State v. Pillsbury , 82 Minn. 359 ( 1901 )

COLLINS, J.

In this proceeding plaintiff seeks to enforce the payment of taxes upon real estate becoming delinquent on the first Monday in January, 1900. The amount sought to be collected was something over $500, and the real estate involved was certain lots in the city of Minneapolis. No defense was interposed to any portion of the tax, except the sum of $171.70, which, it appears, is the second instalment of a total assessment levied against the lots for the construction of a sewer in the street in front thereof. It stands admitted that all proceedings for the establishment and construction of the sewer, and assessment and levy of the tax, were regular in form and strictly pursuant to the charter provisions; but the defense raises the question that said provisions are unconstitutional and void, for a number of reasons. The court below having ordered judgment for -the defendant as to the sewer assessment, and to the full amount of the instalment, it has certified t.o this court five questions, which need not be specifically mentioned as answered.

. It must be conceded that the assessment in question was made •under the provisions of an amendment to the city charter, which is Sp. Laws 1881, c. 76, found in Sp. Laws 1883, c. 3, §§ 18, 19, and known as the “Second Plan” for the construction of sewers. No particular reference need be made at this time to what is known under the charter as the “First Plan.” The second relates to all sewers constructed, relaid, or extended throughout the whole city during any one season. It contemplates that at the end of the season the cost of all sewers constructed during that period shall be marshaled for the purpose of ascertaining the total or entire cost, and thereupon the council shall levy and proceed to collect from abutting property an equal sum per front foot, without regard to the valuation of such property, or the size or cost of the sewer, which sum shall not exceed $4 per lineal foot. The rate per lineal foot, not in excess of $4, is to be fixed by resolution of the council, and one-half of that rate or amount is to be levied and assessed upon property abutting upon each side of the street. When this rate is once fixed by resolution, it remains, from year to year, as such rate, until affirmatively changed by resolution of the council, or until the council decides to pursue the so-called first plan for the construction and assessment for sewers. The cost of sewers constructed in front of exempt property and across streets, and the cost of any particular sewer over and above the amount assessed, is, under the second plan, to be paid out of what is known as the “Permanant Improvement Fund.”

It will be seen that under this plan the council is authorized to assess against abutting property a flat rate per lineal foot, without regard to actual benefits or to the cost of construction, for which the assessment is made. The rate may be more or less than the benefits or the cost. If the amount of the assessment exceeds the actual cost, the surplus, when collected, goes, we infer, into the permanent improvement fund. If less, the deficiency in cost is paid out of this same fund. There is a general provision requiring the council, when it determines upon the laying of a sewer upon any particular street or streets, which must be specifically named, to designate in a general way the character and extent of the improvement and the materials to be used. It is then made the duty of the city engineer to present a report to the council containing certain information, and, if the first plan is being followed, an estimate of the cost and certain apportionments .thereof. If the second plan is adopted, the report need not contain this estimate or apportionment. Then follows this provision, and it is the only one in the charter in reference to notice to interested parties:

“A brief minute of the reception of such report shall be made and published in the record of the proceedings of the city council, which shall be held to be sufficient notice to all persons concerned.” Sp. Laws 1881, p. 481 (c. 76, sube. 10, § 8).

It is then prescribed that such report shall lie over, without any assessment being made, until the next regular meeting of the council, which shall occur at least one week after its reception. The city council shall then hear all persons interested in the matter of such proposed construction who may desire to be heard, and after this hearing the council may adhere to its resolution, or it may modify its character, or it may abandon the improvement altogether.

In this particular case the report of the engineer was made in strict compliance with the requirements of the charter, it was received by the city council at its regular meeting, a minute was made in the records and properly published in full, and no further steps were taken until the council meeting, at which a hearing is granted to all parties concerned; and at this meeting the original resolution was adhered to, or, to speak more properly, it was not departed from. And, as before stated, it stands admitted that the requirements of the charter were faithfully and technically observed. The assessment roll was then transferred to the county auditor, the amount of the assessment extended upon his books with other taxes against the defendant’s lots, and thereafter the proceedings for the collection and enforcement thereof were under and in accordance with the general laws of the state; the answer interposed by defendant and the subsequent proceedings being under such general laws.

Having thus given an outline of the proceedings under the charter in all cases in which the second plan has been adopted, we reach the initial question in this case; the defendant’s contention being that this method of procedure deprives the owner of his property without due process of law, because there is no sufficient provision in the charter for notice to him of the contemplated improvement, and no opportunity afforded him to be heard. He is thus; argues counsel, deprived of his right to be heard before the improvement is made, and the assessment, which may exceed the cost and also the benefits, is levied.

