People ex rel. Mills Water-Works Co. v. Forrest

Hakdin, J.:

In the matter of the application of George W. Phelps for a mandmius to the trustees of Mt. Morris, we held that a taxpayer in the village of Mt. Morris could not compel the village authorities to lay an assessment for municipal purposes upon the WaterWorks Company, as the company held a valid contract, made with the corporation, exempting it from taxation by the village'of Mt. Morris. (In Matter of Phelps, 25 Hun, 60.) Presumptively this corporation is liable to taxation for town, county and state taxes. (1 R. S., 387, § 1.) Hnder the general rule that private corporations are liable to assessment and taxation this company would fall. (People ex rel. M. F. Ins. Co. v. Comrs., 76 N. Y., 73; The People ex rel. The New York Elevated Railroad Comrs., 82 id., 465.) The burden, therefore, of establishing its right to exemption

is cast upon the appellant. The principle laid down by the Court of Appeals in the City of Rochester v. The Town of Rush 680 N. Y., 307) is invoked. We think the principle of that case does not aid the appellant.

There the reservoir was erected for the public benefit, and was held by the city of Rochester for public purposes, and as there was no legislative declaration that it should be subjected to taxation, it was held to be exempt and that the tax imposed by the town was illegal. Here it is the duty of the appellant to show a statute or some general principle of law or of publjc policy to make out its right to exemption. (People ex rel. v. Comrs., 82 N. Y., 465.)

*550The property of the appellant was not brought into existence by money raised by taxation, as in the other case of the property sought to be taxed in the City of Rochester v. Rush (supra). Nor was the property brought into existence by a municipality as a part of the machinery needed to carry forward its functions as an agent of the state in its governmental relation to the state. (City of Louisville v. Commonwealth, 1 Duvall, 297.) It was not a part of the political power of the state.

Nor was the property, made subject to taxation, “necessary to the operations of the government,” as insisted by the counsel for the appellant. If the property in question was a necessary instrument of government or a necessary operation of the government, then the principle laid down in Osborn v. United States Bank (9 Wheat., 738) and kindred cases would be applicable.

Nor was the property held for “ specific public uses in trust for governmental purposes ” so as to bring it within our decision in Leonard v. Reynolds (7 Hun, 73).

Constructing water-works for the purpose of supplying municipalities, or the citizens thereof, may be entirely meritorious and commendable and promote ¡¡the public good; yet the object in this instance is to put gains and profits into the pockets of the stockholders. This corporation, like many others that could be instanced, such as railroad companies, turnpike companies, telegraph companies, may serve the public municipality for pay, or its citizens, yet the organization has for its principal object the realization of profits for its stockholders. Before such a corporation shall be withdrawn .from the field of taxation there must be a clear legislative intent.

None such appears. The general statute subjects it to taxation, and we cannot say because it sells water to a municipality, or to its citizens, that public policy requires its exemption from taxation. We concur with the learned judge, who said in his opinion at Special Term, viz.: “ The true rule in regard to taxation in such cases is, that a private corporation, occupying or using the property for purposes of private gain, is not exempt from taxation, although the corporation may perform a public duty or insure a public use. (Rex v. Terroit) 3 East., 506; Reg. v. Shee, 4 Adol. & E. [N. S.], 2; Mersey Docks v. Cameron, 11 H. L. C., 479 ; Railroad Company *551v. Penniston, 18 Wall., 5, 31; see, also, West. Union Tel. Co. v. Texas, 26 Alb. Law Jour., 229.)

We think the order should be affirmed, with ten dollars costs and disbursements.

Smith, P. J., concurred. Present — Smith, P. J., Hardin and Haight, JJ.

Order appealed from affirmed, with ten dollars costs, to be divided between the respondents, and disbursements.