House v. City of Saginaw, 70

Citation54 N.W.2d 314,334 Mich. 241
Decision Date27 June 1952
Docket NumberNo. 70,70
PartiesHOUSE et al. v. CITY OF SAGINAW et al.
CourtSupreme Court of Michigan

W. Vincent Nash, Russell A. Schafer, R. James Harvey, Saginaw, for defendants and appellants.

Murphy & Murphy, Saginaw, for plaintiffs and appellees.

Richard H. Paulson, City Atty. of Kalamazoo, amicus curiae for Muskegon and other cities.

Roscoe O. Bonisteel, Ann Arbor, Ballard, Jennings, Bishop & Frazer, Lansing, amicus curiae.

Before the Entire Bench.

DETHMERS, Justice.

The city of Saginaw is a home rule city. On February 5, 1951, Section 45 of Chapter VII of its charter entitled 'Adoption of Budget, Tax Limit' provided:

'The council shall, by resolution, determine and adopt the budget and make the appropriations for the next fiscal year and shall provide, by resolution, for a tax levy of the amount necessary to be raised by taxation, which shall not exceed one and one-half per cent (1 1/2%) of the assessed value of all real and personal property subject to taxation in the city, in conformity with and subject to Section 21, Article 10, of the Constitution of Michigan and the state law pertaining thereto.'

The council adopted a resolution proposing to amend said section as follows:

'Adoption of Budget, Tax Limit, Excise Tax

'Section 45(a) The Council shall, by resolution, determine and adopt the budget and make the appropriations for the next fiscal year. It shall provide, by resolution, for a tax levy of the amount necessary to be raised by taxation, for city purposes, on real and personal property, which shall not exceed one per cent (1%) of the assessed value of all real and personal property subject to taxation in the city.

'Section 45(b) For a period of ten (10) years beginning January 1, 1952, the Council may, by ordinance, provide for the levy and assessment of a specific excise tax of not to exceed one per cent (1%) per annum upon the following: (1) All salaries, wages, commissions and other compensation earned (a) by residents of the city and (b) by non-residents of the city for work done or services performed or rendered in the city; (2) the net profits of all businesses, professions or other activities (a) conducted by residents of the city and (b) conducted in the city by non-residents; and (3) that part of the net profits earned as a result of work done or services performed or rendered and business or other activities conducted in the city by corporations having an office or place of business in the city.

'The council may prescribe by ordinance all things it may deem necessary to exercise effectively the authority herein granted, including but not limited to the following: a penalty of not to exceed five per cent (5%) of the amount of any unpaid tax for each month or fraction of a month for the first five (5) months of nonpayments; interest on any tax not paid when due at not more than the rate of one-half of one per cent (1/2 of 1%) per month; the collection of any tax, including interest and penalties, herein authorized without respect to said ten (10) year period and by any method available for the collection of a debt owed to the city; and the examination of books, records and paper necessary to determine tax liability thereunder.' (Section 45[c]. This subsection defined 'association', 'business', 'corporation', 'net profits', 'non-resident' and 'resident'.)

'Section 45(d) The net receipts from the tax authorized by Section 45(b) hereof, after providing for all costs of collection, shall be accumulated in each fiscal year until March 31, and as soon thereafter as possible such net receipts shall be distributed as follows:

'First, an amount equal to three-tenths of one per cent (3/10 of 1%) of the assessed valuation of the real and personal property subject to taxation in the city shall, insofar as funds are available, be transferred to the General Fund, and the tax limit created by Section 45(a) hereof shall, for the next fiscal year be reduced by the amount so transferred.

'Second, there shall be next set aside, insofar as funds are available, an amount sufficient to defray the debt service requirements of the next fiscal year, including principal and interest, of any bonds issued by the city to finance the construction of a sewage disposal system and appurtenances.

'Third, the amount remaining after the payments above required have been made shall be transferred to a fund to be known as the Public Improvement Fund and shall be used solely for the acquiring, extending, altering or repairing of public improvements which the city may, by the provisions of its charter or the general law, be authorized to acquire, alter or enlarge.'

(Section 45[e]. This subsection contained the usual severability provision.)

At an election held on May 22, 1951, the proposed charter amendment was submitted to the qualified electors. Of the 14,462 ballots cast thereon, 9,030 were in favor and 5,432 opposed to adoption. The proposal was submitted upon a ballot which was in form as follows:

'Proposed Amendment to Section 45 of Chapter VII of the City Charter.

'Proposed by Resolution of the Council adopted February 5, 1951.

'Shall Section 45 of Chapter VII of the City Charter be amended: to authorize a tax levy on property of not to exceed one per cent; to authorize for ten years only an excise tax of not more than one per cent on salaries, wages, commissions, other compensation and profits of both residents and nonresidents; and to provide for the use of the net proceeds of such excise tax to reduce property taxes, defray annual sewage disposal bond expense, and for public improvements?

'YES' ( )

'NO ( )'

The plaintiffs are residents and electors of the city of Saginaw; at least one of them is a taxpayer on real property therein. and it is admitted that both would be prospective taxpayers under the tax provided for in the charter amendment. Plaintiffs' bill of complaint alleged the invalidity of the proposed tax both because of the form of the charter amendment and because of the tax itself. From decree holding the amendment and implementing ordinance adopted thereunder invalid and void and permanently enjoining defendant city from levying or collecting any tax authorized thereunder, defendants appeal.

Involved is the question stated in plaintiffs' brief as follows:

'Are the Charter Amendment and implementing ordinance entirely void because the ballot embraced more than one related proposition and did not...

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3 cases
  • Dooley v. City of Detroit, s. 53
    • United States
    • Michigan Supreme Court
    • May 9, 1963
    ...whose submission to electors of a proposal authorizing an income tax was declared invalid by this Court in 1952 in House v. City of Saginaw, 334 Mich. 241, 54 N.W.2d 314, for failure of compliance with procedural requirements. The issues presented to us in this appeal are, therefore, issues......
  • Graham v. Miller
    • United States
    • Michigan Supreme Court
    • June 29, 1957
    ...of an amendment submitted as a single question, citing 15 McQuillin on Municipal Corporations (3d ed.), § 40.09, House v. City of Saginaw, 334 Mich. 241, 54 N.W.2d 314, and Livingstone v. Board of Election Commissioners of Wayne County, 174 Mich. 485, 141 N.W. 122. Livingstone holds merely ......
  • Henry v. City of Pontiac, 16
    • United States
    • Michigan Supreme Court
    • June 28, 1961
    ...259 Mich. 212, 242 N.W. 891; Michigan Public Service Co. v. City of Cheboygan, 324 Mich. 309, 37 N.W.2d 116, and House v. City of Saginaw, 334 Mich. 241, 54 N.W.2d 314. In the Kelly case it was said generally of said section 21, referring to the section as it stood at the time (C.L.1929, § ......

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