Court Opinion

ID: 6426040
Source: CourtListenerOpinion
Date Created: 2022-06-25 12:03:58.299143+00
Date Added: 2024-06-11T15:51:59.491938
License: Public Domain

Holmes, J.
The price to be paid by the city of Newburyport to the Newburyport Water Company for what it purchases under St. 1894, c. 474, is not left to the discretion of the commissioners. A rule is given to them by the statute, and it is not improper that the manner in which that rule has been interpreted and carried out should be reported for the supervision of this court before the acceptance of their report. Kingman, ¡petitioner, 153 Mass. 566, 579. We are not disposed to criticise even the reporting of questions of evidence by agreement of parties, so far as it may seem possible that they had a substantial bearing upon the result. But we should not recommit the report upon a matter of evidence unless we could see some probability of an *553appreciable change in the report upon the correction of the mistake.
The chief complaint of the petitioner is that no allowance is made for its right to lay and maintain pipes in the streets and its right to collect water rates. There was much discussion whether these are among the “rights” which the city buys under § 1 of the act, and, if so, whether they are embraced in the provision that the value of the property shall be estimated without enhancement on account of, among other things, the franchise of the company. As bearing upon this there was a good deal of argument as to whether St. 1893, c. 471, was in force, the city having voted not to purchase the petitioner’s property as therein provided, but afterwards having voted to accept the act. We do not think it necessary to go into these considerations, or even to examine with great accuracy how far the rights in question have not been allowed for. The direction to “ determine the fair value of said property for the purposes of its use by said city ” is clear enough without going into controverted questions. Whatever the city purported to purchase, (see Abbott v. New York & New England Railroad, 145 Mass. 450,453, State v. Sherman, 22 Ohio St. 411,428, and Coe v. Columbus, Piqua, & Indiana Railroad, 10 Ohio St. 372, 387,) the petitioner’s right to lay pipes in the streets was of no use to the city. The city had that right by virtue of the legislative authority to furnish water. Water pipes are not an additional burden to the highway. Pierce v. Drew, 136 Mass. 75, 81. Lincoln v. Commonwealth, 164 Mass. 1, 10. And as soon as the city was authorized by the Legislature to furnish water no one could complain if it proceeded to lay pipes for that purpose. Assuming that the act of 1893 was not in force, and admitting that a purchase from the petitioner was a condition precedent to the exercise of any rights under the act of 1894, still it is plain that, when once the purchase was made, the act of 1894 conferred upon the city directly, and not merely or at all as successor to the Water Company, the right to supply itself and its inhabitants with water, as if under the act of 1893 in case the Water Company had not offered to sell under that act. A similar answer may be made with regard to the right to charge water rates. St. 1894, c. 474, §§ 2, 4. St. 1893, c. 471, §§ 1-3, 8,13. “ It is the statute, and not the company which originally *554constructed the [water works], which confers upon the local authoiity this right.” Edinburgh Street Tramways Co. v. Edinburgh, [1894] A. C. 456, 464, 465.
It must be remembered that the transaction before us springs, out of a voluntary offer by the petitioner to sell upon the statutory terms, and therefore there is no reason to try to bend those terms in its favor. Of course, an offer by a water company made under the threat of municipal competition and to avoid ruin, might be voluntary only in name. But we have no reason to assume in this case that the petitioner is the victim of robbery, and must treat it as having acted of its free choice in fact as well as in form.
The other objection most insisted upon by the petitioner is the exclusion of evidence of its net earnings in the past. Had the evidence been admitted, it is improbable that we should have recommitted the report on that ground. We are not disposed to recommit it because the evidence was excluded. The net income no doubt vrould be an indirect way of getting- at the value of the capital in a transaction between individuals. It is not necessary to say that it would throw no light on the different question which the commissioners had to answer under the statute. But the question was a different one. Their duty was to find the fair value of the property for the purposes of its use by the city, and they were to find it “ without enhancement on account of future earning capacity or good will, or on account of the franchise of said company.” It is doubtful whether the evidence would not be held inadmissible in England as an attempt to get an allowance for “ future earning capacity,” although the way in which these words are used in St. 1891, c. 370, § 12, points to a narrow construction of them in the act before us. Edinburgh Street Tramways Co. v. Edinburgh, [1894] A. C. 456, 466. In this country it has been said that basing the value upon earnings is in effect valuing a franchise which no longer exists. National Waterworks Co. v. Kansas City, 62 Fed. Rep. 853, 864. Even in an ordinary transaction the test would not be past profits, but market value, if that could be ascertained. Montgomery County v. Schuylkill Bridge Co. 110 Penn. St. 54, 60. In re Kensington & Oxford Turnpike Co. 97 Penn. St. 260. Stockton & Copperopolis Railroad v. Galgiani, 49 Cal. 139. *555Compare “ fair market value for the purposes of its use.” St. 1891, c. 370, § 12. At all events, the different conditions under which the property would be used by a municipal corporation seeking only reimbursement, not profit, so diminish the instructiveness of the figures offered that, even if admissible, we think that they ought not to have affected the result.
The commissioners state the elements of valuation which they have taken into account. In addition to the value of the tangible property and easements, they have allowed forty thousand dollars for the fact that the plant was a going concern and in full operation. They have allowed for everything for which the petitioner was entitled to be paid. They have approached the question in a manner in which it was within their discretion to approach it. National Waterworks Co. v. Kansas City, 62 Fed. Rep. 853. If capitalizing profits would give a much greater excess over the value of the land, water easements, and plant of the company than the commissioners allowed, the reasons are to be found in the franchise and monopoly of the company, in its right to lay pipes in the streets, and partly perhaps in the personal skill of the management, none of which are things for which the city is to pay.
The officer who made the tax returns setting forth the value of the stock of the company was called by the petitioner, and testified to the value of the company's property. On cross-examination the respondent was allowed to identify the tax returns made by him and to put them in. The returns had some tendency to show a smaller value of the property than that given on,the stand by the witness, and so to contradict him, and were admissible on that ground, even if they did not amount to admissions by the corporation itself.
It appears to us questionable at least whether evidence that insurance rates were higher than the standard rates, and were advanced because of defects in the water system, would be admissible before a jury upon a question of value. Yet as an actual price paid in the market because of a specific fact, the objection to it is, not that it is res inter alios, but rather that it is too remote from the question at issue to give much help. See Call v. Allen, 1 Allen, 137, 144. We do not see how it could do any harm beyond tending to prove that the waterworks were *556not as good as the average, a fact which, if proved, hardly could affect a valuation arrived at as the commissioners arrived at it.
We are not prepared to say that the price of Norman’s stock was inadmissible. But it gave a value for the total property so far away from the award that it is not necessary to discuss the question, since it was not adopted as a standard.
The evidence of the sum paid Jackman by the city for the use of his spring, as bearing on the value of the water, does not appear to have been open to the objection that his acceptance of it practically was compulsory, as in Cobb v. Boston, 112 Mass. 181, and Sawyer v. Boston, 144 Mass. 470. It seems not to have been very different from the price paid by the petitioner.
It was within the commissioners’ power to award costs. Jones v. Carter, 8 Allen, 431. McLaughlin v. Old Colony Railroad, 166 Mass. 260.

Commissioners’ award accepted.