Opinion
No. 32961
Decided June 11, 1952.
Taxation — Taxes legally assessed — Taxing authority's power to compromise, release or abate — Parties — Action to resist levy and assessment — Taxes illegally assessed — Persons claiming individual defenses — Mandamus — Court's discretion in allowing or denying exercised, how.
1. Where taxes are legally assessed, the taxing authority is without power to compromise, release or abate them except as specifically authorized by statute.
2. Although the allowance of a writ of mandamus rests in the sound discretion of the court, the exercise of such discretion must be consistent with legal right and must not be so exercised as to defeat rights clearly recognized and supported by sound and well established principles of law.
3. Where a tax is illegal, all parties affected thereby may join in resisting its levy and assessment, but where a tax assessment is legal and enforceable in its inception, parties claiming individual defenses to the collection of the tax cannot singly or collectively enjoin or prevent the spreading of the tax assessment on the official tax lists.
APPEAL from the Court of Appeals for Lake county.
This is an action in mandamus instituted by the relator on December 1, 1948, by filing in the Court of Appeals for Lake county his petition against the respondents Pethtel and Cozad, as auditor and treasurer, respectively, of Lake county, Ohio, to require them to reinstate upon the tax list of the county certain special assessments theretofore levied on certain lots and lands in the village of Wickliffe by authority of the council of that village, which assessments were subsequently compromised, abated and removed from the tax list.
The petition in substance alleges that the council in September 1938 enacted certain ordinances reassessing all special assessments previously levied upon certain lots and lands for special improvements made thereon under the terms and provisions of Section 2293-5 q, General code, which reassessments were certified to the respondent auditor for extension and collection; that such reassessments were pledged to the payment of bonds issued by the village in refunding its bonded indebtedness; and that during the years 1942 to 1947 the auditor of Lake county, pursuant to the direction of the council and officials of the village of Wickliffe, abated, discharged and removed from the tax list of the village, without payment having been made, certain of such special assessments theretofore duly levied and assessed in a total amount in excess of $46,000.
The petition alleges further that the compromise, abatement, discharge and removal of such assessments were without authority and contrary to the provisions of Section 3892, General Code, and constituted a preference to the persons owning the lots and lands upon which such assessments were removed; and that such action violated the lawful requirement of uniformity of assessments and increased the burden of other taxpayers of the village to the extent necessary to pay the amount equal to the assessments so abated and removed.
An amended joint answer was filed by the respondents auditor and treasurer, which admits the allegations of the petition so far as it relates to the reassessment and abatement of special assessments, but alleges that, with the exception of the assessments levied against the properties of Samuel A. Harrington, Union Properties, Inc., Raymond C. Powers, R. Tubessing, The Guardian Savings Trust Company and John H. Hogg and one lot now owned by the village, all such special assessments were paid in full; that these abatements were made by the village council in consideration of the payment of delinquent general taxes or special assessments and the construction of homes or other improvements thereon by the owners; that such policy resulted in enhancing and increasing the tax duplicate of the village, all of which was extremely beneficial to the relator and all the taxpayers of the village; that innocent purchasers for value have erected valuable homes and other improvements on such lots and lands, some of which are encumbered with mortgages; and that no action was taken by the relator to restrain such action upon the part of the village, as a result of which the relator is guilty of laches and is estopped from maintaining this action.
Motions to intervene were filed by Samuel A. Harrington and Grace W. Harrington, Leonard M. Laux and Rose I. Laux, The Lubrizol Corporation, The Cleveland Trust Company, and the village of Wickliffe, and answers by such intervenors were filed.
The joint answer of the Harringtons alleges, among other things, that they relied upon and were induced by the action of the village council of Wickliffe in abating assessments on said property to purchase four parcels of real estate upon which such assessments were levied, and that they have re-allotted such parcels of land, improved the same and have resold a portion of the premises to purchasers for value upon which premises there have been built homes for the construction of which such purchasers became indebted by notes secured by mortgages.
Answers were filed by the other intervening respondents setting out in general changed conditions as to other lots and lands in which they are interested and upon which such assessments were abated, and claiming that the relator is estopped to have such assessments reinstated.
By agreement of counsel for the various parties, the case was submitted upon an agreed statement of facts, various stipulations and exhibits. There is no substantial dispute as to the facts.
The Court of Appeals denied the writ of mandamus and dismissed the relator's petition. The relator appealed to this court as a matter of right.
Mr. Wayne E. Davis, for appellant.
Mr. Thomas H. Blakely, prosecuting attorney, for appellees H.Z. Pethtel, auditor, and W. Howard Cozad, treasurer.
