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and the Maine Water Company, and grant fect substantially all of the requested ining to them powers and franchises, are re structions, it will now be comparatively easy ferred to in the bill and are admitted by to pass upon the several requests in the the answer. They are necessarily in the form in which they are presented. case without further proof. The plaintiff may properly ask for a construction of the

(1) Plaintiff's Requests. franchises granted by those acts. Such con The plaintiff, in request 2, asks that the struction is a matter of law.

actual cost of the plant and property, toWe have not searched for other grants of gether with proper allowances for depreciafranchises than those contained in plaintiff's tion, be declared to be legal and competent requests 7 and 8. It is not our duty to do evidence upon the question of the present so. But we have no hesitation in saying, value of the same. We so hold. It is comthat so far as the franchises granted by petent evidence, but it is not conclusive. It those acts are concerned, they are not ex is not a controlling criterion of value, but clusive. The legislature may at any time, it is evidence. National Waterworks Co. v. according to its own wisdom, grant to the Kansas City, 10 C. C. A. 653, 62 Fed. 853, municipalities within which this water sys 27 L. R. A. 827; Smyth v. Ames, supra; San tem is situated franchises similar to the ones Diego Land Co. v. National City, supra; Cotin question. It may grant similar franchises ting v. Kansas City Stockyards Co., supra; to one or more corporations like the Water Westchester Turnpike v. Westchester Counville Water Company or the Maine Water ty, 182 Pa. 40, 37 Atl, 905; Griffin v. GoldsCompany. In re City of Brooklyn, 143 N. boro Water Co., 122 N. C. 206, 30 S. E. 319, Y. 596, 38 N. E. 983, 26 L. R. A. 270; Long 41 L. R. A. 240. Of course, this element is Island Water Supply Company v. Brooklyn, subject to inquiry as to whether the works 166 U. S. 685, 17 Sup. Ct. 718, 41 L. Ed. 1165. were built prudently, and whether they were It has granted similar franchises to this built when prevailing prices were high, so plaintiff, a municipal district, and has even that actual cost, in such respects, may exceed authorized it to take away from the defend- | present value. Reagan v. Farmers' Loan & ant water company all the franchises it Trust Co., 154 U. S. 362, 14 Sup. Ct. 1047, holds within the district and Benton and 38 L. Ed. 1014; San Diego Land & Town Co. Winslow. Kennebec Water District v. Wa.. v. National City, 174 U. S. 739, 19 Sup. Ct. terville, 96 Me. 234, 52 Atl. 774. But the 804, 43 L. Ed. 1154. defendants say that the Maine Water Com The remainder of plaintiff's request 2 asks pany was "practically in the enjoyment of that the companies be directed to produce an exclusive franchise," because it had no their book accounts and other documentary competitor, although its franchise may not evidence bearing upon the question of cost be legally an exclusive one; citing Gloucester before the appraisers. This request raises Water Co. v. Gloucester, 179 Mass. 365, 60 no question of law, and cannot be considered N. E. 977. And we say that the fact that by us. the company was doing its business without Plaintiff's request 3 ought not to be given competition may and should be considered in the form in which it is presented, which by the appraisers when they are valuing is that “under no circumstances can the the property of the defendant as a going con value of the plant of the companies be held cern. That fact is one of the characteristics to exceed the cost of producing at the presof the going business, and may enhance its ent time a plant of equal capacity and modvalue. We are considering now only the ern design.” Among other things, it leaves legal situation of the company. There is a out of account the fact that it is the plant difference between a franchise which is prac of a "going concern,” and it seeks to subtically exclusive and one which is actually stitute one of the elements of value for the exclusive, as there is a difference between measure of value itself. Montgomery Coununcertainty and certainty. The distinction ty V. Bridge Company, 110 Pa. 54, 20 Atl. is vital in principle, and it may be import 407. We shall discuss further the compeant in fixing value. Of how much or how tency of the cost of reproduction when we little importance it is can only be estimated consider defendants' requests 6 and 7. by the appraisers after hearing the evidence. We have already discussed sufficiently the

