The Fourteenth Amendment does not interfere with the
discretionary power of the states to raise necessary revenues by
imposing taxes and assessments within their jurisdiction; nor are
general taxing systems to be presumed to be lacking in due process
of law because of inequalities or objections so long as arbitrary
action is avoided.
A state may, without violating the Fourteenth Amendment,
exercise its authority to assess property on account of special
benefit resulting from an improvement already made.
An assessment for improvements already made and paid for is not
an unconstitutional deprivation of property without due process of
law because the amount when paid is to be used for other public
purposes to which public funds are properly applicable.
Where the classification of property to be improved and the
assessment are fixed by the statute itself and a specified sum
fixed ratably
Page 239 U. S. 208
according to area of the property, notice and hearing a to
amount and extent of benefits are not required in the absence of
abuse of power, in order to render such legislative action due
process of law within the meaning of the federal Constitution.
Spencer v.Merchant, 125 U. S. 345.
While constitutional protection against deprivation of property
without due process of law is available to persons deprived of
private rights by arbitrary state action, whether by legislative
authority or otherwise, no such deprivation exists where, as in
this case, there is no proof of disproportion between the
assessment made and the benefit conferred showing arbitrary
legislative action.
The Maryland Statutes of 1906 and 1908 providing for imposition
of a special tax on property in Baltimore at a specified rate per
square foot for a specified number of years for paving the streets
of that city
held not to be arbitrary and unconstitutional
as depriving the owners of their property without due process of
law.
120 Md. 671 affirmed.
The facts, which involve the constitutionality of a statute of
Maryland and a tax levy thereunder on property in Baltimore for
improving the paving of streets in that city, are stated in the
opinion.
Page 239 U. S. 211
MR. JUSTICE Day delivered the opinion of the Court.
Phillip Wagner, a corporation, filed its bill on behalf of
itself and other taxpayers owning property in Baltimore City,
adjoining or abutting upon a public highway which has been paved
with improved paving without having been assessed for any part of
the cost thereof, and who are similarly situated with the
complainant, who is the owner of certain real estate, improved by
seven two-story dwelling houses, situated on Philadelphia Road, a
public highway within the limits of Baltimore
Page 239 U. S. 212
City, which property abuts and adjoins upon the public highway,
which had been paved with improved paving, to-wit, vitrified brick,
which property, or its present or former owner, had never been
specially assessed for any part of the cost of said improved
paving. The bill was filed for the purpose of enjoining the
enforcement of a certain act of the General Assembly of the State
of Maryland (1906, Chapter 401; 1908, Chapter 202, of the Laws of
Maryland), by which statute the General Assembly enacted that a
special tax be levied and imposed upon property in the City of
Baltimore benefited by improved paving of the amount specified,
said tax to continue as to each property for ten years from the
time it attached thereto, the proceeds to be used for improved
paving in the City of Baltimore, as provided in the act. The act
provided that, for these purposes, all landed property in the City
of Baltimore, adjoining or abutting upon any public highway which
had been or should thereafter be paved with improved paving without
special assessment of any part of the cost upon the abutting or
adjoining property owners, by the City of Baltimore or the State
Roads Commission, or other public commission or agency, or by said
city and such commission or agency, or by either or both, and any
railroad or railway company, occupying with tracks a portion of
such highway, was declared to be specially benefited by such
improved paving to an extent greater than the entire amount of the
special tax levied under the act. The property so benefited was
divided into three classes: Class A to include all landed property
in the City of Baltimore, adjoining or abutting upon a public
highway paved with improved paving and having a width of not less
than 30 feet so paved; Class B to include all such landed property
in the City of Baltimore adjoining or abutting upon a public
highway paved with improved paving and having a width of less than
30 feet, and
Page 239 U. S. 213
not less than 15 feet, so paved; Class C to include all such
landed property in the City of Baltimore adjoining or abutting upon
any public highway paved with improved paving and having a width of
less than 15 feet so paved. The Appeal Tax Court of the City of
Baltimore is authorized and directed by the act to proceed to
classify and list for taxation, as provided by the act, for the
year 1913, all landed property in the City of Baltimore which, on
the 1st day of November, 1912, was in a situation to come under the
