Opinion
May 1, 1908.
Ralph E. Prime, for the relator.
William McCauley, for the respondents.
The valuations of the realty as a basis for these taxes were ascertained and were taken by the board of education as required by law (Laws of 1864, chap. 555, tit. 7, § 67; Id. tit. 9, § 10, as amd. by Laws of 1884, chap. 49, and Laws of 1886, chap. 595) from the last assessment roll of the town made by the town assessors. These taxes were assessed in 1886 and 1887, and were paid on November 1, 1886, and on October 15, 1887, respectively. In September, 1886, and in September, 1887, respectively, the owners of the realty obtained a writ of certiorari under chapter 269 of the Laws of 1880 to review the valuations of the town assessors for those years, and thereby secured final orders or judgments for substantial reductions in such valuations. The claims which are the subject of the writ now before us were presented to the board of education and the district trustees in November, 1907, under section 256 of the Tax Law (Laws of 1896, chap. 908), as amended by chapter 721 of the Laws of 1907, which reads: "3. When a tax shall have been levied and collected in any school district of this State upon any property within such district on any assessment value thereof which shall have been ascertained from a town assessment roll and which assessment upon such town roll shall have been ordered, adjudged or determined by order of the court as aforesaid to have been illegal, erroneous or unequal and which assessment though made by town assessors was adopted and was used in such district for the purpose of taxation for school purposes, then and in such case the trustees of such school district shall audit and allow and cause to be paid to the petitioner, or other person who shall have paid such tax, the amount paid by him in excess of what the school tax would have been in such case if the assessment had been made as ordered, adjudged or determined by such order of the court, together with interest thereon from the date of the payment.
"Application to the proper officer for the audit and allowance of such moneys must be made by the petitioner or other person paying such tax as follows: Where the writ of certiorari was issued pursuant to chapter two hundred and sixty-nine of the laws of eighteen hundred and eighty, and such tax shall not have been heretofore refunded, such application must be made within three years from the passage of this act. When the writ of certiorari was issued under the provisions of this act, then such application for audit and allowance must be made within three years after the entry of the final order ordering or adjudging or determining such assessment to have been illegal, erroneous or unequal; provided that the time of the pendency of any appeal in any such proceeding or from any such order shall not be deemed any part of such three years." This statutory scheme is a refund to the taxpayer of the amount actually paid in excess of amount which he would have been required to pay if the valuations taken by the school trustees had been, not those determined by the town assessors, but such valuations as reduced by the certiorari proceedings under the act of 1880.
The claims are of the kind described in subdivision 3 of the said act of 1907, and I think that they are within the purview of that statute. The language of subdivision 3 is: "When a tax shall have been levied and collected," etc. And "shall have been" is a future perfect tense, for it contemplates an event completed in the future, without reference to the past. ( State, Alden, pros., v. City of Newark, 40 N.J. Law, 92; Dewart v. Purdy, 29 Penn. St. 113; Endlich Stat. § 272.) Notwithstanding this expression and the fact that the statute amends a general law, I think there is clear indication of the legislative intent that the statute shall be retrospective as well as prospective. This intent appears in the 2d paragraph of section 3 regulative of the application for the refund. For it provides: "Where the writ of certiorari was issued pursuant to chapter two hundred and sixty-nine of the laws of eighteen hundred and eighty, and such tax shall not have been heretofore refunded, such application must be made within three years from the passage of this act." As this expressly authorizes the presentation of claims based upon a reduction made pursuant to a certiorari issued under the act of 1880, and as that act was repealed by the Tax Law (Laws of 1896, chap. 908, §§ 280, 281), such a writ must have been issued previous to the time of this repeal — 1896. The reduction resultant from such a writ then must have been made of values assessed previous to the repeal of that act, and as the claim is to be based upon such reduction, it follows that the relief afforded is retrospective. The language itself admits of retrospective construction. ( Norris v. Sullivan, 47 Conn. 474; Jackson v. Chapman, 3 Cow. 390.) In the Norris Case ( supra) the court says: "The words 'shall have levied' are susceptible of both past and future application; they furnish a convenient form for legislative use when it is desired to give all-inclusive force to a single expression. Therefore, as they may mean future, or past and future, it becomes a question of legislative intent in each statute." It cannot be argued that this legislative expression as to a certiorari under the act of 1880 was in forgetfulness of the repeal of that act, or that the intent was merely to refer to certiorari proceedings taken under the act of 1880, or its equivalent (Laws of 1896, chap. 908, § 250 et seq.), for the reason that after this specific declaration as to the said act of 1880, the act proceeds: "When the writ of certiorari was issued under the provisions of this act," etc., referring to the general law which repealed and supplanted the act of 1880, namely, chapter 908 of the Laws of 1896, inasmuch as this act of 1907 is in terms an amendment of the said general law of 1896.
