Opinion
No. 37173.
September 26, 1949.
1. Constitutional law — local legislation — municipalities — assessments for paving.
The municipal authorities enacted all the necessary ordinances providing for the pavement of certain streets at the entire cost of the abutting property except at street intersections. Theretofore all paving had been done with the municipality bearing one-third of the cost, and the property on either side of the street one-third. After the assessments for the paving had been made, the bonds to pay for the improvement had been validated and issued, the legislature by Chap. 738 Laws 1948 undertook to cure the injustice and by a local and private Act provided in effect that the municipality, out of its general funds, should pay one-third the cost of the new paving and that the assessments against the abutting property should be released or reduced by one-third. The Act was attacked as unconstitutional: Held that (a) it did not violate Sec. 90 (h) of the Constitution which prohibits local legislation to exempt property from taxation; that (b) it did not violate Sec. 87 of the Constitution which prohibits local legislation for the benefit of individuals or corporations; but that (c) it did violate Sec. 100 of the Constitution which prohibits the release or diminution of any obligation held by a state or a county or a municipality.
Headnote as approved by McGehee, C.J.
APPEAL from the Chancery court of Leflore County; R.E. JACKSON, Chancellor.
Aubrey H. Bell, for appellant.
House Bill #102 does not provide for an exemption of any property from taxation. The property is still subject to the special assessments although the amount thereof has been by the act reduced one-third thereof.
"An exemption prevents any assessment or levy of tax in the first instance, and in that way relieves the property from the burden of taxation, while in the case of an abatement the property is relieved of its share of the burden of taxation after the assessment has been made and the tax levied". Sheppard v. Hidalgo County, 126 Tex. 550, 83 S.W.2d 649; Asplund v. Alarid, 29 N.M. 129, 219 P. 786.
The court should not construe this to be an exemption from taxation because the property has not been declared free from taxation and the record itself shows that it is being taxed to the extent of two-thirds of the original assessment.
The appellees suggest that House Bill #102 is violative of Section 87 of the Constitution of Mississippi of 1890.
This court has on previous occasions construed the above section to apply only to private corporations and not to public corporations. This question seems to be so well settled that we need not encumber this brief by citing any other case than Feemster v. City of Tupelo, 121 Miss. 733, 83 So. 804.
Appellees further contend that House Bill #102 is violative of Section 100 of the Constitution.
We may assume for the sake of argument that the special assessments are in effect a tax and can be dealt with just the same as ad valorem taxes.
The Legislature has given to municipalities the power to change assessments for ad valorem taxes after they have become final in circumstances enumerated in Section 9815 of the Mississippi Code of 1942. When any circumstances listed therein have been shown to exist, the governing authority of a municipality may change the valuation of property for taxation, which change may be a reduction thereof even after the assessment rolls become final. Section 9815 has been held to be constitutional, see Board of Supervisors of Tunica County v. Tate, 78 Miss. 294, 29 So. 74, and State v. Tonella, 70 Miss. 711, 14 So. 17 cited therein.
The most that can be said against House Bill #102 is that it is merely another enactment of the Legislature which permits the Council of the City of Greenwood to change a special assessment after the same has been made. The entire record shows that the Council recognizes that an error has been made. The policy of the City of Greenwood has been in all other instances to assess the property two-thirds of the entire cost rather than the whole amount of it. House Bill #102 can in effect be reconciled with paragraph 14 of Section 9815 of the Code of 1942 and even with paragraph 2 thereof. Pollard Hamner, amici curiae, for appellant.
Section 87 of the Constitution not applicable. Feemster v. Tupelo, 121 Miss. 227, 83 So. 804; Haas v. Hancock County, 183 Miss. 365, 184 So. 812.
Section 90(h) of the Constitution not applicable. Halsell v. Merchants Ins. Co., 105 Miss. 268, 82 So. 235; Miller v. Lamar Life Ins. Co., 158 Miss. 753, 131 So. 282; Jackson v. Deposit Guaranty Bank Trust Co., 160 Miss. 752, 133 So. 195.
City of Greenwood had a right to change its assessment and levy regardless of section 100. Lexington v. Wilson's estate, 170 Miss. 282, 151 So. 164; Seward v. Jackson, 165 Miss. 478, 114 So. 686.
