Brunswick & Topsham Water District v. Maine Water Co.

59 A. 537, 99 Me. 371, 1904 Me. LEXIS 97
CourtSupreme Judicial Court of Maine
DecidedDecember 14, 1904
StatusPublished
Cited by30 cases

This text of 59 A. 537 (Brunswick & Topsham Water District v. Maine Water Co.) is published on Counsel Stack Legal Research, covering Supreme Judicial Court of Maine primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Brunswick & Topsham Water District v. Maine Water Co., 59 A. 537, 99 Me. 371, 1904 Me. LEXIS 97 (Me. 1904).

Opinion

Savage, J.

The Brunswick and Topsham Water District was incorporated by act of the legislature, chapter 158, of the Private and Special Laws of 1903. By section 6 of that act, it was authorized to take, by condemnatory proceedings, the entire plant, property and franchises, rights and privileges of the Maine Water Company, within the district, with the exception of Thompson’s brook and its tributaries. It was also provided in section 7 for the appointment of appraisers by the court, who should, after due notice and hearing, fix the valuation of the plant, property and franchises taken, so that the Maine Water Company should receive just compensation therefor. As was the case in Kennebec Water District v. Waterville, 97 Maine, 185, so here, it was provided that either party might ask the court for instructions to the appraisers, and that all questions of law arising upon such requests for instructions might be- reported to the law court for determination, before the appraisers should act. The water district has commenced the condemnatory proceedings by petition filed in court, as provided by the act, appraisers have been appointed, and the petitioner has availed itself of the privilege of asking for instructions to the appraisers.

We cannot refrain from saying, as we intimated in the Waterville case, supra, that while there are some practical advantages in obtaining the judgment of the court in regard to the propel- rules governing the fixing of compensation and the assessment of damages in cases of this character, in advance of the hearing by the appraisers, yet there are many difficulties, if not dangers, in attempting to formulate rules which are to be,applied to facts not yet ascertained. While it may be easy enough to state rules in the abstract, it is much more satisfactory, in an opinion of the court, to express them in terms which are applicable to the facts in the precise case in hand. We cannot refuse to perform the duty laid upon us by the legislature, but it must always be understood that our answers to these questions are intended to be given only in the most general and comprehensive terms, which may, or may not, be found to be fitted to the facts [375]*375which may subsequently be developed. No other course would be wise or safe.

1. We are asked to say that “in applying the rule that the basis of all calculation as to the reasonableness of rates to be charged by a public service corporation is the fair value of the property used by it for the convenience of the public, franchise values are to be wholly disregarded, and the element of going concern value is to be considered only as involved in the structure value, that property value, in this connection, means structure value only.” As no particular franchises are spoken of, we assume that reference is made to the ordinary franchises by which the company maintains and operates its existing plant, supplies water to customers and demands rates from them. In order to see the precise bearing of the requested instruction, it is necessary to remember that this is a proceeding to ascertain and fix the fair value of a water company’s plant and property in active operation, and as well of the franchises by virtue of which it operates the plant, and that it is not a proceeding to reduce rates alleged to be excessive, nor is it a proceeding like most of those in which this question has been discussed, and which have been cited by counsel, where it is claimed by a public service company that rates have been made by statute or ordinance unreasonably or unconstitutionally low. All these may, or may not, arrive at the same conclusion. A public service property may or may not have a value independent of the amount of rates which for the time being may be reasonably charged. A public service company may, under some circumstances, be required to perform its service at rates prohibitive of a fair return to its stockholders, considering their property as an investment merely. Smyth v. Ames, 169 U. S. 466; Covington, etc., Turnpike Co. v. Sandford, 164 U. S. 578; Chicago, Milwaukee & St. Paul Ry. Co. v. Minnesota, 134 U. S. 418; Cotting v. Kansas City Stock Yards Co., 183 U. S. 79. It is true that the fair value of the property used is the basis of calculation as to reasonableness of rates, but as was pointed out in the Waterville case, this is not the only element of calculation. There are others, as for instance, the risks of the incipient enterprise, on the one hand, and whether all the property used is reasonably necessary to the service, and whether as a structure it is unreasonably expensive, on the other. For a simple [376]*376illustration, suppose that a five hundred horse power engine was used for pumping when a one hundred horse power engine would do as well. As property to be fairly valued the larger engine might be more valuable than the smaller one, yet it could not be said that it would be reasonable to compel the public to pay rates based upon the value of the unnecessarily expensive engine. But it may not be that any of these distinctions are vital to the determination of the pending question. We allude to them merely to show that all of the principles applicable to the two classes of proceedings referred to are not necessarily identical.

