Ogden City v. Armstrong/Opinion of the Court

The first question to be determined is whether the amount in controversy is sufficient to give us jurisdiction of the appeal.

Although no motion was made to dismiss the appeal, it was suggested at the argument that, as it was not competent to make up the sum necessary to give this court jurisdiction by uniting the several sums for which each taxpayer was liable, this was such a case, and that, therefore, we should dismiss the appeal.

Undoubtedly, it is the well-settled rule of this court that, in a suit in equity brought in the circuit court by two or more persons on several and distinct demands, the defendant can appeal to this court as to those plaintiffs only to each of whom more than $5,000 is decreed. Russell v. Stansell, 105 U.S. 303, was a case in its facts much like the present one. There land within a particular district was assessed for taxation, each owner being liable only for the amount wherewith he was separately charged. A bill of complaint was filed by a number of them praying for an injunction against the collection of the assessment, and from a decree dismissing the bill an appeal was taken to this court. It was held that while the complainants were permitted, for convenience and to save expense, to unite in a petition setting forth the grievances of which complaint was made, the object was to relieve each separate owner from the amount for which he personally or his property was found to be accountable, and that such distinct and separate interests could not be united for the purpose of making up the amount necessary to give this court jurisdiction on appeal.

The same conclusion was reached in Gibson v. Shufeldt, 122 U.S. 27, 7 Sup. Ct. 1066, where the previous cases were fully discussed.

An examination of this record discloses that none of the complainants save one were assessed with an amount sufficient to have enabled them to bring the case here on appeal, and accordingly, under the doctrine of the cases cited, this appeal must be dismissed as to such parties.

But it appears that the Realty Company of Kittery, a corporation of the state of Maine, a party complainant in the supplemental bill, had been assessed, under the ordinance complained of, for the sum of $748.80, as an installment for one year, and had been compelled to pay the same, and that the city was threatening to continue said proceedings, and to sell the real estate of said company annually for nine years as each installment for a like sum became due. The liability of that company then, under the ordinance and assessment complained of, amounted to the sum of $7,488; and as that company could, had the decree of the court below been adverse to it, have brought the case here on appeal, so, upon the authorities above referred to, it is competent for the defendant city to do the same.

Upon the merits, the first and most important question to consider is whether the city council had jurisdiction to assess and collect the paving tax.

The proceedings were initiated and the tax sought to be levied and collected under the provisions of chapter 41 of the Session Laws of 1890 of the late territory of Utah. The thirteenth section thereof reads as follows:

'In all cases before the levy of any taxes for any improvements provided for in this act the city council shall give notice of intention to levy said taxes, naming the purposes for which the taxes are to be levied, which notice shall be published at least twenty days in a newspaper published within said city. Such notice shall describe the improvements so proposed, the boundaries of the district to be affected or benefited by such improvements; the estimated cost of such improvements, and designate the time set for such hearing. If at or before the time so fixed written objections to such improvements signed by the owners of one-half of the front feet abutting upon that portion of the street, avenue or alley to be so improved be not filed with the recorder, the council shall be deemed to have acquired jurisdiction to order the making of such improvements.'

The bill alleged, the answer admitted, and the trial court found, that the notice of intention to pave in district No. 2, and to defray the expenses thereof by levying a local tax on abutting property owners, was published on March 9, 1892, and in which it was stated that the city council would on March 29, 1892, at 10 o'clock a. m., hear objections in writing from any and all persons interested in said local assessment.

The sixth finding of the trial court was as follows:

'That on March 29, 1892, at 9:55 o'clock, D. H. Peery and sixty-eight others, including all the plaintiffs in this action and in the supplemental complaint, who were then owners of real property within the said paving district No. 2, and with a frontage on Twenty-Fifth street within the said paving district, filed a protest with the said recorder of said Ogden City protesting against the levying of any local assessment against or upon their property for the purpose of paving said street within said district; that said persons so protesting owned and protested for more than one-half of the whole frontage on said Twenty-Fifth street within said district, to wit, 2,414 feet; that, after said hour of 10 a. m. of said day, certain persons who had protested to the amount of 302 1/2 feet withdrew their protests, leaving at all times 2,111 3/4 feet frontage on said Twenty-Fifth street in said district still protesting against said local assessment; that the total number of feet fronting on said Twenty-Fifth street in said paving district, as mentioned in said notice of intention above set forth, was 3,960 feet, of which 660 feet belonged at said time, and still belong, to said Ogden City, and were then, and are now, used for public purposes by said city; and 125 feet of said frontage were then, and are now, the property of the said Ogden City, and was public school property, used and owned for public schools.'

It is contended on behalf of the appellant that the city council, on April 4, 1892, determined that less than half of the whole frontage had protested, and that, as the city council was acting principally in a proceeding duly inaugurated, such action cannot be reviewed in an equitable action to restrain the collection of the tax, but should be reviewed, if at all, by certiorari, in which action the whole record would be removed to the district court.

So far as this proposition involves questions of facts as to the proportion of frontage covered by the protests, we, of course, accept finding on that subject made by the trial court, and approved and adopted by the supreme court of the territory. Stringfellow v. Cain, 99 U.S. 610; Haws v. Mining Co., 160 U.S. 303, 16 Sup. Ct. 282.