Again, the charters under which the com first two propositions of plaintiff's request 4. pany operates are subject to repeal by the The deduction sought to be established by legislature. Rev. St. C. 46, § 23. The fran the third proposition is that “the actual rates chises are not perpetual and irrevocable. It which may have been charged by the commay be that it is extremely unlikely that the panies, and their actual earnings, have no legislature would repeal the charters with bearing on the value either of the companies' out providing for compensation in some way. plant or property, or of their franchises, and The probabilities are fairly open to consid are immaterial.” We cannot say this as a eration. But the legal condition exists. It matter of law. As a matter of proof, we is a factor to be considered for what it is think the evidence of such facts is admisworth.

sible and material. The value of the eviHaving considered these general proposi dence, however, depends upon whether the tions, which are far-reaching, and which af appraisers shall find that the rates charged

have been reasonable or not. If reason be deprived the Maine Water Company will able, these facts furnish one important test, be entitled to just compensation. but not the only one, in fixing the present Plaintiff's request 11, in so far as it says value of plant and franchises. Monongahela that "in fixing the value of the companies' Co. v. United States, supra. But if the franchises the appraisers may give such recharges have been excessive, past receipts gard as is demanded by ample and fair pubshould not be regarded by the appraisers as lic policy to the past investment, risks, and a proper test of value. Cotting v. Kansas services of the companies, and to the reaCity Stockyards Co. (C. C.) 82 Fed. 850. sonably just expectations which those who We omit plaintiff's request 5.

In argu

made the investment had in mind when so ment, the counsel on both sides seem to agree investing,” is approved. We have already that the selling price of the capital stock of discussed this proposition in a former part the water company is not to be considered of this opinion, relating to reasonable rates, as affecting the valuation of the property. to which we think it properly relates. The plaintiff does so in part on general prin The remainder of request 11 is not apciples; the defendant, because of the special | proved. It is that in fixing the value of the circumstances of this particular case; and companies' franchises the appraisers may it is immaterial to the present discussion give regard "to the faithfulness or unfaithwhich is right. If the claim of the defend fulness shown by the companies in the perants that the entire capital stock of the Wa formance of their public duty and obligation terville Water Company is owned by the to furnish pure water at reasonable rates." Maine Water Company, and that the capital | We do not think that past faithfulness or stock of the Maine Water Company repre unfaithfulness in the exercise of a franchise sents not only the property in the Water bears any such relation to the present value ville system, but also of many others in of it as to make it a proper matter for conother towns and cities of the state, is found sideration. It is the franchise as it now to be correct, certainly the selling price of exists which is to be taken and paid for. It capital stock will afford no aid in fixing the is the right to do business now, under and value of the Waterville system.

within the charter, which must be appraised, We think the appraisers should be in irrespective of the past use of that right. structed in accordance with plaintiff's re- •If past misconduct has incidentally resulted quests 6 and 10, without any qualification. in lessened business, that matter will have They ask that the quality of the water fur due consideration under other heads. But in nished and of the service rendered, and the this process of condemnation of property, the fitness of the plant and of the source of wa owner is not to be punished for past misuse ter supply to meet reasonable requirements of it. in the present and future, be deemed material Requests 12 and 13 may be considered toupon the question of present value.

