Town of North Haven v. Borough of Wallingford

The plaintiff claims that the court erred in not holding that all of the property of the defendant in North Haven was taxable; and further claims, that in any event the grist-mill on the property was taxable.

Our statutes (General Statutes, § 1160) provide that "buildings, with their appurtenances, belonging to any county, town, city or borough" shall be exempt from taxation. This provision, in the light of the common law, should be treated as if it exempted from taxation all property held by municipalities for public use. West Hartford v. Water Commissioners, 44 Conn. 360,368; Hamden v. New Haven, 91 Conn. 589,101 A. 11.

The plaintiff claims that as the borough was generating electricity not only to light its own streets and public places, but also to sell it for light, heat and power, to the inhabitants of Wallingford, it was not using its North Haven plant for a public use, but for a use that was essentially private. It is the recognized law that the furnishing of electricity to the public for light, heat and power, for pay, is a public use, for which the power of eminent domain may be exercised. 1 Lewis on Eminent Domain (3d Ed.) § 268; Judson on Taxation (2d Ed.) §§ 387, 388. It is now the common law in Connecticut and in substantially all the States, that a municipality, which, acting under legislative authority, maintains and operates a public-service plant and furnishes water or gas or electricity for light, heat and power, to itself, and to its inhabitants for pay, holds such plant for a public use. The great weight of authority holds that such a plant is exempt from taxation, wherever situated within the State of the municipality. West Hartford v. Water Commissioners,44 Conn. 360, 369; Traverse City v. Blair Township,190 Mich. 313, 157 N.W. 81; Idem, Ann. Cas. 1918E, p. 81 and note; Hamden v. New Haven, 91 Conn. 589,101 A. 11; Idem, 3 A. L. R. 1435 and note; New London v. Perkins, 87 Conn. 229, 87 A. 724; Opinion of theJustices, 150 Mass. 592, 24 N.E. 1084; Judson on taxation (2d Ed.) § 388; Pond on Public Utilities, § 322. These principles of law and the public policy underlying them have been so fully set forth in the quoted cases and elsewhere, that it is no longer desirable to repeat them. The electric light plant of the defendant located in North Haven was, therefore, exempt from taxation by that town.

The plaintiff suggests that, under § 10 of Chapter 231 of the Public Acts of 1893 (General Statutes, § 506), relating to the price that a municipality may charge for gas or electricity produced by a municipal plant, it may be that the borough of Wallingford is not now and never has been and never will be subjected to any expense in conducting the electric plant in question, but on the contrary, the borough may always have been making a profit therefrom, and that consequently, if the judgment of the Superior Court is sustained, the town of North Haven by its loss of the power to tax a portion of its territory is the only municipality put to any expense in maintaining the electric plant in question for the benefit of the borough of Wallingford. The town claims that therefore it is not just that its right to tax the portion of the plant located in North Haven should be denied. There is, however, nothing in the finding to show that this suggested possibility is a fact, and hence no question in relation to the matter is before us for decision. Influenced no doubt by the possibility of such an unjust and oppressive condition arising as is here suggested by the plaintiff, the State of New York has provided by statute that the "property of a municipal corporation of the State held for a public use" shall be exempt from taxation "except the portion of municipal property not within the corporation." 8 Birdseye's Consol. Laws of N.Y. (2d Ed.) p. 8284, § 4, par. 3.

In the years 1913 to 1916 inclusive, the grist-mill on said acre of land of the defendant in North Haven was assessed for taxation as a distinct item by the town. The town claims that the use of the grist-mill by the defendant for pay makes it a lawful subject of taxation. When the defendant purchased the water-power and the essential land in North Haven connected therewith, under legislative authority, if it had found thereon a grist-mill which it deemed it could run profitably as a commercial proposition, and then did so run it solely for such purpose, a situation would be presented which would render the plaintiff's claim seemingly valid. The situation presented by the finding is far different. The water-power in question was granted to the defendant's predecessor in title upon condition that the grist-mill should be kept fit for service. The plaintiff claimed that the defendant could not hold the land and water-power without operating the grist-mill. The defendant under such claim, and to protect itself from the possible impairment of its right to the stream by diversion or adverse flowage rights, has continued to keep the grist-mill in a condition for service, and has received and ground the rare and occasional grists brought to the mill. The mill is not run for money-making and the net income from it is inconsequential. The receipts from the mill are merged with all the receipts from the plant, and its expenses are paid from appropriations by the defendant for the operation of its electric plant. Under these conditions the grist-mill building is an inseparable part of the electric plant of the defendant held for public use. Its maintenance and operation as a grist-mill, for the purposes stated above, are purely a subordinate incident in the maintenance by the defendant, unimpaired, of the water-power of its entire plant. It is not an independent commercial enterprise. As the grist-mill is not run as a commercial enterprise, but as an incident to the maintenance of the water-power for the electric plant, the mere receipt of a trifling revenue, which went into the borough treasury, does not render the mill subject to taxation. Hamden v.New Haven, 91 Conn. 589, 101 A. 11; West Hartford v. Connecticut Fair Asso., 88 Conn. 627, 92 A. 432;Perth Amboy v. Barker, 74 N.J.L. 127, 65 A. 201. We hold, therefore, that the grist-mill building is not a subject of taxation, separable from the electric plant, under the conditions now prevailing.

There is no error.

In this opinion the other judges concurred.