Connecticut Val. St. Ry. Co. v. City of Northampton

• Decision Date: 18 October 1912
• Citation: 99 N.E. 516,213 Mass. 54
• Parties: CONNECTICUT VALLEY ST. RY. CO. v. CITY OF NORTHAMPTON.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

213 Mass. 54

99 N.E. 516

CONNECTICUT VALLEY ST. RY. CO. v. CITY OF NORTHAMPTON.

Supreme Judicial Court of Massachusetts, Hampshire.

October 18, 1912

Oct 18, 1912.

COUNSEL

Bentley W. Warren, C. R. Lamson, and Howard Stockton, Jr., all of Boston, for complainant.

John W Mason and Rufus H. Cook, City Sol., both of Northampton, for defendant.

OPINION

HAMMOND J.

This is a petition for the abatement of a tax laid by the assessors of the city of Northampton upon certain real estate owned in fee by the petitioner and situated within the territorial limits of the city. The property consists of a lot of land and such portion of a bridge connected therewith as lies within the city. The bridge crosses the Connecticut river, one end resting upon this land and the other upon land in the town of Hadley. The land is a strip 22 1/2 feet in width, extending from the bridge to the highway. Upon the bridge and land the petitioner has constructed and maintains its rails, sleepers, poles, wires and appliances necessary for the operation of its street railway, and the sole use thereof is for such operation, the rails upon the land forming the connecting link between those on the bridge and those on the highway. The question is whether this real estate is subject to local taxation.

The petitioner is a duly organized domestic street railway corporation owning and operating a street railway over a route of which this real estate is a part. St. 1899, c. 293, authorized the petitioner under its then name of the Northampton & Amherst Street Railway Company, 'to construct * * * a bridge across the Connecticut river between the city of Northampton and the town of Hadley, at such a point as will enable it to connect its tracks on the locations granted or which may be hereafter granted to it by said city with the tracks on the locations granted or which may be hereafter granted to it by said town,' and also 'to construct and operate its railway on said bridge.' And it was further authorized to 'construct and operate its railway and electrical equipment in part upon such private land in the city of Northampton and in the towns of Hadley and Amherst as it may obtain by purchase or lease, subject to the approval and under the control of the board of aldermen of said city and the selectmen of said towns, respectively'; and further, to 'acquire and hold, by purchase or lease, all real estate necessary for the proper maintenance and operation of its railway.' Under this authority the petitioner built the bridge, bought the land in fee and constructed its railway in part on each.

There can be no doubt that both bridge and land are real estate within the meaning of that term as used in our general tax laws (St. 1909, c. 490, § 3), and that in the absence of any law to the contrary they as such are subject to local taxation. The petitioner says, however, that there is a law to the contrary. It says that this property is exempt, first, because devoted to a public; and, second, because of the express language of St. 1909, c. 439, § 1.

1. It certainly is devoted to a public use. But is it for that reason alone exempt from local taxation? Generally speaking, property owned by the government, whether the ownership be in state, county, city or town, and exclusively used for public purposes, is presumed to be exempt from taxation. And this is so, even when the property is situated in another municipality within the state than the owner. Nothing but the clearly expressed will of the law-making power to the contrary will overcome this presumption. Worcester Co. v. Worcester, 116 Mass. 193; Somerville v. Waltham, 170 Mass. 160, 48 N.E. 1092, and the cases therein respectively cited. It is to be noted, however, that the petitioner is not a governmental corporation. It is simply a private corporation doing business for profit; and hence this case is to be distinguished from those just cited.