requirements of either of said classes. Before classifying any
property under the special tax provided in the act, the Appeal Tax
Court was required to give notice to the owner of the property,
designating a certain time when the owner might appear before the
court and be heard with reference to the liability of his property
for the tax, and the class to which it properly belonged. After
having given the owner reasonable notice and an opportunity to be
heard, the Appeal Tax Court is required to proceed to make the
classification provided, and to certify their action, in making
such classification, to the city collector in the same manner as in
cases of classification of real and leasehold property in the annex
for the different rates of taxation as provided under the act
relating thereto, and the City Collector is authorized to add the
special tax to the tax bills of the property, to be called "special
paving tax," and to collect the same in the manner as ordinary
taxes on real estate are collected. The City Collector is required
to account for and pay over to the Comptroller, to be by him
deposited with the City Register, and to be placed to the credit of
a new paving fund provided in the Acts of 1906, Chapter 40, and
1908, Chapter 202, and to be exclusively applicable to the cost of
the work authorized by said acts, or by any amendment or amendments
thereof. Section 3 of the act defines improved paving to mean any
substantial, smooth paving above the grade
Page 239 U. S. 214
of ordinary macadam, and to include granite or Belgian blocks,
vitrified brick or blocks, wood blocks, asphalt or concrete blocks,
sheet asphalt, bitulithic bituminous macadam and bituminous
concrete. Section 4 specifies the amount of the special tax to be
as follows: on all property embraced in Class A, 15 cents per year
per front foot or lineal foot adjoining or abutting upon the public
highway; on all property embraced in Class B, 10 cents per year per
front foot or lineal foot adjoining or abutting upon the public
highway, and on all property embraced in Class C, 5 cents per year
per front foot or lineal foot adjoining or abutting upon the public
highway.
The bill recites that, under and by virtue of that act, Chapter
688 of the Acts of 1912, the General Assembly has attempted to levy
and impose upon the property of the plaintiff and other property
owners similarly situated taxes under the three classes mentioned,
and that the Appeal Tax Court of Baltimore is proceeding now to
list and classify for taxes the property so attempted to be levied
upon by said act, and has classified said property of the
plaintiff, designating it as belonging to Class A. The bill then
sets forth various grounds upon which it is claimed the act is
illegal, the one with which this Court is concerned being that it
is in violation of the Fourteenth Amendment to the Constitution of
the United States.
The Act of 1906, to which reference is made in the act just
recited, Chapter 401, as amended by Chapter 202 of the Acts of
1908, provides for the creation of a paving commission for the City
of Baltimore, with powers to carry out a plan for a complete system
of improved paving of the streets of the city. The Court of
Appeals, in its opinion in this case, states that a fund of
$5,000,000 was procured by means of a loan provided for this
purpose, which loan was approved by the people at an election held
on the 2nd of May, 1911, and that the act was sustained
Page 239 U. S. 215
by the Court of Appeals in the case of
Bond v.
Baltimore, 118 Md. 159, and that the object and purpose of the
Act of 1912 was to raise an additional fund of $5,000,000, to
complete the plan adopted by the city for improved pavements
throughout the city, and that this is to be done by a special
paving tax upon property in the city specially benefited by
improved paving as provided in the act.
The bill was demurred to upon certain grounds: that the
complainant had an adequate remedy at law; that the Act of 1912 in
question did not violate the Constitution of the United States or
the Constitution or Bill of Rights of the State of Maryland; that
the houses of the plaintiff were enjoying special benefit and
advantage, fronting upon a street improved with vitrified brick
pavement, while other houses in the city are upon unhealthy and
unsightly cobblestone streets, for which special advantage the
charge put upon the houses of the plaintiff by the act in question
amounts to $1.80 per year upon each of the houses, or $18 upon each
house for the entire ten years. The demurrer sets forth certain
other reasons why a court of equity should not intervene, not
necessary to repeat. The demurrer was overruled in the circuit
court of Baltimore city, and upon appeal to the Court of Appeals of
Maryland, that court reversed the lower court and sustained the
constitutionality of the act as against the attacks thereon both
under the state and federal Constitutions. (120 Md. 671, 87 A.
1040.)
We will notice such matters as are deemed necessary in order to
dispose of the contentions concerning the alleged violation of
rights secured to the complainant under the federal Constitution.