But under the constitution (amendatory proviso of 1869, art. 9, § 1) the legislature may prescribe the manner in which assessments for local improvements may be made upon property fronting thereon, or upon benefited property, or upon both; and the provision necessarily confers upon the legislature the power to prescribe the kind of notice, and the manner or method of service upon the lot owners. The charter expressly provides that a brief minute of the reception of the report of the engineer to the council, made and published in the proceedings of that body, shall be sufficient notice to all persons concerned. This publication is notice to all of the commencement of the proceedings, and is sufficient for the purpose, under the decisions in Rogers v. City of St. Paul, 22 Minn. 494; State v. District Court of Ramsey Co., 33 Minn. 295, 23 N. W. 222; County of Hennepin v. Bartleson, 37 Minn. 343, 34 N. W. 222. And the property owner is given an opportunity to be heard before the city council, of which opportunity he had notice, not personal, to be sure, but that authorized by law, — the publication in the council proceedings of a minute of the engineer’s report. \The city council is made the proper tribunal to hear all objections of all persons upon all matters connected with the improvement. Any party interested has an opportunity to be heard as to the size, form, depth of sewer, and the material to be used. He may be heard upon the propriety or impropriety of building the sewer at all, and, in the judgment of the council, the original resolution may be modified as to the nature of the' improvement, or the latter may be totally abandoned. * Plenary power is conferred upon the council to exercise its discretion in the whole matter, after a hearing of all interested parties.

In addition to what has been said in the cases cited as to the sufficiency of the prescribed notice to interested parties, we call attention to the fact that any objections to the regularity and legality of these assessment proceedings may be taken, as they have been here, by answer in the attempt to enforce the collection of taxes under the general law. As was said in the Bartleson case upon this same point:

“Any objections of the landowner to the regularity or legality of the proceedings may be taken by him by answer, as in other cases under the general law. * * * He may show fraud, mistake, want of authority to support the assessment, or a failure to ■comply with the provisions of the statute. His constitutional rights are therefore fully protected.”

See also City of Duluth v. Dibblee, 62 Minn. 18, 63 N. W. 1117; Spencer v. Merchant, 125 U. S. 345, 8 Sup. Ct. 921.

The defendant’s right to be heard before being deprived of his property was adequately protected. He was given an opportunity to be heard under the charter provision before referred to, and he was also given a like opportunity when he answered under the general tax law. It follows from what has been said that we are unable to agree with the conclusion of the learned court below, in effect, that the property owner is deprived of his constitutional right to have due notice of a proceeding which might result in devesting him of his property.

The next inquiry in this case is as to the constitutionality of the charter provisions- — the second plan — under which the sewer in question was built, it being claimed that for a number of reasons they are opposed to both state and federal constitutions.

It will be remembered that prior to 1869 section 1, art. 9, of our state constitution did not contain a special provision in regard to assessments for local improvements. The original provision was that

“All taxes to be raised in this state shall be as nearly equal as may be, and all property on which taxes are to be levied shall have a cash valuation and be equalized and uniform throughout the state.”

In Stinson v. Smith, 8 Minn. 326 (366) this original provision was construed, and it was held that an assessment for grading streets must be apportioned upon the basis of the valuation of the property upon which the assessment was made, and that any act of the legislature authorizing such an assessment upon any other basis was repugnant thereto. This decision led to .the adoption of the 1869 amendment before mentioned, whereby the basis of assessment for local improvements was changed, and it was no longer necessary to base such assessments with strict regard to the valuation of the premises on which the assessment was laid. But in Noonan v. City of Stillwater, 33 Minn. 198, 22 N. W. 444, it was expressly declared that in adopting this amendment the people did not intend to reject or modify, in respect to taxes of this class, so just and reasonable a principle as that they “shall be as nearly equal as may be”; and it was said that, whatever basis of apportionment (assessment) may be adopted, it must include the idea of equality. The gist of this decision is that, while the amendment empowered the legislature to apportion and assess according to street frontage, it does not authorize an assessment on that plan wholly disregarding the fundamental rule upon which special assessments are made, namely, that of benefits.

This same general doctrine has been approved a number of times since, and it is clear that while the legislature may authorize municipal corporations to assess for local improvements upon property fronting on the improvement, or on property benefited, or both, in such manner as it may prescribe, such legislation must not authorize a departure from, or a variation of, the previously existing rule of uniformity and equality. No plan can be adopted which will result in gross inequality of taxation. The burden must be apportioned as uniformly and as equally as may be. The legislature cannot fix, or authorize the governing body of a municipality to fix, an arbitrary basis for an assessment to be imposed upon property without regard to benefits. If this be done, the principle which justifies special assessments on abutting property, namely, that it is thereby specially and peculiarly benefited, is wholly ignored; the result being that under the guise of taxation the owner is deprived of his property without just compensation, and for the use of the public. As stated in Cooley, Taxn. (2d Ed.) 661:

“There can be no justification for any proceeding which charges the land with an assessment greater than the benefits; it is a plain case of appropriating private property to public uses without compensation.”

This same proposition is tersely and pointedly put in a Missouri case in the following words:

“A law which would attempt to make one person or a given number of persons, under the guise of local assessments, pay a general revenue for the public at large, would not be an exercise of the taxing power, but an act of confiscation.” McCormack v. Patchin, 53 Mo. 33, 36.

