People v. Ingalls

• Decision Date: 03 May 1927
• Docket Number: No. 105.,105.
• Citation: 238 Mich. 423,213 N.W. 713
• Parties: PEOPLE v. INGALLS, City Treasurer of Detroit, et al.
• Court: Michigan Supreme Court

238 Mich. 423

213 N.W. 713

PEOPLE

v.INGALLS, City Treasurer of Detroit, et al.

No. 105.

Supreme Court of Michigan.

May 3, 1927.

Appeal from Circuit Court, Ingham County, in Chancery; Leland W. Carr, Judge.

Bill by the People against Guy L. Ingalls, as City Treasurer of Detroit, and another. From a decree for plaintiff, defendants appeal. Affirmed.

Argued before the Entire Bench.Walter Barlow, of Detroit (Charles P. O'Neil, of Detroit, of counsel), for appellants.

Andrew B. Dougherty, Atty. Gen., and Lincoln E. Bradt, Asst. Atty. Gen., for the People.

BIRD, J.

During the years 1921, 1922, 1923, and 1924 the city of Detroit made special assessments against the ‘Michigan state fair grounds' in that city to cover the cost of sewers, street paving, sidewalks, and street widening, amounting in all to the sum of $23,222.66. The state fair lands include about 160 acres of land lying contiguous to Woodward avenue. These lands were, prior to 1921, owned by an incorporated association. On April 6, 1921, the lands were conveyed by the association to the state of Michigan by warranty deed.

Repeated demands were made upon the state for these special taxes. The state authorities denied any liability for such taxes, and denied that the city of Detroit had any authority to levy them. To settle the controversy, the Attorney General filed this bill on behalf of the state, praying that the special taxes be declared illegal and void.

The general tax law provides that the following property shall be exempt from taxation:

‘1st. All public property belonging to the United States;

‘2nd. All public property belonging to the state of Michigan.’ C. L. 1915, § 4001, as amended by Act 55 of the Laws of 1925.

These provisions for exemption of state and federal property from taxation do not affect the question of special assessments, as these exemptions have reference only to general taxation. Auditor General v. Union Benevolent Association, 226 Mich. 170, 197 N. W. 552.

The doctrine has been pretty well settled in this state and elsewhere that property owned by the state or by the United States is not subject to taxation unless so provided by positive legislation. And municipalities and state agencies are included in this class when their property is used for public purposes. The reason which supports this doctrine is that, if taxes were permitted to be levied against the sovereign, it would be necessary to tax itself in order to raise money to pay over to itself. This would be an idle thing to do. And, besides, it is rather incongruous that the creature should have the right to tax its creator without its consent. Out of this reason has grown an implied presumption that the state is exempt from all taxes, unless the one asserting it can point to some legislation in support of it. We are not aware of any law, nor has any been called to our attention, which authorizes the city of Detroit to levy any tax or assessment against state property. Unless it can do this, its contention must fail. Again, if this tax can be levied against state property, who has authority to pay the tax, and, if it is not paid, who has authority to sell the land to pay the tax.

But counsel say the property which the city of Detroit has assessed is not used for governmental purposes. This is a provision which applies when it is sought to charge a municipality or state agency with taxation, but does not apply to the federal or state governments. It is of no consequence what use the state makes of its property. The same reason exists for not taxing state property not in governmental use as exists for taxing state property in governmental use. Therefore the question as to the use made of the fair grounds by the state is immaterial.

That the foregoing rule is in force in Michigan is supported by Big Rapids v. Supervisors, 99 Mich. 351, 58 N. W. 358, where the city authorities sought to enforce a special assessment against the county grounds and buildings. There was no question about the county building being used for governmental purposes. In denying the right of the city to impose the tax, it was said:

‘Implied exemptions exist where property is owned and held by the state, its political subdivisions, and its municipalities for governmental purposes. * * * A county is one of the political subdivisions of the state. * * * It would seem to follow that only such burdens of taxation can be imposed upon its property as are expressly provided by law. * * * Whenever the taxing power seeks to impose a tax upon such property, it must be able to point to legislative or constitutional authority’-citing authorities.

In Newberry v. Detroit, 164 Mich. 410, 129 N. W. 699,32 L. R. A. (N. S.) 303, the special assessment was permitted because levied against a public park not used for governmental purposes.

In Auditor General v. MacKinnon Boiler & Machine Co., 199 Mich. 489, 165 N. W. 771, the special assessment was permitted because the title to the vacant lots had been conveyed to the regents of the university, in trust for the university, and they were not used for governmental purposes.

Upon the question of implied exemptions Cooley on Taxation makes this observation:

‘Some things are always presumptively exempted from the operation of general tax laws, because it is reasonable to suppose they were not within the intent of the Legislature in adopting them. Such is the case with property belonging to the state and its municipalities, and which is held by them for governmental purposes. All such property is taxable if the state shall see fit to tax it; but to levy a tax upon it would render necessary new taxes to meet the demand of this tax, and thus the public would be taxing itself in order to raise money to pay over to itself, and no one would be benefited but the officers employed, whose compensation would go to increase the useless levy. It cannot be supposed that the Legislature would ever purposely lay such a burden upon public property, and it is therefore a reasonable conclusion that, however general may be the enumeration of property for taxation, the property held by the state and by all its municipalities for governmental purposes was intended to be excluded, and the law will be administered as excluding it in fact. The grant, therefore, in general terms, to a city of the power to tax will not be held to confer power to tax state or county property.’ Page 172 (2d Ed.)

Dillon on Municipal Corporations says:

‘But the sound principle is that property owned by a state or by the United States, or by a municipality, for public uses, is not subject to be taxed unless so provided by positive legislati...