The provision of that instrument to which appeal is made by the
complainant is the Fourteenth Amendment in the protection secured
thereunder against state action which has the effect to deprive of
property without due process of law. This
Page 239 U. S. 216
Court has frequently affirmed that the general taxing systems of
the state are not to be presumed lacking in due process of law
because of inequalities or objections, so long as arbitrary action
is avoided. It is not the purpose of the Fourteenth Amendment to
interfere with the discretionary power of the states to raise
necessary revenues by imposing taxes and assessments upon property
within their jurisdictions.
It is first contended that the complainant is deprived of its
property without due process of law because the special assessment
levied upon its property is for the special benefits long since
accrued, and that the statute under consideration is retrospective
in its operation, thereby disturbing rights which had accrued to
and become fixed in the property holders long before the passage of
the statute; that the state had no authority because of benefits
thus long since conferred to make the assessment in question. But
we deem this contention foreclosed by the decision of this Court in
Seattle v. Kelleher, 195 U. S. 351. In
that case, it was contended that there could be no valid assessment
for a certain improvement, because it was levied after the work was
completed; but this Court met that contention by saying:
"The principles of taxation are not those of contract. A special
assessment may be levied upon an executed consideration -- that is
to say, for a public work already done.
Bellows v. Weeks,
41 Vt. 590, 599, 600;
Mills v. Charleton, 29 Wis. 400,
413;
Hall v. Street Commissioners, 177 Mass. 434, 439. If
this were not so, it might be hard to justify reassessments.
See Norwood v. Baker, 172 U. S. 269,
172 U. S.
293;
Williams v. Albany County, 122 U. S.
154;
Frederick v. Seattle, 13 Wash. 428;
Cline v. Seattle, 13 Wash. 444;
Bacon v. Seattle,
15 Wash. 701; Cooley, Taxation, 3d ed., 1280. . . . Of course, it
does not matter that this is called a reassessment. A reassessment
may
Page 239 U. S. 217
be a new assessment. Whatever the legislature could authorize if
it were ordering an assessment for the first time it equally could
authorize notwithstanding a previous invalid attempt to assess. The
previous attempt left the city free"
"to take such steps as were within its power to take, either
under existing statutes or under any authority that might
thereafter be conferred upon it, to make a new assessment upon the
plaintiff's abutting property"
in any constitutional way.
Norwood v. Baker,
172 U. S. 269,
172 U. S. 293;
McNamee v. Tacoma, 24 Wash. 591;
Annie Wright Seminary
v. Tacoma, 23 Wash. 109.
The doctrine established by this case is that a subsequent
assessment may be levied because of benefits conferred by the
former action of the city in improving in front of the lots
assessed. As said in the
Kelleher case, "the benefit was
there on the ground at the city expense." So far as any federal
constitutional requirement is concerned, the state might exercise
its authority to assess because of this special benefit, although
that assessment was deferred for some time after the work was done
at the public expense. And these considerations suggest the answer
to another objection made in this connection -- that it is proposed
to use the assessments for paving other streets within the city. It
is true that the assessments are to go into the general fund
provided for such general use. But we are unable to see how the
constitutional rights of the complainant are violated, so long as
there was as to it a benefit formerly conferred, and still
existing, which the property had derived at the public expense. The
fact that the city was authorized to use the assessment in creating
a public fund, in aid of its scheme to pave other streets of the
city, was a public purpose, and a legitimate one, for which funds
of the city might be used.
It is further urged, and much stress seems to be laid
Page 239 U. S. 218
upon this point, that the complainant and others similarly
situated were given no opportunity to be heard as to the amount of
benefits conferred upon them, and the proper adjustment of the
taxes among property owners. But this question, like the other, is
foreclosed by the former decisions of this Court. This assessment,
and the classification of the property to be improved, were fixed
and designated by legislative act. It was declared that the
property which had been improved by paving theretofore should,
according to the width of the paving in front of the respective
properties, be assessed at a certain sum per foot front. We think
such a tax, when levied by the legislature, did not require notice
and a hearing as to the amount and extent of benefits conferred in
order to render the legislative action due process of law within
the meaning of the federal Constitution. In
Spencer v.
