Case ID: mich_35/html/0148-01.html
Source: Caselaw Access Project
Author: {"author": "Cooley, Ch. J.:", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Nahum E. Thomas and others v. James Gain.
    
      Assessments for sew\^ sewers, levied according to the superficial area of lots, witliout regard to actual or probable benefits, are unlawful; and though the legislature has authority to prescribe the rule for apportioning benefits in levying such assessments, the rule adopted must at least be one which it is legally pos- . sible may be just and equal as between the parties assessed.
    
      Assessments: Superficial area. A statute authorizing an assessment according to the superficial area upon such lots as the common council shall determine are increased in market value by the improvement, whether contiguous or not, whether directly benefited or not, or whether city lots or out lots, is held unconstitutional and void.
    
      Special assessments: Benefits: Burdens, The principle upon which alone special assessments can be sustained is, that those who enjoy the benefits shall equally bear the burden.
    
    
      
      ^•Taxation: Opportunity io be head'd. Parties whose property is to “be taken by summary tax proceedings are entitled as of right to he heard at some stage of the proceedings before the tax becomes an established charge against them or their property. 
    
    
      Equity pleading and practice: Dili to enjoin a tax: Cloud upon title to lands. A hill to enjoin the collection of a tax which by statute is made a lien upon lands, is sustained as a proper one to remove a cloud upon the title to lands.
    
    
      Parties: Objection: Amendment. The city marshal alone having been made defendant to such a hill to enjoin the collection of a city sewer tax, it was held the city was a necessary party; but this objection not having been seasonably made, it was obviated by * amendment at the hearing.
    
      Heard October 12,
    
    
      Decided October 25.
    
    Appeal in Chancery from St. Clair Circuit.
    
      G. J. Walker, for complainants.
    The statute is yoid, because it authorizes the imposition of a tax without distinctly stating the object to which it shall be applied: Const., Art. XV, § 14/ 1 Comp. JO., p. 74.
    
    
      The cost of the sewer is the measure of the tax, but that cost has already been fully paid. The money is not, therefore, to be applied to the construction of the sewer, or to the payment for its construction.
    What is to be done with the money ? The law is silent. This, we submit, is fatal. The object doubtless was to pay this money into the public treasury, but the requirement of the constitution is imperative. That object should be stated in the law itself, not left to the inference of the officer who shall collect the money.
    The law is also void because it violates first principles in excluding the tax payer from a hearing, and from all opportunity of redress in case of error or wrong in the assessment. The notice required was a sham and a cheat. There was no review. In all our systems of taxation this opportunity for a hearing is given: 1 Gomp. L., § 988; Laws of 1859, pp. 997, 1002; Hoyt v. Saginaw, 19 Mich., 45; Butler v. Supervisors, 26 Mich, 29; Cooley on Const. Lim., 381, notes; Cooley on Taxation, 265-6, 232.
    We submit further that it is void because it establishes *an arbitrary and unequal rule of apportionment, without reference to the cash value of the property to be assessed, or the benefits conferred by the improvement.
    It is not denied that the legislature may fix a proper rule of apportionment, but it must have some ground of justice Thus, unquestionably, an assessment in proportion to the benefits conferred is valid: Hoyt v. Saginaw, 19 Mich., 43; Cooley on Taxation, 448. So it has been held that in improving a street the expense may be apportioned according to the frontage, or according to the value of the property, as the legislature may determine: Cooley Const. Lim.,504-7; Cooley on Taxation, 451-2; Motz v. Detroit, 18 Mich., 495; but we submit a tax of this kind, apportioned by the area, is unjust and unequal.
    The gross inequality of this rule in the given case can be best shown by reference to the plat, which shows that portions of the property are already accommodated by the Ontario street sewer, which was paid for at the public expense. Other porlions are so situated that they can receive, little or no benefit from the sewer in question, while other property will be greatly benefited. Its inequality is conceded.
    This mode of assessment is quite as objectionable as would be the charging of the expense of grading to each lot in the front of which it was made: Clapp v. City of Hartford, 35 Conn., 79; State v. McClosky, 37 N. J., 390; Downer v. Boston, 7 Cushing, 277; Wright v. Boston, 9 Cushing, 236; Cooley on Taxation, 453.
    
