitably use them. It was for the interest of their owners and of the general public that the use of them should be encouraged by legislation. To make the head and fall available in the best way, the use of the stream beyond the limits of the riparian ownership of the projector of a mill was commonly necessary. In most cases, property rights of an individual owner would not enable him to control a valuable water power, without interference with similar rights of an upper or lower riparian owner. In view of the great amount of property of this kind that could not be used to the best advantage without legislative regulation, the mill act was passed. It did not attempt to take property by the right of eminent domain, but to control and regulate the exercise of common rights for the common good. The common right of every proprietor to use water by a dam, for the production of power at a mill, was treated by the statute as a mere potentiality until it was exercised. It was not treated as having ripened into property which could not be interfered with by another riparian owner in the exercise, on his own land, of his similar right. He who first appropriated a stream to such a use was treated as thus becoming the owner of the property included in his appropriation, which then first came into existence as a useful agent. The power so appropriated became property annexed to the estate with which it was used, and the owner's only liability was to make compensation to any other person whose property was damaged by the use. Water power as a distinct element of value that could be taxed apart from the land, or that must be paid for as between different riparian proprietors, was recognized only in connection with the property to which it was annexed by the structures and appropriation with which it was applied to the mill.

The nature of this legislation, in reference to the purpose of its authors and to the constitutional questions that arose under it, has been fully considered by the courts. Lowell v. Boston, 111 Mass. 454, 464, 467, 15 Am. Rep. 39; Turner v. Nye, 154 Mass. 579-582, 28 N.E. 1048, 14 L. R. A. 487; Otis Co. v. Ludlow Mfg. Co., 186 Mass. 89-95, 70 N.E. 1009, 104 Am. St. Rep. 563. While originally there was some doubt as to the grounds on which it could be sustained under the Constitution, it is now settled by this court and by a unanimous decision of the Supreme Court of the United States, that the validity of the legislation does not depend upon the right of eminent domain, but upon the right of the Legislature to regulate the use of property for the best interests of the owners and of the public, when different persons have separate rights which have a common relation to certain property, such that a use of it by one owner will interfere with a like use by another owner. Besides the cases above cited, see Head v. Amoskeag Mfg. Co., 113 U.S. 9, 5 S.Ct. 441, 28 L.Ed. 889, and cases cited in the opinion. The same principle, with variations, is applied to legislation on other subjects. Wurts v. Hoagland, 114 U.S. 606, 5 S.Ct. 1086, 29 L.Ed. 229; Fallbrook Irrigation District v. Bradley, 164 U.S. 112-163, 17 S.Ct. 56, 41 L.Ed. 369; Hudson Water Co. v. McCarter, 209 U.S. 349, 28 S.Ct. 529, 52 L.Ed. 828; Georgia v. Tennessee Copper Co., 206 U.S. 230, 27 S.Ct. 618, 51 L.Ed. 1038.

Under our mill act, in determining rights as between different riparian proprietors or different towns in this commonwealth, the decision in Boston Manufacturing Co. v. Newton, ubi supra, followed naturally. But that act does not affect property in another state. It adjusts rights in the flow of water, through a stream in which all riparian proprietors have an ownership. It does not assume to give or take away property or rights in property beyond the boundaries of the commonwealth, within which alone our Legislature has jurisdiction. It does not bring into this commonwealth for taxation interests in real property situated in another state, and it does not transfer from this to a neighboring state valuable rights in real property situated in Massachusetts. In determining what rights of property are taxable in Massachusetts under the conditions that exist in this case, we are not to consider a statute enacted merely to regulate the rights of riparian owners to property in our own jurisdiction.

From this point of view, the question before us is, What is the value of the petitioner's property,...