Adams State Revenue Agent v. Lamb-Fish Lbr. Co.

60 So. 645, 103 Miss. 491

• Court: Mississippi Supreme Court
• Decided: October 15, 1912
• Status: Published

Opinion

Cook,'J.,

delivered the opinion of the court.

Appellee was the owner of a manufactory, already established and in operation, located outside the corporate limits of the town of Charleston. The town, by proper ordinance, extended its limits to embrace this manufacturing plant, which ordinance of forcible annexation did not meet the approval of appellee, and it made known its objections to the board of aldermen. In order to placate, the city fathers agreed to, and did, adopt an ordinance exempting the property of appellee from municipal taxation for a period of eight years.

The objections of appellee to the confirmation of the ordinance being of a purely financial nature, it called off the. dogs of war, and declined to carry out its threat to appeal,' in consideration of the exemption of its property from contribution of money to the burdens of government. The revenue agent then took up the cudgels, and, to no avail, attempted to secure from the chancery court its aid in placing the property of the company upon the town assessment rolls like the property of ordinary citizens and taxpayers. The refusal of the chancellor to do so is the cause of this appeal.

The position of appellee is that the annexation ordinance is void because (a) it was not made valid and operative according to the plans and specifications prescribed by section 3305, Code of 1906; and (b) the ordinance exempting its property from taxation is valid and binding upon the town.

We believe it to be settled law that ¿he validity of an ordinance extending the limits of the town cannot be collaterally assailed on the grounds laid in the briefs of counsel, and we therefore hold that the ordinance is valid and binding on appellee in this litigation. It had the remedy of appeal and waived that right.

The real -and only point to be decided in the present case goes to the foundation of the defense, and involves the power of the town authorities to exempt from municipal taxation an existing, going manufactory. If the power exists, it is to be found in section 3347 (Thirty-first), Code 1906, viz.: “To aid and encourage the establishment of manufactories, gasworks, waterworks, and other enterprises of public utility other than railroads, within the corporate limits, by exempting all property used for such purposes from municipal taxation for a period not longer than ten years!” This section is written in the language of section’ 192 of the Constitution, and a correct interpretation of “aid and encourage the establishment of manufactories” will furnish a solution of the controversy in the present ease. It will be observed the section does not confer upon the municipality the broad power to aid and encourage manufactories, but the power to aid and encourage is limited to the establishment of manufactories. The power to exempt from taxation a selected class of property must be strictly construed, and cannot be broadened to cover property not included in the definition. The theory is that all property is subject to taxation, and the makers of our Constitution carefully limited the authority of the legislature to confer upon cities and towns the power to exempt the class of property, specifically mentioned in section 192.

The record discloses that the manufactory named in the ordinance was established at the time the ordinance was passed, and had been in operation for some time prior thereto. It needed no aid or encouragement, and, indeed, was asking none. The company objected to the or dinanee.for the simple reason that the benefits accured to them from being a part of the town of Charleston would not compensate them for the taxes they would have to pay for this privilege. At any rate, the threat to appeal from the action of the board of aldermen was never executed, for the manifest reason that, the question of taxation being satisfactorily adjusted, it had no further interest in the proceedings.

We have not criticised the exemption ordinance on account of its form, or because it purports to be a special privilege granted to appellee alone and because its provisions do not and were not intended to be applied to all property of the same class. The ground upon which our opinion rests excludes any claim of estoppel. The town having exceeded its powers, the ordinance is void.

The able brief invoking the equitable doctrine of estoppel concedes that the doctrine does not apply if the town had no authority to do the thing which it undertook to do.

Reversed and remanded.

ON SUGGESTION OP ERROR.

REED, J.

We have read with interest, and carefully considered, the suggestion of error filéd by counsel for appellee, and we commend them for the fairness and frankness, as well as the forcibleness of their argument.

