U.S. Supreme Court
Spencer v. Merchant, 125 U.S. 345 (1888)
Spencer v. Merchant
Submitted February 7, 1888
Decided April 2, 1888
125 U.S. 345
A judgment of the highest court of a state sustaining the validity of an assessment upon lands under a statute of the state which was alleged to be unconstitutional and void because it afforded to the owners no opportunity to be heard upon the whole amount of the assessment, involves a decision against a right claimed under the provision of the Fourteenth Amendment to the Constitution of the United States prohibiting the taking of property without due process of law, and may be reviewed by this Court on writ of error, although the constitution of the state contains a similar provision and no constitutional provision is specifically mentioned in the record of the state court.
If the legislature of a state, in the exercise of its power of taxation, directs the expense of laying out, grading, or repairing a street to be assessed upon the owners of lands benefited thereby, and determines chanroblesvirtualawlibrary
the whole amount of the tax, and what lands which might be so benefited are in fact benefited, and provides for notice to and hearing of each owner at some stage of the proceedings upon the question what proportion of the tax shall be assessed upon his land, there is no taking of his property without due process of law in violation of the Fourteenth Amendment to the Constitution of the United States.
Pursuant to an act of the Legislature of New York, the expense of grading a street was assessed by commissioners upon the lands lying within three hundred feet on either side of the street and which would, in the judgment of commissioners, be benefited. After the sums so assessed upon some lots had been paid, the Court of Appeals of the state adjudged the assessment to be void because the act made no provision for notice to or hearing of the landowners. The legislature then passed another act directing a sum equal to so much of the first assessment as had not been paid, adding a proportional part of the expenses of making that assessment, and interest since, to be assessed upon and equitably apportioned among the lots the former assessment on which had not been paid, first giving notice to all parties interested to appear and be heard upon the question of the apportionment of this sum among these lots, but not as to any apportionment between them and those lots, the former assessments upon which had been paid. Held that an assessment laid under the latter statute was not a taking of property without due process of law in violation of the Fourteenth Amendment to the Constitution of the United States.
This case was submitted to the General Term in Kings County of the Supreme Court of the New York under § 1279 of the Code of Civil Procedure, without process, upon an agreed statement of facts signed by the parties, the substance of which, and of the statutes therein referred to, was as follows:
On June 20; 1883, the parties made a contract in writing by which the plaintiff agreed to sell to the defendant a parcel of land in the Town of New Lots in that county and to execute and deliver a deed thereof, with full covenants of warranty, and free of all encumbrances, in consideration of the sum of $8,000, part of which was paid, and the rest was payable on delivery of the deed. Upon examination, the defendant discovered that there remained unpaid on the land an assessment of $1,221.73, with interest from November 3, 1881, and demanded that the plaintiff should pay it, but he refused. The assessment was made under the following circumstances:
By the statute of the New York of 1869, c. 217, as chanroblesvirtualawlibrary
amended by the statute of 1870, c. 619, it was enacted in § 1 that the Supreme Court held in the County of Kings should, upon the application of one or more freeholders of the Town of New Lots, appoint three commissioners, who, by § 2, should immediately proceed to lay out in that town a street or avenue in continuation of Atlantic Avenue in the City of Brooklyn, and, by § 3, take the lands lying within the boundaries of the avenue so laid out and, after public notice in two or more newspapers of the county,
"at least twenty days before meeting for that purpose, of their intention to proceed to make the award and assessment required by this act, and of the time when and the place where they will meet for that purpose at which meeting all persons interested may appear and be heard in relation to the said award and assessment,"
award damages to the owners of those lands and assess the amount of the award and the attendant expenses upon the lands lying within three hundred feet on either side of the avenue which in their judgment should be benefited by opening and extending it, and report such award and assessment to the court for confirmation after public notice that all persons having any objection to it might be heard before the court, and that upon its confirmation, the amount of the assessment should be added by the county supervisors to and made part of, the annual taxes for three years, one-third each year, with interest on the portions unpaid, and when collected, be paid over to the owners of the lands taken.
The statute of 1869, as amended by the statute of 1870, further provided in § 4 that upon the confirmation of the report as to the opening of the street, the commissioners should be authorized to enter upon the land taken, to cause it to be regulated, prepared, and graded for public travel, and to assess the expense of such regulating, grading, and preparing for travel
"upon the lands and premises which, in their judgment, shall be benefited by such improvement, in proportion to the benefit accruing to them by reason thereof, the district of assessment to extend back as provided heretofore in this act,"
and that the amounts so assessed, together with interest at the rate of seven percent a year from the making of the assessment, chanroblesvirtualawlibrary
should be added to and made a part of the annual taxes for the ensuing year upon the lands assessed, and, when collected, be applied to the payment of bonds issued under that statute.
