Opinion — Phillip Wagner, Inc. v. Leser

OCTOBER TERM, 1915.

Opinion of the Court. 239 U.S.

City, which property abuts and adjoins upon the public

highway, which had been paved with improved paving,

to-wit, vitrified brick, which property, or its present or

former owner, had never been specially assessed for any

part of the cost of said improved paving. The bill was

filed for the purpose of enjoining the enforcement of a

certain act of the General Assembly of the State of Mary-

land (1906, Chapter 401; 1908, Chapter 202, of the Laws

of Maryland), by which statute the General Assembly

enacted that a special tax be levied and imposed upon

property in the City of Baltimore benefited by improved

paving of the amount specified; said tax to continue as

to each property for ten years from the time it attached

thereto, the proceeds to be used for improved paving in

the City of Baltimore, as provided in the act. The act

provided that, for these purposes, all landed property in

the City of Baltimore, adjoining or abutting upon any

public highway, which had been or should thereafter

be paved with improved paving without special assess-

ment of any part of the cost upon the abutting or ad-

joining property owners, by the City of Baltimore or

the State Roads Commission, or other public commis-

sion or agency, or by said city and such commission

or agency, or by either or both, and any railroad or

railway company occupying with tracks a portion of

such highway, was declared to be specially benefited by

such improved paving to an extent greater than the entire

amount of the special tax levied under the act. The

property so benefited was divided into three classes:

Class A to include all landed property in the City of Balti-

more, adjoining or abutting upon a public highway paved

with improved paving and having a width of not less

than thirty feet so paved; Class B to include all such

landed property in the City of Baltimore adjoining or

abutting upon a public highway paved with improved

paving and having a width of less than thirty feet and

WAGNER eo. BALTIMORE. 213

239 U.S. Opinion of the Court.

not less than fifteen feet so paved; Class C to include all

such landed property in the City of Baltimore adjoining

or abutting upon any public highway paved with im-

proved paving and having a width of less than fifteen feet

so paved. The Appeal Tax Court of the City of Balti-

more is authorized and directed by the act to proceed to

classify and list for taxation, as provided by the act, for

the year 1913, all landed property in the City of Balti-

more which, on the first day of November, 1912, was in a

situation to come under the requirements of either of

said classes. Before classifying any property under the

special tax provided in the act, the Appeal Tax Court

was required to give notice to the owner of the property,

designating a certain time when the owner might appear

before the court and be heard with reference to the lia-

bility of his property for the tax, and the class to which

it properly belonged. After having given the owner rea-

sonable notice and an opportunity to be heard, the Appeal

Tax Court is required to proceed to make the classifica-

tion provided, and to certify their action, in making such

classification to the City Collector in the same manner

as in cases of classification of real and leasehold property

in the annex for the different rates of taxation as pro-

vided under the Act relating thereto; and the City Collec-

tor is authorized to add the special tax to the tax bills

of the property, to be called “Special Paving Tax,” and

to collect the same in the manner as ordinary taxes on

real estate are collected. The City Collector is required

to account for and pay over to the Comptroller, to be

by him deposited with the City Register and to be placed

to the credit of a new paving fund provided in the Acts

of 1906, Chapter 401, and 1908, Chapter 202, and to be

exclusively applicable to the cost of the work authorized

by said acts, or by any amendment or amendments

thereof. Section 3 of the act defines improved paving

to mean any substantial, smooth paving above the grade

OCTOBER TERM, 1915.

Opinion of the Court. 239 U.S.

of ordinary macadam, and to include granite or belgian

blocks, vitrified brick or blocks, wood blocks, asphalt or

concrete blocks, sheet asphalt, bitulithic bituminous mac-

adam and bituminous concrete. Section 4 specifies the

amount of the special tax to be as follows: On all prop-

erty embraced in Class A, fifteen cents per year per

front foot or lineal foot adjoining or abutting upon the

public highway; on all property embraced in Class B,

ten cents per year per front foot or lineal foot adjoining

or abutting upon the public highway; and on all property

embraced in Class C, five cents per year per front foot

or lineal foot adjoining or abutting upon the public high-

way.