gether. They seem to imply that the comWe have already discussed sufficiently panies in the past have been unfaithful in plaintiff's requests 7 and 8, and to some ex the performance of their public duties, both tent its request 9. This last request is that by furnishing impure water and by charging “the appraisers shall regard the franchises excessive rates, and by reason thereof it is of the companies as entitling them to con claimed that the companies "have rendered tinue business as a going concern, but sub themselves liable to such processes as are ject to all proper legal duties governing pub- appropriate to work legal forfeiture” of their lic service companies." So far, we think rights and franchises, and that this liability the instruction should be given. National to forfeiture is to be considered in fixing the Waterworks Co. v. Kansas City, 10 C. C. A. value of the property. We cannot give our 653, 62 Fed. 853, 27 L. R. A. 827; Newbury assent to this doctrine. If these franchises port Water Co. v. Newburyport, 168 Mass. have become forfeitable for misbehavior of 541, 47 N. E. 533. The matter of exclusive the companies, the remedy is found in quo franchise referred to in this request has al. warranto brought by the state, and only by ready been disposed of. The remainder of the state. Any individual affected by the the request is that "the franchise shall not wrongful conduct of the companies might be otherwise appraised or valued.” In its have invoked the intervention of the state. present form, this is not approved. It is, But this does not seem to have been done. to say the least, likely to be misleading. It On the contrary, it is proposed to take these it means to include all of the franchises of franchises as they are. Even if forfeitable, the companies, so far as they have been dis they have not been forfeited. They are in closed to us, it is unobjectionable. But if it full force and vigor. They must be valued is intended to include all franchises not now as living franchises, not as dead or mori. exercised by the going concern, or future ex bund. Whether the state would ever institensions of the use of franchises now exer tute process for forfeiture, and, if it did, cised, it is objectionable. The plaintiff will whether the court would find the facts as take all of the franchises of the companies, the appraisers might, are questions so very except the franchise to be a corporation, and uncertain that an inquiry concerning them for all of these franchises of which it will must be purely speculative and unfruitful.

To permit this inquiry would be to permit , except those which grow out of common own. the appraisers to speculate upon what the ership. The defendants rest their claim upon judgment of the court might be at another the familiar doctrine of damages for severtrial, under other conditions. We think the ance, namely, that, when a portion of a propfranchises must be appraised as they are erty is taken, the impaired value of the renow held and used by the companies. What mainder, bỳ reason of the severance, may ever the past misconduct may have been, we and should be considered, and compensation do not see how it can affect the value of awarded therefor. But we think this case the present right and ability to exercise the cannot be brought within that rule. That franchises. We think, however, that this lia rule applies only when the property taken bility to forfeiture arising from misconduct and the property left may fairly be considis to be distinguished from liability to leg ered one property, and not when they are islative repeal to which we have already al separate and distinct. In Bangor & Piscaluded. The latter is a limitation of the fran taquis R. R. Co. v. McComb, 60 Me. 290, chise which inheres in the franchise itself, Kent, J., after stating the reasons for allowfrom its creation. There is no franchise, ex ance of damages for severance, uses this lancept as so limited. It is the only kind of a guage: "The constitutional provision cannot franchise the companies ever held.

be carried out, -in its letter and spirit, by Plaintiff's request 13 asks that, if it be anything short of a just compensation for all found that the companies have actually re the direct damages to the owner of the lot, ceived more than reasonable rates for the confined to that lot, occasioned by the taking services rendered since operations began, of his land. The paramount law intends that then the amount of such excess shall be de such owner, so far as that lot is in question, ducted from the amount to which the com shall be put in as good a condition, pecuniari. panies would otherwise be entitled. It is ly, by a just compensation, as he would have not approved. It is sufficient to say that been in if that lot of land had remained enthis is not a process of accounting, but one tire, as his own property. How much less is of condemnation of property, for which the that lot

worth

than the owner is entitled by statute and constitution whole lot, intact, was the day before such to just compensation at its present value, taking ?” The implication of this language without any deduction.

clearly is that the parcels must be of the

same property,-in that case, the same lot. (2) Defendants' Requests.

