Rixford Mfg. Co. v. Town of Highgate

• Decision Date: 06 February 1929
• Citation: 144 A. 680
• Court: Vermont Supreme Court
• Parties: RIXFORD MFG. CO. v. TOWN OF HIGHGATE et al.

144 A. 680

RIXFORD MFG. CO.

v. TOWN OF HIGHGATE et al.

Supreme Oourt of Vermont. Franklin.

Feb. 6, 1929.

Appeal in Chancery, Franklin County; Julius A. Willcox, Chancellor.

Suit by the Rixford Manufacturing Company against Town of Highgate and others. Decree for defendants, sustaining demurrer to bill, and plaintiff appeals. Affirmed and remanded.

Argued before WATSON, C. J., and POWERS, SLACK, MOULTON, and CHASE, JJ.

Watson & McFeeters and D. W. Steele, all of St. Albans, for plaintiff.

Fred L. Webster, of Swanton, and M. H. Alexander, of St. Albans, for defendants.

MOULTON, J. This is a proceeding in equity. The plaintiff has alleged in the bill that it is a corporation engaged in the manufacture of scythes, axes, and farm implements, with its place of business in the town of Highgate; that its plant was severely injured during the flood of November, 1927, and its business stopped, so that it contemplated the abandonment of its plant and the removal to another location; that a duly warned meeting of the legal voters of the town was held, at which a motion to exempt the plaintiff from taxation for a period of 10 years was defeated, but later another duly warned meeting was held, at which the former vote was rescinded, and a motion carried to exempt the property of the plaintiff from taxation for the period of five years from January 1, 1928, in consideration that the plaintiff would resume its business to its usual capacity; that thereupon the plaintiff rehabilitated and renewed its plant and operated it, and has since complied with the terms imposed by the vote of the town; that the listers of the town observed the mandate of the vote and entered the exemptions on the tax rolls and books of the town, and the exemption was noted upon the tax book made up by the selectmen for the year 1928, and also upon the tax warrant delivered to the tax collector; that after these things had taken place six or more legal voters of the town of Highgate presented to the selectmen a petition requesting them to call a special meeting of the legal voters of the town to act upon the following:

"To see if the town will vote to rescind the vote of said town taken at a special meeting held on the 17th day of December, 1927, adopting a resolution exempting the property of the Rixford Manufacturing Company from taxation for the term of five years from January 1, 1298."

The bill further alleges that the selectmen are threatening to call the meeting for the purpose indicated; that, if the meeting should be called and the prior vote rescinded, the plaintiff will suffer irreparable damage; and that the plaintiff claims a vested right in the exemption. The prayer is for an injunction against the town of Highgate and the selectmen, restraining the calling of the special town meeting.

Hearing was had below on a demurrer to the bill, which was sustained, and the bill adjudged insufficient, and dismissed. The plaintiff has appealed.

The constitutionality of the statute which is now section 689, G. L., empowering a town to vote certain exemptions from taxation, is well established. Colton and More v. City of Montpelier, 71 Vt. 413, 414, 415, 45 A. 1039; Caverly-Gould Co. v. Springfield et al., 83 Vt. 396, 403, 76 A. 39. An exemption of this class, regularly granted and accepted, and supported by a consideration, is a binding contract. Caverly-Gould Co. v. Springfield et al., supra, page 399 (76 A. 39); Cox v. Mt. Tabor, 41 Vt. 28, 31. It is not within the power of the town thereafter, and within the term of the exemption, to rescind the resolution and withdraw the exemption, to the prejudice of one who has accepted the offer specifically made therein. Bixby v. Roscoe, 85 Vt. 105, 110, 81 A. 255; Cox v. Mt. Tabor, supra; Caverly-Gould Co. v. Springfield et al., supra, page 402 of 83 Vt. (76 A. 39). The resolution by which the exemption was voted stated that, "in consideration that the said Rixford Manufacturing Company will resume its business," its property at East Highgate should be exempted from local taxation for a period of five years from January 1, 1928. This offer was accepted by the plaintiff by rebuilding its factory and resuming its business. A consideration for the contract was thus given. A recognition and practical construction of the contract was given by the town by its action in noting the exemption upon the tax rolls and books and warrant.

The defendants argue that G. L. 689, permits an exemption only for ten years from the commencement of business, and that it appears from the bill of complaint that the flood caused a temporary suspension of the business only. But we think otherwise. It is alleged that the damage by the flood was such that the plant was nearly totally destroyed, and the business stopped, "so much so that plaintiff contemplated the abandonment of its plant and business in Highgate and its removal out of the town of Highgate to another location."

A statute providing for exemption from taxation is to be strictly construed, and no claim for exemption can be sustained unless within the express letter or the necessary scope of the exemption clause. Frazier v. Slack & Bro., 85 Vt. 160, 162, 81 A. 161; Town of Sheldon v. Sheldon Poor House Ass'n, 100 Vt. 122, 130, 135 A. 492; In re Hickok's Estate, 78 Vt. 259, 262, 62 A. 724 (6 Ann. Cas. 578); Ford v. Delta & Pine Land Co., 164 U. S. 662, 666, 17 S. Ct. 230, 41 L. Ed. 590, 592; Knox College v. Board of Review, 308, 160, 139 N. E. 56, 35 A. L. R. 1041, 1044. But, as is said in Y. M. C. A. of Lincoln v. Lancaster County, 106 Neb. 105, Ill, 182 N. W. 593, 595, 34 A. L. R. 1060, 1064: "The rule does not call for a strained construction, adverse to the real intention, but the judicial interpretation of such a statute should always be reasonable."

And in St. Paul's Church v. City of Concord, 75 N. H. 420, 423, 75 A. 531, 532, 533 [27 L. R. A. (N. S.) 910, Ann. Cas. 1912A, 350]: "If the so-called 'rule of strict construction,' as applied to statutes exempting certain property from taxation, is so strictly applied as to render the exempting language so narrow and restricted as to defeat the apparent legislative purpose, it is clear that too much sacredness is attached to a mere rule, and that it should be either abrogated or applied with more liberality and reason. * * * A reasonable construction must be given to the statute. Scholastic strictness of definition cannot be adopted, if it prevents that result."

So, in construing the statute here involved, we have no doubt that the resumption of business after an almost complete destruction of a factory, and consequent entire stoppage of its operation is to be regarded as a commencement of business within the meaning and intent of the Legislature. A similar construction was applied in Bixby v. Roscoe, supra, where a printing establishment was removed from one town to another upon a vote of the latter town to exempt it from taxation. The "commencement of business" took place after the removal. We think that on the allegations of the bill of complaint, the plaintiff was entitled to the exemption.

It is the general rule that a court of equity will not interfere in advance to enjoin the passage of a municipal ordinance or resolution, even though such ordinance or resolution is unauthorized or void upon its face. 2 McQuillin on Municipal Corporations (2d Ed.) par. 741; New Orleans Water-Works Co. v. New Orleans, 164 U. S. 471, 480, 17 S. Ct. 161, 41 L. Ed. 518, 524; Foster v. Topeka, 112 Kan. 253, 210 P. 341, 342; Dailey v. Nassau County, 52 App. Div. 272, 65 N. Y. S. 396, 397, 398; Chicago, R. I....