Inhabitants of Boothbay v. Inhabitants of Boothbay Harbor

• Decision Date: 16 May 1952
• Citation: 88 A.2d 820,148 Me. 31
• Parties: INHABITANTS OF BOOTHBAY v. INHABITANTS OF BOOTHBAY HARBOR.
• Court: Maine Supreme Court

Page 820

88 A.2d 820

148 Me. 31

INHABITANTS OF BOOTHBAY v. INHABITANTS OF BOOTHBAY HARBOR.

Supreme Judicial Court of Maine.

May 16, 1952.

Saul H. Sheriff, Portland, for plaintiff.

David E. Moulton (Deceased), Alexander A. LaFleur, Portland, Locke, Campbell, Reid & Hebert, Augusta, for defendant.

Before MURCHIE, C. J., and THAXTER, FELLOWS, MERRILL, NULTY, and WILLIAMSON, JJ.

WILLIAMSON, Justice.

This is an action in a plea of debt by the town of Boothbay to recover taxes assessed upon certain property in Boothbay forming a part of the water system owned by the defendant town of Boothbay Harbor. The case is before us on exceptions to the acceptance of the report of the referee who found for the plaintiff.

The issue is: Was the property taxable? The regularity and sufficiency of the assessment, commitment and other steps leading to this action are not here questioned. The answer lies in the meaning and application of the statute, which reads in part as follows:

'The following property and polls are exempt from taxation:

'I. The property of the United States so far as the taxation of such property is prohibited under the constitution and laws of the United States, and the property of this state, and the property of any public municipal corporation of this state appropriated to public uses, if located within the corporate limits and confines of such public municipal corporation, and also the pipes, fixtures, hydrants, conduits, gate-houses, pumping stations, reservoirs, and dams, used only for reservoir purposes, of public municipal corporations engaged in supplying water, power, or light, if located outside of the limits of such public municipal corporations, * * *.' R.S.Ch. 81, Sec. 6, Par. I, as amended by P.L.1945, Ch. 90.

The property assessed admittedly is within the classification of 'pipes, fixtures--etc.' (italicised above), is owned by the town of Boothbay Harbor, a corporation engaged in supplying water, and is located outside of the territorial limits of Boothbay Harbor. Tax exemption depends upon whether the defendant has met the remaining conditions of the statute.

We must now ask: (1) Was Boothbay Harbor a public municipal corporation with respect to the property assessed? (2) Is it a condition of the statute that tax exempt property be 'appropriated to public uses'? (3) If so, was the property assessed so appropriated?

The Boothbay Harbor water system has its source of supply in Boothbay. It serves and is designed to serve the communities and inhabitants of Boothbay Harbor, Boothbay and Squirrel Island, a summer colony within the town of Southport, with water for fire protection and for commercial and domestic uses.

We are not here concerned with an incidental disposal of a surplus of water by Boothbay Harbor outside of its limits. The referee well said: 'The outside service is substantial and, in the absence of evidence to the contrary, indicates a plant and system fitted and intended to serve the several towns.' It appears that approximately 28 1/2% of the gross revenue comes from the service in Boothbay and Squirrel Island.

The authority and power of Boothbay Harbor with respect to the water system are derived from a series of Acts of the Legislature, of which the most important is 'An Act authorizing the town of Boothbay Harbor to purchase and succeed to the rights of the Boothbay and Boothbay Harbor Water Company.' P. & S.L. 1895, Ch. 56, as amended. Prior to 1895 we find that in 'An Act to divide the town of Boothbay and incorporate the town of Boothbay Harbor' Boothbay Harbor was authorized to contract 'for the supply of water for all domestic, sanitary, municipal and commercial purposes'--and to maintain and operate 'such a system of water works in its corporate capacity'----. P. & S.L. 1889, Ch. 381.

The Boothbay and Boothbay Harbor Water Company was incorporated in 1891 'for the purpose of conveying to and supplying the inhabitants of Boothbay and Boothbay Harbor, adjacent islands and neighboring territory, with water for all domestic, sanitary, municipal and commercial purposes'----. P. & S.L. 1891, Ch. 241.

In the 1895 law Boothbay Harbor was authorized and empowered to purchase and own stock in the Boothbay and Boothbay Harbor Water Company and also to acquire 'and exercise all the rights, property, franchises and privileges of said corporation.' Section 1. The town was given the right of eminent domain. The general control and management of the system was placed in the hands of commissioners elected by the town.