It is urged that under section 68 of title 7 of the act of 1864 (Chap. 555) the taxpayer was afforded an opportunity of having the school tax assessment reviewed, and that having failed to avail himself thereof by giving notice or by taking any step for a reduction of the valuation taken for the school tax purposes, he is now estopped. The answer is that the statute of 1907 affords in itself a new statutory scheme for a refund of excessive payments, which the statute itself declares shall be determined as excessive perforce of an adjudication in certiorari proceedings. It is not supplemental to any section of the act of 1864, or to that act or to the acts which continued its provisions, or in any way is it made conditional upon it, or of any step taken thereunder. The only condition as to presentation of the claims now up ( i.e., those based upon the result of a certiorari under the act of 1880) is, "and such tax shall not have been heretofore refunded." (Tax Law, § 256, as amd. supra.) It is contended that inasmuch as the payments were voluntary, the tax could not be refunded. The mere fact that the tax was paid voluntarily does not debar the Legislature from providing for a refund of that part which is excessive. (Cooley Taxn. [2d ed.] 753; Matter of Adams v. Supervisors, 154 N.Y. 626. ) The statute itself is not limited to involuntary or compulsory payments; the only conditions expressed are that the tax shall have been levied and paid upon a basis thereafter pronounced improper by the courts, and that it shall not heretofore have been refunded. In Matter of Adams v. Supervisors ( supra) the court say: "With respect to the other question, all that the statute requires a party who makes such an application to the supervisors to show is that the county, through its proper officer, had collected from him a tax illegally or improperly assessed or levied. It would not be very difficult to show that the payment in this case was compulsory; but whether it was or not, the executor had the right to have the money refunded, since the statute was intended for the benefit of a party who pays an illegal tax voluntarily, as well as one who pays under what the law terms duress." The moral obligation to refund an excessive tax is just as strong whether it was paid voluntarily or by duress, for the ground thereof is a payment beyond that which should in justice have been charged. This statute avowedly rests upon the proposition that the amount paid was excessive because the basis for such amount was determined excessive by the adjudication of the courts, and it but refunds the difference between the amount actually imposed and paid and the amount which would have been imposed and paid upon a fair basis as thus determined. Determining from a legal adjudication to that effect that the basis of the tax was excessive, the Legislature has deemed that a moral obligation exists and has given it legal effect by a retroactive statute. The principle that such a statute is within the legislative power is well settled. ( Wrought Iron Bridge Co. v. Town of Attica, 119 N.Y. 204; Matter of Chapman v. City of New York, 168 id. 80, 84; Lycoming v. Union, 15 Penn. St. 166.) The argument that when the payment was voluntary such a refund should not be ordered is one addressed to the Legislature, not the courts. The legislative policy is not the concern of the courts so long as the legislative enactment is within the Constitution. The practical effect of an act may of course be considered by the courts in arriving at the legislative intent where that requires an interpretation, but under the guise of interpretation the courts will not nullify or limit a statute because they may not approve of the policy or of the scope of the statute. Of course it may be said that the application of the statute to this case and those like unto it is in effect to give an interest-paying investment for twenty years to the relator. But that fact affords no justification for nullification or judicial legislation. Such criticism is not against the policy of a refund of an excess, but against that express provision of the statute which affords interest. But the obligation to refund carries with it the right to interest as matter of course. ( Matter of O'Berry, 179 N.Y. 288. ) It is urged that this statute is unconstitutional because it attempts to impose upon one person the debt of another. Taxes are not to be regarded as debts within a constitutional prohibition relating to debts. ( Linn v. O'Neil, 55 N.J. Law, 58; City of Camden v. Allen, 26 id. 398; Cooley Taxn. [2d ed.] 15 et seq.) But even if we consider this tax as a "debt," this statute but adjusts the "debt" in that it returns to the "debtor" the excess paid by him over what was due from him. This statute but provides for an abatement, not for a donation or a gift. ( Matter of Chapman v. City of New York, supra, 83 et seq.; Mayor of New York v. Tenth National Bank, 111 N.Y. 459.) It is also urged that the claims are barred by the Statute of Limitations. This statute is not obnoxious to section 6 of article 7 of the Constitution because that section is aimed against the allowance of stale claims against the State. ( Corkings v. State, 99 N.Y. 494; Cayuga County v. State, 153 id. 287, 288.) The statute itself prescribes the limitations to the application which it authorizes. (Tax Law, § 256, as amd. supra.) In Campbell v. Holt ( 115 U.S. 620) the court say that it may be well held that in an action to recover real or personal property where the question is as to the removal of the bar of the Statute of Limitations by legislative act after the bar is perfected, such act deprives a person of his property without due process of law, because by the law before the repealing act the defendant was vested with property, but that to remove a bar which a statute of limitations enables a debtor to set up "stands on very different ground," and then the court say: "We certainly do not understand that a right to defeat a just debt by the statute of limitations is a vested right, so as to be beyond legislative power in a proper case. The statutes of limitation, as often asserted and especially by this court, are founded in public needs and public policy — are arbitrary enactments by the law-making power. * * * We are unable to see how a man can be said to have property in the bar of the statute as a defense to his promise to pay. In the most liberal extension of the use of the word property, to choses in action, to incorporeal rights, it is new to call the defense of lapse of time to the obligation to pay money, property. It is no natural right. It is the creation of conventional law. We can understand a right to enforce the payment of a lawful debt. The Constitution says that no State shall pass any law impairing this obligation. But we do not understand the right to satisfy that obligation by a protracted failure to pay. We can see no right which the promisor has in the law which permits him to plead lapse of time instead of payment, which shall prevent the Legislature from repealing that law, because its effect is to make him fulfil his honest obligations." (See, too, Hulbert v. Clark, 128 N.Y. 295.)
WOODWARD, HOOKER, GAYNOR and MILLER, JJ., concurred.
Determination of the board of education and trustees set aside, and the defendants are directed to proceed to audit in accordance with the opinion. Settle order before Mr. Justice JENKS.