
    Village of St. Bernard et al. v. Kemper et al.
    
      Taxes and assessments levied upon corpus of realty — And not on title, when — Lessee of realty authorised to subscribe for improvements, when — Section 2272, Revised Statutes.
    
    1. In this state taxes and assessments are levied upon the corpus of real property, and not upon the titles by which the same may be held, unless otherwise provided by statute.
    2. The lessee in possession under a lease of real property for ninety-nine years, renewable forever, the property standing in his name for taxation, is so far the owner of such property as to authorize him to subscribe a petition for street improvements under section 2272, Revised Statutes ; and in such case the signature of the lessor to such petition is not required in order to authorize an assessment against the corpus of such property.
    (Decided May 9, 1899.)
    Error to the Circuit Court of Hamilton county.
    On the twenty-third day of September, 1893, the defendants in error leased a certain tract of land adjoining the village of St. Bernard, in Hamilton county, to one Henry Bostwick, by a written lease duly executed, for ninety-nine years renewable forever, upon a consideration of a ground rent to be paid from time to time, and in default the lien for rent to be foreclosed and leasehold interest be sold. The lease was duly recorded, and the lands transferred to said Henry Bostwick, and the same stood in his name for taxation, and possession was delivered to him, and by him retained therafter. The lease contained a privilege of purchase at any time during the term thereof and contained the further provision that the lessee should pay all taxes and assessments that might thereafter be levied, charged or rated against said premises.
    Said Henry Bostwick caused said lands to be laid out into village lots, and dedicated certain streets to the public, and the village accepted the plat, and the streets were duly opened and used as public streets.
    Afterward, and while said lessee was still the holder of many lots bounding4 and abutting upon the said streets, he, with other owners of property bounding and abutting on said streets, signed petitions directed to the council of said village as provided in section 2272, Revised Statutes, for the improvement of the streets and avenues in said petition mentioned and described, by grading the road-bed, setting the necessary- curbs and gutters along the entire length thereof,' and constructing the necessary culverts and drains, macadamizing and graveling the 'roadway, and building necessary retaining walls; and further that the whole cost of such improvement be assessed per front foot upon the lots bounding and abutting on said streets, and to be collected in ten annual install* ments. In said petition said Henry Bostwick represented himself as the owner of said lots so bounding and abutting on said streets.
    Said petitions having been regularly presented to the council, it duly acted upon the same and passed the proper resolutions and ordinances and caused the said streets to be improved, as asked for in the said petitions, and assessed the cost and expenses thereof against the abutting property by the foot front, pajmble in ten annual installments.
    After the said streets had been improved and the assessments made, said lessee all the while being the holder of said lots under his said lease, the defendants in error instituted proceedings in the court of common pleas to sell said leasehold estate for the payment of arrearages of ground rent reserved in said lease, and said leasehold estate was duly sold at sheriff’s sale, bid in by said defendants in error, sale confirmed and deed made and delivered by the sheriff.
    . Thereupon the defendants in error commenced their action in the court of common pleas against said village, the county auditor and the county treasurer, seeking to enjoin the collection of so much of said assessment as exceeded one-fourth of the value of said lots after the completion of said improvements, and averred in their petition that they did not sign the petition for said improvements, which fact was conceded.
    . To the said petition the said village filed its answer, and in the second and third defenses averred the facts aforesaid, to which the defendants in error demurred, and the circuit court sustained the demurrer, to which the village excepted. There were also defenses numbered four and five, to which demurrers were sustained, but in the view taken by the court upon the main question, they become immaterial.
    The áction was tried on appeal in the circuit court upon the petition and first defense, which raised issues as to the petitions signed by some of the defendants in e.rror as to certain lots, and as to certain other irregularities in the case, and a judgment was rendered in favor of the defendants in error, reducing the assessment, except as to a few lots, to twenty-five per cent, of the value of the ]ots after the improvements were made. The circuit court found its conclusions of fact separate from its conclusions of law, and a motion for a new trial having been overruled and exceptions taken, the plaintiffs in error filed their petition in this court seeking to reverse the judgment of the circuit court.
    