The bill recites that, under and by virtue of that act,

Chapter 688 of the Acts of 1912, the General Assembly

has attempted to levy and impose upon the property of

the plaintiff and other property owners similarly situated,

taxes under the three classes mentioned, and that the

Appeal Tax Court of Baltimore is proceeding now to list

and classify for taxes the property so attempted to be

levied upon by said act, and has classified said property

of the plaintiff, designating it as belonging to Class A.

The bill then sets forth various grounds upon which it

is claimed the act is illegal, the one with which this court

is concerned being that it is in violation of the Fourteenth

Amendment to the Constitution of the United States.

The Act of 1906, to which reference is made in the act

just recited, Chapter 401, as amended by Chapter 202

of the Acts of 1908, provides for the creation of a paving

commission for the City of Baltimore, with powers to

carry out a plan for a complete system of improved paving

of the streets of the city. The Court of Appeals in its

opinion in this case states that a fund of $5,000,000 was

procured by means of a loan provided for this purpose,

which loan was approved by the people at an election

held on the 2nd of May, 1911, and that the act was sus-

WAGNER v. BALTIMORE. 215

239 U.S. Opinion of the Court.

tained by the Court of Appeals in the case of Bond v.

Baltimore, 118 Maryland, 159; and that the object and

purpose of the Act of 1912 was to raise an additional

fund of $5,000,000, to complete the plan adopted by

the city for improved pavements throughout the city,

and that this is to be done by a special paving tax upon

property in the city specially benefited by improved

paving as provided in the act.

The bill was demurred to upon certain grounds: that

the complainant had an adequate remedy at law; that

the Act of 1912 in question did not violate the Constitu-

tion of the United States or the Constitution or Bill of

Rights of the State of Maryland; that the houses of the

plaintiff were enjoying special benefit and advantage,

fronting upon a street improved with vitrified brick

pavement, while other houses in the city are upon un-

healthy and unsightly cobble stone streets, for which

special advantage the charge put upon the houses of the

plaintiff by the act in question amounts to $1.80 per

year upon each of the houses, or $18.00 upon each house

for the entire ten years. The demurrer sets forth certain

other reasons why a court of equity should not intervene

not necessary to repeat. The demurrer was overruled

in the Circuit Court of Baltimore City, and upon appeal

to the Court of Appeals of Maryland, that court reversed

the lower court and sustained the constitutionality of

the act as against the attacks thereon both under the

state and Federal Constitutions. (120 Maryland, 621.)

We will notice such matters as are deemed necessary

in order to dispose of the contentions concerning the

alleged violation of rights secured to the complainant

under the Federal Constitution. The provision of that

instrument to which appeal is made by the complainant

is the Fourteenth Amendment in the protection secured

thereunder against state action which has the effect to

deprive of property without due process of law. This

_—_— thay EUG ENE NTE SE NI EEN PDS a RATS BES Se ANE RE LIN

OCTOBER TERM, 1915.

Opinion of the Court. 239 U.S.

court has frequently affirmed that the general taxing

systems of the State are not to be presumed lacking in

due process of law because of inequalities or objections, so

long as arbitrary action is avoided. It is not the purpose

of the Fourteenth Amendment to interfere with the dis-

cretionary power of the States to raise necessary revenues

by imposing taxes and assessments upon property within

their jurisdictions.

It is first contended that the complainant is deprived of

its property without due process of law, because the special

assessment levied upon its property is for special benefits

long since accrued, and that the statute under considera-

tion is retrospective in its operation, thereby disturbing

rights which had accrued to and become fixed in the prop-

erty holders long before the passage of the statute; that

the State had no authority because of benefits thus long

since conferred to make the assessment in question. But

we deem this contention foreclosed by the decision of

this court in Seattle v. Kelleher, 195 U.S. 351. In that

case it was contended that there could be no valid assess-

ment for a certain improvement, because it was levied

after the work was completed, but this court met that

contention by saying (p. 359):

“The principles of taxation are not those of contract.