Counsel present the single proposition that the court erred in deciding that the ordinance extending the limits of the town of Charleston could not be collaterally attacked in this case, and that the ordinance is valid and binding on appellee. Counsel contend that the ordinance is not valid and will not bind appellee, because it is not shown that the municipal authorities inquired into the fact of the publication and notice thereof, and adjudged that the same was made according to law, as provided in section 3305 of the Code of 1906. Section 3301 of the Code of 1906 provides for the enlargement of the boundaries of a municipality by an enactment of an ordinance by the municipal authorities defining the territory to be added. Section 3302, which is headed “When ordinance to become operative,” requires that the ordinance shall be published for three weeks in a newspaper, or be posted in three public places, and provides that after the publication or posting of the ordinance, after one month has elapsed, the ordinance shall become operative, unless an appeal be prosecuted. Section 3303 provides that any person interested may appeal at any time before the ordinance becomes operative, and section 3304 states that the appeal shall be to the circuit court, and the issue to be tried to be whether the proposed extension be or be not unreasonable. If adjudged unreasonable, it shall be vacated, and, if adjudged reasonable, it shall go into effect within ten days after the final judgment. Section 3305 makes the further provision that, if an appeal be not prosecuted from the ordinance within the time provided, the municipal authorities shall inquire into the fact of publication and the notice, and adjudge whether the same has been made according to law. Such finding, if made in good faith, shall be conclusive, and thereupon, after the expiration of one month from the passage of the ordinance, it shall become operative. It contains the further provision that, in the event of the affirmation of the ordinance by the circuit or supreme court, it shall become valid and operative. It will be seen that in the plan for the adding of new territory to a municipality a notice is required to be given of the passage of the ordinance, and that the operation of the ordinance is deferred until one month after its passage. It is plain from the statute that the purpose of this notice and the delay in time when the ordinance shall go into operation is to permit any person who may be interested to oppose the enlargement of the muni•eipality by taking an appeal from the action of the authorities in passing the ordinance to the circuit court for the trial of the question as to whether the extension is or not unreasonable.

Section 3302 makes a clear statement of when and under what conditions the ordinance shall become operative. Then section 3305 repeats the statement as to the time after the passage when the ordinance shall become operative, and imposes upon the municipal authorities the duty to look into the publication and notice, if appeal had not been prosecuted within the prescribed time, and decide whether they have been made according to the statute. When they shall have dune this, if done in good faith, the question of the notice and publication shall be conclusive. Now, the récord in this case shows that the ordinance was duly passed, and that the publication thereof was made as provided by the statute. Through the publication a proper notice was given to the public, and the record shows that one of the public, the appellee, an interested party in the subject-matter, after the publication of this notice and before the expiration of the time in which an appeal could be taken, appeared before the municipal authorities to except to the ordinance; that following the appearance and the exception, and after negotiation with the authorities, it was agreed that an ordinance exempting the appellee from taxation should be passed. Appellee participated in the discussion of this matter with the mayor and board of aldermen of Charleston, and accepted the benefits of the exemption ordinance. That ordinance was passed three days before the expiration of the month after the passage of the original ordinance, and refers to the extension of the limits of the municipality as made by the ordinance. It also appears in the record that at the end of the thirty days after the passage of the ordinance the exemption ordinance was brought up at a meeting of the board of aldermen of Charleston for the purpose of reconsideration.

It will be seen that, not only was publication and notice of tbe passage of tbe ordinance made in pursuance of tbe statute, but that it bad tbe effect of giving notice to tbe appellee, and that appellee, in accordance with its rights, prepared to oppose tbe operation of tbe ordinance, purposing to appeal as provided in tbe statute, and would have appealed bad not tbe authorities granted tbe exemption of its property from taxation.- Tbe benefit of this exemption received by appellee extended for oyer two years. Appellee by all of" its conduct in this cáse recognized and accepted tbe sufficiency in tbe complete enactment of tbe ordinance whereby tbe additional territory was taken into tbe limits of tbe town of Charleston, and'by its acceptance of the benefits of tbe ordinance, and its continued acquiescence in what was done by tbe authorities, and tbe status of tbe town through tbe extension of its limits, in effect, approved tbe ordinance as sufficiently making tbe addition to tbe municipality, which included its property. It will be noted that one of tbe main contentions of appellee in tbe original presentation of this case was that tbe ordinance exempting its property from taxation was valid and binding upon tbe town. In truth, one of tbe counsel for appellee in the first presentation of its case in this court rested all of bis argument upon tbe proposition that tbe town of Charleston was estopped from questioning tbe validity of tbe exemption ordinance. It will be seen that tbe exemption ordinance could only be vabd if tbe ordinance extending tbe town limits is valid.

