Opinion
February Term, 1898.
A.J. Rodenbeck, for the plaintiff.
William F. Cogswell, for the defendants.
Plaintiff is a municipal corporation according to the definition given in section 3 of the General Corporation Law (2 R.S. [9th ed.] 974).
Under the general system of tax laws adopted in 1828, and the amendments thereof prior to 1896, the property placed upon the assessment roll by the defendants was exempt from taxation.
When the case of City of Rochester v. Town of Rush (15 Hun, 239) was before the General Term, TALCOTT, P.J., in delivering the opinion of the court, said: "We think the property was not subject to taxation, and that the assessors of the town of Rush had no authority or jurisdiction to place the same upon the tax roll as liable to taxation." The doctrine of that opinion was sustained and approved when the case reached the Court of Appeals, as appears by the report thereof in 80 New York, 302; and it was there held that the lands of the plaintiff, the reservoir and appendages, were for the public benefit and held for public purposes, and "that, in the absence of an express legislative declaration authorizing it, it was not subject to taxation, and that a tax imposed thereon in said town was illegal and void."
The Rush case was referred to in People ex rel. Mills Water Works Co. v. Forrest ( 97 N.Y. 101), and in speaking of the property sought to be taxed in that case, DANFORTH, J., said: "The property involved belonged to the city — had been purchased under the compulsion of a legislative act for a public purpose only, and was so retained by it. It was, therefore, thought to be exempt from taxation." Following that case was People ex rel. Mayor v. Assessors ( 111 N.Y. 505), which was a case relating to a landing place at the foot of Fulton street, in Brooklyn, which had been assessed by the authorities in the city of Brooklyn. The title to the landing place was vested in the city of New York, and had been for a period of upwards of 250 years, and, in speaking of it, ANDREWS, J., said: "We think the landing place was not taxable, upon the principle that property of a municipality acquired and held for governmental and public uses, and used for public purposes, is not a taxable subject within the purview of the tax laws, unless specially included. It would, probably, be competent for the Legislature to make the landing place taxable in Brooklyn, but not having done so in terms or by necessary implication, the power to tax the landing cannot be spelled out from general words subjecting to taxation all real and personal property within the State." A similar doctrine was recognized in United States v. Railroad Company (17 Wall. 329).
It is contended by the learned counsel for the plaintiff that the doctrine of the cases to which reference has been made still applies to the property which the defendants have assessed, and that, therefore, their assessment is illegal. On the contrary, it is argued by the learned counsel in behalf of the defendants that a contrary rule has been prescribed by the revision and enactment of the tax laws in 1896. (Laws of 1896, chap. 908.)
The Legislature of 1889, by chapter 289, provided for the revision of certain general statutes of the State, and the Governor, by that statute, was authorized to appoint three competent persons as commissioners to prepare and report to the Legislature "bills for the consolidation and revision of the general statutes of this State upon the following subjects: * * * 3. Providing for the collection and assessment of taxes and the exemption of property from taxation throughout the State." (Laws of 1889, chap. 289, p. 357.)
In chapter 660 of the Laws of 1892 the Legislature provided that the Governor should appoint two counsel "to examine the laws of this and other States relating to taxation, and to report to the next Legislature before the first day of February the results of their investigations, with recommendations as to legislation, relating to assessment and taxation in this State."
The commissioners for revision accompanied their report of a bill which ultimately resulted in the statute of 1896, with a statement that "Various changes, however, have been necessary to eliminate inconsistencies and to reduce the subject to a harmonious and systematic whole," and they stated that there had been about 100 acts supplemental to the Revised Statutes of 1828.
We are called upon by the case before us to give construction to certain provisions found in chapter 908 of the Laws of 1896. (Laws of 1896, chap. 908; chap. 24 of General Laws, p. 795.) Section 3 of that act provides as follows: "All real property within this State, and all personal property situated or owned within this State, is taxable unless exempt from taxation by law." The language used is broad and comprehensive, and, presumptively, is intended to reach all the real property and personal property found in any tax district of the State except such as is exempted from taxation by statutory law. We think the words "unless exempt from taxation by law" were used with the intention of limiting the exemptions to such as should be enumerated by statutory law. ( Brinckerhoff v. Bostwick, 99 N.Y. 185.)
We must, therefore, inquire whether there is anything in the statute under consideration which exempts the property in question from taxation. In section 4 provision is made for exempting certain properties from the operation of the preceding section.
"§ 4. The following property shall be exempt from taxation:
"1. Property of the United States.
"2. Property of this State other than its wild or forest lands in the forest preserve.
"3. Property of a municipal corporation of the State held for a public use, except the portion of such property not within the corporation. * * *
"5. All property exempt by law from execution, other than an exempt homestead."
That section contains other enumerations not important to be considered here.
