City of Providence v. Hall

• Decision Date: 09 May 1928
• Docket Number: No. 6493.,6493.
• Citation: 142 A. 156
• Parties: CITY OF PROVIDENCE v. HALL et al., TOWN ASSESSORS.
• Court: Rhode Island Supreme Court

142 A. 156

CITY OF PROVIDENCE

v. HALL et al., TOWN ASSESSORS.

No. 6493.

Supreme Court of Rhode Island.

May 9, 1928.

Case Certified from Superior Court, Providence and Bristol Counties.

Action by.the City of Providence against Harry J. Hall and others, Assessors of the Town of Scituate, in which the Superior Court, under Gen. Laws 1923, § 5113, certified a question to the Supreme Court. Question answered.

Elmer S. Chace, City Sol., Ellis L Yatman, Francis D. MeManus. Asst. City Sols., all of Providence, for the City.

James Harris, Alexander L. Churchill, and Clinton G. Clough, both of Providence, for respondents.

BARROWS, J. Land in the town of Scituate, owned by the city of Providence, was returned by the latter to the tax assessors of the town as ratable real estate of the value of $1,713,450, on June 15, 1926. $1,538,200 thereof was claimed to be exempt because used solely for public purposes of the city of Providence in connection with its water supply system. The tax assessors of Scituate declined to recognize the exemption, and assessed the entire realty owned by the city within the limits of the town of Scituate for $3,652,505.

The city sought relief from the assessment both on the ground of excessive valuation of all and nontaxability of a large portion of the real estate.

With the claim of excessive valuation we are not now concerned. That question remains in the superior court.

The problem presented to us comes on certification of a question of doubt and importance, under Gen. Laws 1923, c. 348, § 5.

The question certified is:

"Is real estate and improvements thereon belonging to the city of Providence located in the town of Scituate liable to taxation by the town of Scituate under the following state of facts?"

The facts then stated recite the acquisition of said land under legislative authority, chapter 1278, Pub. Laws 1915, for use exclusively as part of a waterworks system and reservoir supplying Providence and other municipalities and their inhabitants in this state; that the city of Providence derives income from the sale of water at rates by it fixed to the towns of North Providence, Johnston, and Cranston and their inhabitants as well as to inhabitants of the city of Providence; that neither the town of Scituate nor its inhabitants receive water from said system; and that, since 1872, the city of Providence has owned real estate in Warwick, Johnston, and Cranston, used for its water supply system, under an act of the Legislature, chapter 640, Pub. Laws March 8, 1866, and that said city has paid taxes assessed by said municipalities on such waterworks properties without protest from 1872 until 1926, and thereafter under protest.

The claim made on behalf of the city is that the property in question is public property devoted to public use, and therefore not taxable because not expressly so provided by statute. The town's claim is that it is taxable because not "otherwise specially provided" in the exemption statute.

Both sides have presented carefully prepared and helpful briefs. As claimed by the city, numerous courts and eminent text-writers support the contention that property of a municipal corporation used in furnishing such utilities as water, gas, and electricity is public property devoted to a public use, and is entitled to exemption whether located within or without the geographic limits of the municipality owning the system. Pond on Pub. Util. (3d. Ed.) c. 174, p. 414; 2 Cooley on Taxation, (2d Ed.) § 643, p. 1351. It is observable, however, that in many states exemption is given because the statute specially sets forth property owned by a municipality or employed by it for a public use.

Careful examination of the cases cited shows that in Colorado the Constitution exempts property "owned by a municipality." Colo. Springs v. Freemont County, 36 Colo. 231, 84 P. 1113. New Hampshire exempts "real estate of the * * * town used for public purposes." Newport v. Unity (1896) 68 N. H. 587, 44 A. 704, 73 Am. St. Rep. 626. In Vermont the exemption is of property "granted for a public use." Stiles v. Newport (1904) 76 Vt. 154, 56 A. 662. See, also, Stiles v. Newport (1901) 76 Vt. 154, 56 A. 662. Maine exempts "the property of any municipal corporation of this state, appropriated to public uses." City of Augusta v. Water District (1906) 101 Me. 148, 63 A. 663. Connecticut exempts "buildings with their appurtenances belonging to any * * * city." North Haven v. Wallingford (1920) 95 Conn. 544. Ill A. 904. See. also, Town of West Hartford v. Board of Water Commissioners, 44 Conn. 360. Illinois in its Constitution (article 9, § 1) provides that "every person and corporation shall pay a tax in proportion to the value of his, her or its property," and the court states that this includes a municipal corporation. The exemption is "such grounds used exclusively for public purposes," and the court has strictly construed the exemption in Sanitary District v. Martin (1898) 173 Ill. 243, 50 N. E. 201, 64 Am. St. Rep. 110.