In 10 Am. & Eng. Ency. of Law (2d Ed.) P. The first paragraph of the defendants' re 1166, tit. "Eminent Domain," it is said that: quests presents no question of law, and the "To entitle an owner to recover damages to second request has already been considered. the whole tract when a part of his lands

Their request 3 is "that any increase of have been taken, there must have been a pecuniary obligation or burden or duty, or unity of contiguous parcels. The land must any damage to or impairment of the value of have been together. All of it must have been its remaining property or franchises, in any used as a single tract.” In 3 Sedgwick on way resulting to said Maine Water Company Damages (8th Ed.) at p. 413, the rule is laid by reason of the exercise of the right of emi down that: "In assessing damages or bennent domain contemplated by said act of efits, the inquiry is limited to the tract of 1899, should be considered by said appraisers, land immediately affected. This is held to and just compensation therefor should be in be so much as belongs to the proprietor whose cluded.” It seems to be assumed in argu land is taken, and is continuous with it, and ment, and we assume, that this request is used together for a common purpose. based upon the fact that the Maine Water When land is divided into blocks by the ownCompany is the owner of other water sys er, and dealt with as such by himself and tems situated at other places. Of course, it purchasers, it is held that each block is to be cannot refer to any remaining property at considered as a separate tract, in assessing Waterville, for there will be none.

The argu damages.” Laflin v. Chicago, etc., Ry. (C. ment is that, by depriving the company of its C.) 33 Fed. 415. Nor are the two cases which Waterville plant, the general expense of su the learned counsel for the defendants say pervision and management will still remain are the only ones found, in which the quespractically unchanged, and will be a propor tion of damages for the dismemberment of tionately heavier burden upon the remaining a public service corporation by a compulsory property. The language of counsel is that taking has been raised, opposed to this doc“the economy and efficiency of administration trine. In Monongahela Navigation Co. wbich are sought and obtained by the com United States, 148 U. S. 312, 13 Sup. Ct. 622, bination are inevitably more or less impaired 37 L. Ed. 463, the general government was by breaking it up, either in whole or in part.” proceeding to condemn, under the power of The compensation asked is not for property eminent domain, one of the seven locks and taken, but for incidental damages to other dams owned by the navigation company. property having no physical connection with The court, calling attention to the doctrine of or contiguity to that taken, and having no damages by severance, said: “This is a quesrelations whatsoever with the property taken, tion which may arise, possibly, in this case,

54 A.-2

V.

if the seven locks and dams belonging to the property taken at its fair and equitable valnavigation company are so situated as to be ue, but it does not provide for compensation fairly considered one property,-a matter in for consequential damages. which the record before us furnishes no posi Defendants' request 5 has already been distive evidence. It seems to be assumed that cussed. It should not be given, except as aleach lock and dam by itself constitutes a sep ready qualified. We hold that the construcarate structure and separate property, and tion cost is admissible, but not controlling, the thoughts we have suggested are pertinent on the question of present value. It must be to such a case. The other case so cited and borne in mind, as said by Mr. Justice Brewer referred to by counsel is U. S. v. Gettysburg in National Waterworks Co. v. Kansas City, Electric Ry. Co., 160 U. S. 268, 16 Sup. Ct.

