Court Opinion

ID: 3867942
Source: CourtListenerOpinion
Date Created: 2016-07-06 09:02:01.46144+00
Date Added: 2024-06-11T07:41:35.628269
License: Public Domain

It is objected to this declaration, that it shows no cause of action in this, that although it sets forth the covenant made by the defendant, yet that the assessment alleged, and for non-payment of which the defendant is now sought to be charged, is not, upon a proper construction of the covenant, within its terms and intent; that, as it was for a permanent improvement of the estate, was extraordinary in its character, and not in use at the time the covenant was made, it could not have been in the contemplation of the parties.
The defendant's covenant is, that he will pay, or cause to be paid, at the time the same shall become due and payable, all rents accruing under this lease, and "all taxes and assessmentsthat may at any time during said term be assessed upon said lotor its appurtenances."
The question raised is not new to courts of law. It has been frequently in times past mooted in the English courts, and become the subject of judicial decision; and some rules of decision have been announced in regard to it.
In Davenant v. Bishop of Sarum, 2 Levinz, 68, the lease was made in 1635, and contained a covenant to pay all taxes during the term. In 1665, in the reign of Charles II., a tax was ordered by parliament — a kind of assessment — in which it was provided, that the tenant, who was first to pay the assessment, might deduct a portion from the rent payable by him. It was unlike any which had been before ordered by parliament. The question was, if the lessee under his covenant was bound to pay it to the relief of the lessor; and it was held, that the was not. In that case, it was said by the court that this covenant cannot oblige him to pay the new tax; but it must be understood of such taxes as were then in use. In Hopwood v. Barefoot, 11 Mod. 240, the covenant made in 1672 was this: that the lessee "shall pay all sum and sums of money that now is, or shall be assessed or taxed, for or in respect of the premises demised as aforesaid, for chimney money, church and poor, or visited houses, or otherwise, above and besides the rent reserved thereupon." The lease was renewed in 1698 with the same covenant. The question was, whether the land-tax was included in the covenant.Gould, J., said: The words "or otherwise" *Page 122 
must mean something, and make it a charge on the tenant; and that the tax of royal aid (the tax in question) had been before the covenant. Powell, J., said: If a tax be given by parliament which was never known before or in esse, these words would not extend to these taxes; but if it had been, "all taxes which should be thereafter imposed by parliament," all taxes whatever, would be included; and adds, the first taxes were tenths and fifteenths, till eight of Edw. III., which were upon goods, and were uncertain until subsidies came in Elizabeth's reign, and in 1641 the land-tax. To all these the covenant will extend; but not to any of a different nature. Lord Holt, in this case, stated, that it had been adjudged, that when there was a covenant to discharge the lessee of all burdens and charges, and there being no tax at the time, a fifteenth was afterwards ordered by parliament, such tax was within the covenant, because the tax was always a charge in viris; and said, if this covenant had been before 1642, it had not bound the tenant because there had been no such tax before; and cited the case of Brewster v.Kidgill, 12 Mod. 166. This case arose out of a wager. The defendant affirmed that he had a right to deduct 4s. in the pound for parliamentary taxes. This he claimed against his covenant, which was this: "It is the true intent of these presents, that the grantee, his heirs and assigns, shall forever thereafter be paid the said rent charge without deduction or abatement of taxes, charges, or payments, out of, or concerning said rent, or the said manor, or land charged therewith." The question was, whether the grantor of the rent charge should be allowed to deduct the amount of tax imposed by parliament after the grant; and Lord Holt said, it had been a question, for a long time, whether such covenants extended to all future parliamentary taxes, "which I think would be very hard, and I cannot agree thereto in this large sense; but we are all of opinion that it extends to all those sorts of taxes that shall be given by future acts of parliament;" and concluded, by saying, "when this covenant was made, taxes of this nature had been used four or five years. This assessment was begun since the war in 1642. If this covenant had been in 1640 it would not reach this case." *Page 123 
In Giles v. Hooper, Carthew, 135, upon a covenant "to pay £ 80 rent, free and clear of all manner of taxes, charges, and impositions whatsoever," it was held, that the covenant included all land taxes whatsoever, although there was no land tax at the time; that having been ordered long after the making of the lease and covenant; and this, because the land tax was known and understood, and to be made as occasion required.
