People ex rel. Doyle v. Austin

By the Court, Crockett, J.:

The Act of April 1, 1872 (Stat. 1871-2, p. 911), which provides for the opening of “ Montgomery Avenue,” in the city of San Francisco, is assailed on the ground that it is unconstitutional. It is claimed, that under the provisions of the Act, the expenses of the improvement are to be defrayed by a tax, to be levied on the property to be benefited, and not by an assessment, in any just sense, and that the fax is void because not assessed and levied as taxes are required to be under the Constitution. But we think the Act provides for an assessment, and not a tax. It is true that in section 11 provision is made for the assessment and collection of what is there designated “ a tax ” upon the lands to be benefited. But in section 3 the cost of the improvement is directed to be “assessed ” on the lands to be benefited, “in proportion to the benefits accruing therefrom to said several lots,” etc.; and in section 4 the lands to be benefited and which “shall be assessed” are particularly described. In section 5 the Board of Public Works is required to make a map showing “each lot and subdivision of land liable to be assessed to pay the cost and expenses of opening said avenue.” But independently of this express recognition in terms, that the charge on the land is to be an assessment and not a tax, it sufficiently appears on the face of the Act that the' whole scheme contemplates an assessment and not a tax. The two are essentially different in their nature, and designating as a tax that which in its elements is an assessment, can have no effect in determining whether it is one or the other. The question must be decided by the nature of the imposition, and not by the mere name by which it is called. Tested by this rule, the charge in this case is clearly an assessment and not a tax.

It is next objected that it is not competent for the Legislature to impose upon the property to be benefited, a greater burden than will be sufficient to defray the cost of improvement, and it is said that under this Act the property is charged not only with the actual cost of improvement, but with an additional sum sufficient to cover the interest to accrue on the bonds, and such discount as may be suffered in converting them into cash. But instead of requiring the cost of the improvement to be paid in cash during the progress, or on the completion of the work, the Act provides for raising the money by the sale of bonds, payable at a future day; the annual interest on which, and the ultimate redemption of the principal, are provided for by an assessment of the property to be benefited. We do not see on what theory it can be claimed that by this process the property is charged with anything more than the cost of the improvement. The interest on the bonds, and the discount, if any, on the sale of them, are incidental expenses incurred in providing a sufficient fund for the accomplishment of the work, without exacting in cash from the property owners the necessary sum. It is a provision for their benefit, which enables them to pay the cost of the improvement in easy instalments, instead of paying the Avhole sum on the completion of the work. As they will have the benefit of the credit, it is but just that they should pay the accruing interest and any discount which may be suffered in the sale of bonds. As before stated, the interest and discount are but incidental expenses of the enterprise, and, upon principle, stand upon the same footing as the compensation of the officers who superintend it.

But it is further claimed that the assessment was made on a wrong basis. Section 11 of the Act provides that the assessment “shall be adjusted and distributed according to the enhanced values of the respective parcels of land as fixed in the said final report by the said Board.” The assessment complained of was “adjusted and distributed” upon the respective amounts which the Board reported would be the enhancement in value of the several parcels of land, and not upon the total value of each parcel, as enhanced by the improvement. In other words, the assessment was limited to the increase of values, and excludes from the computation the values of the respective parcels without the improvement. We think this was the correct basis for apportioning the assessment. The theory on which the whole scheme proceeds is that each parcel of land is to be assessed according to the benefit it will receive, and not according to its total value as enhanced by the improvement. A lot worth $1,000 may be enhanced in value $5,000, while another lot worth $10,000, would not be enhanced in value $1,000' worth by the improvement. The intention of the statute clearly is that in such a case each lot shall be assessed according to its increase in value, and not according to the sum total of its value, as enhanced by the improvement.

The Act is also assailed on the further ground that by the fourteenth subdivision of section 4, all public streets and public squares belonging to the United States, or to this State, within the district to be benefited, “shall not be assessed for the cost of opening said avenue:” and it is further provided, that if, at any time before the report of the Board is made to the County Court, “ the Governrnent of the United States, or the State of California, or the said city and county of San Francisco, shall relinquish or convey, or in any manner transfer its or their title to any portion of said lands to any person or corporation, said lands so transferred to private ownership shall be assessed in the same manner as other lands, now private property, lying within the limits of any of the above described tracts of land.”

It appears from the findings that within the district to be benefited there are included certain lands belonging to the United States, the State of California and the city and county of San Francisco, respectively; and it appeared from the report of the Board of Public Works that these lands would be benefited in the sum of $800,000. But in apportioning the assessment they were excluded from the computations, and are not assessed. It is contended that it was not competent for the Legislature to exempt from assessment any lands within the district which would bo benefited by the improvement, and that the whole assessment is therefore void.

The argument is that though the lands of the United States, or of the State, or of a municipal corporation, may be exempt from taxation for revenue purposes, they are not necessarily exempt from assessment for local improvements, and that within the district to be benefited the same rule of equality and uniformity which governs taxation for revenue applies to assessments. Whilst it may safely be conceded that all laws of a general nature are required by the Constitution to have an equal and uniform operation upon all persons, and property on which they operate at all, it does not therefore result that the property of the Federal or State-Governments, or even of a municipal -corporation, which is but a local subdivision of the State government, must necessarilybe liable to assessment for a local improvement equally with private property within the district to be benefited. It is well settled in this State and elsewhere that the property of the United States, or of the State, or of a municipal corporation, is not subject fco taxation for revenue purposes. (People v. McCreery, 34 Cal. 456; People v. Shearer, 30 Cal. 645; Fall v. Marysville, 19 Cal. 391; Low v. Lewis, 46 Cal. 549.)

A tax “is a charge levied by the sovereign power upon the property of its subjects. It is not a charge upon its own property, nor upon property over which it has no dominion.” (People v. McCreery, supra.) The power of assessment is but a portion of the power of taxation, and if the sovereign cannot tax its own property for general revenue purposes, it cannot be doubted that it may exempt it from assessment or taxation in any form. The rule of equality and uniformity cannot be more stringent in respect to local than to general taxation, and if it has no application in the latter case to the property of the sovereign it can have none in the former. The exemptions from assessment of the property specified in subdivision fourteen, section four of the Act, do not, therefore, render the Act void, or the assessment illegal.

Judgment and order affirmed. Remittitur forthwith.

Mr. Justice MoEjnstry dissented.