Styles v. Vill. of Newport

• Decision Date: 07 January 1904
• Citation: 76 Vt. 154,56 A. 662
• Parties: STYLES, Tax Collector v. VILLAGE OF NEWPORT et al.
• Court: Vermont Supreme Court

56 A. 662

76 Vt. 154

STYLES, Tax Collector

v. VILLAGE OF NEWPORT et al.

Supreme Court of Vermont. Orleans.

Jan. 7, 1904.

Exceptions from Orleans County Court; Tyler, Judge.

Action by John S. Styles, collector of taxes, against the village of Newport and its trustees to collect taxes. Verdict was ordered for defendants, and plaintiff excepted.

Argued before ROWELL, G. J., and MUNSON, START, and WATSON, JJ.

J. W. Redmond, for plaintiff.

Young & Young, for defendants.

MUNSON, J. The defendant village is authorized to provide a supply of water for fire, domestic, and other purposes, and to sell and furnish water for domestic and other purposes to persons or corporations within or without said village. No. 201, p. 203, Acts 1878; No. 283, p. 399, Acts 1894; No. 196, p. 227, Acts 1898. A part of the defendant's water system, including its reservoir and aqueduct, lies in the town of Derby. The land for the reservoir was acquired under the right of eminent domain. The defendant uses the water for fire protection and other municipal purposes, supplies it to its inhabitants for domestic purposes at a certain compensation, and sells to one inhabitant enough to run a small motor for manufacturing purposes. The defendant also supplies the village of West Derby, a manufacturing establishment located in that village, and two properties in the town of Derby outside the village limits, with water for fire protection, and the inhabitants of West Derby with water for domestic purposes; receiving compensation from all these sources. Defendant also supplied the Boston & Maine Railroad Company, at its yard in Derby, with water for its engines, for an agreed compensation, until November 1, 1900. In 1899 and 1900 that part of the system located in the town of Derby was set to the defendant in the Derby grand list, and this suit is brought to recover the taxes assessed thereon. The defendant claims that the property is not taxable.

The only general provisions exempting property from taxation are those contained in V, S. 362. The first, seventh, and ninth subdivisions of this section contain the only provisions that exempt property solely on the basis of ownership. The owners named in these provisions are the state, the United States, colleges, academies, and other public schools, and cemetery associations. Other provisions exempt property because of the use to which it is put, and among these is the first clause of subdivision 7, which exempts property "granted, sequestered or used for public, pious or charitable uses." The defendant's claim of exemption is based upon two grounds: First, that the property of a municipal corporation is exempt by implication; second, that this property is devoted to a public use, and is therefore expressly exempted. It will be noticed that as to some of the owners mentioned in section 362 the statute does not create the exemption, but merely declares it. The United States is exempt because of federal supremacy. The state is exempt because of its sovereignty. Municipal corporations are not mentioned, but these are instrumentalities of the state, and the defendant contends that they are exempt, although not mentioned, the same as the state would have been. But the plaintiff contends that any implication of this character that might otherwise have existed is cut off by the provision of section 300 that all real and personal estate shall, except as otherwise provided, be set in the list. It is argued further that, inasmuch as owners necessarily and impliedly exempt are included in the list named, the omission of municipal corporations is equivalent to the legislative declaration that the property of such corporations is taxable unless otherwise specially exempted. It is said that, if the Legislature had intended that the property of municipal corporations should be exempt because of their relation to the state, it would have mentioned them in connection with the state.

These considerations alone will not suffice to deprive municipalities of any implied exemption to which they may otherwise be entitled. General statutory provisions like those referred to are treated as having reference only to such property as the law considers the subject of taxation. For instance, if the state had not been mentioned as exempt, the sweeping provision cited would certainly not have been held to require the taxation of its property. The most express language would be needed to overcome the presumption that the state does not tax itself. It is certain that there is also an implied exemption in favor of municipal corporations, but the extent of that exemption is open to inquiry. It is doubtless true that the implied exemption in favor of the state is absolute and unlimited, but it by no means follows that the exemption in favor of municipal corporations is of equal scope. The municipality is an agent of the state, but it is often something more. It is frequently permitted to hold property for purposes which are not within the scope of its governmental duties, but which are nevertheless recognized as conducive to the public welfare. This leaves room for the question whether the property of a municipal corporation is exempt from taxation because of such ownership, and regardless of the use to which it is put.