Now, what is the property which the district has taken by the power of eminent domain? In the first place it is a structure, pure and simple, consisting of pipes, pumps, engines, reservoirs, machinery and so forth, with land rights and water rights. As a structure it has value, independent of any use, or right to use, where it is,— a value probably much less than it cost, unless it can be used where it is, that is, unless there is a right so to use it. Nevertheless it has value as a structure. But more than this, it is a structure in actual use, a use remunerative to some extent. It has customers. It is actually engaged in business. It is a going concern. The value of the structure is enhanced by the fact that it is being used in, and in fact is essential to, a going concern business. We speak sometimes of a going concern value as if it is, or could be separate and distinct from structure value, — so much for structure and so much for going concern. But this is not an accurate statement. The going concern part of it has no existence except as a characteristic of the structure. If no structure, no going concern. If a structure in use, it is a structure whose value is affected by the fact that it is in use. ■ There is only one value. It is the value of the structure as being used. That is all there is of it.

But, again, it is not only a structure, and a structure being used, but it is a structure built, maintained and used by authority expressly granted to the company by the state, that is, it was built and is maintained and used by virtue of a franchise or franchises. The structure is lawfully in existence, and may rightfully continue to be used as a going concern structure, until the state determines other[377]*377wise. This also makes the structure in use more valuable. It is the difference between a structure existing by sufferance, and one maintained by right. The franchise, however, is a limited one. It is not perpetual. It may be recalled' by the state.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

In re the Valuation Proceedings under Sections 303(c) & 306
445 F. Supp. 994 (Special Court under the Regional Rail Reorganization Act, 1977)
Town of Vernon v. Public Utilities Commission
318 A.2d 121 (Connecticut Superior Court, 1971)
New England Telephone & Telegraph Co. v. Public Utilities Commission
94 A.2d 801 (Supreme Judicial Court of Maine, 1953)
Florida Power & Light Co. v. City of Miami
98 F.2d 180 (Fifth Circuit, 1938)
Oklahoma Cotton Ginners' Ass'n v. State
1935 OK 1004 (Supreme Court of Oklahoma, 1935)
Metropolitan Water District v. Toll
35 P.2d 519 (California Supreme Court, 1934)
Gay v. Damariscotta-Newcastle Water Co.
162 A. 264 (Supreme Judicial Court of Maine, 1932)
Oswego & S. R. Co. v. Commissioner
29 F.2d 487 (Second Circuit, 1928)
Oswego & S. R. Co. v. Commissioner
9 B.T.A. 904 (Board of Tax Appeals, 1927)
Oswego & Syracuse Railroad v. Commissioner
9 B.T.A. 904 (Board of Tax Appeals, 1927)
United States v. Boston, C. C. & N. Y. Canal Co.
271 F. 877 (First Circuit, 1921)
Donham v. Public Service Commissioners
232 Mass. 309 (Massachusetts Supreme Judicial Court, 1919)
Public Service Gas Co. v. Board of Public Utility Commissioners
87 A. 651 (Supreme Court of New Jersey, 1913)
Appleton Water Works Co. v. Railroad Commission
142 N.W. 476 (Wisconsin Supreme Court, 1913)
Louisville & N. R. v. Railroad Commission
196 F. 800 (N.D. Alabama, 1912)
Montana, W. & S. R. v. Morley
198 F. 991 (D. Montana, 1912)

Cite This Page — Counsel Stack

Bluebook (online)
59 A. 537, 99 Me. 371, 1904 Me. LEXIS 97, Counsel Stack Legal Research, https://law.counselstack.com/opinion/brunswick-topsham-water-district-v-maine-water-co-me-1904.