Merchant, 125 U. S. 345,
125 U. S. 356,
this Court, speaking by Mr. Justice Gray, said:
"In the absence of any more specific constitutional restriction
than the general prohibition against taking property without due
process of law, the legislature of the state, having the power to
fix the sum necessary to be levied for the expense of a public
improvement, and to order it to be assessed, either like other
taxes, upon property generally, or only upon the lands benefited by
the improvement, is authorized to determine both the amount of the
whole tax and the class of lands which will receive the benefit and
should therefore bear the burden, although it may, if it sees fit,
commit the ascertainment of either or both of these facts to the
judgment of commissioners."
This case has been followed and approved in subsequent decisions
in this Court.
Parsons v. District of Columbia,
170 U. S. 45,
170 U. S. 50,
170 U. S. 56;
French v. Barber Asphalt Paving Co., 181 U.
S. 324,
181 U. S. 343.
In the latter case, the former cases in this Court were reviewed at
length, and
Spencer v.
Page 239 U. S. 219
Merchant quoted with approval;
Norwood v.
Baker, 172 U. S. 269, was
commented upon and distinguished.
French v. Barber Asphalt
Paving Co. supra, was followed and approved in a series of
cases in the same volume:
Wight v. Davidson, 181 U. S. 371;
Tonawanda v. Lyon, 181 U. S. 389;
Webster v. Fargo, 181
U. S. 394;
Cass Farm Co. v. Detroit,
181 U. S. 396;
Detroit v. Parker, 181 U. S. 399;
Wormley v. District of Columbia, 181 U. S. 402;
Shumate v. Heman, 181
U. S. 402;
Farrell v. West Chicago Park,
181 U. S. 404.
French v. Barber Asphalt Paving Co. supra, was referred to
with approval in
Hibben v. Smith, 191 U.
S. 310,
191 U. S. 326.
See also Louis. & Nash. R. Co. v. Barber Asphalt Paving
Co., 197 U. S. 430;
Martin v. District of Columbia, 205 U.
S. 135.
Norwood v. Baker, supra, is much relied upon by the
plaintiff in error, and while this Court has shown no disposition
to overrule that case when limited to the decision actually made by
the Court, much that is said in it must be read in connection with
the subsequent cases in this Court already referred to. In
Norwood v. Baker, a portion of a person's property located
in a village of Ohio was condemned for street purposes, and the
entire cost of opening the street, including the amount paid for
the strip condemned, with the costs and expenses of condemnation,
was assessed upon the abutting property owner whose land was
condemned. This, it was said in
French v. Barber Asphalt Paving
Co. supra, was an abuse of the law and an act of confiscation,
and not a valid exercise of the taxing power. Taking the decisions
in this Court together, we think that it results that the
legislature of a state may determine the amount to be assessed for
a given improvement, and designate the lands and property benefited
thereby, upon which the assessment is to be made, without first
giving an opportunity to the owners of the property to be assessed
to be heard upon the amount of the assessment or the extent of the
benefit conferred.
We do not understand this to mean that there may
Page 239 U. S. 220
not be cases of such flagrant abuse of legislative power as
would warrant the intervention of a court of equity to protect the
constitutional rights of landowners because of arbitrary and wholly
unwarranted legislative action. The constitutional protection
against deprivation of property without due process of law would
certainly be available to persons arbitrarily deprived of their
private rights by such state action, whether under the guise of
legislative authority or otherwise. But, in the present case, there
is neither allegation nor proof of such disproportion between the
assessment made and the benefit conferred as to suggest that the
small tax levied upon this property would amount to an arbitrary
exercise of the legislative power upon the subject. There can be no
question that paving with brick in front of the property of the
complainant conferred a substantial benefit, and gave authority for
the subsequent legislation which, because of that benefit, original
and continuing, warranted an assessment upon the property owner for
a confessedly public purpose -- the improvement of the streets of
the city.
We are unable to find that the act of the legislature in
question, or the manner of its present enforcement, operates to
deprive the complainant and others similarly situated of any rights
secured to them by the federal Constitution. The judgment of the
Court of Appeals of Maryland is
Affirmed.
MR. JUSTICE PITNEY and MR. JUSTICE McREYNOLDS dissent.