Case Name: DETROIT BOARD OF STREET RAILWAY COMMISSIONERS v. COUNTY OF WAYNE
Court: Michigan Court of Appeals
Jurisdiction: Michigan
Decision Date: 1969-08-26
Citations: 18 Mich. App. 614
Docket Number: Docket No. 3,480
Parties: DETROIT BOARD OF STREET RAILWAY COMMISSIONERS v. COUNTY OF WAYNE
Judges: Before: T. G. Kavanagh, P. J., and Levin and Beer, JJ.
Reporter: Michigan appeals reports; cases decided in the Michigan Court of Appeals.
Volume: 18
Pages: 614–631

Head Matter:
DETROIT BOARD OF STREET RAILWAY COMMISSIONERS v. COUNTY OF WAYNE
Opinion of the Court
1. Taxation — County Taxes — Home Rule City — Transportation Utility.
Transportation utilities owned by home rule cities are not obligated to pay county taxes (CL 1948, 8 117.4f as amended by PA 1965, No 116).
References for Points in Headnotes
[1, 4, 5, 9] 51 Am Jur, Taxation § 563.
51 Am Jur, Taxation §§ 413, 414.
50 Am Jur, Statutes § 223.
51 Am Jur, Taxation § 563.
50 Am Jur, Statutes §§ 183-185, 190.
50 Am Jur, Statutes §§ 180, 181.
51 Am Jur, Taxation §§ 1172, 1173.
50 Am Jur, Statutes § 180 et seq.
50 Am Jur, Statutes § 384 et seq.
50 Am Jur, Statutes § 159 et seq.
2. Taxation — Property Tax — Change in Status.
Statute providing that property is not to be removed from the property tax rolls if it was subject to taxation on tax day, regardless of any change in the taxable status of sueh property since that day, does not apply to changes in the status of the property brought about by new legislation (MCLA § 211.29).
3. Statutes — Construction—Legislative Intent.
Courts construing legislation should attempt to determine what the legislative intent was.
4. Taxation — County Taxes — Transportation Utility — Exemption — Refund.
Statute which beeame effective July 2, 1965, whieh provided that transportation utilities owned by home rule cities no longer were obligated to pay county taxes held, not intended to require counties to repay municipal transportation utilities any portion of the taxes paid before the statute beeame effective (CL 1948, § 117.4f as amended by PA 1965, No 116).
5. Taxation — County Taxes — Transportation Utility — Exemption — Statute — Effective Date.
Statute which beeame effective on July 2, 1965, which provided that transportation utilities owned by home rule eities were no longer obligated to pay county property taxes held, to excuse sueh transportation utilities from taxes whieh were payable after the statute beeame effective even though taxes were assessed before the statute became effective (CL 1948, § 117.4f as amended by PA 1965, No 116).
6. Taxation — Words and Phrases — Local Taxes — County Taxes.
The term “local taxes” as used in statute requiring that transportation utilities owned by home rule cities must pay state and local property taxes as if privately owned does not inelude county taxes (MCLA § 117.4f).
7. Constitutional Law — Statutes—Object—Title of Statute.
No statute may embrace more than one object, whieh must be expressed in its title (Const 1963, art 4, § 24).
8. Constitutional Law — Statutes—Object—Title of Statute.
Statutes whieh by their title provide for the incorporation of cities and other units of local government may have as their object anything germane to the functioning of sueh units of local government (Const 1964, art 4, § 24).
9. Taxation — Constitutional Law — Statute—Object—Statutory Title — Home Rule Cities — Transportation Utility — Property Tax.
Provision for the acquisition by home rule cities of public transportation utilities and anything related to acquisition and ownership, and a provision regarding the taxability ■ .of such a transportation utility’s property may properly be included in a statute whieh by its title provides for the incorporation' of cities and other units of local government (Const 1963, art 4, § 24; MOLA § 117.1 et seq.).
10. Taxation — Payment Under Protest — Refund—Judgment—Interest.
A taxpayer is entitled to interest from the date of payment on all property taxes paid under protest where the Court of
Appeals orders a refund of such taxes.
Dissenting Opinion
Beer, J.
11. Constitutional Law —• Statutes —■ Object — Title — Taxation — Exemption.
The Constitutions have provided for more than 100 years that no law shall embrace more than one object which shall be expressed in its title; therefore the governmental right to tax should never be legislated under an inappropriate statute nor be buried in a statute not related to taxation (Const 1963, art 4, § 24; MCLA § 117.1 et seq.).
Appeal from Wayne, John B. Swainson, J.
Submitted Division 1 January 10, 1968, at Detroit.
(Docket No. 3,480.)
Decided August 26, 1969.
