City Of Newport News v. Warwick County

• Court: Virginia Supreme Court
• Writing for the Court: CHINN, J
• Citation: City Of Newport News v. Warwick County, 166 S.E. 570 (1932)
• Decision Date: 17 November 1932
• Parties: CITY OF NEWPORT NEWS. v. WARWICK COUNTY.

166 S.E. 570

CITY OF NEWPORT NEWS.

v.WARWICK COUNTY.

Supreme Court of Appeals of Virginia.

Nov. 17, 1932.

^*

Error to Circuit Court, Warwick County.

Separate proceedings by the City of Newport News seeking correction and cancellation of certain tax assessments by Warwick County and by York County. To review adverse judgments, the City of Newport News brings error.

Amended and affirmed.

Argued before CAMPBELL, C. J., and HOLT, EPES, BROWNING, and CHINN, JJ.

R. M. Lett and S. R. Buxton, both of Newport News, and James H. Corbitt, of Suffolk, for plaintiff in error.

Joseph D. Parker, Commonwealth's Attorney, and Charles C. Berkeley, both of Newport News, and M. I. Armistead, of Williamsburg, for defendant in error.

CHINN, J.

Acting under the authority given by its charter, the general law, and a special act of the General Assembly approved March 25, 1926 (Acts 1926, p. 880, c. 530), in particular, the city of Newport News, by deed effective July 1, 1930, purchased from the Newport News Light & Water Company and the Old Dominion Land Company the entire waterworks plant and system then owned and operated by the water company, including the auxiliary property owned by the Old Dominion Land Company. The property so purchased embraced three reservoirs, known as the Lee Hall reservoir, Skiff's Creek reservoir, Howard's Mill reservoir, Young's mill-pond and Causey's millpond, the watersheds of the waterworks system, and all distribution mains, pipes, and rights of way therefor throughout the municipality and counties where they were then located, and the power plant or plants, filtration plant or plants, service meters, hydrants, fire plugs, and all apparatus and equipment appurtenant to the system, owned by the companies or either of them.

Section 1 of the special act authorizes the city to improve or extend the system by the purchase of additional lands, or the construction of additional reservoirs, power plants, filtration systems, water mains, and such other improvements as may be necessary for the purpose of supplying pure potable water in adequate amounts to the consumers thereof.

Section 2 provides that, upon the purchase of the waterworks plant by the city of Newport News, "the said city shall continue to serve all corporations or persons now being supplied with water [in the territories aforesaid] by said water works system in York county, James City county, Warwick county, Elizabeth City county, the city of Hampton, the town of Phoebus and the village of Kecoughton." It also authorizes the city council of Newport News to extend the water mains of the system so as to supply additional consumers of water in the above-named and other territories.

Sections 3 and 4 authorize the city to purchase, lease, or acquire by the exercise of the power of eminent domain, any additional lands that may be necessary for the operation of said waterworks plant not to exceed 15,-000 acres at any one time; and in its discretion to sell, lease, or otherwise dispose of any of its lands or other properties under certain conditions and limitations therein set forth, the proceeds of any such lease, sale, or other conveyance thereof to be "applied solely to the extension, betterments or renewals of said plant, water sheds, or system or to the retirement of the principal of any indebtedness incurred or assumed by the city of Newport News under the provisions of this act in the purchase of said water works plant and system." Section 4.

Section 5 empowers the city of Newport News to "charge and enforce the payment of reasonable rates for the supply of water to all consumers in the territories aforesaid, the proceeds whereof shall be applied solely to the operation, maintenance and necessary extension of the waterworks plant and system and to the payment of the bonds issued hereunder, and said city, in the operation of its said waterworks plant and system, shall succeed to and enjoy all the powers and rights and privileges appertaining thereto, now possessed by the Newport News Light and Water Company and the Old Dominion land company within the territories aforesaid, and all rights, privileges and immunities allowed or granted by general law to cities purchasing or owning water supply plants or systems."