      W. 2?. Atkinson and W. T. Mitchell, for defendant.
    The only serious question presented by the bill and proofs, that occurs to us, is, whether the act authorizing the reassessment was a valid law under the constitution. Similar legislation was held to be valid In re Van Antwerp et al., by the court of appeals, as stated in Albany Law Journal of Dec. 26, ’75, at page 410. We do not find it yet reported.
    ’•’Possibly it may be urged that this act does not make sufficient provision for review and correction, and that the notice was deficient in that respect. We, however, insist that review and correction are to be fairly implied from the time the assessment was to remain in the clerk’s office. There could be no other purpose for the time given, and all persons affected by it must have so understood it and acted upon it. But it is clear from the case no one appeared for any purpose and no review or correction was sought.
    But even if the law is unconstitutional, or imperfect, or the proceedings irregular, then, we submit, the complainants have not stated or proved a case entitling them to an injunction, the only relief sought.
    The bill charges that all the proceedings were “wholly illegal and void,” and gives reasons, and after stating what property is assessed, states that defendant, as city marshal (or so claiming), “threatens and intends to collect the amount of said several assessments by a levy or sale of Vxe personal property, goods and chattels of complainant,” and nowhere charges that their lands would be sold or any cloud created on their titles.
    
      Levy upon or sale of personal property, unless irreparable injury •would be done, and this is not stated, does not call for the interposition of a court of equity by injunction. Their legal remedy was ample and sufficient: Cooley on Taxation, 528; Youngblood v. Sexton, 32 Mich., 406.
    It will be perhaps asserted that the bill charges that Gain pretends that the taxes are liens upon the lots described. And the defendant admits they are liens upon the lots, and he would have collected from their personalty.
    We submit that there is no cause for injunction until there is some effort to enforce the liens.
    But in view of the whole case we cannot see why the assessment and taxes are not legal, nor any such irregularity as should invalidate the taxes. And that even *if the bill was to prevent a cloud upon title, it and the proofs do not make out a sufficient case.
    
      
       To authorize a special assessment, the benefits must be direct and certain, not remote and contingent: New York, &c. B. B. Co- v. New Haven, 42 Conn., 279. The benefits must be present and peculiar, not merely intended or speculative, as where land is assessed for a main sewer, which cannot he reached from it for lack of lateral sewers: State v. Elizabeth, 40 N. J. L., 274; In re Pequest River, 39 id., 433. Por a sewer assessment by area upheld see Grimmell v. Des Moines, 57 la., 144.
      In State v. Newark, 37 B. J. L., 415, the question arose as to the right of the legislature to control the apportionment of benefits. Beasley, Oh. .T., after stating that it is competent for the legislature to impose special burdens on the benefited property, says: “ I think it impossible to assert with the least show of reason that the legislative right to select the subject of taxation is not a limited right. * * * In a government in which the legislative power is not omnipotent, and in which it is a fundamental axiom that private property cannot he taken without just compensation, the existence of an unlimited right in the law making power to concentrate the burthen of a tax upon specified property, does n<?t exist. If a statute should direct a certain street in a city to be pavod, apd the expense of such paving to be assessed on the houses standing at the four corners of such street, this would not he an act of taxation, and it is to be presumed that no one would assert it to be such. If this cannot be maintained, then it follows that it is conceded that the legislative power in question is not completely arbitrary. It has its limit; and the only inquiry is where that limit is to he' placed.” So, where it was held that the assessment district, made up of city and rural property, was so far wanting in uniformity as not to allow of assessment by frontage, the court, by Agnew, Ch. J., says: “It is so plainly, palpably, rankly, and ruinously unjust, it must be pronounced no proper or lawful mode of special taxation, but an injustice so gross as to be void against tbe rights of property as protected by the Bill of BightsSeely v. Pittsburgh, 82 Pa. 8t., 360.
    
    
      
       Land owners assessed for local improvements have a right to be heard even when the act authorizing the assessment is silent as to notice. It is not enough that they have notice of hearing on application to a court for confirmation of the commissioners’ report: State v. Corners, 41 N. J. L., 83. Stuart v. Palmer, 74 N. Y., 188; Lehman v. Robinson, 59 Ala. 219; Doolv. Cassopolis, 42 Mich., 547; Darling v. Gunn, 50 111., 424, illustrate the same rule; •and see Davidson v. New Oi'leans, 96 U. S., 97; Kennard v. Louisiana, 92 IT. S., 480; Reel. Dist. v. Hagar, 6 Sawy., 569. The notice of the improvements may, in the legislative discretion, he given by publication: In re DePeyster, 80 N. Y., 565.
    
