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concluding that an argument that an assessment was arbitrarily and wrongly imposed was a due-process claim that could be heard in equity
Summary of this case from Elba Twp. v. Gratiot Cnty. Drain Comm'rOpinion
Calendar No. 63, Docket No. 50,540.
Decided June 7, 1965.
Appeal from Genesee; McGregor (Louis D.), J. Submitted March 3, 1965. (Calendar No. 63, Docket No. 50,540.) Decided June 7, 1965.
Complaint by Ralph Blades and others of a class who are similarly affected against Genesee County Drain District No. 2, a body corporate, Anthony J. Ragnone, drain commissioner and agent for Genesee County Drain District No. 2, Bernard O'Brien, former drain commissioner, and Genesee County Board of Supervisors to declare the special assessment district and assessment rolls invalid. Judgment for defendants. Plaintiffs appeal. Reversed.
Cline George and Thomas Delaney, for plaintiffs.
McTaggart Lattie and Dickinson, Wright, McKean Cudlip ( Charles R. Moon, of counsel) and John G. David, Genesee County Corporation Counsel, for defendants.
Whatever view one may take of the majority and minority opinions of Crampton v. City of Royal Oak, 362 Mich. 503, one contrasting fact stands forth from that like equity case. There the plaintiffs received, as was due, a full testimonial hearing of their claim that the proposed local improvement would not specially or otherwise benefit properties owned by them and included in the special assessment district. Here that fundament of due process was denied to similarly appealing plaintiffs. They were thrown out of court, summarily under GCR 1963, 117, without so much as a supporting affidavit attesting facts distinguished from verification of the public records on which the defendant drain commissioner relies. Such plaintiffs are here, requesting reversal for trial. That they should have.
This complaint for adjudicatory and injunctive relief reached, in circuit, the very nadir of curtly peremptory justice. Denied all semblance of a trial of their seemingly just factual issue; that is, that their agricultural properties will receive no benefit (no benefit at all that is) from this proposed drain and sewage disposal project, they were told that the question of partial presence or total absence of benefit — to such properties — was exclusively for the county drain commissioner. Then, as declaredly controlling, they were treated to that part of the trial court's opinion which Justice DETHMERS has quoted. Although my Brother's opinion does not disclose the fact, such quoted part was based exclusively on our wholly inapplicable decision of In re Macomb Drain Commissioner, 369 Mich. 641.
I rise to observe that both courts in the cited Macomb Case provided complete judicial review, by certiorari and appeal as sought, of the therein assailed special drain assessments. Questions of law only were advanced for judicial consideration by the petitioner in certiorari. Too, that petitioner did not (p 652) "deny that some benefit, concededly substantial, will accrue to it from each project." Here the plaintiffs want only an opportunity to prove, if they can, a total absence of specially assessable benefit to them or to their respective parcels. To deny them such opportunity is no more nor less than a denial of constitutionally guaranteed due process.
"If the tax imposed clearly results in such a flagrant and palpable inequality between the burden imposed and the benefit received that it amounts to an arbitrary taking of property without compensation, it is said to violate the due process guaranty under the Fourteenth Amendment. All of the cases which have affirmed the broad powers of taxation have recognized these limitations, i.e., see Dane v. Jackson, 256 U.S. 589 ( 41 S Ct 566, 65 L ed 1107); Henderson Bridge Co. v. Henderson City, 173 U.S. 592, 614 ( 19 S Ct 553, 43 L ed 823); Houck v. Little River Drainage District, 239 U.S. 254 ( 36 S Ct 58, 60 L ed 266), 1 Cooley, Taxation (4th ed), § 144." Morton Salt Co. v. City of South Hutchinson (CCA 10), 159 F.2d 897, 901.
Enough has been written recently about the vaulting growth of abuses Court Rule 117 started a little over two years ago. On the face of this record, considering it solely in array with the technical questions that are raised in defendants' motion for summary judgment, plaintiffs have a right to say that nothing has been given or offered in return for that which the assessing authorities would exact. Defendants' sole answer, advanced below and here, is that the statutory proceedings thus far taken by the drain commissioner are conclusive; that plaintiffs' sole remedy of review was by certiorari, and that the time for pursuit of that remedy has long since passed. So a drain commissioner's determination of special benefit, no matter how fanciful, speculative, whimsical, capricious, arbitrary, or downright outrageous it may be, is beyond the controlling hand of equity. I would let that chestnut burn. It was charred beyond recognition from the very beginning of equity's growth.