But the argument seems to be that when once that question of fact was determined by the city council, proceeding under the statute, their determination cannot afterwards be challenged in a collateral proceeding; that, while it would not be conclusive in an action by certiorari to set aside the assessment, it is conclusive, as against a proceeding by injunction, to prevent the collection of the tax. It is said that the jurisdiction of the city council attached when, by resolution or ordinance and publication, it gave notice of its intention to make the improvement in question.

We agree with the courts below in thinking that no jurisdiction vested in the city council to make an assessment or to levy a tax for such an improvement, until and unless the assent of the requisite proportion of the owners of the property to be affected had been obtained, and that the action of the city council in finding the fact of such assent was not conclusive as against those who duly protested. The fact of consent by the requisite number, in this case, to be manifested by failure to object, is jurisdictional, and in the nature of a condition precedent to the exercise of the power.

'Where the power to pave or improve depends upon the assent or petition of a given number or proportion of the proprietors to be affected, this fact is jurisdictional, and the finding of the city authorities or council that the requisite number had assented or petitioned is not, in the absence of legislative provision to that effect, conclusive. The want of such assent makes the whole proceeding void.' 2 Dill. Mun. Corp. (4th Ed.) § 800, where numerous cases from the different states are cited in support of that proposition.

In Zeigler v. Hopkins, 117 U.S. 683, 6 Sup. Ct. 919, a similar question was thus stated and decided:

'There is in reality but a single question presented for our consideration in this case, and that is whether, in an action of ejectment brought to recover the possession of lands sold for the nonpayment of taxes levied to defray the expenses of opening Montgomery avenue generally, and not in obedience to an order of a court of competent jurisdiction to meet some particular liability which had been judicially established, the landowner is estopped from showing, by way of defense, that the petition for the opening presented to the mayor was not signed by the owners of the requisite amount of frontage; and this depends on whether the owner is concluded, (1) by the acceptance of the petition by the mayor and his certificate as to its sufficiency and the action of the board of public works thereunder, or (2) by the judgment of the county court confirming the report of the board of public works.

'This precise question was most elaborately considered by the supreme court of California in Mulligan v. Smith, 59 Cal. 206, and decided in the negative, after full argument. With this conclusion we are entirely satisfied. It is supported by both reason and authority.'

It is next contended on behalf of the appellant that if the city council wrongfully took jurisdiction, in face of the facts shown in or upon the face of its own proceedings, then the tax was absolutely void on its face, and the plaintiffs must seek their remedy at law; and further, if the city council wrongfully and falsely made its record to show facts sufficient to give it jurisdiction, when such facts never existed, then, in order to get into equity plaintiffs must plead all such facts, and that even in such a case certiorari is, under the laws of Utah, a plain and perfect remedy.

It is doubtless true that the collection of a tax will not be restrained on the ground that it is irregular or erroneous. Errors in the assessment do not render the tax void; and usually there are legal remedies for all such mere irregularities, and errors as do not go to the foundation of the tax, and parties complaining must be confined to these. As was held by this court in Dows v. City of Chicago, 11 Wall. 108: 'A suit in equity will not lie to restrain the collection of a tax on the sole ground that it is illegal. There must exist, in addition, special circumstances, bringing the case under some recognized head of equity jurisdiction, such as that the enforcement of the tax would lead to a multiplicity of suits or produce irreparable injury, or, where the property is real estate, throw a cloud upon the title of the complainant.'

But the present case would seem plainly to be one of equitable jurisdiction, within the doctrine of that case. What is complained of is no mere irregularity or error in the assessment. As we have seen, there was an entire want of jurisdiction in the common council to proceed for want of the assent of the requisite proportion of property owners, and the assessment and tax were therefore void. That there was no plain and adequate remedy by certiorari would seem to be evident. Upon that writ nothing could have been shown by evidence of facts outside of the record. It is true that, in some of the states, provision is made by statute to bring such evidence in, but such is not shown to have been the case here. It is an admitted fact upon the face of the pleadings that the common council actually found that the necessary jurisdictional fact existed, and that such a finding was made a matter of record. The plaintiffs alleged in their bill, and the defendants in their answer denied, that the finding of the jurisdictional fact by the common council was not a true finding. Such an issue required evidence dehors the record of the proceedings before the council in order to impeach their finding. The record of this case discloses that a large amount of oral evidence was introduced by the complainants, and admitted without objection by the defendants, to show ownership by the protesting parties, and to show that the common council were mistaken in finding that the requisite number had not protested.

Not only, however, was there a want of an adequate remedy in proceeding by a writ of certiorari, but we think equitable jurisdiction was properly invoked to prevent a multiplicity of suits, and also to relieve the plaintiffs from a cloud upon their title.

The finding on this fact of the case was as follows:

'The said plaintiffs are without any speedy and adequate remedy at law for the recovery of said amounts without a great multiplicity of suits, and said assessment constitutes a cloud upon the title of the various plaintiffs to their several parcels of realty, and that said city asserts that it will annually for nine years hereafter lay assessments upon said real estate for the payment of said paving, and collect the same from the said parties plaintiff, and has already caused to be sold the property of certain of the plaintiffs under and by virtue of said assessment.'