A special assessment may be levied upon an executed

consideration, that is to say, for a public work already

done. Bellows v. Weeks, 41 Vermont, 590, 599, 600;

Mills v. Charleton, 29 Wisconsin, 400, 413; Hal? v. Street

Commissioners, 177 Massachusetts, 434, 439. If this were

not so it might be hard to justify reassessments. See

Norwood v. Baker, 172 U. S. 269, 293; Williams v. Su-

pervisors of Albany, 122 U. S. 154; Frederick v. Seattle,

13 Washington, 428; Cline v. Seattle, 13 Washington,

444; Bacon v. Seattle, 15 Washington, 701; Cooley, Taxa-

tion, 3d ed., 1280. . . . Of course, it does not matter

that this is called a reassessment. A reassessment may

WAGNER pv. BALTIMORE. 217

239 U.S. Opinion of the Court.

be a new assessment. Whatever the legislature could

authorize if it were ordering an assessment for the first

time it equally could authorize, notwithstanding a pre-

vious invalid attempt to assess. The previous attempt

left the city free ‘to take such steps as were within its

power to take, either under existing statutes, or under

any authority that might thereafter be conferred upon

it, to make a new assessment upon the plaintiff’s abutting

property’ in any constitutional way. Norwood v. Baker,

172 U. S. 269, 293; McNamee v. Tacoma, 24 Washington,

591; Annie Wright Seminary v. Tacoma, 23 Washington,

109.”

The doctrine established by this case is that a subse-

quent assessment may be levied because of benefits con-

ferred by the former action of the city in improving in

front of the lots assessed. As said in the Kelleher Case

(p. 359), ‘‘the benefit was there on the ground at the

city’s expense.” So far as any Federal constitutional

requirement is concerned, the State might exercise its

authority to assess because of this special benefit, al-

though that assessment was deferred for some time after

the work was done at the public expense. And these

considerations suggest the answer to another objection

made in this connection, that it is proposed to use the

assessments for paving other streets within the city. It

is true that the assessments are to go into the general

fund provided for such general use. But we are unable

to see how the constitutional rights of the complainant

are violated, so long as there was as to it a benefit formerly

conferred, and still existing, which the property had de-

rived at the public expense. The fact that the city was

authorized to use the assessment in creating a public

fund, in aid of its scheme to pave other streets of the

city, was a public purpose, and a legitimate one, for which

funds of the city might be used.

It is further urged, and much stress seems to be laid

_—_— ERE OTP NER IN EEE IONE LON FE RTE LN ON) EERE QT

OCTOBER TERM, 1915.

Opinion of the Court. 239 U. 8.

upon this point, that the complainant and others similarly

situated were given no opportunity to be heard as to

the amount of benefits conferred upon them, and the

proper adjustment of the taxes among property owners.

But this question, like the other, is foreclosed by the

former decisions of this court. This assessment, and the

classification of the property to be improved, were fixed

and designated by legislative act. It was declared that

the property which had been improved by paving there-

tofore should, according to the width of the paving in

front of the respective properties, be assessed at a certain

sum per foot front. We think such a tax, when levied

by the legislature, did not require notice and a hearing

as to the amount and extent of benefits conferred in order

to render the legislative action due process of law within

the meaning of the Federal Constitution. In Spencer v.

Merchant, 125 U. S. 345, 356, this court, speaking by

Mr. Justice Gray, said:

“In the absence of any more specific constitutional

restriction than the general prohibition against taking

property without due process of law, the legislature of

the State, having the power to fix the sum necessary to

be levied for the expense of a public improvement, and

to order it to be assessed, either, like other taxes, upon

property generally, or only upon the lands benefited by

the improvement, is authorized to determine both the

amount of the whole tax, and the class of lands which

will receive the benefit and should therefore bear the

burden, although it may, if it sees fit, commit the ascer-

tainment of either or both of these facts to the judgment

of commissioners.”