Mr. Ross G. Sweet, for appellee The Cleveland Trust Company. Mr. Lester W. Donaldson, for appellees Samuel A. Harrington, Grace W. Harrington, Leonard M. Laux and Rose I. Laux.
The principal questions presented are (1) whether a municipal corporation is empowered to compromise, abate and cancel special assessments levied against abutting properties for public improvements, in anticipation of the payment of which municipal bonds were issued, and (2) whether the municipal corporation is estopped to reinstate and collect such assessments because of changed conditions affecting the equitable rights of the present owners or lienholders of such properties.
The power of a municipal corporation to levy and collect special assessments for public improvements benefiting abutting lands and to issue bonds in anticipation of the collection of such assessments under the provisions of Sections 3892 and 2293-24, General Code, must be and is by the respondents conceded, and no claim of invalidity is made against the levy of the original assessments or the reassessments in the instant case. See 36 Ohio Jurisprudence, 902, Section 3.
The general rule is that the power to tax does not include the power to remit or compromise taxes. A tax is not predicated on contract and cannot be discharged by reason of contractual considerations. Where taxes are legally assessed, the taxing authority is without power to compromise, release or abate them except as specifically authorized by statute, and this is for the reason that, if such contracts can be made and performed on the part of a municipality, uniformity and equality are destroyed, and the burden of obligation so remitted is inequitably cast upon the payers of general taxes in the taxing district. 38 American Jurisprudence, 77, Section 388; Peter v. Parkinson, Treas., 83 Ohio St. 36, 93 N.E. 197, Ann. Cas. 1912A, 751; Miami Conservancy District v. Ryan, 104 Ohio St. 79, 135 N.E. 282; State, ex rel. Hostetter, v. Hunt et al., Exrs., 132 Ohio St. 568, 9 N.E.2d 676; St. Lucie Estates, Inc., v. Ashley, 105 Fla. 534, 141 So. 738; Davis v. City of Litchfield, 145 Ill. 313, 33 N.E. 888, 21 L.R.A., 563; Inhabitants of Frankfort v. Waldo Lumber Co., 128 Me. 1, 145 A. 241; City of Louisville v. Louisville Ry. Co., 111 Ky. 1, 63 S.W. 14, 98 Am. St. Rep., 387; State, ex rel. Richards, v. Armstrong et al., County Board, 17 Utah 166, 53 P. 981, 41 L.R.A., 407.
It is contended that in refusing the extraordinary writ prayed for in the instant cause, the Court of Appeals was privileged to exercise its discretion and for that reason no reversal of its judgment should be made by this court. Although the allowance of a writ of mandamus rests in the sound discretion of the court, the exercise of such discretion must be consistent with legal right and must not be exercised so as to defeat rights clearly recognized and supported by sound and well established principles of law. 25 Ohio Jurisprudence, 1021, 1123, Sections 40, 161, 162; State, ex rel. Weinberger, a Taxpayer, v. Miller, 87 Ohio St. 12, 99 N.E. 1078, 44 L.R.A. (N.S.), 712, Ann. Cas. 1913E, 761.
The intervening respondents seek to set up as defenses to relator's claim certain claimed equitable rights which they as purchasers or lienholders have acquired in reliance upon the action of the village council in rebating and cancelling these assessments against the property of their predecessor owners, and seek joint action in their own behalf at the hands of this court on the ground of laches and estoppel against the relator.
This is an action only to compel public officials to perform their official duties, and it is not necessary to make third persons parties defendant, although they may be affected by the order. Where a tax is illegal, all parties affected thereby may join in resisting its levy and assessment, but where a tax assesment is legal and enforceable in its inception, parties claiming individual defenses to the collection of the tax cannot singly or collectively enjoin or prevent the spreading of the tax assessment on the official tax lists, for the reason that the claimed equities under the operative facts in each case must necessarily be personal and diverse in interest. However, all parties affected by the reinstatement of remitted assessments are entitled to their day in court. 25 Ohio Jurisprudence, 1171, Section 230; State, ex rel. City of Dayton, v. Patterson, Pros. Atty., 93 Ohio St. 25, 112 N.E. 142.
This court is of the opinion that the village council of Wickliffe had no authority or power to rebate and cancel the assessments in question in the first instance. Therefore, the judgment of the Court of Appeals is reversed, the prayer of relator's petition is granted and the assessments are restored to the tax list. However, the judgment in this case shall not affect the right of any taxpayer or interested party to resist the collection of the tax levied against his individual property and to establish his equitable defenses against such collection, if any, superior to the equities of the payer of general taxes who may be affected by the abatement of any such assessments.
Judgment reversed and final judgment for appellant.
WEYGANDT, C.J., ZIMMERMAN, STEWART, MIDDLETON, TAFT and MATTHIAS, JJ., concur.