EXEMPTION FROM TAXATION AS A CONDITION OF PURCHASE.

Court of Appeals for Lucas County.

#### Carrie E. Vrooman et al v. City of Toledo et al.

Decided, December 14, 1914.

*Municipal Corporations*— Land *Purchased for a Bouelvard*— Sale *Conditioned on Exemption from Assessments for Improvement and Maintenance*— Condition *as to Maintenance-Void as Against Public Policy.*

1. Where a city, having' statutory authority to acquire land for street purposes and assess the cost upon the general tax list, purchases land to be used as a boulevard, and as a consideration for such land agrees that such land shall be improved for boulevard purposes within ten years, and that no special tax or assessment for the improvement thereof or the maintenance of said boulevard will ever be levied or assessed against the property abutting' said boulevard, except such as is levied in the general levy for park purposes, and where the deed for such property is executed by the grantor and delivered to the city and the city takes possession of such land and improves the same in accordance with the terms of the deed, it will be enjoined from assessing the cost of such improvements against the abutting lands of the grantor.

2. That part of such agreement providing that the abutting lands of the grantor shall never be assessed for the maintenance of such boulevard is against public policy and is void.

*Kohn, Northup, Bitter & McMahon,*for' plaintiffs.

*W. S. Thurstin, Jr.,*City Solicitor, and *Thomas L.*Gifford, contra.

Chittenden, J.

Appeal from the court of common pleas.

This cause has been submitted upon a demurrer to the petition. The petition sets forth, in substance, that in the fall of 1899 certain of the plaintiffs, for a valuable consideration, sold and transferred 'by proper deed of conveyance, to the defendant, *130the city of Toledo, certain property therein described. The petition reads in part as follows:

> “One of the considerations and conditions of said sale of the premises last above described to the city of Toledo, as evidenced by and contained in said last mentioned deed of conveyance was and is that the sáid premises last above described, together with other lands procured by said city for the same purposes, would be opened by said city from Walbridge Park to Ottawa Park in said city and improved by turnpiking on or before July 1, 1900, and that said boulevard between said points would all be permanently improved and completed by opening it to its- full length and 'grading- it' to 'its' permanent grade, constructing roadways, improving the same with gravel or other- suitable material to make improved roadways thereof, within ten years from the date of said last described conveyances, and would in like, maimer be perpetually maintained as a boulevard and that, no special tax or assessment for the improvement thereof or the maintenance of said, boulevard would ever be levied or assessed, against the property abutting said boulevard except such as is levied in the general levy for park purposes. Ever since said 7th day of November, 1899, the said defendant, the city .of Toledo, has been the owner and in possession, of the premises last above described.” . • .

- Thereafter in the .petition it is alleged-that the city.took possession of the property and improved the same as a boulevard, in accordance with the condition of the deeds as set forth in the petition. That as a part of the improvement the city constructed sidewalks along the side of the boulevard and in front of the premises of the several plaintiffs, and thereafter passed an ordinance levying a special assessment against the abutting property to pay the cost and expense of the construction of the sidewalks, the amount assessed against each piece being specifically set forth in the petition. It is alleged that the ordinance was duly approved and that the assessment was thereafter certified to the auditor of the county, who placed the assessments ¿gainst the several parcels of land of the plaintiffs upon the tax duplicate of Lucas county, to be collected with the general taxes. An injunction is asked restraining'the collection of the assessments so levied-'by the city,- - -

*131Tbe only question sought to be raised by the demurrer, and the only question argued, is the validity of the condition set forth in the deeds as one of the considerations for the sale of the property. It is claimed that the condition which provides that no special tax or assessment for the improvement of the boulevard or the maintenance of the same would ever be levied or assessed against the property abutting upon the boulevard, except such as are levied for general park purposes, is void because it is an attempt to exempt property from taxation.

The claims of the several parties have been presented to the court in orál argument and by briefs. We have examined the cases cited by counsel and many others, but do not believe it would be profitable to enter upon an extended examination and analysis of these eases in this opinion.

At the time the deeds were executed the city was empowered, by virtue of Section 1692, Eevised Statutes, paragraph 18, to lay off, establish, open, widen, narrow, straighten, extend, keep in order and repair streets, etc. By paragraph 34 of the same section the city was empowered to acquire, by purchase or otherwise, and to hold real estate.

. Section 2263, Eevised Statutes, provided that when the corporation appropriated or otherwise acquired lots or lands for the purpose of laying off, opening, extending,' straightening or widening a street, the council might assess the cost and expense of such appropriation or acquisition and of the improvement, upon the general 'tax list, in which case, the same should be assessed lipón all the taxable real and personal property in the corporation.

Section 2264, Eevised Statutes, provided that in the city of Toledo the municipality might, if it so desired, assess the cost and expense of such improvement upon either" the general tax list or upon the benefited property, and provided for the time when such assessments might be made due and payable, etc.