We conclude that appellee, in view of all of its conduct in the present matter, including its approval and acceptance of tbe exemption ordinance, its failure to appeal in accordance with tbe rights given under tbe statute, and its acquiescence in tbe status of the town’s territory after tbe passage of tbe ordinance extending its limits, is now estopped to question the validity of the ordinance making the annexation. It is stated in 28 Cyc. 214, that: “Taxpayers, or inhabitants, may be estopped to question the validity of annexation or detachment of territory to or from a municipal corporation, as by acquiescence in the annexation, or delay in attacking the same, or by failing to exercise the right of contravention and appeal given them by statute.” In the case of Kuhn v. Port Townsend, 12 Wash. 605, 41 Pac. 923, 29 L. R. A. 445, 50 Am. St. Rep. 911, it is therein decided: “A private citizen cannot question the right of a municipal corporation to exercise the authority, powers, and functions of an incorporated city; nor can he, in a private action, question, the due annexation to it of territory over which it has assumed to exercise jurisdiction for several years, under proceedings taken to effect such annexation......One who participated in proceedings for the annexation of territory to a municipality, and subsequently recognized the jurisdiction of the municipal= authorities and acquiesced for several years in their claim that such annexation had been effected, is estopped from thereafter questioning it.” In delivering the opinion in this ease, Gordon, J., said: “The appellant’s participation in the annexation proceedings, his subsequent recognition of the jurisdiction of the city authorities, his acquiescence in the result reached and declared by them, and his gross laches in the assertion of his rights, constitute an equitable bar to the cause of action which he, after the lapse of nearly three years, first attempted to assert; and it would be immaterial to the result were we to determine that his conduct amounted to a ratification or an election, or requires the application of the doctrine of estoppel. Strosser v. Ft. Wayen. 100 Ind. 443; Hayward v. National Bank, 96 U. S. 611, 24 L. Ed. 855; Graham v. Greenville, 67 Tex. 62, 2 S. W. 742. In Strosser v. Ft. Wayne, 100 Ind. 443, it is said: ‘If a taxpayer were permitted to long acquiesce in the order of annexation and then secure its overthrow, great confusion would ensue, and much injustice be often done. High considerations of public policy and of justice require that a taxpayer, who is notified that a public corporation claims to have extended its limits so as to take in his property, should act with promptness and proceed with diligence, if he would resist the attempted annexation.” One of the reasons upon which the doctrine of waiver or estoppel is grounded is the statute gives individuals and corporations interested a day in court, and they may be heard both before the town board and by the courts, and all this was waiyed by appellee. The only interest individuals can have in the extension is the reasonableness of taking their property in, but the state can challenge by quo warranto the unwarranted and illegal exercise of franchises and powers by a municipal corporation, and this seems to be the only proper way to raise the question which appellee attempts to raise in a collateral attack.

It is the general rule that the validity of proceedings to annex territory to a municipality' should be attacked by quo warranto, and that unless the annxation proeeedimgs are absolutely void, as for want of jurisdiction, they are not subject to collateral attack. 28 Cyc. 212, 213. It is stated in McQuillin on Municipal Corporations, p. 305, that: “It is a general legal proposition that quo warranto is the proper remedy to test the right, of a municipal corporation to exercise its functions- over territory alleged to be outside its corporate limits.” There is nothing in the present case to prevent the consummation of the proceeding for annexation, and, seeing that the Legislature has conferred upon the town the power to enlarge its corporate limits by the passage of proper ordinance, and that such ordinance has been passed, and that notice required by the statute has been properly given, and that the town has proceeded to act upon the basis that the annexation has been made, and to exercise its authority aud powers over the portion so annexed, we do not believe that the legality of the annexation can be called into question in a collateral proceeding.

The appellee should not now be heard to assail the ordinance of annexation.

Suggestion of error overruled.