Sections 7 and 8 authorize the city to issue bonds to provide funds for the purchase of said plant and system under the terms and conditions therein provided, which shall be the general obligations of the city of Newport News, for which the full faith and credit of the city shall be irrevocably pledged, and in case the revenues from the plant are insufficient for the payment of the principal and the interest as the bonds become due and payable, then the city council is required to levy annual taxes upon the taxable property of the city for the payment thereof. There are other provisions in relation to the issuance and payment of said bonds and existing liens, and by section 13 the city council is given the discretion to provide by ordinance for the establishment of a commission, which "shall be vested with such powers as to the management of said waterworks system, including the fixing rate therefor as said conn-cil may deem proper."

Section 14 provides: "This act shall be construed as an additional grant of power to the city of Newport News, supplementary to the general law of the State relating to the rights and privileges of cities purchasing or owning water supply plants or systems."

Since its purchase the city, through its waterworks commission, has operated the waterworks plant as a unified system, in supplying water to itself for all municipal purposes, and to the consumers residing in outside territories previously served by the water company, in conformity with the provisions of the general law and the special act referred to.

It appears that Lee Hall reservoir (at which the principal buildings and machinery usedin the operation of the waterworks system are located) and Skiff's Creek reservoir are located in Warwick county. The Howard's Mill reservoir, its watershed, and a considerable area of Lee Hall reservoir watershed are located in York county. The Skiff's Creek and Howard's Mill reservoirs are connected with Lee Hall reservoir by pipe lines, through which their waters are forced by pumps located at each reservoir into Lee Hall reservoir, from which the principal distribution mains of the system extend.

On June 21, 1930, the city of Newport News filed its application in the circuit court of Warwick county, asking for the correction and cancellation of certain assessments for local taxation for the year 1929, upon its waterworks properties situated in Warwick county, upon the ground that the properties were assessed beyond their fair market value, and that all of its properties are exempt from taxation under section 1S3 of the state Constitution, as revised and amended in 192S (see Acts 1928, c. 46). On July 11, 1930, a similar application was filed in the circuit court of York county, asking for relief from the assessments against the properties of the city located in that county. By consent of all parties, the applications were heard jointly by Hon. Robert F. Hutcheson, with the agreement of counsel that the evidence in either case is to be considered in each case so far as applicable.

There were numerous demurrers and pleas filed in both cases, which were overruled by the court, and to which it is unnecessary for us to refer.

After hearing the cases on the merits, the trial judge refused the relief prayed for and dismissed said applications by final orders entered in the circuit court of Warwick county on April 11, 1931, and in the circuit court of York county on April 15, 1931, respectively. Upon the petition of the city of Newport News, writs of error were allowed to each of said judgments, which brings the proceedings of both cases before this court for review.

Broadly speaking, the questions presented by the petition are: (1) The construction to be placed upon section 183 of the Constitution, as amended in 192S, with reference to the exemption from taxation of municipally owned property; and (2) the application of that construction to the facts of the cases embraced in the record.

To clarify the subject it should be said that the liability of the city of Newport News to taxation upon its waterworks system for the year 1927 was determined in the cases of Warwick County v. City of Newport News, 153 Va. 789, 151 S. B. 417, and York County v. City of Newport News, 153 Va. 824, 151 S. E. 428, and the taxes for that year and for. 1928 The decisions in those cases were based upon the provisions of section 183 of the Constitution prior to the amendment of that section in 1928. In the instant case relief is sought from the assessment of the same property by the counties for the year 1929, it being now contended by the city that under section 183, as amended, all of the properties comprising its waterworks system, both real and personal, are exempt from taxation.

The amendments relied on by the city in its claim for absolute exemption can be best shown by a comparison of the provisions of that section, so far as they are pertinent, prior and subsequent to the amendments.

-------------------------------------------------------------------------------
                |Constitution of 1902.              |Constitution as Amended in 1928.         |
                |-----------------------------------|-----------------------------------------|
                |"Sec. 183. Property exempt from    |                                         |
                |taxation. Except as otherwise      |"S: 183. Property exempt from            |
                |provided in this Constitution, the |taxation.-- Unless otherwise provided in|
                |following property and no other,   |this Constitution, the following property|
                |shall be exempt from taxation,     |and no other shall be exempt from        |
                |state and local; but the General   |taxation, State and local, including     |
                |Assembly may hereafter tax any of  |inheritance

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