It has been repeatedly said in general discussions that property owned by municipal corporations cannot be taxed without express statutory authority, that the nature and purpose of taxation are such as preclude the idea of its being made a burden upon public property, and that tax laws will not be held applicable to municipal holdings unless the language positively requires it. These statements are doubtless made with reference to the general rule that a municipal corporation does not and cannot hold property except for public use. They certainly have failed to control when the courts have met with exceptional cases where the ownership was municipal, and the use distinctly private. It will be well to refer to some of these cases, that we may guard against giving general statements of this character an undue effect in the further discussion. In West Hartford v. Com'rs of Hartford, 44 Conn. 360—one of the cases most relied upon by the defendant in support of its main contention—the city bought a larger tract than was needed for its reservoirs because it could trade most advantageously upon that basis, and the part not used for the reservoirs was held taxable. In Inhabitants of Wayland v. Com'rs of Middlesex, 4 Gray, 500—another case especially relied upon by the defendant?the municipality acquired the fee of the land needed for its aqueduct; and it was said with reference to this that, "if the land was valuable for and used for purposes other and distinct from those of the aqueduct, the property so used, to the extent it was so used, would be liable to taxation." In Essex County v. Salem, 153 Mass. 141, 26 N. E. 431, it was held that land purchased by the county for the purpose of enlarging its jail and jail grounds was subject to taxation while leased for private purposes and a source of income to the county. In Water Com'rs of Jersey City v. Gaffney, 34 N. J. Law, 131, where land bought and property held for a city reservoir, but not yet put to use, was declared exempt, the court recognized the limitation of the right of exemption by distinguishing this from previous decisions; saying that in the case before it the land was being held for a necessary purpose, and without being used for any other purpose. It is doubtless in recognition of this class of cases that most writers treat the rule as requiring not only municipal ownership, but appropriation to a public use. We are satisfied that under the doctrine of implied exemption, as applied to municipalities, the ultimate test is not municipal ownership, but public use, so that this doctrine gives the defendant no greater right than it has by our statute, and the question whether the use is public will be controlling under either branch of its claim.

We have seen that the defendant's plant is designed and used to supply its inhabitants with water for domestic purposes, and our next inquiry is whether this is a public use, within the meaning of the laws relating to taxation. We have no cases bearing directly upon this question, and not many that will be specially helpful in its determination. In Middlebury College v. Cheney, 1 Vt. 336, and in Willard v. Pike, 59 Vt. 202, 9 Atl. 907, there is some discussion of the question of public use as related to colleges and academies. The first case was ejectment for land in Albany which the defendant claimed under a tax title. The plaintiff contested this title upon two grounds: First, that the college was authorized to hold lands of the yearly value of $2,000 free from taxation; second, that the land was nontaxable because sequestered for public, pious, and charitable uses. The court sustained both contentions, saying with reference to the second that a conveyance for the use of the college was to a public use. In the second case cited, the validity of a list was contested because of the omission of certain buildings owned by the St. Johnsbury Academy, which were partly occupied by teachers and students, and partly rented. The court rejected certain authorities from other states on the ground that our statute differed from theirs in placing the exemption on the ground of ownership alone, without mention of use, but considered that the building in question was held to a public and charitable use, and left undecided the question whether buildings acquired and held solely as an investment would be exempt. Here the defendant is a municipal corporation, and its use of property is public in a different sense. Its functions are ordinarily such as justify the condemnation of whatever property may be necessary for their exercise. It is undoubtedly true that the furnishing of water to the inhabitants of a village for domestic...