So, in Bradbury v. Wright, Doug. 624, on a similar covenant, viz., "to pay without any deduction, defalcation, or abatement, for or in any respect whatsoever;" it was held, on the authority of the preceding cases, that it extended to all land taxes.
The rule recognized and adopted in these cases is, that if the tax or assessment be made under a law existing at the time of the covenant, it is within it; or if there be no law existing at the time authorizing or requiring it, but it is afterwards enacted, still, if the assessment or tax be of the same kind with taxes or assessments made under former acts, it is presumed to have been in the contemplation of the parties, as a tax inviris, though not in esse. But if such tax or assessment be different in kind from such as have been theretofore in esse,
it is not to be presumed that the parties contemplated any unusual exercise of power in the legislature, such as it had never before exercised. The land-tax act seems not to have been a continuing act; but these taxes were levied by act of parliament as the public exigencies from time to time required; but as they had been used, in the language of Lord Holt, they were not of a foreign nature, but known to the law, and had always a virtual,
though not an actual, existence; and speaking of the covenant, he says: "It does not provide against an unusual accident, but against a thing well known to our law as part of the constitution."
In Mayor, c., of New York v. Cashman, 10 John. 96, the covenant of the lessee was, that he would, "at his own proper cost and charge, bear, pay, and discharge all such duties, taxes, impositions, and payments, as shall, during the term hereby demised, be issued, grow due, and payable out of, and for the said demised premises." The assessment in this case was for opening a street in the city of New York, and was made under a *Page 124 
statute similar to the one under which the assessment was made in the case before us; and the question was, if the assessment was within the covenant? In giving the judgment in that case, the cases in 11th and 12th of Modern are referred to, as those by which the question was to be determined; and the court say: "The assessment was made in pursuance of a statute in force at the time when the covenant was made, and which, we must presume, was in the contemplation of the parties."
There are one or two cases cited by the plaintiff's counsel, apparently for the purpose of showing that the rule of these cases has been shaken or reversed. They are cases in which questions between landlord and tenant under the land-tax act have arisen. The case of Hyde v. Hill, 3 T.R. 377, is one. The covenant in this case was, that the tenant should pay "all, and all manner of rates, payments, assessments, and impositions, both ordinary and extraordinary, whatsoever, c., the land tax onlyexcepted;" and the lessee covenanted to lay out £ 400 in building on the premises four houses. Prior to the lease, the tax annually was £ 3 8s.; after the new houses were built, they were assessed, in addition, for £ 5 12s. The lessee paid the increased tax; and the question was, whether he had the right to deduct it from the rent; or, in other words, whether the lessor was bound to pay. The court held, that the land tax excepted was the tax which the landlord was before bound to pay; and to see what that was, that they must look to the act which directed the tenant to pay first, and then deduct so much as the landlord ought to pay. It is evident, that this case is entirely foreign from the question in the preceding cases. There was no question, whether the assessment was, in its kind, different from any existing or known at the time of the covenant. Confessedly it was the same in kind — known and understood — in use at the time. The question there was, whether an assessment upon an increased valuation was excepted, or merely the tax upon the valuation as it was at the time of the covenant.
In Astor v. Miller, 2 Paige, Ch. 68, the covenant was "to pay and discharge all such taxes and assessments as might be imposed *Page 125 
or rated on the premises, or any part thereof, by authority derived from the people of the State of New York, or of the United States, or from the corporation of the city of New York." No question was made upon this covenant, as to whether it did or did not extend to new taxes of a different kind, or whether the tax was, or was not, new in its nature.
