Lovett v. City Treasurer of Detroit

• Decision Date: 05 October 1938
• Docket Number: No. 84.,84.
• Citation: 286 Mich. 159,281 N.W. 576
• Parties: LOVETT et al. v. CITY TREASURER OF DETROIT et al.
• Court: Michigan Supreme Court

286 Mich. 159

281 N.W. 576

LOVETT et al.

v.CITY TREASURER OF DETROIT et al.

No. 84.

Supreme Court of Michigan.

Oct. 5, 1938.

Suit by Louie C. Lovett and others against Charles L. Williams, City Treasurer of the City of Detroit, and another to restrain the treasurer from selling certain property on tax sale and to relieve the plaintiffs from paying certain taxes. From an adverse decree, plaintiffs appeal.

Affirmed.

Appeal from Circuit Court, Wayne County, in Chancery; Guy A. Miller, judge.

Argued before the Entire Bench.

James G. McHenry, of Detroit, for appellants.

Raymond J. Kelly, Corp. Counsel, and John H. Witherspoon, Asst. Corp. Counsel, both of Detroit, for appellees.

WIEST, Chief Justice.

Plaintiffs owned property on the southerly side of Michigan avenue, between Shelby and Wayne streets in the city of Detroit. In June, 1925, they leased the property to the Mutual Theatre Company for six years. Under the terms of the lease the lessee was to pay all taxes, ordinary and extraordinary. The lessee made default and, in February, 1928, plaintiffs brought summary proceedings to recover possession. Thereupon one Nederlander, treasurer and fiscal agent of the theatre company, entered into an agreement guaranteeing performance of the covenants of the lease. Nederlander did not perform his agreement and, in March, 1929, plaintiffs brought suit against the theatre company and Nederlander to recover rental and unpaid taxes.

In preparation for trial of that suit and to ascertain the amount of unpaid taxes, the attorney for plaintiffs, in order to make payment thereof, if any due, and have recovery against the defendants in that suit, applied to the treasurer of the city of Detroit for a statement of the taxes and assessments then due and was informed there were none unpaid, although at that time there was due and unpaid the general city taxes for 1926.

It is claimed that for sometime the records in the office of the city treasurer showed that the tax on this property for 1926 had been paid. No claim is made that such tax had in fact been paid, but plaintiffs claim that, being informed that the tax had been paid, the amount thereof was not claimed in their suit on the lease against the guarantor mentioned and they were, therefore, damnified to the amount of about $15,000.

The bill herein was filed to restrain the city treasurer from selling for the tax of 1926, and have decree that plaintiffs be relieved from paying the tax for that year.

The court decreed the tax for 1926 unpaid and a lien upon the property but granted plaintiffs the right to pay the same, with interest and penalty thereon computed as of May, 1928, that being the date the attorney applied for a statement of unpaid taxes and, upon such payment, to have the records show the tax paid.

Plaintiffs appeal and contend that the city is estopped from exacting payment of the tax for the year 1926, that the offer of plaintiffs to pay was equivalent to payment and that the tax sale was void because not reported to the council and confirmed.

The last point, relative to confirmation of the tax sale, need not be considered.

The pivotal question is: ‘Can a city be estopped by the act of its city treasurer in giving erroneous tax information to owners of real estate who are thereby damnified?’

The issue here involves the general city tax, duly levied upon plaintiffs' real estate in 1926. The validity of the levy is not questioned. The tax has not been paid. Under the circumstances mentioned does the tax levy still exist or should the lien be removed?

The collection of duly levied taxes for governmental purposes is a governmental function and the collection officer cannot, by mistake or misinformation, work an estoppel, enforceable in a court of equity. The fact, and not the misinformation, controls. The treasurer was serving in a governmental capacity and the right of the municipality in the particular at bar is not to be measured by his mistake of fact. No matter how innocently done the treasurer could not, because of lack of authority, by any representation, make unenforceable a duly levied tax in his official hands for collection.

Counsel for plaintiffs cites Curnen v. Mayor, 79 N.Y. 511.

In City of San Angelo v. Deutsch, 126 Tex. 532, 91 S.W.2d 308, it was pointedly stated [page 312]: ‘The value of the New York decisions as authorities is weakened by the peculiar facts of Curnen v. Mayor, etc., of City of New York, supra, which the other New York cases follow. The taxes were in fact paid through mistake by one who was not the owner of the property, and proper entry was made in the tax record. The plaintiff, when he purchased the property,...