Constitutional questions automatically arise when a quick judgment is entered on fast motion, before trial, in a case which from its very nature presents a controlling question or questions of fact. A true day in court is part and parcel of constitutionally guaranteed due process. And when a landowner seeks relief in equity from an assessment of his property for special benefit, alleging — as these plaintiffs have fairly and adequately done — no benefit in actual fact, he thereby raises a question of taking of his property, under the guise of taxation, for public use without compensation.
I go to early principles of the law of taxation and the right of special assessment for special benefit; principles which Justice COOLEY announced first with widespread acceptance throughout the country.
In Norwood v. Baker, 172 U.S. 269 ( 19 S Ct 187, 43 L ed 443), which was another like equity case, the Supreme Court observed in a preliminary way that there is a point (p 278) "beyond which the legislative department, even when exerting the power of taxation, may not go consistently with the citizen's right of property," and that "the principle underlying special assessments to meet the cost of public improvements is that the property upon which they are imposed is peculiarly benefited, and therefore the owners do not, in fact, pay anything in excess of what they receive by reason of such improvement." Then the Court, relying principally upon Justice COOLEY'S work on Taxation, laid down this rule (p 279):
"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." (Emphasis by Justice Harlan.)
COOLEY'S text, cited in Morton Salt Co. v. City of South Hutchinson, supra at 902, accents the need for trial rather than summary disposition of this equity case. Morton reads in part as follows:
"Whether the exaction is in the form of a special assessment for a special improvement, or a general tax for the general welfare, the constitutional test is always whether anything is given or offered for that which is taken. Indeed, the underlying purpose for the creation of special taxing districts is to attain a constitutional balance in relationship to benefits conferred for burdens imposed. 1 Cooley, Taxation (4th ed), § 320."
For present purposes it is sufficient to say that the presented question, whether plaintiffs' lands will receive actual distinguished from speculative benefit from the proposed project, is one of fact ( Briscoe v. District of Columbia, 221 U.S. 547, 551 [ 31 S Ct 679, 55 L ed 848]; 48 Am Jur, Special or Local Assessments, § 29, p 588). That consideration, viewed with the general rule, calls for reversal.
"§ 28. Character of Benefit as Certain, Speculative, Pecuniary, et cetera.
"It has been ruled that benefit to property from a public improvement to sustain a special or local assessment must be actual, physical, and material, and not merely speculative or conjectural. In order to justify the assessment, the benefits must be substantial, certain, and capable of being realized within a reasonable time. Benefits arising from improvements which depend upon contingencies and future action of public authorities cannot be considered in estimating the assessment, although they may form part of a general plan for public improvement." (48 Am Jur, Special or Local Assessments, pp 587, 588.)
I note in conclusion that every Michigan decision cited and quoted by my Brother DETHMERS came to submission here on a full meritorious hearing below; not upon a granted or denied motion for summary judgment.
The circuit court's judgment of dismissal should be reversed with instruction to order denial of defendants' motion for summary judgment. Plaintiffs should have costs of both courts.
T.M. KAVANAGH, C.J., and SOURIS and ADAMS, JJ., concurred with BLACK, J.
KELLY and SMITH, JJ., did not sit.
Plaintiffs filed their complaint in the Genesee county circuit court, asking that the establishment of a special assessment district and assessment roll be set aside. They appeal from entry of summary judgment for defendants.
See GCR 1963, 117. — REPORTER.