Rehearing denied November 26, 1969.
Complaint by the Board of Street Railway Commissioners of the City of Detroit against the County of Wayne and Louis H. Funk, Treasurer of Wayne County to recover certain property taxes paid under protest. Judgment for plaintiff. Defendant appeals. The Attorney General of the State of Michi gan intervened as a party defendant on appeal.
Judgment modified and affirmed.
Manuel Zechman, for plaintiff.
William L. Cahalan, Prosecuting Attorney and Aloysius J. Suchy and William F. Koney, Assistant Prosecuting Attorneys, for defendant.
Frank J. Kelley, Attorney General, Robert A. Derengoski, Solicitor General, and William D. Dexter and Rickard R. Roesck, Assistant Attorneys General,- for intervenor defendant.
Before: T. G. Kavanagh, P. J., and Levin and Beer, JJ.
Thomas Giles Kavanagh, Justice of the Supreme Court, assigned to sit on the Court of Appeals from February 27, 1969, “until the work assigned has been completed” pursuant to Const 1963, art 6, § 4,.and CLS 1961, § 600.225, as amended.
Circuit judge, sitting on the Court of Appeals by assignment.

Opinion:
Levin, J.
The plaintiff Department of Street Railways (DSR) has, over the years, paid both local taxes on its property situated outside Detroit's city limits and county taxes in accordance with the 1909 Amendment to the home rule act, which authorized a home rule city to purchase a transportation utility, and which provided:
"When a transportation utility is so acquired, state and county taxes shall be paid thereon as if privately owned, also local taxes on any portion of such property lying outside of the city limits." CL 1948, § 117.4f (Stat Ann 1949 Rev § 5.2079).
The State of Michigan has not levied an ad valorem property tax since 1934.
In 1965 the legislature eliminated the words "and county" from this statutory provision. Accordingly, after the July 2, 1965, effective date of this amendment, the DSR no longer was obligated to pay county taxes and, no State tax being levied, was obligated to pay only taxes levied by local units of government on the DSR's property located outside of Detroit's city limits.
The DSR claims it is entitled to a refund from the county of Wayne of
(1) 1964 Wayne county taxes, paid in January and February, 1965 (before the July 2, 1965, effective date of the amending act), applicable to so much of the county's fiscal year as remained after July 2, 1965 ; and
(2) 1965 Wayne county taxes, paid under protest in January and February, 1966.
The county contends that the DSR is not entitled to any refund of 1964 taxes and that the DSR was required as well to pay the 1965 taxes because they were assessed as of December 31,1964, a date before the effective date of the amendment, even though 1965 taxes did not become payable until a date, December 1,1965, after the effective date of the amendment. The county contends that the amendment creates an exemption from assessment and cannot affect an assessment made before the effective date. Thus, contends the county, since the amendment affects only assessments made after the effective date, the first assessment affected by the amendment was tlie assessment made as of December 31, 1965, and, accordingly, the first taxes from which the DSR became exempt were 1966 county taxes.
The county argues that the following statutory provision supports its contention that a change in the taxable status of property after assessment but before the assessment becomes payable does not affect liability to make payment:
"The roll shall be reviewed according to the facts existing on the tax day. The board [of review] shall not add to the roll any property not subject to taxation on the tax day nor shall it remove from the roll any property subject to taxation on said day regardless of any change in the taxable status of such property since such day." MCLA § 211.29 (Stat Ann 1960 Rev § 7.29).
In our opinion the county reads too much into the provision just quoted. This provision was added by PA 1941, No 234. Before this 1941 amendment was enacted, the Michigan Supreme Court had ruled that there was properly stricken from the assessment roll property held at the time of assessment by one who was not tax exempt and thereafter, before the final session of the board of review authorized to review that assessment, transferred to an organization which enjoyed tax exemption. Township of Grosse Ile v. Saunders (1933), 262 Mich 451. The 1941 amendment was designed to change the law applicable in that kind of situation. Henceforth, a change after the assessment date in the status of the owner [e.g., from exempt to nonexempt or vice versa) or in the nature of the property {e.g., its enlargement, improvement or destruction) would not affect its tax-ability or ad valorem value.
The 1941 amendment need not be read, however, as declaring a legislative purpose applicable to all future legislation changing the taxability of persons or property. In our opinion the 1941 legislation does not concern changes in status brought about by new legislation. The 1941 legislature did not mean to tie the hands of future legislatures, nor could it. In determining the legislature's intent in enacting a particular law, we are not encumbered by an absolute rule of construction such as that argued for by the county.
