Court Opinion

ID: 7940940
Source: CourtListenerOpinion
Date Created: 2022-09-08 23:14:49.325111+00
Date Added: 2024-06-11T16:33:43.282602
License: Public Domain

ON APPLICATION POE EEHEAEING.
Hookee, J.
This cause is before us on respondent’s application for a rehearing.
At the time the city authorized the building of these railroads, the policy of the State was to collect a specific tax in lieu of other taxes. At the same time the legislature so far modified this rule that it permitted the city to contract for the payment of local taxes as a condition to the building of the roads. City of Detroit v. Detroit City R. Co., 76 Mich. 425 (43 N. W. 447). When made, that was a binding contract on the city for the period for which the company was authorized to use the streets. Neither party could change it without consent of the other. In 1882 the policy of the State was changed, and the provisions relating to the specific tax were repealed, and thenceforth State and county taxes were levied in accordance with the rule pertaining to other property. But this could not affect existing contracts, and the railways theretofore organized had the right to pay local taxes on the basis of such contracts. The city of Detroit made the repeal of the law providing for the specific tax a ground for claiming the right to ignore the contract in *710relation to city taxes, and dissensions arose, which led to a new arrangement. Thus, in 1887 the Detroit City Railway consented to an adjustment of this controversy by accepting a new ordinance; and this was passed upon in the case of City of Detroit v. Detroit City R. Co., 76 Mich. 421 (43 N. W. 447). In 1885 the same thing had been done in the case of the Grand River Street Railway, and the tax has since been paid upon the basis of that arrangement. Now the city is again insisting upon a right to ignore its contract and increase the tax upon this property.
We passed upon the question in our original opinion, but counsel ask a rehearing upon the ground that we overlooked the fact that the ordinance of 1887 relating to the Detroit City Railway and that of 1885 relating to the Grand River Railway are not identical in terms. Both had contract rights that were invulnerable under their original franchises. Both undertook to adjust controverted rights by accepting new ordinances, making new contracts, which this court in the case cited has held might be done. The second of these readjustments contained the provision:
“The above-mentioned percentage payments and the tax on lands provided for to accrue from January 1, 1887, to the end of the franchise of said railway, shall be paid by the said railway and received by the city in lieu of and in discharge of all taxes, license fees, and charges of any kind against the property, capital stock, rights, and franchises of. said company which have been or may be levied, assessed, or imposed under any present or future law or authority.”
That relating to the Grand River Railway was less specific. It provided for an increased tax on gross receipts. It took the place of a former contract. It contained the provision that:
“Said special tax shall be in lieu of license and other taxes and charges under existing ordinances: Provided, that this shall not in any manner affect the obligations of said company in the matter of paving or repairing pavements as required by existing ordinances.”
*711Had the words “under existing ordinances” been omitted, there would probably be no claim that the case would not be within the decision of City of Detroit v. Detroit City R. Co., 76 Mich. 425 (43 N. W. 447). The only city taxes collectible were those provided for by existing ordinances. No others could be imposed, except by consent of the railway company. They did consent, but it was upon the condition that the new tax agreed upon should be in lieu (i. e., should stand in the place) of the pre-existing tax. This did not mean in part, but was a full substitute for the previous contract obligation.
The city of Detroit had granted contract rights which it disputed, and a compromise was made, and new contract rights were created. The effect of counsel’s contention is that, notwithstanding this new arrangement, and the con- • troversies that the parties sought to settle by it, the .new contract really settled nothing, and left the council the right to increase the tax at will, by a new ordinance, which might take effect as soon as the same could be adopted. The question was not overlooked. We adhere to the opinion already expressed, — that the city must accept taxes under this contract.
The motion for rehearing is denied.
The other Justices concurred.