The Genesee county drain district No. 2 covers most of the northwesterly quarter of Genesee county. Plaintiffs are members of a class of upwards of 375 landowners in that district, mostly farmers, with large parcels of land. Proceedings for creation of the district were instituted in June, 1959, under the drain code of 1956, PA 1956, No 40 (CLS 1961, § 280.1 et seq. as amended [Stat Ann 1960 Rev § 11.1001 et seq.]), and bids were taken for a sanitary sewer artery trunk line as a sole and separate construction project. At the same time, the Genesee county board of supervisors adopted a resolution or ordinance under PA 1939, No 342 (CLS 1961, § 46.171 et seq. [Stat Ann 1958 Rev and Stat Ann 1963 Cum Supp § 5.2767(1) et seq.]), providing for a revenue bond issue to finance construction of a sewage disposal plant. The mentioned trunk line is intended to be connected with that plant and to extend out east and south therefrom for several miles in a manner designed to make it available to laterals sufficient to serve the entire drainage district. Operating costs of the plant and retirement of the revenue bonds are to be collected from connection charges and users of the system who hook up with the trunk line or laterals to be built and leading thereto. Contracts, under PA 1939, No 342, supra, with two cities and five townships comprising the drainage district are contemplated, under which any of those governmental units which so desires will make charges to any of its residents connected with the system, collect usage fees from them and remit for operation costs of the plant and retirement of the bonds. All of this would necessitate construction of laterals through those units from the property of users to the trunk line. No governmental unit is obligated to do so.
Plaintiffs, acting for themselves and others in the class similarly situated, some of them owning land located several miles from the trunk line, say that no benefit could or would accrue to their properties from the construction and laying of the trunk line. This is the basis of their contention that inclusion of their lands within the special assessment district and on the assessment roll is invalid.
Plaintiffs say that inclusion of their properties in the district on the theory that they have been or will be benefited amounts to a fraud in law. Their chief reliance is on Panfil v. City of Detroit, 246 Mich. 149, and Fluckey v. City of Plymouth, 358 Mich. 447. In Panfil this Court held, inter alia, that under a charter provision permitting assessment of costs of paving a street against property abutting the street, it was a fraud in law for the city to so assess plaintiff's property which abutted property ostensibly condemned and taken by the city for street widening purposes when the portion thereof immediately adjoining plaintiff's lot was not needed or used for street purposes but, apparently, was taken only for the purpose of making plaintiff's lot abut the street and subject to the special paving tax. In Fluckey this Court held it a fraud in law to impose a special assessment on residential properties along a two-lane, 22-foot, black-topped street to pay for widening the pavement to a 48-foot, reinforced concrete pavement to accommodate truck and other industrial traffic, which would come, in part, from a new plant which a company had been induced to locate nearby. In effect, in Fluckey, this Court held that as a matter of law there was no benefit to those residential properties. This Court stated that conversion of a peaceful country road to a four-lane thoroughfare to accommodate and attract new heavy truck traffic, so far from benefiting the residential properties, actually would detract from their values and that the special assessment, imposed on a theory of benefit thereto, was, therefore, invalid.
The Panfil and Fluckey situations do not obtain in the instant case. It is true that here a sewer trunk line is to be installed to which plaintiffs will not have immediate access unless connecting laterals are constructed. However, the construction of the trunk line will make available for the benefit of plaintiffs' properties and others that which is not now in existence, namely, a line to which such laterals may be connected to carry sewage from their properties. Without its construction such benefit would not be available to these properties. To deny that this constitutes a benefit to plaintiffs' properties differs only in degree from saying that a sewer in the street running along plaintiffs' properties would not benefit them because plaintiffs' had not elected to make the necessary connections thereto. To those who might urge that, traditionally, on the typical American farm scene there is no need for indoor plumbing or a modern sewer system, defendants point out that the very accessibility of the indicated service, created by the trunk line, would make lands theretofore usable only as farm lands more desirable for development into platted, residential areas and, thus, create an enhanced value of the lands. We cannot say as a matter of law that this is not so.
That brings us to a consideration of whether we treat here with a question of fact or a question of law, inasmuch as a summary judgment is involved. We proceed with the assumption that the question of benefit to plaintiffs' properties is one of fact, in the first instance, for determination by the drain commissioner. If so, may the court make a determination as a matter of law warranting the entry of a summary judgment accordingly?
