Perry Company v. City of Norfolk No 103 William White v. City of Norfolk No 104

• Decision Date: 17 April 1911
• Docket Number: Nos. 103 and 104,s. 103 and 104
• Citation: 220 U.S. 472,55 L.Ed. 548,31 S.Ct. 465
• Parties: J. W. PERRY COMPANY and John L. Roper, Plffs. in Err., v. CITY OF NORFOLK, Virginia. NO 103. WILLIAM H. WHITE, Plff. in Err., v. CITY OF NORFOLK, Virginia. NO 104
• Court: U.S. Supreme Court

220 U.S. 472

31 S.Ct. 465

55 L.Ed. 548

J. W. PERRY COMPANY and John L. Roper, Plffs. in Err.,

v CITY OF NORFOLK, Virginia.

NO 103.

WILLIAM H. WHITE, Plff. in Err.,

v. CITY OF NORFOLK, Virginia.

NO 104.

Nos. 103 and 104.

Argued March 16, 1911.

Decided April 17, 1911.

From the bill in 103, to enjoin the collection of city taxes, it appears that prior to 1792 the borough of Norfolk, Virginia, existed as a municipality of limited power. It had a mayor and council, but no power to tax. The town owned the Fort land, and appointed commissioners to subdivide the tract and let out the lots at public outcry. Thereupon the borough 'demised, leased, and farm-let lot No. 10 to Richard Evers Lee, his executors, administrators, and assigns, from August 26, 1792, for and during the term of ninety-nine years, and after that time renewable for the further term of ninety-nine years, and so on forever,' he and they to pay yearly the rent of £6.6 and 'the public taxes which shall become due on said land.' It was provided that if there should be arrears for three years in paying rent or taxes the town should advertise and lease out the lots and improvements for the remainder of the term of ninety-nine years, said Lee and his assigns to make good the deficiency, if any, between the first and last prices, together with all arrears of rent and taxes, the overplus, if any, to be paid over to said Lee or his assigns. If the rent and taxes were paid as stipulated, the borough and its successors were to renew the lease for the further term of ninety-nine years, and so on forever. The leases were renewed in 1892 on practically identical terms. Subsequently, the eastern portion of lot 10 was assigned to John L. Roper and the western portion to the J. W. Perry Company, who, 'relying on the stipulations and agreements therein, purchased the lease, and, at great expense erected costly improvements on the land.' The bill charged that 'it was the intention of all the parties, in both the original and renewal leases, that the stipulation as to the payment of public taxes applied solely to such taxes as might be imposed by Virginia and the United States, and neither the borough nor the city of Norfolk had ever attempted to impose any municipal tax upon the property. But 'though the city owns the fee, it has for the year 1906 caused the lot to be assessed in the name of it, the said city of Norfolk, at a valuation of $21,000, and intends to collect the tax of $346 from the lessees of lot 10.'

The bill also charged that the buildings, on being attached to the land, became the property of the city as landlord, and likewise free and clear from the payment of city taxes, notwithstanding which it had assessed the improvement to the lessee at a value of $6,500, and demanded the tax thereon.

Lot 9 was held by White on substantially identical terms, except that the renewal lease made in 1892 provided that the lessee should 'pay all rent and all state and national taxes.' The city contended that this change was without consideration, and did not modify the rights or liabilities of either party, because, from the instrument as a whole, it appeared that there was no intention to change, but only to renew and continue in force the original lease of 1792.

In each case it was alleged that the assessment and collection of taxes for city purposes impaired the obligation of the lease contract.

The trial judge granted perpetual injunctions. Those rulings were reversed by the court of appeals of Virginia (108 Va. 28, 128 Am. St. Rep. 940, 61 S. E. 867, 108 Va. 35, 61 S. E. 870), and plaintiffs brought the case here, assigning as error that the collection of taxes by the city of Norfolk, in pursuance of authority conferred subsequent to the leases, impaired the obligations of the contracts.

Messrs. Tazewell Taylor, Walter H. Taylor, and William Leigh Williams for plaintiffs in error.

[Argument of Counsel from pages 474-476 intentionally omitted] Mr. Nathaniel T. Green for defendant in error.

[Argument of Counsel from page 476 intentionally omitted] Mr. Justice Lamar, after making the foregoing statement, delivered the opinion of the court:

In 1792, at a time when it had no right to tax, the municipality of Norfolk, Virginia, leased to Lee and others, several lots of land for ninety-nine years, renewable forever, the lessees and their assigns to pay the annual rent and 'the public taxes which shall become due on said land.' Subsequently the city was given the power of taxation, but made no effort to assess these lots until 1906. The lessees then sought to enjoin their collection on the ground that the 'public taxes' they had assumed were those which might be due to the state and to the United States. They contended that for Norfolk to assess land belonging to Norfolk, for taxes payable to Norfolk, constituted an invalid charge, and was not a lawful public tax of the kind which the lessees had agreed to pay, and that if such a tax could be assessed, it was by virtue of statutes passed since the contract was made, and for the city to exert this new statutory power against them would impair the obligation of their contract.

In support of their claim that the city as lessor could not tax its own property, so as to make it a valid public tax, payable by the lessee, they rely on the general rule that taxes are assessed to the owner, and as the landlord receives the rent, he ought to bear the burdens imposed upon the property. No the authority of State ex...