Davy v. McNeill , 31 N.M. 7 ( 1925 )

We concur in holding the act constitutional. We have not been able to satisfy ourselves, however, that the legislative policy of apportioning the cost of the improvement per acre of included land dispensed with the constitutional necessity of notice to the landowner, and an opportunity to be heard as to whether the cost to the landowner will be or is in excess of the special benefit to his land. We think that such notice and opportunity for hearing are afforded by the statute. We are of the opinion that the decision of this court in City of Roswell v. Bateman, 20 N.M. 77, 146 P. 950, L.R.A. 1917D, 365, Ann. Cas. 1918D, 426, declares principles which have application to this case

It is complained by the appellant in this case that under the irrigation district act the property owners are not given opportunity, after notice, for hearing on the questions of benefits received, and that no provision is made for a hearing upon the levy of assessments, and that, therefore, the act constitutes the taking of property without due process of law.

In Roswell v. Bateman, supra, we decided:

"Where an assessment levied for a street improvement can only be enforced by the filing of a notice of lien, and foreclosing the same in the same manner that mortgages on real estate are foreclosed, and as such foreclosure can only be had upon notice to the property owner, there is no taking of property without due process of law, although neither the statute nor ordinance adopted in pursuance thereof makes provision for notice to the owner of property of the levying of assessments for street improvements."

So much of section 22 of the act in question as amended as is material is as follows:

"The revenue laws of this state for the assessment, levying and collection of taxes on real estate for county purposes, except as herein modified, shall be applicable for the purposes of this act, including the enforcement of penalties and forfeitures for delinquent taxes."

Section 20 of the act declares that "all taxes levied under this act are special taxes." The difference between general and special taxes is marked.

"There is a marked difference between general taxation and special assessments for local objects, and the word ``tax' may be used in a contract or statute so as not to embrace within its meaning local or special taxes, although both kinds of taxation derive their authority from the general taxing power." Newby v. Platte County, 25 Mo. 258, 269; Farrar v. City of St. Louis,80 Mo. 379, 389.

"Special taxation means the same as special assessment, and in general is used to indicate impositions of assessments made on property in cities to pay for city improvements according to the extent of the value of the property by reason of the improvement. Special taxation differs from general taxation in this, that special taxation can only be imposed to the extent of the special benefits received, while the benefits which the taxpayer receives in return for general taxation are simply the enforcement of the laws, protection to life and property, and such other benefits as he shares with the public at large. The principle, however, which underlies special taxation is that the value of the property is enhanced to an amount at least equal to the assessment. City of Beatrice v. Brethern Church, 59 N.W. 932, 934, 41 Neb. 348." 7 Words and Phrases, 6592.

That these observations are pertinent will be seen from the irrigation district act which so frequently refers to the lands to be benefited by the improvement and the importance given to the element that only lands benefited shall be embraced within the district. See, also, State ex rel. Johnson vs. Chicago, etc., Co., 195 Mo. 228, 241, 93 S.W. 784-787 (113 Am. St. Rep. 661), wherein the court said:

"The term ``special taxes,' as applied to the charging of the cost of the improvement of city streets against abutting property, is not technically correct. Such charges are special benefits and not taxes in any sense of the word. If they were taxes, they could not, generally, be enforced, because the amount would make the total tax exceed the limitation prescribed by the Constitution."

Page Jones on Taxation by Special Assessment, par. 50 defines "special tax" as follows:

"The term ``special tax' is one which is used with several different meanings. In many cases it is used as a synonym of the local assessment."

These definitions are sufficient to indicate that, although our statute used the expression "special taxes" to describe the funds to be raised to defray the costs of the improvement, they are in the nature of assessments on the theory of benefits to accrue to the property to be improved. General taxes which are collected under the revenue laws of the state are levied upon a different basis.

Cooley on Taxation (4th Ed.) defines taxes as follows:

"While in a general sense the term ``taxes' includes every burden that may be lawfully laid upon citizens by virtue of the taxing power, yet all burdens imposed in the exercise of the power are not taxes.

"For instance, special assessments, although an exercise of the taxing power, are not taxes, so-called taxes are often not taxes within the legal definition of the term. Taxes are the enforced proportional contributions from persons and property, levied by the state by virtue of its sovereignty for the support of government and for all public needs."

An examination of the taxation code contained in chapter 133, Laws 1921, discloses that the only method existing at the time this cause of action was commenced, for the foreclosure of the lien of taxes levied upon real estate, is by suit in the district court, commenced by filing a complaint therein. In such action the lien on the real estate charged with the taxes may be foreclosed. Summons to the defendant, or persons having property assessed, or any right or title or interest in the real estate, is to be served by publication. It is suggested, however, that this provision of the irrigation district act by reference does not provide "due process of law," because section 431 of the general revenue law limits the defenses which may be made in an action to collect taxes in an action in the district court. Bearing in mind the difference in the nature of the general taxes and the special taxes provided by the irrigation district act, and considering section 22 thereof, and the apparent modification of the general revenue law in the matter of assessment and otherwise, we construe section 22 of the irrigation district act to mean that the revenue laws of this state for the assessment, levying, and collection of taxes on real estate for county purposes are applicable for the purposes of this act, except where the provisions of the general revenue act may be inapplicable. It is apparent that the provisions of the general revenue law which are adopted, except as modified by the irrigation act, would be inapplicable in its workings in a number of respects for the purposes of the irrigation district act. We think that section 431 of the revenue act, with respect to the defenses which may be made in a suit to collect general taxes, is inapplicable to a suit to collect special taxes and enforce the lien thereof under the irrigation district act; and we think that what was said in Kentucky Tax Cases, 115 U.S. 336, 6 S. Ct. 57, 29 L. Ed. 414, is applicable to the situation which here presents itself.

The court, after approving the rules as laid down in Davidson v. New Orleans, 96 U.S. 97, 24 L. Ed. 616, and Hagar v. Reclamation District No. 108, 111 U.S. 701, 4 S. Ct. 663,28 L. Ed. 569, which are cited in City of Roswell v. Bateman, supra, said:

"In that case, the statute of California, which conferred the jurisdiction, authorized any defense, going either to the validity or to the amount of the tax assessed, to be pleaded. What inquiries may be permitted in such cases, of course, is a matter that depends upon the particular provisions of the law of the jurisdiction. In the absence of such provisions, and as a principle of general jurisprudence, it is safe to say, that any defense is admissible which establishes the illegality of the proceedings resulting in the alleged assessment, whether because it is in violation of the local law which is relied on as conferring the authority upon which it is based, or because it constitutes a denial of a right secured to the party complaining by the Constitution of the United States."

Being convinced, therefore, that the provisions for a suit to collect taxes under the general revenue law is applicable to the purposes of the irrigation district act with respect to collection of the special taxes provided for therein, and the enforcement of the lien thereof, and that the defenses provided in the general revenue act would not be exclusive in such an action to collect the special taxes which may be imposed by the irrigation district act, we conclude that the appellant and others similarly situated are given an opportunity, after notice, for hearing by way of defense of his grievances before his property could be irrevocably charged with the lien of the special taxes, or such lien foreclosed.

For these reasons and others we concur in the decision.