City of Detroit v. Detroit City Ry. Co.

• Citation: 43 N.W. 447,76 Mich. 421
• Court: Michigan Supreme Court
• Decision Date: 11 October 1889
• Parties: CITY OF DETROIT v. DETROIT CITY RY. CO.

43 N.W. 447

76 Mich. 421

CITY OF DETROIT v. DETROIT CITY RY. CO.

Supreme Court of Michigan

October 11, 1889

Error to circuit court, Wayne county.

CAMPBELL J.

The city of Detroit sued defendant for alleged unpaid taxes for the year 1887. The first count was for taxes assessed on personal property to the amount of $439.140. The second count was for 1 per cent. upon the gross receipts of defendant for six months, ending December 31, 1887, under an ordinance of November 14, 1879, accepted by defendant. The court below found for defendant under facts determined and contained in the record. Those facts, so far as material, show this condition of things: Defendant is a company organized under the tram-railway act, found in chapter 94, How. St. By section 22 of that act every such company was required to pay into the state treasury one-half of 1 per cent. on the capital stock, in lieu of all other taxes on all the property of the company. By amendatory section 34 it was provided that no such company should construct its railway on any city street "without the consent of the municipal authorities of such town or city, and under such regulations, and upon such terms and conditions, as said authorities may from time to time prescribe; provided, further, that after such consent shall have been given, and accepted by the company or corporation to which the same is granted, such authorities shall make no regulations or conditions whereby the rights or franchises so granted shall be destroyed or unreasonably impaired, or such company or corporation be deprived of the right of constructing, maintaining, and operating such railway in the street in such consent or grant named pursuant to the terms thereof." Various arrangements were made from time to time between plaintiff and defendant previous to 1879, and on November 14, 1879, a new agreement was made, covering the management and maintenance of defendant's railways in Detroit, whereby among other things, it was agreed that defendant should pay yearly a tax of 1 per cent. on its gross receipts, and should pave and keep in repair the road-way covering the tracks and switches, and that this special tax and paving liability should be in lieu of license and other taxes and paving charges. In 1882 a law was passed repealing section 22 of the tramway law, providing for specific taxes payable to the state. Laws 1882, p. 4. A controversy subsequently arose concerning the effect of the various changes in the taxing system, and the validity of taxes assessed by the city, and this led to a final attempt to settle the dispute by a new ordinance covering all matters arising after July, 1882, up to the date of the ordinance, as well as laying down rules for the future. This ordinance, adopted January 4, 1887, and accepted by defendant, provided: First. That relating back, and running from July 1, 1882, to December 31 1896, defendant should pay 1 1/2 per cent. annually on its gross receipts, and thereafter 2 per cent thereon. Second. That it should pay usual municipal taxes on all its lands and buildings, to be assessed as is done to individuals. Third. These payments were to be in lieu of all taxes, license fees, and charges on the property stock, rights, and franchises of the defendant, under present or future laws or authority. Fourth. In case defendant should be directly or indirectly required to pay any other or further tax, license fee, or charges, it should be allowed on the percentage, and defendant not be required to pay any more than such percentage and land taxes, and that defendant's liability should be so confined, without its consent in writing to the contrary.

On January 14, 1887, the defendant paid, and the city accepted all the percentage due on the basis of the ordinance up to that time. On July 1, 1887, defendant paid into the city treasury, under the ordinance, 1 1/2 per cent. on its gross earnings for the first half of that year, amounting to $3,197.12. The same percentage for the rest of the year 1887 was $3,053.28, making for 1887 a percentage of $6,250.40. The city assessors, in addition to the land-tax, which is not disputed, assessed defendant, on the tax-roll of 1887, upon its track, $294,290; upon horses, cars, machinery, and other personalty, $144,850,-making a total of $439,140, and taxes were laid on this basis to the amount of $5,232.70, of which $3,559.16 was for the tracks. This assessed tax was rather more than $1,000 less than the percentage on gross earnings. The present suit covers nothing but what is claimed by the city for itself. The specific tax by section 22 of the tram-road...