    
      
       As to when a tax is a cloud upon title, see Detroit v. Martin, 34 Mich,, 170; Curtis v. East Saginaw, infra, 508.
    
   Cooley, Ch. J.:

The principal question in this cause is, whether it is competent to provide by law that sewer taxes in a city shall be assessed upon the lots and lands benefited in proportion to their superficial area. A subordinate question is, whether, conceding such an assessment to be legal, it can be lawfully made without giving the parties concerned an opportunity to be heard.

The assessment in question was laid under .act No. 241 of 1875. — Local Acts 1875, p. 8. The second section of that act provides that before the assessment shall be made, the common council shall, by resolution, declare what lands, lots, and premises are and have been benefited by the construction of the sewers respectively, and such lots, lands, and premises are then to constitute the assessment district for the purpose of assessing the cost and expense of such sewers respectively. By the fourth section it is provided that the assessment shall be .made on the lots, lands, and premises within the district “in proportion to the number of superficial feet therein.” It is further provided that the assessment roll, when completed, shall remain on file with the city clerk for' at least two weeks, at the end of which timo “the same shall be a valid lien and assessment upon and against the several lots and descriptions of land.” No hearing on the assessment is provided for.

The principal objection made to the assessment is, that it is not apportioned among the parties benefited upon any principle recognized in the law; that it is made on a basis purely arbitrary, and consequently cannot be justified as an exercise of the taxing power. It is not claimed that an assessment by benefits would be inadmissible, but it is insisted that an assessment by the area of lots, irrespective of proportionate benefits, is nothing but a levy of arbitrary exactions, and therefore unconstitutional.

*The proper method of levying assessments for sewers has not been much discussed by the courts. In England they have generally been laid in proportion to benefits received, estimated according to the yearly value of the lands within the district. — Rooke's Case, 5 Rep., 100; Masters v. Scroggs, 3 M. & S., 447; Netherton v. Ward, 3 B. & Ald., 21; Stafford v. Hamston, 2 B. & B., 691; Soady v. Wilson, 3 Ad. & El., 248; Metropolitan Board of Works v. Vauxhall Bridge Co., 7 EL & Bl., 964. In this country, assessments for sewers, and also for drains, have generally been levied upon an estimate of special benefits. — Reeves v. Treasurer of Wood Co., 8 Ohio N. S., 333 ; Sessions v. Crunkilton, 20 Ohio N. S., 349; Draining Co. Case, 11 La. An., 338; O’Reiley v. Kankakee Braining Co., 32 Ind., 169; Wright v. Boston, 9 Cush., 233: Springfield v. Gay, 12 Allen, 612; Brewer v. Springfield, 97 Mass., 152; Cone v. Hartford, 28 Conn., 363; Commonwealth v. Woods, 44 Penn. St., 113., It was decided in Connecticut, that an arbitrary assessment by the frontage of lots was unreasonable and invalid.— Clapp v. Hartford, 35 Conn., 66; but in Pennsylvania, assessments which charged upon lots a portion of the costs of sewers, not to exceed a certain maximum per foot front, have been sustained. — Lipps v. Philadelphia, 38 Penn. St., 503; Philadelphia v. Tryon, 35 Penn. St., 401.

The assessment of sewer taxes by the superficial area is quite unusual. In the southwest, levee taxes are sometimes assessed in that proportion, and the right to make such assessments has been sustained. — Daily v. Swop, 41 Miss., 361; Alcorn v. Hamer, 38 Miss., 652; Williams v. Cammack, 21 Miss., 209; Smith v. Aberdeen, 25 Miss., 458; McGehee v. Mathis, 21 Ark., 40; Wallace v. Shelton, 14 La. An., 498. In the latter case it is intimated that while no basis of assessment which could be fixed upon would be absolutely just, yet as it costs as much to protect one acre of land from overflow as it does to protect another, the apportionment by the area is not presumptively unjust. A *like decision has been made in Missouri; the court’s attention being directed apparently only to the question whether the assessment was such taxation as under the constitution was required to be apportioned according to the value of property.- — Egyptian Levee Co. v. Hardin, 21 Mo., 491. This decision was afterwards applied to an assessment for sewers, the court apparently being of opinion that there was no difference in principle between the cases, and discussing the subject with a bare reference to previous decisions. — St. Louis v. Octers, 36 Mo., 456.