      
      Samuel B. Rommel, for plaintiffs in error.
    In view of the facts presented by the record; and the character of permanent leasehold estates as recognized and determined by the Legislature of- Ohio in the various sections of the Revised Statutes, and bearing in mind the fact that the lessee was bound to pay all taxes and assessments levied and assessed against the lots in question, and the further fact that at the time of signing-said petitions, he was in good standing under his lease, the conclusion that he was the “owner,” within the meaning of said section 2272, both upon principle and sound reason, is irresistible.
    And we are not wanting in authority sustaining the principles which mad to this conclusion. Laird v. Cincinnati, 5 W. L. B., p. 903; 6 Dec. Re., 1006.
    Until the case at bar was decided by the court below, the case above cited stood as the recognized authoritj in this state on the question here involved, for almost seventeen years, and established, as we claim, a rule of property not subject to be lightly overturned. Loring v. Melendy, 11 Ohio, 355; The Northern Bank of Kentucky v. Roosa et al., 13 Ohio, 355; Holland v. Mayor, 11 Maryland Rep., 186 (June Term, 1857).
    As to the resolution to improve and notice being-jurisdictional. Welker v. Potter, 18 Ohio St., 85; Stephan v. Daniels, 27 Ohio St., 527; Cinti. v. Sherike, 47 Ohio St., 217; Green v. Cincinnati, 7 O. C. C., 233; 4 Circ Dec., 573.
    To hold that the petition under section '2272 must be signed by the lessor, when he'has executed a lease for ninety-nine years, renewable forever, and bound the lessee to pay all taxes and assessments, the lessee being in possé'ssion, and the property taxed in his name; and then to hold after such petition has been filed and acted upon, notice of the jurisdictional resolution in the same improvement may be served upon the lessee, or, if you please, upon any other person in whose name the property may be assessed for taxation, is not in accord with “the uniform policy of our legislature,” on the subject of permanent leases, and must lead to absurd consequences.
    The petition for improvement binds from the time action is taken thereon by the council or other legal body. Laylin v. Commrs. of Huron Co. ,3 O. C. C., 338; s. c., 2 Circ. Dec., 193; Grinnell v. Adams, 84 Ohio St., 44 : Columbus v. Sohl, 44 Ohio St., 479; Columbus v. Slyh, 44 Ohio St., 484.
    The petitioner, Bostwick, being- in good standing under his perpetual lease when the petitions were presented to the council and acted upon, the property for which he signed became bound from that moment and any subsequent changes in the title could in no wise operate as a release.
    It has been held that guardians may sign petitions for their minor wards. Campbell v. Park, 32 Ohio St., 545.
    The widow has been held to pay assessments on land held as dower. Whyte v. Mayor and Alderman of Nashville, 2 Swan (Tenn.) 364 ; Worthington v. Hewes et al., 19 Ohio St., 66; Hickey v. Railway Company, 51 Ohio St., 40.
    Are not defendants in error, who were fully informed, and knew that council acted upon said petitions, and made the improvements on the faith o’f the representations of the lessee, Jane Kemper, one of said defendants in error (the others being tenants in common with her in the property in volved herein), joining in one of said petitions for the improvement of Beecher avenue, said defend^ ants in error permitting said improvements to be made without objection, and knowing that the cost and expense thereof was to be levied and assessed upon the lots and lands bounding and abutting upon said avenues, and assenting to the making of said improvements and the levying of said assessments, and whose lots have been benefited by said improvement, now estopped from denying the sufficiency of said petitions, the improvements having been made and the bonds of the village issued to pay the expensé of same? State ex rel v. Mitchell, 31 Ohio St., 592 ; Tone v. Columbus, 39 Ohio St., 281; Columbus v. Sohl, 44 Ohio St., 479.
    We claim—
    . Mrst — The owner of a perpetual lease of lands, bound to pay taxes and assessments, is the owner within the meaning of section 2272.
    
      Second — The petition for a street improvement signed by such owner, binds the lots and lands from the time same is acted upon by council.
    
      Third — The defendants in error are estopped from claiming that the petitions signed by their lessee under a perpetual lease are insufficient.
    