Our task is to determine what the 1965 legislature intended. Did the 1965 legislature intend that the county repay the DSR for county taxes paid in 1965 before the 1965 amendment was enacted? Did it intend that the DSR would, despite the passage of the amendment, be obliged to pay taxes which did not become payable until after the effective date of the amendment and that the benefit of the exemption would be deferred until the time for payment of 1966 taxes?
We have concluded that the 1965 legislature did not intend to require counties to repay municipal transportation utilities any portion of the taxes paid before the amendment became effective, but it did intend to relieve them from liability to pay taxes otherwise thereafter payable even though the assessment date for the taxes thereafter payable preceded the effective date of the amendment.
We arrive at this conclusion not only because that construction of the 1965 amendment appears to be the more sensible construction and the one most likely to be in accord with the legislature's purpose, but also because, read literally, the act as amended provides that the only taxes thereafter "payable" are State taxes (no longer levied) and local taxes. Thus, after the amendment took effect, county taxes no longer were required to be "paid."
As amended effective July 2, 1965, the statutory provision read: "state taxes shall be paid thereon as if privately owned, also local taxes on any portion of such property lying outside of the city limits." (Emphasis supplied.) Accordingly, effective July 2, 1965, the DSR, as to property located within Detroit's city limits, was not required to "pay" anything. Thereafter, all that "shall be paid" are "local taxes on any portion of such property lying outside of the city limits." Since the taxes for the year 1965 (county fiscal year December 1, 1965 — November 30, 1966) did not become payable until December 1,1965, and, thus, had not been paid on July 2, 1965, there was no further obligation to pay them. 1964 taxes (county fiscal year December 1, 1964 — November 30, 1965) had, however, already been paid when the amendment was adopted. In short, the exemption from taxation effected by the 1965 amendment is an exemption from future payment as well as an exemption from future assessment.
The intervenor's contention that the term "local taxes" includes county taxes is rejected. Clearly the legislature, at least for this purpose, distinguished between State, county and local taxes. While the word "local" may for some purposes include a county as well as a city, township, village, etc., in this case it is apparent that the word "county" and the word "local" have different meanings. When the legislature eliminated the word "county," it meant to exempt municipal transportation utilities from the payment of county taxes as to property located both within and without the limits of the parent city.
The DSB. alternatively contends that this statutory provision, imposing liability to pay taxes on public transportation utilities acquired by home rule cities, violates Michigan's one-object-expressed-in-the-title constitutional provision (Const 1963, art 4, § 24) and, for that reason, it is entitled to recover the taxes paid for 1964 as well as 1965.
It might have been better draftsmanship to have placed the provision concerning the taxability of municipal transportation utilities in the general property tax law (where one might expect to find it) rather than in the home rule act. There is, however, no constitutional requirement that the legislature do a tidy job in legislating. It is perfectly free to enact bits and pieces of legislation in separate acts or to tack them on to existing statutes even though some persons might think that the bits and pieces belong in a particular general statute covering the matter. The constitutional requirement is satisfied if the hits and pieces so enacted are embraced in the object expressed in the title of the amendatory act and the act being amended.
The home rule act and other acts providing for the incorporation of cities and other units of local government have been interpreted as having as their object anything germane to their functioning.
"Most of the great changes in our city organizations have come in under laws which did no more than to indicate by their titles a purpose to incorporate, or reincorporate, or revise the corporate charter of the municipality dealt with. Anything which is meant to form a permanent element in municipal arrangements is pertinent to the incorporation." Holden v. Board of Supervisors of Osceola County (1889), 77 Mich 202, 204.
So interpreted, the acquisition of a public transportation utility and anything related to its acquisition and ownership properly could be included in the home rule act. A provision regarding the tax-ability of a transportation utility's property is related to the ownership of such property. Therefore, such a provision does not go beyond the entitlement and does not violate the constitutional requirement.
The trial judge did not allow interest. In our opinion the plaintiff is entitled to interest from the time of payment and, accordingly, interest on the amount to be refunded should be computed from that date.
On remand, the judgment shall be modified to require a refund to the DSR of all ad valorem taxes paid in January and February, 1966, by the DSR to the county of Wayne plus interest thereon at the rate of 5% per annum from the time of payment. Nothing shall be refunded in regard to taxes paid by the DSR. to the county of Wayne in January or February,-1965.
No costs, a public question.
T. Gr. Kavanagh, P. J., concurred.
PA 1909, No 279 (MOLA § 117.1 et seq. [Stat Ann 1969 Cum Supp § 5.2071 et seq.]).
PA 1965, No 116 (MCLA § 117.4Í [Stat Ann 1969 Cum Supp § 5.2079]).
The county terms as "1964 taxes" the taxes assessed as of December 31, 1963, for the fiscal year of the county beginning December 1, 1964, and ending November 30, 1965, which did not become payable until December 1, 1964, and which were payable without penalty in early 1965, even though many (perhaps most) taxpayers paid the tax in 1965 and 11/12 of the eounty fiscal year is in 1965.
