Opinion
Argued December 14, 1881
Decided January 17, 1882
Alex. B. Johnson for appellant. D.J. Dean for respondent.
Three propositions may be regarded as established in the law as to taxation and assessments, by the courts of this State: First, An action in equity to vacate an assessment and restrain its collection cannot be maintained merely because the assessment is for any reason invalid or illegal. ( Heywood v. City of Buffalo, 14 N.Y. 534; Guest v. City of Brooklyn, 69 id. 506.) This has its foundation principally in public policy. It would lead to great embarrassment and inconvenience if the collection of taxes and assessments were to be delayed by such actions. Second, An action at law cannot be maintained to recover back money paid upon an illegal assessment which the assessors had jurisdiction to impose, and which is not void upon its face, so long as the assessment remains unvacated and unreversed. ( Swift v. City of Poughkeepsie, 37 N.Y. 511; Bank of Commonwealth v. The Mayor, 43 id. 184; Marsh v. City of Brooklyn, 59 id. 280; Peyser v. The Mayor, 70 id. 497; Wilkes v. The Mayor, 79 id. 621.) This is so because the action of the assessors is regarded as judicial, and because the assessment is regarded as in the nature of a judgment which cannot be attacked collaterally. The money paid upon the assessment in such a case is treated as if collected by virtue of a valid judgment which can be retained until the judgment is vacated or reversed. Third, An action can be maintained to vacate an assessment which is a lien upon land, and thus a cloud upon title, when the assessment is in fact invalid, and the invalidity does not appear upon the face of the assessment, and will not necessarily appear in any proceeding taken by a purchaser, under the tax sale for non-payment of the assessment, to recover possession of the land. This is so, because in such a case the action comes under one of the recognized heads of equity jurisprudence.
Upon the facts alleged in the complaint in this action, if the assessment remained unpaid, it is conceded that an action could be maintained by the plaintiff to vacate it as a cloud upon his title; but by payment, it has ceased to be a cloud, and hence no action is needed, or can be maintained, to vacate it on that ground.
The assessment has not been vacated, and hence, if this were merely an action at law to recover back the money paid upon the assessment, as it was assumed to be in the court below, it could not be maintained. But this action is in equity, and the relief prayed is for judgment declaring the assessment invalid to the extent of the over-payment claimed by the plaintiff, and then to recover the amount of such over-payment. Why may not such an action be maintained? There is no case to be found in the books holding that it cannot be. There can be no objection that both kinds of relief are sought in the same action. In that respect, it is analogous to an action in equity to reform a written instrument and then enforce it as reformed, and such actions have been frequently sanctioned by this court. Here is a case where it is conceded that the plaintiff is equitably and justly entitled to the sum which he seeks to recover. The only obstacle in his way is the unvacated assessment. That obstacle, without any fault of his, he cannot overcome or remove in an action or proceeding at law. No degree of vigilance which could have been expected or required of him would have enabled him before payment to discover the illegality in the assessment. Unless, then, he can have equitable relief, there will be a wrong without a remedy — an absolute failure of justice. Upon general principles of equity, then, we think he should have the equitable relief he seeks, against the obstacle interposed, in aid of the legal relief which he demands.
But there is a distinct head of equity jurisprudence under which the plaintiff can maintain his action. He paid this money under a mistake; a mistake not induced by or due to any negligence or fault on his part, so far as we can perceive from the facts alleged in the complaint; and against this mistake, equity has jurisdiction to relieve. It has complete jurisdiction of the subject, and it can give all the relief needful to accomplish the ends of justice. So far as the assessment stands in the way, it can be removed. It matters not that it is in the nature of a judgment, for courts of equity will, on the grounds of mistake, fraud or surprise, relieve even against judgments of courts which have been regularly taken and are regular in form.
It will not be against public policy to allow an action, under the circumstances of this case, to be maintained. The assessments have been collected and the revenue for public purposes has been realized. It will be no more embarrassing for a municipality to be compelled to pay this debt than to be compelled to pay a debt of any other kind. Under such circumstances there can be no public policy which will be served or promoted by depriving a citizen of the money justly due him, and leaving it where it has been placed by the illegal action of a municipality or its officers.
Therefore, treating this as an action to vacate the assessment as to the illegal excess, and then to recover the illegal excess paid, we are of opinion that it can be maintained.
The judgment of the General and Special Terms should be reversed, and judgment given to the plaintiff, with costs, unless the defendant, within twenty days after filing the remittitur in the court below, pay the costs and serve an answer to the complaint.
All concur, except RAPALLO, J., not voting.
Judgment accordingly.