Town of Keene v. Town of Roxbury

• Decision Date: 26 June 1924
• Citation: 126 A. 7
• Parties: TOWN OF KEENE v. TOWN OF ROXBURY.
• Court: New Hampshire Supreme Court

126 A. 7

TOWN OF KEENE

v. TOWN OF ROXBURY.

Supreme Court of New Hampshire. Cheshire.

June 26, 1924.

Transferred from Superior Court, Cheshire County; Allen, Judge.

Petition by the Town of Keene against the Town of Roxbury for abatement of taxes. Case transferred on defendant's exceptions, on some of which no rulings were made. Case discharged.

Petitions for the abatement of taxes, assessed in the years 1918 to 1923, inclusive. Keene takes its water supply largely from Echo Lake and Roaring brook in Roxbury, and to protect the same has from time to time purchased a substantial acreage in the drainage area. Some of the holdings are in part outside this area. In 1922 Keene sold the standing timber upon 400 acres, some of which is within the watershed. It has at other times cut growth on other parts of its holdings, and has planted or seeded to pine some parts of the drainage area. The city collects pay for water furnished consumers in Keene, and has also done so in Roxbury. It purchased some of the land before it was given special authority to do so, but it had full authority to hold land in Roxbury before 1918.

Upon a master's report of the facts, the defendant requested certain rulings calculated to present questions of the constitutionality of Laws 1911, c. 40, and also of its interpretation, if constitutional. The requests to rule that the act is unconstitutional were denied, subject to exception, and the others were transferred without ruling.

Arthur Olson, Roy M. Pickard, and William H. Watson, all of Keene, for plaintiff.

Chester B. Jordan, of Keene for defendant.

PEASLEE, J. "Property held by a city, town or precinct in another city or town for the purpose of a water supply, if yielding no rent, shall not be liable to taxation therein, but the city, town or precinct so holding it shall annually pay to the city or town in which such property lies an amount equal to that which such place would receive for taxes upon the average of the assessed value of such land without buildings or other structures for the three years last preceding the acquisition thereof, the valuation for each year being reduced by all abatements thereon; but any part of such land or buildings from which any revenue in the nature of rent is received shall be subject to taxation." Laws 1911, c. 40.

The defendant contends that this statute is unconstitutional. Conceding that the Legislature has power to grant exemptions from taxation, it is urged that the exemption here provided for is so connected with and dependent upon the imposition of an unauthorized tax that the whole statute is void, and the property is taxable under the rule laid down in Newport v. Unity, 68 N. H. 587, 44 Atl. 704, 73 Am. St. Rep. 626. Many of the questions involved here received exhaustive consideration in Canaan v. District, 74 N. H. 517, 70 Atl. 250, 17 L. R. A. (N. S.) 733. In that litigation all the Justices sitting in the case concurred in the conclusion reached, but for different reasons and upon divergent grounds. There was not a majority for any view of the law, so far as the questions now in issue were concerned. It follows that the opinions rendered in that case do not have the authority of precedents.

Upon a reconsideration of the subject, it seems to us that the views then expressed by the Chief Justice embody a correct statement of the law. The subject was considered in great detail, and it is superfluous to restate the argument here. It is sufficient to call attention to the following, propositions: Towns as such have no constitutional rights in matters of taxation. No tax can be laid, except by authority of the Legislature; and the Legislature may grant exemptions, either in express terms or by omitting certain property from the catalogue of taxable estate. It follows that the act in question violates no constitutional right of Roxbury, since it has no such right. Canaan v. District, supra, 535-537, 70 Atl. 250.

It was urged at the argument that the principle relied upon applies as between superior and inferior governmental agencies, but not as between two of equal rank. A case involving taxation of property in one stale, held for public uses in another state, is cited to sustain the contention. State v. Holcomb, 85 Kan. 178, 116 Pac. 251, 50 L. R. A. (N. S.) 243, Ann. Cas. 1912D, 800. That case presents no parallel to this. It was a controversy between two sovereignties, concerning attempted acts of one within the territory of the other. But the present litigation concerns two subordinate governmental agencies, and their status as fixed by the common creator of both. It is not the case of attempted acts of one town against another, but of the regulation of the affairs of both by the power which created both, and could abolish or modify both or either at its will. Berlin v. Gorham, 34 N. H. 266, 275; Farnum's Petition, 51 N. H. 376; East Kingston v. Towle, 48 N. H. 57, 97 Am. Dec. 575, 2 Am. Rep. 174.