It is to be observed that the petition alleges that this contract has been fully performed, the grantors having executed and delivered the deed for the property, and the city having accepted such deed and taken possession of the property and improved *132the same in accordance with the conditions and provisions of the deed. Therefore, all those eases in which the parties sought by mandamus to compel the specific performance of similar agreements are of little, if any, assistance in determining the question here-presented.

The statutes above cited conferred upon the city full power to acquire the land in question, either by process of condemnation or by purchase. Had it been acquired by condemnation, under the decisions of this state the cost and expense could not be assessed upon the abutting land. *C., L. & N. Ry. Co.*v. *Cincinnati et al,*62 O. S., 465; 4 Longsdorf’s Notes, 839.

In Ohio, therefore, when property is acquired by a city for the purpose of opening and laying out a street, unless the method provided for by the special act, Section 2264, is followed, the cost thereof must be paid by the city and assessed upon the general tax list. There is no claim that the city undertook to act under Section 2264 in the purchases set forth in the petition in this case.

The decided cases sustain the statement of the law set forth in 2 *Elliott on Boads and Streets,*Section 678, as follows:

> “In the absence of legislative authority a city, under ordinary circumstances'at least, has no power to make contracts for the exemption or commutation of local assessments.”

. The law is stated to .the same effect in 1 Page and Jones Taxation by Assessment, Section 616, and in 28 Cye., 1133.

After a careful consideration of the facts alleged in the petition, we do not construe the contract as therein set forth as one granting exemption from taxation. There was no attempt by the wording of the deed to exempt the property from general taxation. The deed provided, first, that the abutting property should not be subject to any special tax or assessment for the improvement of the boulevard, and, second, that it should not be required to pay any special tax or assessment for the maintenance of the boulevard. The provision that the abutting property should not be called'upon to pay any assessment for the 'cón'struction and improvement of the boulevard is, in effect, an agreément that the value of the land so conveyed by the grantors *133to the city was equal in value to the cost of making the improvement contemplated. The city needed the land for the purpose of constructing a boulevard connecting its several park properties. This land was valuable and its value was recognized by the city. The construction of the boulevard would no doubt be of some value to the abutting property of the .grantors. That the construction and improvement of the boulevard would entail a given expense upon the city was known. The grantors and the city were competent to contract and it was undoubtedly concluded that the values were equal, and that the one should be offset by the other. There is no claim that the one value was not as great as the other, and there is nothing in the pleading to indicate that either the city or the grantor was imposed upon. This view of the case is in accordance with the opinion of the United States Circuit Court of Appeals in the ease of *Bartholomew*v. *The City of Austin,*29 C. C. A. Rep:, 568, 577, and the case of *Grant*v. *City of Davenport,*36 Iowa, 405, 406, cited by the circuit court of appears in the above case.

The-ease at bar we think corresponds in principle with'the case of *Coit*v. *The City of Grand Rapids,*115 Mich., 493, in which ease, concerning a similar contract, Judge Grant, rendering the opinion, said:

> “The contract was one of sale and purchase. The deed was not intended as a gift.”

See also, *City of Omaha*v. *Megeath,*46 Neb., 502; *Browne*v. *Palmer,*66 Neb., 287.

There is no positive statutory provision requiring a city to pay for the property so acquired, in money. The city having purchased the land and paid the consideration agreed upon by making the improvements as provided in the deed, and having retained and used tbe land for boulevard purposes, it would seem to be inequitable to permit the city to thereafter collect from the grantors the cost of making the. improvements that the city had agreed specifically to make as a consideration for the land conveyed by the grantors to the city.

The ease presented by the petition is quite different from the ease of *Richards*v. *Cincinnati,*31 O. S., 506, in which the owners *134of land dedicated certain streets and sought to attach to the dedication a stipulation that the adjoining property should thereafter 'be exempt from assessments for the improvement of such streets.

That contracts on behalf of a municipality by which it is attempted to exempt property from assessments and taxes indefinitely, are contrary to public policy, we think, is well established upon authority of the decided cases and upon reason. We therefore hold that that part of the condition in the deed which provides that the abutting property shall never be assessed for the maintenance of the boulevard is void. *Coit*v. *City of Grand Rapids, supra.*

The court in the case just cited did not decide the effect of an agreement to exempt abutting lands from taxation for the maintenance of the sewer, under the terms of the' deed in that case, but raised the- question as to whether or not the contract would be valid in so far as it undertook to exempt from the maintenance of the sewer.

We do not find that the cases cited by counsel for the city are in conflict with the conclusion' we have reached. They are all, or nearly all, readily distinguishable upon grounds that are not obscure.

. The demurrer will be overruled and the defendant given leave to answer.

Kinkade, J., and Richards, J., concur.