Paris Mountain Water Co. v. Woodside

• Decision Date: 06 November 1925
• Docket Number: 11855.
• Parties: PARIS MOUNTAIN WATER CO. v. WOODSIDE, COUNTY TREASURER. PARIS MOUNTAIN WATER CO. v. FOSTER, COUNTY TREASURER.
• Court: South Carolina Supreme Court

131 S.E. 37

133 S.C. 383

PARIS MOUNTAIN WATER CO. v. WOODSIDE, COUNTY TREASURER.

PARIS MOUNTAIN WATER CO. v. FOSTER, COUNTY TREASURER.

No. 11855.

Supreme Court of South Carolina

November 6, 1925

Appeal from Common Pleas Circuit Court of Greenville County; H. F Rice, Judge.

Actions by the Paris Mountain Water Company against Jas. H. Woodside as County Treasurer of Greenville County, and J. A. Foster as County Treasurer of Greenville County. From judgments for plaintiff, defendants appeal. Affirmed.

If pipe lines of water company are realty, there can be assessment only every four years.

The following is the decree of the lower court:

"These two actions were begun January 28, 1913, and January 28, 1914, against the treasurer of Greenville county, to recover taxes paid under protest December 30, 1912 (for the year 1912), and December 30, 1913 (for the year 1913). By agreement herein, both complaints are regarded as amended to substitute Walter L. Miller, present treasurer of said county as defendant in each case. The original action in each case sought to recover taxes paid in four townships: Greenville city, Greenville township, Chick Springs, and Paris Mountain; the claims have been withdrawn as to Chick Springs and Paris Mountain townships, and the actions now relate only to the other two townships.

On June 30, 1924, the company surrendered and canceled its charter; it appearing that it was inadvertently done, without having in view this litigation which has been pending for a long time. There was a motion to substitute as parties plaintiffs Robert Wetherill, H. P. Hodge, W. H. Roth, E. E. Smith, and J. G. Leipey, who were the board of directors, they to be substituted as trustees under the statute; and it is ordered that they be, and they are hereby, substituted as plaintiffs in this action. The case was heard by me upon an agreed statement of facts and upon certain papers and records referred to therein.

Plaintiff was chartered as a public service corporation October 1, 1890; the charter being unlimited as to time. By virtue of ordinances of the city of Greenville July 15, 1890, and April 5, 1892, plaintiff acquired a 25-year franchise for the purpose of furnishing water supply for the city of Greenville. Under the terms of this ordinance, which became the agreement between the city and the company, it is provided:

'That the company for the purpose of constructing, maintaining, operating, extending and repairing said system of waterworks, shall have the sole and exclusive privilege and full power, right, and authority to lay pipes and mains for water along any or all streets and avenues of said city as the same are now open, or may hereafter be extended, or any new streets which may be opened, said lines to be laid by consultation with the chairman of the street committee, and to that end shall have full right to dig ditches or trenches in the streets of said city to such depth and width as may be necessary in which to lay the pipes or mains in, and to use the streets, sidewalks and bridges for like purposes.'

The water company acquired a large tract of land in nearby townships of Paris Mountain and Chick Springs for watersheds, built dams and reservoirs there, and constructed a gravity system of waterworks, all connected together, the water pipes and mains running from the reservoirs through Greenville township and throughout the city. In the city the pipe lines are in the streets, which are owned in fee by the city; the company's rights therein being acquired under its charter and the ordinance above referred to. In the township of Greenville (which is outside the city) pipe lines are laid on perpetual rights of way, acquired from the owners of the land about 1890 and shortly thereafter.

Prior to 1910, so far as appears, the company had no trouble on question of tax liability. But in 1910--the year for making real estate returns under the statute requiring such returns once in every four years--the agent of the company, erroneously, if the pipe lines are realty, returned said pipe lines in Greenville city and Greenville township as personal property instead of real estate. This 1910 return has been lost or destroyed by fire, but Mr. Perry, the new superintendent, in 1911 and 1912 made returns based on and identical with the 1910 return. The 1913 return for the city and for Greenville township was the same (except for the addition of a new pipe line valued at $1,750).

