Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1904-12-16
WATER DISTRICT REscR,pr.
Important Ruling in a cumberl.ne
County Case.

ton ard appraisal of Il portion of a
system of water works by the exercise
of the right of eminent domain. under
Il statute which created a water dis
irict composed of two towns with
power to take IL specified portion of an
entire system. being operated in those
TWO and other towns. and which prO-
Fided that appraisers appointed by the
court should fix the valuation of the
plant. property and franchises taken.
compensation therefor: and further
that the appraisers should assess dam.
ages fo!' the severance of that portion
Of the plant. property and franchises
taken from the owners entire water
system and franchises. the declared in
tent OF the act being that the amount
of the valuation of the property taken.
and Of the additional damages for sew
erance. if any. taken together. should
be so fixed us to equal the difference
between the valuation. before sever
ance of the entire plant. property and
franchises. and the value after sever
erty and franchises not taken, both of
mined under the principles OF eml..
domain; and it was further provided
that the act itself should take effect
when approved by a majority vote OF
the Inhabitants of each of the towns
which We're to compose the water dis
trict. and that such an approval should
constitute an acceptance by said wa
ter district Of the methods Of appraisal
prescribed by the Act. and should bind
the water district and the water COM
pany thereto. ii is held that the APP
praisers should be instructed among
other things, in accordance with the
following principles:
/. In applying the rule that the ba-
sis of all calculations as to the reason
ableness Of rates to be charged by
public service corporation is the fair
value of the property used by it for the
service of the public, franchise values
are not to be disregarded. that the ele-
ment of going concern value is not to
be considered only as involved in struc-
ture value, and that property value, in
this connection, is not merely struc-
ture value.
2. The fact that the structure TAX
en- is in use. and the further fact that
it may lawfully be used where it is
may properly enhance it's value.
3. The direction of the statute to
the appraisers to fix the valuation of
the plant and of the franchises is in
substance direction to fix the valua-
ton of the plant as affected by the
franchises.
4. While actual cost bears upon
reasonableness of rates, and as well.
upon the preesnt value of the structure
as such. in estimating structure value,
prior cost is not tie only criterion of
present value. If by the rise of prices.
the present value of the structure is,
greater than the cost, the owner is en-
titled to the benefit of it: if less than
the cost, the owner must lose it. And
the same factors should be considered
in estimating the 'reasonableness Of
rates. ..-i.., Will,
5. Reasonable is a relative term,
and what is reasonable depends upon
many varying circumstances. But in
determining what are reasonable rates
so as to produce a reasonable return to
the owner upon his investment, the
amount of money which has been ac-
tually and wisely expended in produce
ing the plant is primary considera-
ton.
6. TIE question of the reasonable
ness of rates relates to both, the owner
and the customer. But in case of con-
flict, they must be reasonable to the
customer in any event.
Z. A public service company cannot
lawfully charge more than the services
are reasonably worth to the public as
individuals, even if charges so limited
would fail to produce a fair return to
the owner upon his property or in
vestment.
8, Profits which in the aggregate
exceed fair return on the owners
property and franchises do involve un-
reasonable rates. and furnish no. cri-
I erion of either franchise values or go
ing concern values. But what would
be a fair return must depend upon the
circumstances of each particular case.
9. The issue Of the reasOnableness
of rates charged. as well as all other
issues affecting value. are to be deter
mined by a preponderance of the evil
dence.
10. The value is to be fixed as of
January /, 1904, and in determining the
value on that day. market prices OF
materials and labor on that day or
during a period long enough before
that time for construction. are the
Standards rather than former prices.
And as to be completed on that day,
the construction of the plant must
have been begun before. interest upon
the money invested in the plant during
and before completion, Is
a part of the cost of construction.
II. Damages for severance are to
be allowed as prescribed in the plain
tiffs charter.
1o. While it is not constitutionally
competent for the Legislature to pre-
scribe a rule of damage, the rules pre-
scribed in this case are to be deemed
effective, not because they were estab-
lished by the legislature. but because
by the approval of the charter they
were assented to by the inhabitants OF
the water district.
10. In estimating the value of
public servece to the public or the
customers. one of the elements neces-
sary to be considered is the expense at
which the public or customers, as a
community. might serve themselves.
were they free to dosso, and were 1t
ro+ for tho practically exclusive fran.