But we need not dwell further-upon the powers of a legislature to determine, or to confer authority to determine, the basis upon which assessments for local improvements must be made, or the manner and method of apportionmefit. It has been discussed this term in the case of Ramsey Co. v. Robert P. Lewis Co., infra, page 390, in which Norwood v. Baker, 172 U. S. 269, 19 Sup. Ct. 187, was considered and regarded as controlling. We have simply to apply the well-settled rules to the case at bar, — in fact, to all cases where the second plan of assessment has been followed, the details of which we have hereinbefore stated.

Twelve years prior to the time this particular improvement was determined upon, a resolution was adopted by the council, in which was fixed the amount of assessment to be made upon property fronting on streets in which sewers had been constructed that year, to wit, $3 per lineal foot; and this resolution and the amount so fixed continued in force, under the charter, ufitil another resolution or another amount or another plan of apportionment should fie adopted. This resolution, with all of its details, was adopted, so far as shown, without regard to any benefits which might accrue to the assessed property. It was followed and made the basis of the assessment against defendant’s property without the slightest regard to the benefits to such property arising out of the improvement. No consideration was given to the fact that the cost of this particular sewer was but $1.86 per lineal foot, and that the assessment was sixty per cent, in excess of this cost.

The charter contains no provision whatever under which benefits to the property against which an assessment is ordered may be ascertained or even considered. The council arbitrarily, and many years in advance, determined and declared what amount should be assessed against defendant’s property whenever a sewer should be constructed in the street upon which it fronted. The charter authorizes this method, and none other, except that, at the option of the council, the first plan may be adopted. Of course, the amount to be assessed per lineal foot of frontage might be increased, not to exceed a total of $4 per foot, or might be decreased, at the will of the council, but at no time was this body obliged to consider or ascertain benefits. No plan of assessment can be upheld which will permit such an outrageous departure from the principle of uniformity and equality in taxation embodied in the constitution as will this one now being considered.

There are other provisions of the charter to which attention has been called by counsel. One is to the effect that, when the total cost of any improvement for which special assessments have been levied shall be less than ninety per cent, of the total special assessments levied or collected for the same, the city council may refund out of the permanent improvement fund to such property owners as have paid their assessments three-fourths of their proportionate share of the excess of such assessments so collected, over the total cost of such improvements. Exactly what this means is not very clear, and whether it could be made to apply to assessments made under the second plan is in great doubt. But, more than this, there are several reasons why this provision is not only inoperative, but insufficient as a means of redress to the person whose property has been assessed. But two need be mentioned: He is obliged to pay the illegal.tax before he can have any standing at all with the council, and then refundment of the excess is optional with that body. It may or may not return the “proportionate share of the excess,” whatever that means. There is a total absence of 'any provision under which the city council or the city itself can be compelled to recognize the principle which governs' in cases of assessments for local improvements, and to refund any sum whatever to the, property owner. In Norwood v. Baker, supra (page 279), is found the following language, which is extremely pertinent, in this connection, to the present case:

“In our judgment the exaction from the owner of private property of the cost of a public improvement in substantial excess of the special benefits accruing to him is, to the extent of such excess, a taking, under the guise of taxation, of private property for public use without compensation. We say ‘substantial excess,’ because exact equality of taxation is not always attainable, and for that reason the excess of cost .over special benefits, unless it be of a material character, ought not to be regarded by a court of equity when its aid is invoked to restrain the enforcement of a special assessment.”

The manner and method of procedure provided for in the city charter known as the “Second Plan” is obnoxious both to the state and federal constitutions.

This brings us to the final question certified up. In his answer defendant alleged, among other things, that the actual share of the cost of the sewer in question assessable and apportionable upon his lots was a stated sum, and, further, that he was entitled to have credited on the amount of taxes claimed to be due the difference between such share of the cost and the amount assessed, with interest. Judgment to this effect was demanded if the trial court failed to declare the sewer tax wholly null and void. At the trial there was a stipulation of facts in which defendant candidly admitted that his property was benefited to the amount of one-half of the actual cost per lineal foot of the sewer in front thereof, and further stipulated that he had offered to pay to the proper authorities all of the taxes assessed and claimed by the state, except the excess thereof over and above the actual cost of the sewer, which offer was refused. In legal effect the allegations in the answer and the facts stipulated on the trial, above alluded to, amounted to an offer to pay a sum equal in amount to the value of the benefits actually conferred; and we see no reason why the offer so fairly and honorably made should . have been rejected, as it was in the court below, .the conclusion being that no portion of the sewer tax should be included in the judgment.

From what has been said it is evident that we hold that the provisions of the charter under which the assessment was made and the tax therefor extended upon the list contravene and are obnoxious to section 13 of article 1,¶ and section 1 of article 9, of the state constitution, and are also repugnant to section 1 of the fourteenth amendment to the constitution of the United States. We answer in the affirmative the certified questions numbered from 1 to 4, inclusive. And under the circumstances appearing here, and without considering the right of the state to enforce collection of a part of his assessment levied in accordance with the charter provisions in question, we also answer the fifth question in the affirmative.

The case is rexhanded, with directions to the court below to cause an entry of judgment in accordance with these views.