In the light of these cases, then, we are to inquire, whether the assessment in this case was of the same kind and nature with any assessment before known or in use in this state. It had not any actual existence at the time of the covenant. The act under which it was made was passed at the January session, 1854, six years after the making of the lease. It was not necessary that its existence should have been at that time actual, if in the language of Lord Holt it had a virtual existence; or, in other language of his, it were one "in viris"; such as the legislative power had before ordered or authorized, and which it might be foreseen and anticipated that they might again authorize; for in such case, parties covenanting against taxes and assessments would not be providing against unusual accidents, but against things well known and understood. The assessment here was made under the provision of an act for laying out, enlarging, straightening, and otherwise altering, streets in the city of Providence. The act provides, that in making such improvements there shall be an assessment upon the lands benefited by it, both upon the leasehold interest and upon the reversion, of a portion of the damages caused by such improvement. This is to be assessed and apportioned to the several estates benefited, in proportion to the benefit to each, respectively; i.e. in proportion to its increased value. It is to be apportioned, also, in case of estates under lease, to the leasehold and to the reversion,
respectively. The assessment here is for the permanent increased value to the state, to the landlord and tenant, respectively; continuing and remaining, as to the landlord, after the expiration of the term.
In looking back to past legislation, we look in vain for any taxes or assessments made upon any such principle, for any similar purpose. In laying, widening, or altering highways, theretofore, the expenses and damages caused thereby were paid by *Page 126 
the towns in which the highways were, and levied in the ordinary taxes for town expenses upon the estates of those liable to taxation, in proportion to the appraised value of their taxable property. But in no case, either for highways or other public improvements, have lands been taxed for the value added thereto by the public improvement. This is certainly a departure from any known mode or purpose of assessments. So novel and extraordinary did the provisions of this act appear when it went into effect, that it was seriously and earnestly denied to be within the constitutional power of the legislature to enact it; and because of its novel and extraordinary nature. The fact that its operation is confined to the city of Providence, and does not extend to the state generally, shows, that it is extraordinary in its kind, and required only by the high necessities of a growing city.
This kind of assessment being newly authorized, — differing in kind from any theretofore existing, — within the rule established and recognized by the preceding cases, is not within the defendant's covenant; but is such as, upon the authority of those cases, could not have been foreseen by the parties at the time, or have been in their contemplation.
But, independently of the cases referred to, must we not come to the same conclusion? There are no words in this covenant pointing to any extraordinary contingency; and in agreeing "to pay all taxes and assessments that may at any time during the term be assessed" upon the estate, while the estate was liable to be taxed and assessed in various ways by state and city, while there were taxes in esse and taxes not in esse but inviris, — taxes which might be laid, because such had been before laid, though not then in existence, it is sufficient to presume, that the parties contemplated, that such as were thus known would be, or might be, levied. It may be fairly presumed, that had it been contemplated by the parties, that at some future time during the lease, the owners of the reversion were to be assessed for, and be liable to pay for value added to their sole interest, — and that, too, a permanently added value, which would enure to, continue, and be enjoyed by them alone beyond the term, — some other provisions would have been *Page 127 
made than are here contained. It can hardly be presumed, that the tenant would be willing to pay such assessments without some provision for their deduction at the expiration of the term when the estate passed from him to the landlord, — and still less could we presume this in view of the provision in the lease for renewals, that the rate of rent is to be at periods of five years, newly fixed and determined by referees, according to the then rentable value of the estate. It cannot be presumed, that the tenant would agree, or the lessor claim, that the lessee should be first charged with the cost of the improvement, and then charged with rent for it. Yet such would be the effect of the covenant, if the force be given to it which is now claimed.
We are of opinion that this assessment was not within the defendant's covenant; and, therefore, that the declaration sets forth no cause of action. The conclusion to which we have arrived upon this point renders it unnecessary to consider the other questions which have been raised and argued by the counsel.
Judgment must therefore, upon the demurrers, be rendered for the defendant.