General authority of the municipality to tax. Sections 3708, 2712, 3716, 3722, 3726, 3742, 3748, 3749 and 3759 Code of 1942.
Cases distinguished. McDonald v. State Tax Commission, 158 Miss. 331, 130 So. 473; Jackson Electric Railway Light Power Co. v. Adams, 79 Miss. 408, 30 So. 694; Morris Ice Co. v. Adams, 75 Miss. 410, 22 So. 944.
Kimbrough, Kimbrough McLean, for appellees.
Section 90 (h) of the Constitution. Toombs v. Sharkey et al., 140 Miss. 676 (1925); Beall v. Bd. of Spvrs., 191 Miss. 470; Am. Jur., Vol 38, page 78; Hogg v. MacKay, 19 L.R.A. 77 (Oregon, 1893); State ex rel. Richards v. Armstrong et al. 41 L.R.A. 407 (Utah, 1898); Wells v. Hyattsville Comrs., 20 L.R.A. 89 (Md., 1893).
Section 87 of the Constitution. Yazoo M.V.R. Co. v. Southern R. Co. in Mississippi, 83 Miss. 746 (1904); Beall v. Bd. of Spvrs., 191 Miss. 470 (1941); City of Jackson v. Deposit Guaranty Bank Trust Co., 160 Miss. 752 (1931); Miller v. Tucker et al., 142 Miss. 146 (1925); Feemster v. City of Tupelo, 121 Miss. 733 (1920).
Section 100 of the Constitution. Adams v. Fragiacomo, 71 Miss. 417 (1893); McDonald v. State Tax Commission, 158 Miss. 331 (1930); Seward v. City of Jackson, 165 Miss. 478 (1932); Adams v. Clarke, 82 Miss. 134 (1902); Stingily v. City of Jackson, 140 Miss. 19 (1925).
Complainants have the right to maintain this suit. McKee et al. v. Hogan, 145 Miss. 747 (1927); Griffith's Chancery Practice, page 132; McQuillin's Municipal Corporations, 2d Ed., Vol. 6, Sec. 2755, p. 964.
Conclusion. Annotation: 99 A.L.R. 1062, 1068.
The City of Greenwood is a municipal corporation operating under the Code Chapter on Municipalities and acts under the commission form of government as provided therein.
From time to time various street improvement programs have been adopted and various streets of the city have been paved. In each instance the City has followed the proportion of two-thirds of the cost to be borne by adjacent property owners, and the other one-third to be borne by the municipality.
In 1946 certain streets remained unpaved and the City determined to pave these streets as listed in the ordinances, and, for some reason not apparent in this record, distributed the cost of the improvement in the proportion of one-half to the adjacent landowners on either side of the street, and the City to bear the cost only of the street intersection. The proceedings for the performing of this work, and the issuing of bonds to provide funds for payment of the cost of construction are regular and according to law, in every detail, and no question is raised in this proceeding regarding their validity. The City issued special improvement bonds in the amount of $119,000 and these bonds were validated by a decree of the Chancery Court and can no longer be brought in question in any court of this state, and no question is raised regarding their validity in this proceeding.
Realizing the disproportion between the cost assessed against the adjacent landowners in the last paving project, the City, or someone else, not shown by this record, procured the Legislature to pass a local and private law, House Bill #102, Laws of 1948, appearing as Chapter 738, Laws of 1948, for the purpose of attempting to relieve this discrimination against the property-owners in the last paving project.
The City undertook to exercise the authority granted to it in House Bill #102 and the appellee herein brought suit in the Chancery Court of Leflore County to enjoin the City of Greenwood from exercising any authority granted in House Bill #102 for the reason that said Act is unconstitutional in that it violates Sections 87 and 90(h) and 100 of the Constitution of 1890.