As we have already seen, the plaintiff is a municipal corporation, and, as such, owns the property which the defendants have assessed, and the property is held by the plaintiff for a public use, and confessedly the property so assessed is "not within the corporation;" it all lies outside of the territorial limits of the city. Property lying within the territorial limits of the city, held for a public use, by the language of the section was clearly and distinctly exempted by it from taxation. In the notes of the revisers it is said: "The Legislature added the words 'except the portion of such property not within the corporation.'" The revisers state in their notes that the subdivision, as reported by them, was intended to extend to and include all the property of a municipal corporation in accordance with the decisions of the courts that such property is not taxable, and they refer to the case of City of Rochester v. Town of Rush ( supra) and to the case of People ex rel. Murphy v. Kelly ( 76 N.Y. 479) where a municipal purpose is defined. The intention of the revisers seems to have been overruled by the Legislature, or limited to such property as was held for a public use within the territorial limits of the municipal corporation; and the words "except the portion of such property not within the corporation" may be regarded as equivalent to a declaration of an intention on the part of the Legislature that property owned by a municipal corporation, not within its territorial limits, although held for public use, should be subject to taxation. It is a familiar rule of construction that that interpretation which gives significance to all the words of a statute or an instrument should be preferred to one which will leave the words which were used inoperative. ( People v. McGloin, 91 N.Y. 250; People ex rel. Freligh v. Matsell, 94 id. 179.)
Presumably when the words of the statute, as they first came from the commissioners were under consideration, the Legislature well understood the rule which had been declared by the Court of Appeals in City of Rochester v. Town of Rush ( supra) and kindred cases, and, therefore, inserted the words of exemption so as to limit the same to property held within the territorial limits of a municipality.
It is contended by the learned counsel for the plaintiff that "The assessors of the town of Livonia inferred that, because the statute expressly exempted only the property of the city within its boundaries, the balance of it was taxable. This is not a fair inference from the statute, and does not fulfill the requirements of the decision that property of a municipal corporation used for a public purpose is not taxable unless expressly so declared." We cannot assent to the contention made by the learned counsel. On the contrary, we are of the opinion that the legislative intent was to declare all property liable to taxation except such as was exempted by the terms of the act, and, having expressly limited the terms of the act to property held for public use by municipal corporations when the property was within its territorial limits, it evinced an intention to declare that property which was lying outside of the territorial limits unprotected by an exemption of the statute. Such intent of the Legislature, as manifested by the language used, is equivalent to "an express declaration" that property lying outside of the limits of a municipality should be subject to assessment.
Judge Cooley, at page 172 of his work on Taxation, second edition, says: "Some things are always presumptively exempted from the operation of general tax laws, because it is reasonable to suppose they were not within the intent of the Legislature in adopting them."
We think the statute before us expressly indicates the intent of the Legislature to include all property belonging to a municipality not held within its territorial limits. That learned author says: "All such property is taxable if the State shall see fit to tax it." In the case in hand we think the Legislature has enacted that property lying outside of the territorial limits of a municipality shall be subject to be assessed. That learned author also says: "To levy a tax upon it would render necessary new taxes to meet the demand of this tax, and thus the public would be taxing itself in order to raise money to pay over to itself, and no one would be benefited but the officers employed, whose compensation would go to increase the useless levy." That language is very appropriate in support of the idea that property within the municipality should not be taxed when it was held for a public use. However, the property now here in question does not lie within the territorial limits of the city, and it may well be suggested that to withdraw a large portion of the property of another municipality from the taxing power would lead to irregularities and inequalities which the Legislature, by the language which they have used, sought to obviate.
The learned counsel for the plaintiff calls our attention to subdivision 5 in the section exempting property from taxation. That subdivision is as follows: "All property exempt by law from execution, other than an exempt homestead." We think the words "all property exempt by law from execution" were intended to protect from assessment and taxation such property as the Legislature, by statutory law, had exempted from execution.
We see nothing in section 1397 of the Code of Civil Procedure which supports the contention of the learned counsel for the plaintiff; nor has he cited us to any statute, nor do we know of any statute, which in terms provides for exemption from execution of municipal property situated like that assessed by the defendants.
No question is made or can be made in respect to the power of the Legislature over the property in question, as there is no limitation upon such power which should prevent it from declaring such property liable to taxation in the locality where it is situated. With the motives of the Legislature, in providing that property held by municipalities outside of their territorial limits should be taxed, we have no concern, nor with the wisdom of the policy of the law in prohibiting the withdrawal of a large amount of rural property from local taxation when the same has been acquired by municipalities situated like the plaintiff
The foregoing views lead to the conclusion that the defendants, as assessors of the town of Livonia, did not exceed their jurisdiction, and that their acts in making the assessment mentioned in the statement of facts were legal, and the assessment made by them should be sustained.
Judgment accordingly is ordered for the defendants, with costs.
All concurred.
Judgment ordered for the defendants, with costs.