supra, that “

'original cost' and 'present val. 427, 40 L. Ed. 576. But this case seems ue' are not equivalent terms,” and that berather to be within the rule of the "single sides the elements of wear and tear, and detract" cases. The court simply says: “If the preciation in physical structure or in value, part taken by the government is essential to the property may have cost more than it enable the railroad corporation to perform ought to have cost. San Diego Land Co. v. its functions, or if the value of the remain National City, supra. ing property is impaired, such facts might Defendants' requests 6 and 7, as limited in enter into the question of the amount of the their brief, are that neither the reproduction compensation to be awarded.” It was alleged cost of the existing plant, nor the cost at by the company that the effect of the con present of a new one differently constructed, demnation of the strip of land in question but equal or even superior in efficiency to would be to cut off a particular branch rail the one now existing, is the legal criterion of way or extension belonging to it, and destroy the total values to be awarded, or even of its continuity, and prevent its construction. the plant or structure value. This is unIt seems to us clear that the several parts of doubtedly true, if by "criterion" is meant a an electric railway system may properly be sole or controlling test of present value. regarded as a single property. No other au There are other elements besides cost of rethority cited by the defendants upon this point production or replacement which affect presaids them. The damages occasioned to the ent value. The present value of the propcompany by the taking of the Waterville erty is of vital importance, for, as we have property, considered with respect to its other seen, the value of the property at the time and distinct property, if any, will be inci it is being used for the public is one of the dental and consequential. And such damages elements essential in determining what are are not within the statutory and constitution then reasonable rates, and question of franal requirements of “just compensation.” chise value depends upon the rates which may Cushman v. Smith, 34 Me. 247; Brooks v. Ce reasonably be charged. San Diego Land Co. dar Brook Imp., etc., Co., 82 Me. 17, 19 Atl. v. National City, supra. We think it will be 87, 17 Am. St. Rep. 459, 7 L. R. A. 460.

proper for the appraisers to consider what the The defendants' request 4 should be given. existing system can be reproduced or replaced It relates to property not directly connected for, because evidence of cost of reproduction with the water system or plant. It should will have some tendency to show what is the be appraised "at its fair market value, not present value. Such cost will not, however, at a forced sale, but at what it is fairly worth be conclusive. There are other elements, still to the seller, under conditions permitting a to be noticed, which should be considered in prudent and beneficial sale." Chase v. Port fixing present value. In Newburyport Water land, 86 Me. 367, 29 Atl. 1104; Doughty v. Co. v. Newburyport, the cost of the reproducSomerville R. R. Co., 22 N. J. Law, 495; 10 tion of all of that part of the physical plant Am. & Eng. Ency. of Law (2d Ed.) 1152; Mo used in pumping and delivering water, less nongahela Navigation Co. v. United States, any depreciation, was considered without obsupra; Montgomery County v. Bridge Co., su jection, and seems to have been approved by pra; Westchester Turnpike v. Westchester the court. Gloucester Water Supply Co. v. Co., 182 Pa. 40, 37 Atl. 905. In Chase y. Gloucester, 179 Mass. 365, 60 N. E. 977; Portland, our own court quoted with approval. Smyth v. Ames, supra. But the mere cost of from Lawrence v. Boston, 119 Mass. 126, the reproduction is not enough. Judge Brewer, following: “Market value' means the fair in National Waterworks v. Kansas City, suvalue of the property, as between one who pra, calls attention to two additional ele wants to purchase and one who wants to sell ments,-one, that it is a completed structure, any article; not what could be obtained for it connected with buildings prepared for use; under peculiar circumstances, when a greater and the other, that the company is a going than its fair price could be obtained; not its concern. He says (page 665, 10 C. C. A., page speculative value; not value obtained from 865, 62 Fed., 27 L. R. A. 827): "Nor would the necessities of another. It is what it the mere cost of reproducing the waterworks would bring at a fair public sale, when one plant be a fair test, because that does not party wanted to sell, and the other to buy.” take into account the value which flows from Palmer v. Penobscot Lumbering Association, the established connections between the pipes 90 Me. 193, 38 Atl. 108. The statute provides and the buildings of the city. It is obvious for fixing the “just compensation" for the that the mere cost of purchasing the land,

