Opinion
Argued April 18, 1923
Decided May 29, 1923
James M. Vincent and Charles C. Sanders for appellant.
George P. Nicholson, Corporation Counsel ( William H. King of counsel), for respondent.
The relator, a domestic manufacturing and mercantile corporation, is the owner of 457 West Forty-fifth street, in the city of New York. On October 1, 1919, the commissioners of taxes entered the assessed valuation of this property on their books as follows: The value of the land was fixed at $42,000, and the value of the land with improvements at $170,000. Included in the improvements was an item of manufacturing machinery, $73,000, which should have been classed as personal property, and was, therefore, exempt ( People ex rel. General Chemical Co. v. Cantor, 105 Misc. Rep. 62; 188 App. Div. 959; 228 N.Y. 506; Tax Law [Cons. Laws, ch. 60], § 219-j). There was also an item, power plant, $20,000, which was a building on another lot. Under the charter of the city of New York (§ 892), the relator had until November 30, 1919, to make complaint of this assessment, and to ask the commissioners for a revision. It let the time go by without making any move. The valuation was confirmed on February 1, 1920, and on March 26, 1920, the assessment rolls were delivered to the receiver of taxes. Relator sued out a writ of certiorari, but the failure to make previous complaint before the commissioners invalidated the proceeding ( People ex rel. Chambers v. Wells, 110 App. Div. 336), and in May, 1921, it was discontinued by consent. In the meanwhile, the taxes remained a lien upon the property, and the relator accordingly paid them, one-half on July 7, 1920, and the other half on December 1, 1920.
The writ of certiorari having failed, the relator sought a remedy under section 897 of the charter of the city, which reads as follows:
"The board of taxes and assessments is hereby invested with power to remit or reduce where lawful cause therefor is shown. It may remit or reduce if found excessive or erroneous a tax imposed upon real or personal property. It shall require a majority of the commissioners of taxes and assessments to remit or reduce the assessed valuation of personal property, and no tax on personal property shall be remitted, canceled or reduced, except to correct clerical errors, unless the person aggrieved shall satisfy the board of taxes and assessments that illness or absence from the city had prevented the filing of the complaint or making the application to the said board within the time allowed by law for the correction of taxes. Any remission or reduction of taxes upon the real estate of individuals or corporations must be made within one year after the delivery of the books to the receiver of taxes for the collection of such tax. After the expiration of one year from the delivery of the books to the receiver of taxes, the comptroller, with the written approval of the board of taxes and assessments, may correct any erroneous assessment, or tax due to a clerical error, or to an error of description of any parcel of real estate, contained in the annual record of assessed valuations of real estate, and, if the taxes computed on said erroneous assessment have been paid, the comptroller is authorized to refund the difference between the taxes computed on the erroneous and the corrected assessments."
The petition for relief under this section was presented to the commissioners on February 21, 1921. The relator alleged that the assessment was erroneous, stating its reason for that conclusion, and asked that the tax be reduced and remitted. The commissioners referred the petition to the chief deputy, who reported to them that the assessment was excessive to the extent of $93,000. On March 16, 1921, they adopted a resolution for the reduction and remission of the tax, and fixed the sum of $2,576.10 as the amount overpaid. Demand for repayment was made on the comptroller. The demand was refused, and this proceeding for a mandamus followed.
The Appellate Division took the ground that the tax commissioners had no power to remit a tax after it had been paid. Their power was confined, it was thought, to the reduction of an outstanding assessment. We do not share that view. Both the wording and the purpose of the statute suggest another meaning. Jurisdiction is given, not merely to reduce the assessment, but to remit the tax. Jurisdiction to do less would mean in many instances that action would be futile. The tax becomes a lien at the times stated in the charter (§ 914). Payment made thereafter is not voluntary, for the menace of the lien with penalties added for delay (Charter, §§ 916, 1020) has the effect of rendering it compulsory ( People ex rel. Am. Ex. N. Bank v. Purdy, 196 N.Y. 270, 277; Ætna Ins. Co. v. Mayor, etc., of N.Y., 153 N.Y. 331, 340; Tifft v. City of Buffalo, 25 App. Div. 376, 382). The case is not like Tripler v. Mayor, etc., of N.Y. ( 125 N.Y. 617, 627; 139 N.Y. 1). There the assessment was void in its entirety, and not merely erroneous in part ( 125 N.Y. 627). Payment, moreover, was made without protest, and made at a time when the assessment was stale through the inaction and silence of those empowered to enforce it. Here an assessment, valid at least in part, was a cloud on the title, and a cloud of such a nature that it could not be removed except upon certiorari or by the action of the assessing officers. Whether a payment is in truth voluntary, i.e., whether it was meant to be made in renunciation of any adverse right, is, in such circumstances, a question of intention. The relator's continued purpose to challenge the assessment is indicated by the fact that when the payments were made there was pending a certiorari proceeding, which was later discontinued because of technical defects. The pendency of such a proceeding is at least the equivalent of protest.
The purpose of the legislature in adopting section 897 was plainly to give relief to taxpayers who have failed for some reason to make their complaints before the grievance day has passed. Within one year the commissioners may reduce and remit. If the subject-matter of the tax is personal property, the taxpayer is required to show that illness or absence from the city prevented him from making application before the closing of the books. A court could not relieve him even though he presented that excuse ( People ex rel. Chambers v. Wells, supra). Where the subject-matter is real estate, the statute does not require that any excuse be presented. Possibly it ought to do so. It does not. All that is then exacted is that relief be granted within a year. The order, when made, has the effect of an order of a court. It is the order of a statutory tribunal acting within its statutory jurisdiction. If the court in certiorari proceedings were to reduce the assessment, the comptroller would be under a duty to repay the excess collected. The statute so provides (Tax Law, § 296), but the same conclusion would follow if the statute did not exist ( Bank of Commonwealth v. Mayor, etc., of N.Y., 43 N.Y. 184). The order of the tax commissioners like the order of a court is conclusive evidence that the tax has been illegally collected ( Mutual Life Ins. Co. v. Mayor, etc., of N.Y., 144 N.Y. 494; People ex rel. McCabe v. Matthies, 179 N.Y. 242, 248; People ex rel. Erie R.R. Co. v. Supervisors of Erie Co., 193 N.Y. 127, 132). Being illegally collected, the money in the hands of the comptroller is retained without right ( Strusburgh v. Mayor, etc., of N.Y., 87 N.Y. 452, 455).
The final sentence of section 897, added by amendment in 1915, does not help the respondent's case. It applies to cases where there has been some clerical error. Express authority to refund is then given to the comptroller, upon application made to him, with the commissioners' approval. The relator did not proceed under that provision, and does not need to look to it. If a duty to refund was already laid on the comptroller, the amendment did not serve to take it away.
The order of the Appellate Division should be reversed, and that of the Special Term affirmed, with costs in the Appellate Division and in this court.
HISCOCK, Ch. J., HOGAN, POUND, McLAUGHLIN. CRANE and ANDREWS, JJ., concur.
Order reversed, etc.