It is further contended that the assessment provided for violates the rights of other taxpayers in Roxbury. Conceding for the purpose of the argument that this objection is open to the defendant, the question of the nature of this charge against towns and cities is presented. The argument for the defendant is based upon the contentions that the charge upon Keene is a tax upon its property in Roxbury, and as it is not laid upon the value of the property on the taxing date it is unequal, and therefore unauthorized. The claim that the charge is a Roxbury tax, and comes within the constitutional restriction, is based upon the theory that it could not be laid other than as such tax. There are two sufficient answers to this position. The grantor of a privilege may annex conditions to its acceptance, and the Legislature may provide that one division of the state shall contribute to the expenses of another division, when such expense is in some degree for the benefit of the former.

Holding real estate in another town for waterworks purposes is not a matter of municipal right. It may be granted or withheld as the Legislature sees fit. The list of acts cited in Canaan v. District, 74 N. H. 517, 533, 535, 70 Atl. 250, 17 L. R. A. (N. S.) 733, note, shows the frequent exercise of this power. Such use of property is a public one. Its enjoyment is a kind of franchise, and it is familiar law that a grant of such power may be upon such terms and conditions as the granting authority sees fit to impose. State v. Railroad, 75 N. H. 327, 74 Atl. 542, and cases cited.

This is what was done in the present instance. The property was exempted from taxation, and the right to hold and use it for the specified purpose was made subject to certain contributions to the town where the property was situated. As the Legislature could have withheld the grant of the right, it could impose terms when conferring it. The burden imposed might have been made twice, or half that of a taxpayer, or it might have been fixed without any reference to the subject of taxation.

Taking this statute as a whole the legislative purpose is not doubtful. The law was enacted shortly after the decision of Canaan v. District, supra, and quite evidently with the views there expressed clearly in mind. The Act is a copy of St. Mass. 1893, c. 352, § 1, and the court had there held (1906) that the charge was not a tax. Milford Water Works v. Hopkinton, 192 Mass. 491, 78 N. E. 451. The intent to impose a duty to pay which was distinct from a taxpayer's obligation is apparent. No right of taxpayers in Roxbury is violated by such a provision.

The charge laid is also sustainable under the power to determine the apportionment of public burdens between municipalities. That this power is not limited by municipal boundaries is shown by the statute requiring towns to contribute to the construction or maintenance of highways in other towns. P. S. c. 69, § 11; Webster v. Alton, 29 N. H. 369. The cases involving other aspects of the exercise of this legislative function, and illustrating its broad scope, are fully reviewed in Wooster v. Plymouth. 62 N. H. 193. There are of course constitutional limits. The Legislature cannot arbitrarily provide that taxpayers in one district shall contribute to the support of a public enterprise which is wholly for the benefit of another district. Bowles v. Landaff, 59 N. H. 164, 192; 1 Cooley, Tax'n, § 316. But, when there are overlapping, common, or intermingled rights or benefits, it is within the legislative power to make a reasonable division of the burden. Londonderry v. Derry, 8 N. H. 320. Such a division is not the exercise of that part of the power of taxation which is governed directly and immediately by the constitutional rule that each citizen shall be called upon to contribute his share. It is not a distribution of the common burden among the individual taxpayers, but rather a determination of where, and in what degree, the common burden should rest in the aggregate. It is an exercise of the legislative authority "to distribute with greater equality and uniformity the public burdens." Langley v. Barnstead, 63 N. H. 246, 247; Webster y. Alton, 29 N. H. 369, 382:

In this case it appeared desirable to the Legislature that towns and cities should be permitted to exercise certain functions upon territory not within their municipal boundaries. It was thought reasonable that property so held should be exempt from taxation, and it was so enacted. It also seemed just that the town or city so holding property should contribute to the municipal burdens of the servient town, from whose local government the contributor presumably receives some benefit. As against the plaintiff the statute is sustainable upon the ground of special benefit received, as well as upon the theory that it has accepted the grant of a power and must take it with the conditions imposed with the grant.

As against the taxayers of Roxbury, the statute is valid, because it does not touch any right...