The commissioners were appointed, laid out the street, and regulated, graded, and prepared it for travel, and made the award and assessments as directed by the statutes aforesaid. The assessment made under § 4 for the expense of regulating, grading, and preparing the street for travel amounted to more than $100,000. The sums so assessed upon some lots were paid, but the sums assessed upon other lots remained unpaid, the owners of these lots contesting the validity of the assessment. The principal amount of the unpaid part of that assessment, being $40,664.96, was returned for five years as uncollected by the Treasurer of Kings County to the comptroller of the state and, together with interest thereon at the yearly rate of five percent and amounting to $8,293.33, was paid or credited in account by the state to the Treasurer of Kings County. On June 18, 1878, the Court of Appeals declared that assessment void. Stuart v. Palmer, 74 N.Y. 183. On January 29, 1879, the comptroller of the state cancelled thef Appeals declared that assessment void. Stuart v. Palmer, 74 N.Y. 183. On January 29, 1879, the comptroller of the state cancelled thef Appeals declared that assessment void. Stuart v. Palmer, 74 N.Y. 183. On January 29, 1879, the comptroller of the state cancelled the unpaid assessment and charged the county with the amount thereof, being $40,664.96, together with the interest thereon to February 1, 1879, amounting to $8,293.33.
On August 12, 1881, the Legislature of New York, by the statute of 1881, c. 689, directed the Board of Supervisors of Kings County to levy on the assessment roll of the Town of New Lots for 1881, upon the lands, the assessment made upon which, under § 4 of the act of 1869, had been so cancelled by the Comptroller, and charged to the County of Kings,
"a sum equitably apportioned among the several parcels comprising said lands which shall be sufficient to refund to the New York the sum its due by reason of such cancellation, which sum, amounting to $40,664.96, was duly credited August 28th, 1876, by the comptroller of said state to the Treasurer of Kings County, and the interest charged thereon by said Comptroller, as required by law, to February 1st, 1879, amounting to $8,293.33, together with further interest thereon
at six percentum per annum, from February 1st, 1879, to the date of such levy. Before proceeding to levy such sums, the said board shall apportion the same among the several parcels of land hereinbefore mentioned, and said board shall give ten days' notice of the time and place when they will meet to make such apportionment, which notice shall be published daily in a newspaper published in the County of Kings, and all parties interested in said lands shall be entitled to be heard before said board upon the question of said apportionment."
The statute of 1881 further provided that the sums so levied should be collected by the Collector of Taxes of the Town of New Lots and paid over to the county treasurer, and by him applied "to pay the amount so due the New York by reason of such cancellation.'"
Under and pursuant to this statute, the Supervisors of Kings County added to the aforesaid sums of $40,664.96, being the unpaid balance of the previous assessment, and $8,293.83, being the interest thereon to February 1, 1879; further interest thereon at the yearly rate of six percent from that date to November 3, 1881, the day of the final conclusion of their report, and assessed and levied the aggregate sum of $55,653.52 upon the plaintiff's and other lots.
The lots so assessed were isolated parcels, not contiguous, and many of them not fronting on the avenue. Most of the territory benefited as fixed by the statute of 18$9, and a great portion of the original assessment, were not included in the statute of 1881 nor directed to be taken into consideration in making the new assessment. But this assessment included a proportionate part of the expenses of the former assessment, which had been declared void by the Court of Appeals.
The case stated by the parties, after setting forth the foregoing facts, continued and concluded as follows:
"The plaintiff claims that said assessment of 1881 in question is not a lien or cloud on the title to said premises, and the defendant refuses to pay the balance of said consideration until the plaintiff allows it to be deducted from the consideration money or pays the same, neither of which is the plaintiff willing to do, and the plaintiff also claims that the statute
of 1881, c. 689, is unconstitutional, and therefore void for the reason that it is an attempt made by the legislature of this state to validate a void assessment, and to do the same without giving the propertyholders an opportunity to be heard as to the total amount of the assessment, only providing for a hearing on the apportionment, which was levied upon said premises under and pursuant to c. 217 of the laws of 1869, as amended by c. 619 of the laws of 1870, and that the statute of 1881 is clearly void for the further reasons that the defect in the former assessment was jurisdictional, and it has been so declared and decided by the Court of Appeals in the case of Stuart v. Palmer, 74 N.Y. 183, and is special and invidious and unjustly and illegally apportioned upon certain individuals without reference to a uniform standard, and is an arbitrary exaction, and is levied on an individual or individuals to the exclusion of others in the same district. The defendant doubts the said claim of the plaintiff. The question submitted to the Court upon this case is as follows:"
"Is the assessment levied on the property in 1881 in question a good and valid lien or cloud on said property?"
"If this question is answered in the affirmative, then judgment is to be rendered in favor of the defendant and against the plaintiff, requiring the plaintiff to pay said assessment to deliver a deed according to contract."
"If it be answered in the negative, then judgment is to be rendered in favor of the plaintiff, requiring the defendant to take title to said premises in accordance with the contract above mentioned, without the plaintiff's paying said assessment or tax and without deducting the same out of the consideration money."
The Supreme Court of New York gave judgment for the defendant, and the plaintiff appealed to the Court of Appeals, which affirmed the judgment and remitted the case to the Supreme Court. 100 N.Y. 585. The plaintiff sued out this writ of error and assigned for error that it appeared by the record that both those courts held that the statute of 1881, c. 689, and the proceedings under it were constitutional and valid,
"whereas the said courts should have decided that the
said statute and the proceedings thereunder were in violation of the Constitution of the United States and were void for the reason that they deprived the said plaintiff and the other persons assessed thereunder of their property without due process of law."