Village of Morrisville Water and Light Dept. v. Town of Hyde Park, 132-75

• Decision Date: 01 June 1976
• Docket Number: No. 132-75,132-75
• Citation: 134 Vt. 325,360 A.2d 882
• Court: Vermont Supreme Court
• Parties: VILLAGE OF MORRISVILLE WATER AND LIGHT DEPARTMENT v. TOWN OF HYDE PARK et al.

Page 882

360 A.2d 882

134 Vt. 325

VILLAGE OF MORRISVILLE WATER AND LIGHT DEPARTMENT v. TOWN OF HYDE PARK et al.

No. 132-75.

Supreme Court of Vermont.

June 1, 1976.

Paterson, Gibson, Noble & Brownell, Montpelier, for plaintiff.

Alan F. Sylvester of Sylvester & Maley, Burlington, for defendants.

Before SMITH, DALEY, LARROW and BILLINGS, JJ., and SHANGRAW (C. J. Ret.), Specially Assigned.

LARROW, Justice.

This is a tax appeal under 32 V.S.A. § 4467 from the 1974 tax assessment on property of the Village of Morrisville lying in the Town of Hyde Park. It deals with the listed valuation on that property under that section and 32 V.S.A. § 3659, relating specifically to taxation of real estate owned by one municipal corporation and located within the boundaries of another. The general subject matter has been before us twice before, under the same title. 129 Vt. 1, 270 A.2d 584 (1970); 131 Vt. 590, 313 A.2d 22 (1973). Appeals from prior assessments, through no fault of the trial judge here involved, are also pending in the trial court.

In our 1973 opinion, we held in substance that the trial court had improperly allocated to the appealing taxpayer the burden of establishing that properties similar to its own were taxed at a lower level; we laid down the rule that under 32 V.S.A. § 3659 the taxing authority, to justify the collection of the tax in question, must show at least a substantial compliance with all the statutory requirements, and that it was error to place upon the appealing taxpayer the burden of showing that similar properties were subjected to lesser tax. We reversed the dismissal below, and remanded for determination of the correct tax valuation. That case involved the 1972 assessment, while this involves the 1974 assessment. Otherwise, the property involved and the issues presented are the same, with an added issue in this case relating to the imposition of an additional tax on 75% of the appraisal levied by the trial court in lieu of personal property tax, as provided by the statute.

32 V.S.A. § 3659 reads as follows:

§ 3659 Municipal lands.

Land and buildings of a municipal corporation whether acquired by purchase or condemnation and situated outside of its territorial limits shall be taxed by the municipality in which such land is situated. Said land shall be set to such municipal corporation in the grand list of the town or city in which such real estate is located at the value fixed in the appraisal next preceding the date of acquisition of such property and taxed on such valuation. The value fixed on such property at each appraisal thereafter shall be the same per acre as the value fixed on similar property in the town or city. Improvements made subsequent to the acquisition of the land shall not be taxed; except that an additional tax not to exceed seventy-five per cent of the appraisal of the land may be levied in lieu of a personal property tax.

The salient provisions of this section were enacted in 1949 (1949, No. 17), and their legislative history indicates a compromise between the municipalities which owned various properties and those in which the properties had their situs.

32 V.S.A. § 4467 is more general in its application. It was first enacted in 1970 (1969, No. 253 (Adj. Sess.)), and, after providing for judicial recognition of the principles of equality in taxation, mandates that, if the board or court finds that the listed value of the property subject to appeal does not correspond to the listed value of comparable properties within the town, it shall set said property in the list at a corresponding value. We have not specifically passed upon allocation of the burden of proof in an appeal based upon this section, and the posture of this case does not require that we do so now. But it is significant to note that § 3659 deals with the taxation of property ordinarily exempt, while § 4467 deals with property normally subject to taxation, and speaks of a positive finding that listed values of comparable properties do not correspond.

Neither party to this appeal seems to have difficulty with the general principle underlying § 3659, at least as far as the general tax upon the realty is concerned. Granting the existence of 'similar properties' in the town, the subject property owned by Morrisville is required to be taxed at the same value per acre. The trouble arises from the legal conclusion drawn by the trial court, implicit and express throughout its findings and its conclusions, that the properties relied upon by Morrisville are 'collectively more similar' than those relied upon by Hyde Park, so that the aggregate of their ten different appraisals, covering approximately the same area as that of the Morrisville property, may be used as a yardstick. The court also took judicial notice that, all other things being equal, it is generally true that the smaller the parcel of land the greater will be its per acre fair market value in relation to comparable property.

The fallacy of the court's judicial notice, used to partially justify its resort to a combination of smaller parcels as comparable to the subject property (conceded to be 2590 acres despite a disparate finding), is that is simply is not true. It does not take into consideration the 'use, both potential and prospective' which Mr. Justice Keyser pointed out in Bookstaver v. Town of Westminister, 131 Vt. 133, 300 A.2d 891 (1973) as an essential element of fair market valuation. Without laboring the point, lots in a residential area, but too small for a dwelling, would be outside the utilized axiom; so would similar tracts along a highway capable of subdivision without development costs. And so, because of its intrinsic nature, is the subject property here.

Without describing the property at great length, it is about three-fourths owned in fee and one-fourth lease land. It encompasses water privileges, rights of way and easements. Subsequent to acquisition, a dam, dike and access road were constructed, to impound water for hydroelectric generation on the Lamoille River. Generation itself is elsewhere. Known as the 'Green River Reservoir', it is a man-made lake surrounded by steep hills with carefully managed timber cover. The created lake covers about 640 acres, 590 within the Town of Hyde Park. There is within the Town of Hyde Park no single parcel where a comparable body of water could be created, and no single property even approximating this parcel in size. In short, while other properties were in evidence which were similar in topography and timber growth, there are none in Hyde Park having 'use, potential or prospective' as a reservoir for hyroelectric power generation. Nor were there any with water power privileges and flowage rights, and element of value under Swanton v. Highgate, 131 Vt. 318, 320, 305 A.2d 586 (1973). Faced with this virtually uncontradicted conclusion, the trial court decided it must resort to those properties 'collectively more similar' to comply with the mandate of § 3659. We disagree.

As Bookstaver sets out, potential use is an important factor in valuation. So is location. So is demand for the particular use to which the property is suited. All these...