This case has been followed and approved in subsequent

decisions in this court. Parsons v. District of Columbia,

170 U. S. 45, 50, 56; French v. Barber Asphalt Paving Co.,

181 U. S. 324, 343. In the latter case, the former cases

in this court were reviewed at length, and Spencer v.

WAGNER v BALTIMORE. 219

239 U.S. Opinion of the Court.

Merchant, quoted with approval; Norwood v. Baker,

172 U. S. 269, was commented upon and distinguished.

French v. Barber Asphalt Paving Co., supra, was followed

and approved in a series of cases in the same volume:

Wight v. Davidson, 371; Tonawanda v. Lyon, 389; Web-

ster v. Fargo, 394; Cass Farm Co. v. Detroit, 396; Deiroit v.

Parker, 399; Wormley v. District, 402; Shumate v. Heman,

402; Farrell v. Commissioners, 404. French v. Barber

Asphalt Paving Co., supra, was referred to with approval

in Hibben v. Smith, 191 U. S. 310, 326. See also Louis.

& Nash. R. R. v. Barber Asphalt Paving Co., 197 U. S.

430; Martin v. District of Columbia, 205 U. 8. 135.

Norwood v. Baker, supra, is much relied upon by the

plaintiff in error, and while this court has shown no dis-

position to overrule that case when limited to the deci-

sion actually made by the court, much that is said in it

must be read in connection with the subsequent cases

in this court already referred to. In Norwood v. Baker,

a portion of a person’s property, located in a village of

Ohio, was condemned for street purposes and the entire

cost of opening the street, including the amount paid

for the strip condemned, with the costs and expenses of

condemnation, was assessed upon the abutting property

owner whose land was condemned. This, it was said in

French v. Barber Asphalt Paving Co., supra, was an abuse

of the law and an act of confiscation, and not a valid

exercise of the taxing power. Taking the decisions in

this court together, we think that it results that the legis-

lature of a State may determine the amount to be assessed

for a given improvement and designate the lands and

property benefited thereby, upon which the assessment

is to be made, without first giving an opportunity to the

owners of the property to be assessed to be heard upon

the amount of the assessment or the extent of the benefit

conferred.

We do not understand this to mean that there may

_— EINE LTO LL PON DS INE TE OES, QO EIR TEENS, < ET REPEL GA SRE ROC SNP

OCTOBER TERM, 1915.

Opinion of the Court. 239 U.S.

not be cases of such flagrant abuse of legislative power

as would warrant the intervention of a court of equity

to protect the constitutional rights of land owners, be-

cause of arbitrary and wholly unwarranted legislative

action. The constitutional protection against depriva-

tion of property without due process of law would cer-

tainly be available to persons arbitrarily deprived of

their private rights by such state action, whether under

the guise of legislative authority or otherwise. But in

the present case there is neither allegation nor proof of

such disproportion between the assessment made and

the benefit conferred as to suggest that the small tax

levied upon this property would amount to an arbitrary

exercise of the legislative power upon the subject. There

can be no question that paving with brick in front of

the property of the complainant conferred a substantial

benefit, and gave authority for the subsequent legisla-

tion which, because of that benefit, original and con-

tinuing, warranted an assessment upon the property

owner for a confessedly public purpose,—the improvement

of the streets of the city.

We are unable to find tuat the act of the legislature

in question, or the manner of its present enforcement,

operates to deprive the complainant and others similarly

situated of any rights secured to them by the Federal

Constitution. The judgment of the Court of Appeals

of Maryland is

A firmed.

Mr. Justice Pitney and Mr. Justice McRryno.ps

dissent.

REY RE PE EOI EE EE