None of the eases cited by the parties is dispositive. In Mackinac Transportation Co. v. Township of Mackinaw (1913), 175 Mich 418, the Court did not decide that legislation providing a new exemption could not affect past assessments, but rather that in the factual context in which the new law there before the Court would operate the legislature did not intend to permit exemption from the payment of general property taxes for the tax year in which the new law was passed; rather that the first tax year for which exemption could be obtained was the tax year after passage of the new law.
The law there before the Court permitted owners of steam vessels to pay a specific tax in lieu of the general property tax. The cut-off date for payment of the specific tax was December 1. The Court reasoned that the legislature meant to establish as the cut-off day the December 1 preceding the tax year for which the general property tax exemption was sought rather than the December 1 of the tax year itself because otherwise it would not be known until the lien date (which was also December 1) whether a particular steamship would be subject to general property tax. The "troublesome predicament" (p 422) visualized by the Court is not presented in tins case. The DSR was not given a choice of taxes, it had no option, it did not have to take affirmative action to avail itself of the exemption from taxation effected by the amendment to the Home Hule Act.
PA 1965, No 116 (MCLA § 117.4f [Stat Ann 1969 Cum Supp § 5.2079]).
A similar contention involving the words "State taxes" was similarly analyzed and resolved in Hertzog v. City of Detroit (1966), 378 Mich 1. In that ease the Supreme Court declared that the DSR was not required to pay the Detroit board of education ad valorem taxes on its real and personal property situated in the city of Detroit, sinee, for the purposes of that aet, the Detroit board of education was not a State ageney levying a "State tax."
"No law shall embrace more than one object, which shall be expressed in its title." Const .1963, art 4, § 24.
The complete title of the home rule aet is as follows: "Ail aet to provide for the incorporation of cities and for revising and amending their charters." PA 1909, No 279, as amended by PA 1911, No 203 and PA 1913, No 5.
In all the following eases the subject matter dealt with in the aet under consideration was held to be within the objeet expressed in the title: Hall v. Calhoun County Board of Supervisors (1961), 373 Mich 612 (annexation of territory of one home rule eity by another); City of Detroit v. Wayne Circuit Judge (1897), 112 Mich 317 (requirement that notice be given to eity within 3 months of alleged negligent injury; aet was entitled: "an act to provide a charter for the city of Detroit") ; Village of Kingsford v. Cudlip (1932), 258 Mich 144, 151, and Bray v. Stewart (1927), 239 Mich 310, 317 (annexation of territory of a township by a village; the title of the act under consideration in the last 2 cited eases parallels the home rule aet, viz.-. "An aet to provide for the incorporation of villages and for revising and amending their charters." [PA 1913, No 95]); People v. Hurst (1879), 11 Mich 328, 332, 333 (conceding that "there is much awkwardness in including within a eity charter provisions affeeting judicial proceedings in courts having general jurisdiction outside and beyond the eity," the Michigan Supreme Court held valid provisions in Detroit's charter establishing and regarding the recorder's court; the act was entitled, "An act to revise the charter of the city of Detroit"); People v. Pond (1887), 67 Mich 98 (provision for municipal court in act entitled, "An act to revise an aet to incorporate the eity of Bay City"). See, also, Loomis v. Rogers (1917), 197 Mich 265, 271.
This language was quoted with approval in Common Council of Detroit v. Schmid (1901), 128 Mich 379, 386 (amendment of aet entitled, "An aet to provide a charter for the city of Detroit" to require biennial rather than annual elections is valid).
Cf. People, ex rel. Connecticut Mutual Life Insurance Company v. State Treasurer (1875), 31 Mich 6, 17, 18, where the Court held that a provision for the taxation of life insurance companies could validly be included in an act the title of which stated that its object was "to establish an insurance bureau." The Court observed:
"It was certainly admissible to include any just and pertinent regulations respecting the course of action to be observed by the bureau as a state agency, towards those engaged in the business of insurance; and it was equally admissible to include any just and appropriate provisions for prescribing the duty due to the state in the matter of taxation from insurance companies."
Under our Supreme Court's recent ruling in Ballog v. Knight Newspapers, Inc. (1969), 381 Mich 527, the DSR would be entitled to receive payment of interest at least from the time its complaint was filed. Under other precedent the DSR would be entitled to interest from the time of payment of the taxes under protest. Helmsley v. City of Detroit (1963), 320 F2d 476, 481. Since this suit was filed within 30 days of the time of payment in 1966, it will make relatively little difference which of the 2 dates is ehosen.