constructing the buildings, putting in the ma the old customers will resort to the old place. chinery, and laying the pipes in the streets, Crutwell v. Lye, 17 Ves. Jr. 335. See Flagg -in other words, the cost of reproduction, Mfg. Co. V. Holway, 178 Mass. 83, 59 N. E. does not give the value of the property as 667. Under any possible definition, it involves it is to-day. A completed system of water an element of personal choice. This phrase works, such as the company has, without a is inappropriate where there can be no choice. single connection between the pipes in the So far as the defendants' system is “practicalstreets and the buildings of the city, would ly exclusive," the element of good will should be a property of much less value than that not be considered. Bristol v. Waterworks, susystem connected, as it is, with so many pra. buildings, and earning in consequence thereof The defendants, in request 9, ask that in the money which it does earn. The fact that determining the amount to be added to strucit is a system in operation, not only with a ture value, in consideration of the fact that capacity to supply the city, but actually sup the system is a going concern, the appraisers plying many buildings in the city,-not only should consider, among other things, the preswith a capacity to earn, but actually earn ent efficiency of the system, the length of ing,-makes it true that the 'fair and equita time necessary to construct the same de novo, ble value is something in excess of the cost the time and cost needed after construction of reproduction."

to develop such new system to the level of The court, in San Diego Water Co. v. San the present one in respect to business and Diego, 118 Cal. 556, 50 Pac. 633, 62 Am. St. income, and the added net incomes and profRep. 261, 38 L. R. A. 460, holds that the its, if any, which, by its acquirement as such method of fixing present value by ascertaining going concern, would accrue to a purchaser cost of replacement is not applicable to prop during the time required for such new conerty of this character, because, chiefly, the struction, and for such development of busiconstruction and development of waterworks ness and income. We think this instruction is a matter of growth. At the outset the com should be given. These are all proper matpany owning them is a pioneer. It must keep ters for consideration "among other things." pace with or anticipate municipal growth. They are not controlling. Their weight and The works must be constructed, and usually value depend upon the varying circumstances no reward can be realized by the constructors of each particular case. Of course a plant, as until some time has elapsed. In the mean such, already equipped for business, is worth time, as the city grows, the facilities of build more, if the business be a profitable one, than ing such works are increased, and the cost the mere cost of construction. of construction thereby diminished. But we The defendants' request 10 should also be think that, at the most, these considerations given. It asks, in effect, that, in addition to suggest only that other elements are also tak structure values already considered, the apen into account in fixing present value. So praisers should consider all the franchises, far as they relate to the original hazard, we rights, and privileges now held by the Maine have discussed them in an earlier part of this Water Company within the Kennebec water opinion. We think the inquiry along the line district and Benton and Winslow, and allow of reproduction should, however, be limited to just compensation for them as such. This the replacing of the present system by one valuation, however, must be made with refsubstantially like it. To enter upon a com erence to the character and duration of the parison of the merits of different systems franchises. So far as appears, they are not to compare this one with more modern sys- exclusive, and they are subject to repeal. tems-would be to open a wide door to specu- This we have already discussed. A franchise lative inquiry, and lead to discussions not ger is property, and it has value. In this case mane to the subject. It is this system that the franchises have value in themselves, inis to be appraised, in its present condition and asmuch as they give the owner the privilege with its present efficiency.

of doing what is called a "profitable business." Defendants' request 8 is, in effect, that, in We have already shown that the existence of estimating even the structure value of the such franchises may also enhance the value plant, allowance should be made, in addition of the plant by which they are exercised. It to the value as otherwise established, for the should be remembered, however, that a fraufact, if proved, that the water system is a chise has only one appraisable value, and going concern, with a profitable business and care should be taken that that value is apgood will already established, and with a praised only once. present income assured and now being earned. The defendants' request 11 should be given We think this instruction, with a modification in this case. It has been given in part alto be noted, should be given. Newburyport ready. It is that the value of a frauchise Water Co. v. Newburyport, supra; National depends upon its net earning power, present Waterworks Co. V. Kansas City, supra; and prospective, developed and capable of deGloucester Water Supply Co. v. Gloucester, velopment, at reasonable rates; that the valsupra; Bristol v. Waterworks, 23 R. I. 274, ue to be assessed is the value to the seller, 49 Atl. 974. But the term "good will” may and not to the buyer; and that “just combe misleading. Lord Eldon said that good pensation" means full compensation for evwill is nothing more than the probability that erything or element of value taken. Monon

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