Hamilton Manufacturing Co. v. City of Lowell

Knowlton, C. J.

These are petitions to the Superior Court in the nature of appeals from decisions of the assessors denying to each of the petitioners an abatement of its taxes upon real estate. The petitioners are manufacturing corporations; and the respondent contended as to each petitioner that its land, buildings and machinery in the mill yard, were all parts of one parcel, con *117 stituting a single unit for taxation, and that the petitioner is not entitled to an abatement unless the parcel taken as a whole was overvalued, even though there was an overvaluation of the land, or buildings, or both.

Under our statutes and decisions, real estate and personal estate are two distinct classes of property for the purpose of taxation. Preston v. Boston, 12 Pick. 7 . Howe v. Boston, 7 Cush. 273 . Lowell v. County Commissioners, 3 Allen, 546 . Taxes upon real estate are a lien upon the property, and may be collected by a sale of it, while taxes upon personal property cannot be collected in this way. This in itself is a sufficient reason for assessing them separately. Different parcels of real estate belonging to the same owner cannot properly be assessed together upon a single valuation. Hayden v. Foster, 13 Pick. 492 . Jennings v. Collins, 99 Mass. 29 .

Land and the buildings upon it are ordinarily parts of the same real estate, and they cannot be separated for the purpose of collecting taxes. Although for statistical purposes they are at first valued separately, their aggregate worth, limited by their value in use together, constitutes the valuation of the entire real estate for the purpose of taxation. But this principle does not apply to machinery in a mill used with land and buildings for manufacturing purposes. The requirement of the Pub. Sts. c. 11, § 53, (R. L. c. 12, §§ 58, 59,) that machinery shall be valued separately, is partly for statistical purposes, and partly because it has to some extent a local character which well may make it a subject of local taxation. Its worth is deducted from the whole value of the corporate property in determining the value of the franchise. See R. L. c. 14, §§ 37, 42. Such machinery is not taxed as real estate, but as personal property. ' The land and the buildings and the water power are real estate, and are taxed accordingly.

Except for the purpose of enforcing a lien in the collection of the tax on real estate, it is ordinarily of no practical consequence to any one, in drawing a line between machinery which is personal property and fixtures in a building which are real estate as between grantor and grantee, whether the division is made precisely as the law makes it in connection with conveyances of such property. It is often a matter of great difficulty to deter *118 mine as between mortgagor and mortgagee, or grantor and grantee, whether certain kinds of machinery do or do not pass as a part of the real estate. In all doubtful cases it is better that the rule as to taxation should be such as to give a lien for the collection of the tax only when the tax is upon that which is plainly real estate. Perhaps for this reason the statute authorizes taxation of machinery as personal property in terms broad enough to include that which otherwise properly might be taxed as a part of the building. But all that is taxed as machinery and not as a part of the building is taxed as personal property. It is not a part of the same unit of taxation as the land and the buildings.

The fact that, when the land, buildings and machinery are of more value if kept together and used for mill purposes than if separated, each of them should be valued for taxation at its worth as used in connection with the others, (see Troy Cotton & Woolen Manufactory v. Fall River, 167 Mass. 517 ,) does not affect the principle. In proceedings for an abatement, the machinery is to be treated as belonging to a separate class, and if the land or the building is overvalued an abatement may be ordered, whether the machinery is rightly valued or not.

The judge rightly ruled that, upon the agreed facts, the Hamilton Manufacturing Company is not taxable for the land within the railroad location. The right of the petitioner is a mere easement in the land, terminable on the happening of a contingency. The fee is in the Proprietors of the Locks and Canals, and the title of the railroad company under its location, inasmuch as the. land is outside of its road five rods in width, is not exempt from taxation under the statute. K. L. c. Ill, § 96. It is unnecessary further to consider the effect of the indentures, or to determine anything more than the questions raised by the exceptions.

Exceptions overruled.