It is in Section 2 of this Act as amended that we find fully set forth the authority and power of the defendant town. The section now reads:

'Sec. 2. Said town is further authorized and empowered, in case it obtains control of said corporation either directly by purchase, or indirectly through ownership of stock, to take water from Adams pond in the town of Boothbay or from any other ponds or supply within said towns of Boothbay and Boothbay Harbor, sufficient for all domestic, sanitary, municipal and commercial purposes, and to take and convey the same, through the towns of Boothbay and Boothbay Harbor, and to Squirrel Island. Said town is also authorized and empowered, to sell water to the town of Boothbay and to any company, individual, firm or corporation in the towns of Boothbay and Boothbay Harbor and Squirrel Island.' Priv. & Sp. Laws 1937, c. 52.

When originally enacted the section did not include the clause 'or from any other ponds or supply within said towns of Boothbay and Boothbay Harbor' added in 1937, and ended with the italicized words 'towns of Boothbay and Boothbay Harbor'. In 1903 the section was amended by adding:

'and Southport, and to Squirrel Island, Mouse Island, and other adjacent islands. Said town is also authorized and empowered, to sell water to the towns of Boothbay and Southport, and to any company, individual, firm or corporation in either of said towns, or either of the adjacent islands.'

In 1923 Southport, Mouse Island and other adjacent islands were stricken from the section under a law significantly entitled 'An Act to Relieve the Town of Boothbay Harbor from All Liability and Duty to Sell or Furnish Water for Any Purpose to a Portion of the Town of Southport and the Inhabitants Thereof, by Reason of Chapter Two-hundred and three of the Private and Special Laws of Nineteen hundred and three.' The section, except as amended in 1937 to enlarge the available sources of supply, has since remained without change. P. & S.L. 1903, Ch. 203; P. & S.L. 1923, Ch. 7; P. & S.L. 1937, Ch. 52, Sec. 1.

In 1894 Boothbay Harbor constructed a water system under the authority of the 1889 Act, and shortly after the 1895 Act became effective, it acquired the charter rights of the water company. For over a half century Boothbay Harbor has owned, maintained and operated the water system.

Returning to the questions we will answer the second and third at the outset. In our view only property appropriated to public uses is tax exempt under the statute; and further the property here assessed was so appropriated.

The argument of the defendant is that even if the property was not appropriated to public uses, it would nevertheless be tax free. That is, the defendant's position is that ownership, and ownership alone, by Boothbay Harbor of the given types of property outside of the limits of the town determined the exemption, and 'public use' was not a test.

In City of Bangor v. City of Brewer, 1946, 142 Me. 6, 45 A.2d 434, will be found a complete study of the history and of the purpose and effect of Paragraph I, which it is unnecessary here to repeat. It is sufficient to note that the Legislature added to Paragraph I of the Statute in 1903 the words 'and the property of any public municipal corporation of this state, appropriated to public uses,' and in 1911 the words italicised. P.L. 1903, Ch. 46; P.L. 1911, Ch. 120.

The words 'appropriated to public uses' with relation to taxation were well understood in 1903. For example, the property of a private water company was 'appropriated and devoted to a public use', and hence could be exempted from tax. City of Portland v. Portland Water Company, 1877, 67 Me. 135. A village corporation was held a public municipal corporation and the village hall 'exempted by implication from the general provisions of the statute is relation to taxation, as property appropriated to public uses.' Inhabitants of Camden v. Camden Village Corp., 1885, 77 Me. 530, at page 534, 1 A. 689, at page 690.

In the Camden case the use was in the exercise of a function of government, and in the Portland case for purposes of a public utility. In either event with reference to taxation, the use was 'public'. It was with this meaning that the words were carried into the statute in 1903. See Kennebec Water District v. City of Waterville, 1902, 96 Me. 234, 52 A. 774; City of Augusta v. Augusta Water District, 1906, 101 Me. 148, 63 A. 663; Laughlin v. City of Portland, 1914, 111 Me. 486, 90 A. 318 51 L.R.A., N.S., 1143.

The 1911 amendment (the words italicized) created a new test for property outside the corporate limits without, however, destroying the test of 'public use'. First, there clearly appears an intention to limit and not to enlarge exemptions, or in other words, to subject to tax certain property previously exempt. Whiting v. Inhabitants of Lubec, 121 Me. 121, 115 A. 896, 899. Second, the exempt outside property of a public municipal corporation 'engaged in supplying water' etc., must form part of a utility system for either corporate or municipal purposes.

The property assessed in fact was appropriated to public uses. It was included within a public utility system. Had it been owned by a privately owned utility, or by a water district, for example, the 'public uses' would be unchallenged. No more can it be here said that a use otherwise public became private by reason of ownership by a town.

The decisive...