      Ed. M. Spangenberg; John L. Casser and A. C. Kay lor, for defendants in error.
    For the purposes of this case it is not important whether or not a lessee under a perpetual lease is considered such an owner of property abutting on the street to be improved as will entitle him to be counted as one of the three-fourths in interest, provided the limitation clause of twenty-five per cent, applies to the owner of the fee who did not subscribe the petition. It can hardly be presumed that the owner of the fee would be excluded, and that the limitation could have application only to persons or owners having an interest in the property inferior to a fee. It can not be presumed that the limitation had reference to a lesser estate than the fee; for it would be a very precarious claim if it was restricted to twenty-five per cent, of the lessee or tenant’s interest, an interest which may at any time be terminated by the failure to pay rent or perform any other of the covenants usually inserted in such leases. If it has no application to lessees, then it must apply to the owner in fee or to all such persons having an interest in the property and who were not subscribing the petition, which again would extend the benefit of the limitation clause to the defendants in error. It would be absurd to exclude the owner of the fee from the benefit of the twenty-five per cent, limitation clause.
    It would be wrong to give a lessee an unlimited power to create a charge on the fee against the will of its owner, when the object of the law is to protect owners against assessments on more than one-fourth of their property. If such unlimited power was given to lessees; if they could cause assessments to be made to the full value of the property, it would be, in effect, in their power to cause the confiscation of the property of the owner in fee.
    It has alwaj^s been the policy of our legislatures to carry out section 6 of article 13 of the Ohio Constitution restricting the power of taxation and assessments by enacting laws limiting assessments to twenty-five per cent. Of course one who applies for certain improvements shall be permitted to bind his entire interest in the property for it, but the law says he shall not bind, or be instrumental in binding, the interest of- one who does not ask for the improvement except to the extent of twenty-five per cent, of the value of the property. During the years 1875 and 1876, being the only years since the adoption of our new constitution, was the power of assessment unlimited; and it was during 1876 that the case of Laird v. Cincinnati, 5 W. L. B., 903, (6 Dec. Re., 1006) decided by the Hamilton county district court, arose.
   Burket, J.

No question is made by any of the parties as to the constitutionality of that part of section 2272, Revised Statutes, which applies to corporations in counties containing a city of the first or second grade of the first class, and therefore that question has not been considered.

Section 2272 as it was then is as follows :

“In cities of the first grade of the first class when a petition subscribed by any owner or owners of property abutting upon any street or highway, of any description, between designated points, is presented to the board of administration for the purpose, and in other cities of the first class, or in corporations in counties containing a city of the first or second grade of the first class, when a petition subscribed by three-fourths in interest of the owners of property abutting upon any street or highway of any description, between designated points, is reg’ularly presented to the council for the purpose, the costs of any improvement of such street or highway may be assessed and collected in equal annual installments, proportioned to the whole assessment, in a manner to be indicated in the petition, or if not so indicated, then in the manner which may be fixed by council; and the interest on any bonds issued by the corporation for the improvements, together with the annual installments herein provided for, shall be assessed upon the property so improved ; but when lot or land of one who did not subscribe the petition is assessed, such assessment shall, not exceed twenty-five per centum of the value of his lot or land after the improvement is made; provided, that whenever in this title the' petition of the owners of property is required, a married woman shall have the same authority to sign that she would have if unmarried; and the guardians of infants or insane persons may sign such petition on behalf of their wards only when expressly authorized by the probate court on good cause shown.”

(The plaintiffs in error contend that Mr. Bostwick, the lessee for ninety-nine years renewable forever, was the owner of the property abutting on the streets in question, within the meaning- of this section of the statute, while the defendants in error claim that he was not such owner.

If he was not such owner, the judgment of the circuit court is right; but if he was such owner, the judgment is wrong.

In this state taxes and assessments are levied and assessed upon the corpus of real estate, and not upon the title by which the same may be held, unless otherwise provided by statute.

Section 2897 provides that where lands held upon permanent leases are taxed in the name of the lessee and are allowed to become delinquent, and are brought to sale for taxes, the sale shall be confined to the rights of the lessee, if the same shall be sufficient to meet the tax, interest and penalty so assessed and due. This statute undertakes to protect the interests of the owner of the fee, but this protection is given only in case the interest of the lessee shall be sufficient to pay the taxes; If not sufficient, the interests of the owner of the fee must respond to make up the deficiency. This is the only statute on the subject, and it shows the policy of the state to be, that the state0must have its taxes, and while it, will first exhaust the interest of the lessee in the property, the state will require full payment, even though it takes the whole property, including' the interest of the lessor.