If a tax is a lien upon lands, it may then constitute a cloud upon the title; and one branch of equity jurisdiction is the removal of apparent clouds upon the title, which may diminish the market value of the land, and possibly threaten a loss of it to the owner. It is doubtless true that it has been held by this and other courts that if the alleged tax has no semblance of legality, and if, upon the face of the proceedings, it is wholly unwarranted by law, or for any reason totally void, as disclosed by a mere inspection of the record, such a tax would not constitute a cloud, and that the jurisdiction which is exercised by courts of equity to relieve parties by removing clouds upon their titles would not attach.

But when the illegality or fatal defect does not appear on the face of the record, but must be shown by evidence aliunde, so that the record would make out a prima facie right in one who should become a purchaser, and the evidence to rebut this case may possibly be lost or become unavailable from death of witnesses, or when the deed given on a sale of the lands for the tax would be presumptive evidence of a good title in the purchaser, so that the purchaser might rely upon the deed for a recovery of the lands until the irregularities were shown, the courts of equity regard the case as coming within their jurisdiction, and have extended relief on the ground that a cloud on the title existed or was imminent. Dows v. City of Chicago, 11 Wall. 108; Hannewinkle v. Georgetown, 15 Wall. 147.

Undoubtedly, for merely irregular assessments, where the authorities have jurisdiction to act, the statutory remedy is also the exclusive remedy. But when the statute, as in this case, leaves open to judicial inquiry all questions of a jurisdictional character, it is well settled that a determination of such questions by an administrative board does not preclude parties aggrieved from resorting to judicial remedies.

Thus, in Emery v. Bradford, 29 Cal. 75, the supreme court of California, while holding that the remedy of an owner of a lot in San Francisco assessed for work on a street in front of the same, if dissatisfied with the decision of the superintendent of public streets, is an appeal from such decision to the board of public supervisors, and that, if the proceedings are such that the proper officers have jurisdiction to act, their determinations are valid, and can only be reviewed in the mode provided by the statute, said: 'That, where there are acts to be performed of a jurisdictional character essential to the validity of the assessment, it is not to be supposed that the conclusiveness of the decision of the board of supervisors is to extend to that class of cases.'

So, in Wright v. City of Boston, 9 Cush. 233, the supreme judicial court of Massachusetts, in holding that objections to a tax for some defect or irregularity in making the assessment must be taken advantage of by appeal, stated the proposition thus: 'For any defect or irregularity in the course of proceeding in making the assessment,-any ground of objection,-which does not go to show the whole proceeding a nullity, he must take his appeal, if he has one.'

In Railway Co. v. Cheyenne, 113 U.S. 516, 525, 5 Sup. Ct. 601, 605, this court, through Mr. Justice Bradley, said:

'But it is contended that the complainant should have sought a remedy at law, and not in equity. It cannot be denied that bills in equity to restrain the collection of taxes illegally imposed have frequently been sustained. But it is well settled that there ought to be some equitable ground for relief besides the mere illegality of the tax; for it must be presumed that the law furnishes a remedy for illegal taxation. It often happens, however, that the case is such that the person illegally taxed would suffer irremedial damage, or be subjected to vexatious litigation, if he were compelled to resort to his legal remedy alone. For example, if the legal remedy consisted only of an action to recover back the money after it had been collected by distress and sale of the taxpayer's lands, the loss of his freehold by means of a tax sale would be a mischief hard to be remedied. Even the cloud cast upon his title by a tax under which a sale could be made would be a grievance which would entitle him to go into a court of equity for relief.'

Numerous cases to the same effect may be found cited in Cooley, Tax'n, 543.

Again, it is contended on behalf of the appellant that the defendants cannot recover the taxes paid by them under protest, because Sess. Laws Utah 1890, p. 58, § 1, provides that 'any party, feeling aggrieved by any such special tax or assessment or proceeding, may pay said special tax assessed or levied upon his property, or such installments thereof as may be due, at any time before the same shall be delinquent, under protest, and with notice in writing to the city collector that he intends to sue to recover the same, which notice shall particularly state the alleged grievances and grounds thereof; whereupon such party shall have the right to bring a civil action within sixty days thereafter, and not later, to recover so much of the special tax as he shall show to be illegal, inequitable and unjust, the cost to follow the judgment, to be apportioned by the court as may seem proper, which remedy shall be exclusive.'

As respects this contention, we agree with the supreme court of the territory that this statute applies to cases where there are only errors, irregularities, overvaluations, or other defects which are not jurisdictional, but that where the council, not having the jurisdiction to levy the tax, could not proceed under the statute, the taxpayers need not proceed under the statute to recover the money paid. Where the tax was wholly void and illegal, as in this case, the statute and its remedies for errors and irregularities have no application.

Our conclusion is that the decree of the supreme court of the territory of Utah, so far as respects the Realty Company of Kittery, is affirmed, and that as to the other appellees the appeal is dismissed.