It is quite evident to our minds, however, that when it has been determined that a case is one in which a special assessment may be laid, we have not got over all the difficulties that present themselves here. That is only a preliminary question, and involves only a single consideration, namely: whether the particular burden which it is proposed to levy is or is not a tax in the meaning of that term as it is employed in the constitution in making provision that taxes shall be laid by the value of property. If it is a tax in the ordinary sense, it must be assessed by value; if it is not a tax in that sense, it must be apportioned on some other basis. But it does not follow that it may be apportioned on any basis whatsoever which the legislature may see fit to prescribe.

It has been decided in this state that an assessment of paving and similar taxes may constitutionally be made in proportion to the frontage of lots along the improvement.— Williams v. Detroit, 2 Mich., 560; Motz v. Detroit, 18 Mich., 495; Hoyt v. East Saginaw, 19 Mich., 39. The idea that underlies statutes for this purpose is, that the benefit to the abutting lots is generally in proportion to the length of their respective fronts, and that as a rule this principle of apportionment is more just than any other. There is a basis of truth to this idea, and it is so'generally accepted that assessments for street improvements are perhaps now more generally apportioned by the frontage than by any other standard. In Warren v. Grand Haven, *30 Mich., 24, it was held that the court could, not say, as matter of law, that an assessment for a sewer, estimated by the foot front of abutting lots, was not laid in proportion to actual or probable benefits. In Brewer v. Springfield, 97 Mass., 152, an assessment of benefits by the value of the lands, exclusive of buildings, was sustained. In several cases it has been decided that ip assessing benefits the future probable advantages may be considered, as may also be the incidental benefits, equally with those which the land receives directly. See Soady v. Wilson, 3 Ad. & El., 248; Hammersmith Bridge Co. v. Overseers of Hammersmith, L. R., 6 Q. B., 230.

But it is generally agreed that an assessment levied without regard to actual or probable benefits is unlawful, as constituting an attempt to appropriate private property to public uses. This idea is strongly stated in Tide- Water Co. v. Coster, 18 N. J. Eq., 519, which has often been cited with approval in other cases. It is admitted that the legislature may prescribe the rule for the apportionment of benefits, but it is not conceded that its power in this regard is unlimited. The rule must at least be one which it is legally possible may be just and equal as between the parties assessed; if it is not conceivable that the rule prescribed is one which will apportion the burden justly, or with such proximate justice as is usually attainable in tax cases, it must fall to the ground, like any other merely arbitrary action which is supported by no principle.

The only discretion which the act in question allows to the common council as an assessing board is in determining what lots and lands are benefited by the improvement. When that determination is made, the rule of apportionment is fixed, and it must be made according to the area. It is not required that the lands shall lie contiguous to each other, or that the benefits to be- taken, into the account shall be only the direct benefits to the land. We find nothing in the act to preclude the taxation of lots remote from the sewer if their market value, actual or speculative, *is increased by means of it. While this increase of value might be a reason for general taxation for sewer purposes, it is manifest that it could not possibly warrant an apportionment by superficial area, since that, under no circumstances, could be just unless limited to lands directly and peculiarly benefited. But this act makes no provision by which parties assessed may of right drain into the sewer, so as to be enabled to reap the benefits they ought to derive from the expenditure. It makes no distinction between property actually occupied, or capable of being occupied for city purposes, and that of an agricultural nature, of which there must be some within the city limits, upon which such a burden would fall with great severity and injustice. Nor does it confine the assessment to lands upon the street in which the sewer is laid; and in the assessment before us lots on a parallel street are assessed. These lots, it is to be assumed, will be assessed again if a sewer is constructed in the street on which they front, and there is nothing in the act or in the nature of things to prevent a lot being assessed several times in different districts, as often as a sewer is constructed which, in the opinion of the common council, is productive of benefit to the neighborhood. This might not be unjust if each assessment was laid upon an estimate of actual benefits; but when it is levied by an arbitrary standard which requires the burden to be laid upon lands far from the sewer .and only slightly benefited, equally with those fronting upon' it and greatly benefited, it is manifest that it must not only woi’k injustice, but that in some cases it may amount to actual confiscation. It is not, therefore, legally possible that such an apportionment of the cost of sewers can be just or equal, or in proportion to benefits, and when injustice must result from its adoption, we have no alternative but to reject the assessment as an unlawful exaction. It is an assessment made in entire disregard of the principle upon which special assessments can alone be sustained; the principle, namely, that “those who enjoy the benefits shall equally bear the burden.”— Shaw, C. J., in * Wright v. Boston, 9 Cush., 233, 241. See Matter of Washington Avenue, 69 Penn. St., 360; Patterson v. Society, etc., 24 N. J., 385.