In Cummings v. Garner, 213 Mich. 408, this Court quoted with approval from the trial court's opinion in that case as follows (p 420):
"`The boundaries of the district specially benefited, the per cent of benefit derived by the lands therein, the township or townships benefited and the per cent of such benefit, and the per cent of benefit derived by the county at large, are all matters to be determined first by the board of road commissioners and then all are subject to review by an impartial tribunal appointed by the probate court for that special purpose, to which hearing on review all parties are given due and timely notice and provided full and adequate opportunity to be heard. It has been held time and again that these questions are purely legislative in character and must be left to the agencies provided by legislative authority, and so long as a free and fair opportunity is given to be heard no one is in position to complain and no question of judicial cognizance is raised. Troost v. Fellows, 169 Mich. 66, 70; Township of Clinton v. Teachout, 150 Mich. 124. '"
In Marks v. City of Detroit, 246 Mich. 517, 523, this Court quoted with approval from Brown v. City of Grand Rapids, 83 Mich. 101, 109, the following:
"`It is not for this Court to set its judgment up in opposition to that of the board of commissioners and the council, and to say that this parcel of land or that is assessed too much or too little. The assessments were to be made according to benefits to each parcel of property, and there is nothing in the record showing that the commissioners did not assess the complainant's lands in accordance with their best judgments.'"
In Fluckey this Court said (p 454):
"The assessors, not the court, weigh the benefits, if, in truth, there are benefits to be weighed."
In its opinion granting summary judgment the trial court in the instant case said:
"It is apparent that the courts in Michigan will limit the scope of their review of drain proceedings very drastically. The courts will not substitute their discretion and judgment for that of the drain commissioner in (1) deciding the type of drain improvement to be constructed, (2) the location of such improvement, (3) the area which will be served or benefited thereby, (4) the engineers, contractors and consultants to be employed and (5) the many other details involved in locating, establishing and constructing a drain. The courts will also not determine the amounts of or make the apportionments of benefits and they will not review the details of bond financing or the wisdom of the pledging of full faith and credit by the county or by any other public corporation involved. All decisions of this nature, made by the drain commissioner, are conclusive and are not subject to judicial review of any kind."
We approve the statement of the trial court. It follows that while the determination of benefits presented the commissioner with a question of fact, after he has made that determination it is not for the court to substitute its judgment and to make either a concurring or contrary determination of facts, but, only, to determine the legal question of whether there is a lack of any reasonable basis or theory to support the commissioner's factual determination of benefit. No dispute of facts is presented by the pleadings in that respect. Plaintiffs' complaint alleges no facts which, if taken as true, require a holding that, as a matter of law, no benefits will be conferred, as this Court did in Fluckey. In City of Grand Rapids v. Grand Trunk Railway System, 214 Mich. 1, this Court said (pp 5, 11):
"It is a legislative policy of this State that railroad properties shall be subject to tax for local improvements. But if the track, roadbed, or right-of-way of a railroad is not susceptible of benefit from a local improvement a taxing of such property for such improvement would be wanting in the due process of law required by the Constitution. * * *
"The weight of authority is, and we so hold, that the court may not say, as a matter of law, that the track, roadbed, or right-of-way of a railroad may not be benefited or susceptible of benefit by a local improvement. No bad faith is charged and to what extent the property included in the assessment district was benefited and whether benefited or not were questions to be determined in the special proceedings. We cannot review the assessment."
The question of benefit to plaintiffs' properties, if viewed as a question of fact, was for determination by the commissioner. In the absence of any charge of bad faith or wilful fraud the function of the court was solely to determine the legal question of whether there was a lack of any reasonable theory to support the commissioner's finding of benefit. Only upon such determination could the court reverse the commissioner's finding of benefit and hold as a matter of law that there was no benefit. On this question of law the court properly found for defendants, namely, that there was a reasonable theory of benefit to support the commissioner's finding thereof as a fact. That being decided as a matter of law, the summary judgment for defendants properly followed. As applied to equitable actions we find in 1 Honigman and Hawkins, Michigan Court Rules Annotated, p 360, and approve the following:
"Summary judgment should also be permissible in an equitable type of action, even though the plaintiff is not, strictly speaking, `entitled to judgment as a matter of law' but only as a matter of equitable discretion. There is no good reason why the absence of disputed facts cannot be shown by the summary judgment procedure and the requested relief be given or denied according to equitable principles, just as would be the case after the facts were established by trial. See 3 Barron Holtzoff, Federal Practice and Procedure, § 1232.3. The phrase `according to law' means according to the rules of decision — whether statutory, common law, or equitable — by which the courts dispose of cases when factual issues have been resolved. It was not intended to limit summary judgment to what were historically legal actions as distinguished from equitable."
The judgment should be affirmed. Costs to defendants.
O'HARA, J., concurred with DETHMERS, J.