The extent to which the real estate of a private corporation which is devoted to public use is exempt from taxation, and the reasons upon which this exemption is based, have been considered by this court in several cases, among which are Salem Iron Foundry v. Danvers, 10 Mass. 514, Worcester v. Western R. R., 4 Metc. 564, Worcester v. Board of Appeal in Tax Matters, 184 Mass. 460, 69 N.E. 330, and Milford Water Co. v. Hopkinton, 192 Mass. 491, 78 N.E. 451. From these cases and the authorities therein respectively cited, it appears that in the early tax acts no mention is made of shares of corporation stock by name; that when first specially mentioned for taxation and for nearly a quarter of a century thereafter they were assessed according to their just value to the individual stockholders where domiciled; that, at least in some towns, the practice prevailed of assessing the property both real and personal of a corporation to it as the owner, thus subjecting some portion of the corporate property both real and personal to a kind of double taxation; that in Salem Iron Foundry v. Danvers, ubi supra, it was adjudged that the personal property of a corporation was not assessable to it as owner, but that the real estate was so assessable in the place where situated; that with certain exceptions which, so far as material to this case, will be hereinafter noticed, this general system of the taxation of corporate property was continued until the passage of St. 1864, c. 208; that by that statute a change was made in the matter of taxation of certain corporations, the change consisting in relieving the stockholders from taxation and imposing upon the corporation a franchise tax depending upon the market value of all its shares less certain deductions among which is the value of the corporate estate subject to local taxation; and that such ever since has been a general feature of our system of taxation.

It further appears from these cases that early it was determined that certain real estate owned by public service corporations and exclusively devoted to public use was exempt from local taxation. The leading case upon this subject in our reports is Worcester v. Western R. R., 4 Metc. 564, in which it was held that the strip of land five rods wide which the defendant was authorized to take by right of eminent domain was, together with what was constructed upon or affixed to it, exempt from taxation as long as used for the public purpose for which the corporation was chartered. It was further held that this was the limit of the exception. The rule as thus limited was approved in B. & M. R. R. v. Cambridge, 8 Cush. 237. See for other cases in which it has been applied, Milford Water Co. v. Hopkinton, 192 Mass. 491, 78 N.E. 451, and cases cited. Only such land is exempt as the corporation has taken by right of eminent domain, or, having the right so to take, has purchased. In other words this right of exemption from taxation is coextensive with the right to take by eminent domain. Because of difference in the statutes not much assistance is to be got from consideration of decisions in other states, but for cases adopting a similar rule see Milwaukee & St. Paul Ry. v. Milwaukee, 34 Wis. 271, and State v. Hancock, 33 N. J. Law, 315. See also Cooley on Taxation (3d Ed.) 367, and cases therein cited. This exemption is not founded upon any express language of the tax acts, but upon judicial construction of them as dictated by considerations of justice and expediency. The rule was declared 60 years ago, and, although the method of taxing real estate of a corporation has been changed in many respects, no change has been made in this respect as to real estate owned by railroad and railway companies (at least up to the time of St. 1909, c. 439, hereinafter considered). The Legislature has been content with this interpretation of the tax acts. It is clear that the petitioner did not acquire title to this real estate by right of eminent domain, nor could it have so acquired it. This general principle of implied exemption upon which the petitioner relies is therefore not applicable, and the case so far as it rests upon that ground fails.

2. The petitioner, however, further contends that the property is expressly exempted from local taxation by St. 1909, c. 439, § 1, which so far as material reads as follows: 'Tenth. Underground conduits, wires and pipes laid in public streets, and poles, underground conduits and pipes, together with the wires thereon or therein, laid in or erected upon private property, or in a railroad location by any corporation, except street railway companies, the value of whose poles, underground conduits and pipes, together with the wires thereon or therein, for the purpose of taxation, shall, like their rails and rights of way, be included in, and not deducted from, the value of their corporate franchises ascertained as provided by section one hundred and twenty-six of part III of chapter four hundred and sixty-three of the acts of the year nineteen hundred and six, and excepting also such poles, underground conduits, wires and pipes of a railroad corporation laid in the location of said railroad, shall be assessed to the owners thereof in the cities or towns in which they are laid or erected.' Shortly stated, the contention of the petitioner on this branch of the case is that by the fair interpretation of the statute all rights of way of street railway corporations are exempt from local taxation, and that this bridge and land included in that term.

In considering this statute it is well to look at the legislation leading to it, and also at the state of the law at the time it was passed as to the right of street railway companies to acquire rights of way and real estate.

Under the Revised Laws, the real estate and machinery of a corporation like the petitioner...