While this is the rule as to taxes, the same rule obtains as to assessments, because the statutes provide that when assessments are certified to the auditor, they shall be collected the same as other taxes, which in this case would be by a sale of the leasehold estate, if sufficient to pay the assessment, and if not sufficient, then by a sale of the whole property.

It is urged that to hold the lessee under such a lease to be the owner, would put it in his power to cause an assessment to be put upon the property to an amount greater than the value of the whole property, and. thereby in effect confiscate the estate of the lessor to the public. But this consideration is not of sufficient weight to override the public policy of the state as shown by its statutes.

The rules of taxation are prescribed by the statutes, and persons must make their contracts with reference thereto, and if the power is given to a lessee to deal with property as owner, to have it stand in his name for taxation, the lessor becomes bound by the acts of his lessee, and has no cause for complaint.

A 'mortgagor is regarded as the owner of the real estate, even though' the mortgage is for more than the value of the land, and in such cases the mortgagor may sign a petition as owner for improvements of streets and avenues, even though the assessments should exceed the value of the land, and thereby cause a total loss to the mortgageq. As the lessee in this lease is bound personally for the payment of the taxes and assessments, it must be presumed that he would not sign petitions for improvements recklessly, for the mere purpose of injuring the holder of .the fee, and the same is true of a mortgagor. He is by statute made personally liáble for the assessments in some cases to the amount of the value of the abutting property, and in others to the amount of twenty-five per cent, of such value, and this personal liability is sufficient usually to deter the lessee, as well as the mortgagor, from signing petitions for improvements whose cost would equal or exceed such value of the property.

This personal liability is usually a sufficient protection to the lessor and mortgagee, but cases may arise, as in the case at bar, where unforeseen depressions take place, and shrinkages in value occur, to such an extent as to wipe out all profits, and most if not all of the capital; and in such cases each party attempts to save himself as far as possible from the wreck, and to shift the responsibility upon others, or the public.

In this case it was reasonably expected that Mr. Bostwick, by platting the lands and improving the streets, would not only be able to pay the ground rent, but pay the assessments and make large profits by sales of lots. But by reason of unforeseen causes, all this failed, and there is a loss to be borne by some one. Shall it be by the public, or those who engaged in the speculative ventures The defendants in error accepted the promise of Mr. Bostwick to pay the taxes and assessments, knowing that if he failed to pay the same, the real estate would be held therefor; first the leasehold1 estate, and if that should prove insufficient then the whole property. The defendants in error so drew the lease as to enable the lessee to have the property stand in his name on the duplicate for taxation and assessment, and now when a loss occurs by reason thereof they desire to shirk it themselves, and throw itupon the public. ' We think the loss should fall upon those who engaged in the speculation, and not upon the public'; and if the lots of the defendants in error are assessed for what Mr. Bostwick agreed to pay, defendants must look to him for reimbursement. We think that Mr. Bostwick was so far the owner of the property as to make him the proper person to sign the petition for the improvements, and that the signatures of the lessors were not necessary.

Holding the lessee under such a lease to be the owner of the property under said section 2272, harmonizes the statutes and decisions of this court upon the subject of permanent leases. By section 4181 such leases are subject to the same law of descent as estates in fee simple. By sections5374 and 5375 such leasehold estates are regarded as real estate, and subject to levy and sale upon execution as. such, and are bound by the lien of a judgment the same as other lands. See also the cases of Loring v. Melendy, 11 Ohio Rep., 355, and Northern Bank of Kentucky v. Roosa, 13 Ohio Rep., 335.

The case of Mayor of Baltimore v. John Boyd, 64 Md., 10, does not seem to throw much light upon the question, as in that case the lessee was by statute made the owner for the purposes of signing petitions for street improvements.

The judgment of the circuit court will be reversed, and the cause remanded .to that court with instructions to overrule the demurrer to the second and third defenses, and for further proceedings according to law.

Judgment reversed.  