In what has here been said, it is not intended to decide, or to intimate, that a sewer tax may not, under some circumstances, be lawful though apportioned by the area of the lots assessed. If under the law providing therefor the assessment were confined exclusively to lots lying contiguous to each other, and on or near the street in which the sewer was to be' constructed, and all properly urban lots, or, as they are sometimes designated, in-lots, as distinguished from the outer lands of the town, which receive only slight and indirect benefit from such improvements, and if the law also provided for private drains "into the sewer as matter of right on the part of the-proprietors of the lots assessed, the case would be so different from the one now before us that much of what we have said could have no application. We confine our discussion strictly to the record before us, and to the act under which this assessment is laid, not caring to enter upon any discussion of hypothetical eases which may never arise, or which, if they do arise, can better be considered when their special features are presented for consideration.

The principle of the statute being thus found to be unsound, it does not become necessary to consider details. But as new legislation will probably be procured, it seems proper to declare in this case that parties whose property is to be taken under summary tax proceedings are entitled as of ight to be heard at some stage of the proceedings before the tax shall become an established charge against them or their property. It was said by Agnew, J., in Philadelphia v. Miller, 49 Penn. St., 440, 448, that “notice, or at least the means of knowledge, is an essential element of every just proceeding which affects rights of persons or property.” The principle was recognized by this court in Butler v. Supervisors of Saginaw, 26 Mich., 22. In England, until appeals were given from sewer assessments, it *was held that the party taxed might sue the officer in trespass or replevin for a levy on his property, and in that suit might defeat the assessment if he could show that he was not benefited as the commissioners had adjudged. — See Dore v. Gray, 2 T. R., 358; Masters v. Scroggs, 3 M. & S., 447; Netherton v. Ward, 3 B. & Ald., 21; Stafford v. Hamston, 2 B. & B., 691; Soady v. Wilson, 3 Ad. & E., 247; Emmerson v. Saltmarshe, 7 Ad. & El., 266; Metropolitan Board of Works v. Vauxhall Bridge Co., 7 El. & Bl., 964. In this country we do not allow the justice of an assessment to be inquired into in a suit to charge the officers with a personal liability; but it follows legitimately from this that parties taxed must have an opportunity to be heard regularly at some stage in the proceedings. Their rights are not to be concluded by proceedings which are wholly ex parte.

We have deferred to the last a question raised-by the defendant which goes to the jurisdiction of the court. We have decided in several cases that equity has no jurisdiction to restrain the collection of a tax from goods and chattels.— Youngblood v. Sexton, 32 Mich., 406; Hagenbuch v. Howard, 34 Mich., 1; Mears v. Howarth, Ib., 19. The bill in this case complains that the city marshal is about to proceed in the collection of the assessment from the personal property of the complainants; and had it been demurred to, the objection would have been fatal. But this case differs from Youngblood v. Sexton, in that the tax is one levied upon real estate, and which by the statute is made a lien. The case is consequently a proper one for a bill to remove a cloud from the title. But to such a bill ■che city should have been made a party, as the cloud would not be removed by merely enjoining the action of the marshal on his tax warrant. It was held in the similar ease of Palmer v. B,ich, 12 Mich., 414, that where the objection to want of parties was not seasonably made, it might be obviated by amendment made at the hearing; and with a view to putting an end to expensive litigation, we are disposed to allow that course to be taken here. The case will be ordered remanded, with leave to the complainant to amend by adding the city as a formal party, and with directions to enter final decree for complainants when the amendmenfc is made. But under the circumstances no costs will be awarded to either party.

The other justices concurred.