The 1912 return for Greenville city (and Greenville township together) was: Real estate, $1,250; personal property, pipe lines, etc., $81,310. For 1913 separate returns were made for Greenville city and Greenville township, aggregating the same as in 1912 (disregarding the new Westervelt line, $1,750). The return was: City--real estate, $1,250; pipe lines, $66,419.09. Greenville township--pipe lines, $14,890.91 (there was nothing but pipe lines in Greenville township). It is agreed that the return for 1912 should be separated, and should be similar to the 1913 returns, omitting the Westervelt line.

The taxing authorities raised this total assessment (as to the pipe lines only) from $81,310 to $256,605, divided in 1912: City, $216,180; and township, $40,425. In 1913 the increased amount was the same for the city and was $42,175 for the township (which adds the $1,750 for the Westervelt line).

Taxes collected on this assessment for both city and township together in 1912 were $5,684.29; whereas, if the taxes had been collected upon the value as set forth in the company's return, they would have amounted to $1,874.24. The difference is $3,810.05, for which plaintiff brings this action, claiming interest from the date of payment, December 30, 1912.

The taxes collected for both city and township together in 1913 were $6,280.89; whereas upon the valuation in the return the taxes should have been $1,987.86. The difference is $4,293.03 for which the plaintiff brings a second action, claiming interest from date of payment, December 30, 1913.

If these pipe lines were realty, then, under the statute (volume 3, Code 1922, § 348) providing assessments every four years only, there could be no new assessment in 1911 and 1912; there having been an assessment in 1910.

The increase from the valuation of the pipe lines in these two townships in 1912 was made by the township assessors, and, when it was brought to the attention of the company's counsel that the pipe lines had been assessed as personal property, he made prompt objection for the water company, and on June 6

took the matter to the company board of equalization. The county board not only overruled the objection, but raised the assessment still further to the large sum of $353,325. The water company appealed to the comptroller general, claiming that county Board should have assessed the property as real estate, and that the valuation was excessive. The comptroller general did not pass upon the question as to whether the pipe lines were realty, but restored the assessment to the amount fixed by the township board of assessors.

The question in these cases is this: Whether the pipe lines or pipe system of the water company (including the rights of way and other easements of the company) in Greenville city and Greenville township, are personal property or real property, for the purpose of taxation; or, in other words, the question is whether the company's system of pipe lines constitutes fixtures such as become part of the realty to which they are attached. These pipe lines are buried from 2 to 7 feet under the ground, annexed to the reservoirs a few miles away, and annexed to the hydrants, stand pipe, etc., in the city. Are they taxable by common law as realty or personalty? And are the taxation statutes in this state declaratory of the common law, and in harmony with it, or in derogation of, and establishing a different rule from, the common law?

Both under the principles of the common law as deduced from the South Carolina cases and general authorities, and under the cases from other jurisdictions upon the same questions as to pipe line systems and similar structures, such pipe lines would clearly seem to be such fixtures as are realty, and such would be the conclusion here, unless a contrary result is brought by the South Carolina statutes. The court will consider first the question with reference to the common law and second as the statutes.

1. As to the common law:

It was a maxim of the common law that whatever is annexed to the soil becomes a part thereof. 26 C.J. 652, § 2; Bl. Com. 281. And by annexation is meant such a connection with the freehold that the article could not be removed without violence or injury to the freehold. 11 R. C. L. 1095; McClintock v. Graham, 3 McCord (13 S.C. Law) 554-556; Reid v. Kirk, 12 Rich. (46 S.C. Law) 54-64; and numerous other decisions in this state on the point. However, the general rule has been much relaxed in modern times in favor of trade, our court looking at the question of annexation and the question of agreement or intention of the parties, as said in McClintock v. Graham, above, 556: 'It is obvious that it must always be considered, first, in relation to the article itself, to say if it be a fixture, and, if so, then in relation to the parties claiming the right.' And there has been a decided relaxation as to the original rule of the common law--this modern relaxation has been effected chiefly in favor of trade. Padgett v. Cleveland, 33 S.C. 344, 11 S.E. 1069; Rawls v. Ins. Co., 97 S.C. 189, etc., 81 S.E. 505. It is a mixed question of law and fact, and all the circumstances should be considered by the court. Saye v. Hill, 100 S.C. 21, etc., 84 S.E. 307.

What are the circumstances?

The water company admittedly had an easement or a right in the

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