Section 3 of Chapter 738 of the Laws of 1948 provides as follows: "This act shall not be construed to affect the lien of the Special Street Improvement Bonds, dated October 1, 1946, issued by the City of Greenwood, to pay the entire cost of making the said improvements on the streets named in the ordinance above referred to and in the event any default be made in the payment of the principal or interest thereon, this act shall not be offered as evidence of any defense to said bonds or for the failure of the City of Greenwood to make sufficient assessment against the property abutting streets so improved and the said City of Greenwood is given authority to pay from its general funds into the special street improvement bond fund such amount as may be necessary to pay the principal and interest on the said bonds when and as the same mature and become due, an amount equal to the principal sum of the assessments authorized to be cancelled herein so that sufficient funds will be available for the payment of the said bonds and interest thereon, when the same respectively mature and become due."
It is first contended that Chapter 738, Laws of 1948, violates Section 90, Paragraph (h) of the Constitution of 1890, which reads as follows: "The legislature shall not pass local, private, or special laws in any of the following enumerated cases, but such matters shall be provided for only by general laws, viz.: . . . (h) Exemption of property from taxation or from levy or sale".
(Hn 1a) It will be observed that Section 3 of Chapter 738 of the Laws of 1948 provides that the act shall not be construed to affect the lien of the Special Street Improvement Bonds, and shall not be offered as evidence of any defense to said bonds or for the failure of the City of Greenwood to make several assessments against the property abutting the streets so improved, and by its terms preserves intact the judgment lien against the abutting property for any taxes that may subsequently be levied for the necessary retirement and payment of the bonds. Since the assessment is not disturbed, but by the terms of the act machinery is instituted only to enable the City to bear one-third of the cost, we are of the opinion that no question of exemption of property from taxation or from levy or sale is involved here, and that Section 90(h) of the Constitution has no application.
(Hn 1b) It is further contended that Chapter 738 of the Laws of 1948 violates Section 87 of the Constitution of 1890, reading as follows: "No special or local law shall be enacted for the benefit of individuals or corporations, in cases which are or can be provided for by general law, or where the relief sought can be given by any court of this state; nor shall the operation of any general law be suspended by the legislature for the benefit of any individual or private corporation or association, and in all cases where a general law can be made applicable, and would be advantageous, no special law shall be enacted."
This section has no application to Chapter 738 of the Laws of 1948, which is a local and private law applying to a municipal corporation. We held in Feemster v. City of Tupelo, 121 Miss. 733, 83 So. 804, that Section 87 of the Constitution has no application to municipal corporations, but applies only to individuals and private corporations.
(Hn 1c) It is further contended that Chapter 738 of the Laws of 1948 violates Section 100 of the Constitution of 1890, which reads as follows: "No obligation or liability of any person, association, or corporation held or owned by this state, or levee board, or any county, city, or town thereof, shall ever be remitted, released or postponed, or in any way diminished by the legislature, nor shall such liability or obligation be extinguished except by payment thereof into the proper treasury; nor shall such liability or obligation be exchanged or transferred except upon payment of its face value; but this shall not be construed to prevent the legislature from providing by general law for the compromise of doubtful claims."
When the City levied the special assessment against the property abutting the streets to be paved under the program this assessment became final and is a judgment against the property to the extent of the sum assessed against it, and it is liable to the City for the payment of annual taxes sufficient to retire such judgment against said property.
Accordingly if any plan is adopted that would release any portion of this judgment, or any liability for the payment of the same, the obligation to the City would be to that extent remitted or released. The Constitution provides that such liability or obligation shall not be extinguished except by payment thereof into the proper treasury. This language of our Constitution could not be satisfied by a payment made by the City in extinguishment pro tanto of the taxes to be collected under the judgment against the property for the payment of the bonds.
In Morris Ice Co. v. Adams, Revenue Agent, 75 Miss. 410, 22 So. 944, and in McDonald et al. v. State Tax Commission, 158 Miss. 331, 130 So. 473, this Court held that Section 100 of the Constitution of 1890 applies to tax liability. We can see no escape from its provisions in the case before us. It is clear that Chapter 738 of the Laws of 1948 is in clear violation of the provisions of Section 100 of the Constitution of 1890.
Our sympathies are with the abutting property-owners, and if our personal preferences were to be followed it would be our pleasure to see the correction of this discrimination by the City of Greenwood. However, our oath as Judges requires us to uphold the Constitution of the State, and we proceed to perform our duty without hesitation.
The decree of the lower court is affirmed.
Affirmed.