In New York the early case of Rochester v. Rush, 80 N. Y. 302, without specific exemption, follows Massachusetts and Connecticut, it added the doctrine that property produced by taxation could not be taken or diminished by taxation, citing, at page 307, as authority therefor, United States v. Railroad, 17 Wall. 322, 21 L. Ed. 597, and stating the English principle, at page 309, as laid down by Lord Ellenborough, that, if the party vested holds the property as a mere servant of the crown, the property is not ratable, even though it be situated outside the borough benefited. Rex v. Terrott, 3 East, 506; Rex v. Exminster, 12 A. & E. 12. To the same effect was People v. Brooklyn, 111 N. Y. 505, 19 N. E. 90, 2 L. R. A. 148. The Rush Case is not now followed because of a subsequent statute. See People v. Hess, 157 N. Y. 42, 51 N. E. 410. In the latter case the court held that the earlier New York statute exempted all property held for public use; and then stated, at page 44 (51 N. E. 411):

"The present statute is more comprehensive in its terms and provides that all real and personal property within this state is taxable unless exempt from taxation by law. This clearly embraces the property owned by municipal, as well as other corporations, and subjects it to taxation unless exempt by law."

The New York statute then under consideration expressly excluded from exemption property outside the municipal limits. See, also, New York v. Mitchell (1905) 183 N. Y. 245, 76 N. E. 18. New Jersey, by statute, originally exempted all property of a city, but by a later statute, in 1903 (4 Comp. St. 1910, p. 5078, § 3, subd. 2), exempted only such property "when used for public purposes." In Perth Amboy v. Barker (1906) 74 N. J. Law, 127, 65 A. 201, the court held that waterworks were public purposes, and that public purposes were not confined to governmental purposes. A later statute in New Jersey made a reservoir outside the limits of the town owning the same taxable. See Mayor v. Blum, 101 N. J. Law, 93, 127 A. 214. Maryland by statute exempts property "belonging to any incorporated city," and waterworks were held to be exempted in Anne Arundel County v. Annapolis (1915) 126 Md. 445, 95 A. 40. Tennessee exempts "all property of * * * municipal corporations."

The statute was narrowly construed in Knoxville v. Park City (1914) 130 Tenn. 626, 172 S. W. 286, L. R. A. 1915D, 1103, to exclude exemption of the waterworks of the city of Knoxville situated within the limits of Park City. In Virginia the court in Commonwealth v. Richmond, 116 Va. 69, 81 S. E. 69, holding waterworks exempt, stated that the settled policy of the state had been for many years to exempt property owned and used by municipalities for public purposes. In Ohio the statute exempted such property used exclusively for any public purpose, and the court held reservoir property exempt in Toledo v. Hosier (1896) 54 Ohio, 418, 43 N. E. 583. An interesting case, as showing that the real basis of exemption in the court's view rested in sovereignty, is State v. Kolcomb (1911) 85 Kan. 178, 116 P. 251, 50 L. R. A. 243, Ann. Cas. 1912D, 800, in which the reservoir property belonging to Kansas City, Mo., but situated in Kansas City, Kan., was held not to be entitled to exemption. In Massachusetts, where no specific exemption by statute was made of property held by a municipality and devoted to a public use, the cases are collated in Nichols on Taxation in Massachusetts, at pages 217, 218, and the early cases adopted a very liberal attitude. Worcester v. Western R. R. Corp., 4 Mete. (Mass.) 564. Inhabitants of Wayland v. County Comm'rs of Middlesex, 4 Gray (Mass.) 500. Latterly, in Massachusetts, special acts relating to particular water supply projects have provided for payments in lieu of taxes to the towns wherein the property was situated. It is to such legislation that the city here claims the town must look if it desires relief from an admitted hardship.

Immunity from taxation must be determined by construction of the Constitution or statute of the particular state where the question arises. Providence & Worcester R. R. v. Wright, 2 R. I. 459, at page 466. In some states it is held that such property as is involved in this case is presumptively immune because owned by a governmental division, and that it is taxable only if expressly so provided by statute. Whiting v. Lubec (1922) 121 Me. 121, 115 A. 896. The city here admits that ownership by a governmental division is not necessarily for a governmental use. Nowhere is property owned by the city and employed for a governmental use held to be taxable. This is because of the inherent nature of a sovereignty. Pond, supra, § 404, calls an attempt to tax such property "the useless and inconsistent formality of permitting the government to tax itself to pay itself money which could finally only be secured by other taxation." This reason has no force when applied to a tax by the town...