Opinion
No. 33357.
October 24, 1938.
TAXATION.
The acquirement of title to realty by city for school purposes extinguished assessments against land, so that subsequent sale for taxes by sheriff and tax collector of county to state, which patented the land to individual, was ineffective, notwithstanding that city had not recorded its deed.
APPEAL from the chancery court of Harrison county; HON. D.M. RUSSELL, Chancellor.
Howie, Howie McGowan, of Jackson, for appellants.
So far as our own laws are concerned, statutory and by judicial determination, this appellee can only rely upon two decisions of this Honorable Court. The first is the case of the City of Laurel v. Weems, 100 Miss. 335, 56 So. 451; and Alvis v. Hicks, 150 Miss. 306, 116 So. 612.
As we view it, these decisions mean exactly the same thing. If a municipality procures a perfected record title to real property after the tax lien of the state attaches and before sale, then the state's lien will be absolved. This being accomplished, of course, by a pure dispensation of the sovereign.
This Honorable Court in its decisions heretofore handed down has determined that it is the better principle that the state will forgo and dispense with its lien if a municipality procures the property and a completed record title thereto before the state sells the property. We respectfully submit that this principle, which in our jurisdiction has been carried fully as far as in any other jurisdiction in the country, should not be further extended. As will be hereinafter more fully set out, in some states the courts have flatly refused to remove the State's lien after it has attached the property, although a municipality may acquire it by record title. However, frankly, the prevailing rule seems to be that where the assessing machinery is in an inceptive state, that is to say, where the rolls have not been completed and delivered, the state will forego its lien if the city acquires title, but the prevailing sentiment is that where the rolls have been completed, finally approved and turned over to the tax gathering officer, the lien will not be absolved.
Gachet v. City of New Orleans, 27 So. 348; Prytania Street Market Co., Ltd., v. City of New Orleans, 34 So. 797; City of Jackson v. Howie, 175 So. 198.
The municipality must, of course, have a perfect title. We do not think that it is reasonable that this court would determine for a moment that a municipality relying upon a series of secret and unrecorded deeds in a foreign state could ever say that it had a perfect title.
Glen R. Charles, the record owner of this property, as well as the Keeneys, resided in a foreign state, that is to say in the City of Chicago and state of Illinois. They all resided there at the time these deeds were supposed to have been exchanged between them. It is certain that the passing deeds between non-residents of the State of Mississippi in a foreign and distant state would not have any bearing on the ownership of the property in this state, especially as to defeat the rights of the lien or title of the State of Mississippi to the property.
Meridian v. Phillips, 65 Miss. 362, 4 So. 119; Moores v. Thomas, 95 Miss. 644, 48 So. 1025; Steiff v. Tait, 26 F.2d 489; State Trust Co. v. Chehalis County, 79 Fed. 282.
It appears that practically universally where the courts give way to the right of municipalities which procure lands during the progress of the current assessment the forbearance only extends to instances where the city procures before the assessing machinery is completed.
There are some jurisdictions in which the courts flatly refuse to absolve the state's lien whether the assessment roll has been completed or not.
Triangle Land Co. v. City of Detroit, 204 Mich. 444, 170 N.W. 549; Iron Mt. Public School v. O'Conner, 143 Mich. 35; Cooley on Taxation (3d Ed.), page 380; Sisters of the Poor v. New York, 51 Hun. (N.Y.) 355.
If the land is duly assessed to the owner of record, the title of the tax purchaser will prevail against the holder of an unrecorded deed from such former owner. Provided, the tax purchaser had no notice or knowledge of such deeds or facts which should have put him upon inquiry.
61 C.J. 1309, sec. 1829; Robertson v. Puffer Mfg. Co., 73 So. 804, 112 Miss. 890; Augusti v. Citizens Bank, 15 So. 74.
No one, including a municipality, should be permitted to hold deeds off the record for years until an assessment is made, and sale made thereunder, and the title practically matured in the state before they come forward with their claim. Especially would it be untenable where they are relying not upon one unrecorded deed but upon a series of unrecorded deeds, one based upon the other, and especially, as we have stressed hereinbefore, where the transactions took place in a foreign state.
The tax title in Mississippi is a perfect title. It is a perfect fee simple title and indefeasible so far as any collateral attack is concerned.
Section 3011, Code of 1930.
After property is sold the absolute title vests in the state or in the individual unless there is a defect somewhere in the assessing machinery or in the sale of the property; or unless, of course, the records in the county show the property is exempt property. There is no attack here upon the regularity of the sale, and as we insist, the City of Biloxi, appellee, never acquired any title whatsoever to this land until May, 1936, some years and eight months after the absolute title to it has passed to the state. That which the owner, Glen R. Charles, conveyed to the city at that time was not a title but a bare equity of redemption, if anything.
In Mississippi tax titles are absolute titles, and are not what is referred to in some jurisdictions as derivative titles. To show a perfect paramount fee simple title under a tax claim in Mississippi one is only required to show two things: first, that the property was aliened by the United States government and subject to taxation; second, a valid assessment and sale for taxes. This record discloses both of these and shows such a title in the complainant.
Griffith Chancery Practice, sec. 219; 26 R.C.L., sec. 360, Taxation.
The efforts of this appellee by recording a deed during the summer of 1934 which bore date from the summer of 1932, and which they claim was based upon another instrument executed in the fall of 1931, which was never recorded, constitute the barest and thinest kind of an equitable claim to this land. As we view it, the record title is not only the better legal title but the only title in this controversy. Appellees in vainly striving to fabricate a title out of a succession of unrecorded deeds certainly could not obtain more than equitable rights.
Chiles v. Gallagher, 67 Miss. 413, 7 So. 208.
We call the attention of the court to Chapter 280, Laws of 1936, which amends Section 2588, Code of 1930. By this act the legislature made subject to taxation all property which municipalities acquire by tax sales. We also call the court's attention to Section 13, Chapter 174, Laws of 1936, which provides that land purchased by drainage districts or municipalities from the State Land Office shall be liable for state and county taxes. Looking to the legislative intent with reference to property held by municipalities it certainly cannot be said that there is present evidence to extend further freedom from taxation to the municipalities. We mention these statutes merely for the purpose of urging upon the court that the doctrine as laid down in the Laurel case and the case of Alvis v. Hicks, (both above) should not be further extended, and any further extension thereof cannot be justified by legislative intent.
White Morse, of Gulfport, for appellants.
The lower court based its decree on Weems v. City of Laurel, 100 Miss. 335, and in a measure upon Alvis v. City of Jackson, 150 Miss. 306. There is, we submit, a clear distinction between these cases and the case at bar, because the recording statutes were compiled with the Alvis v. City of Jackson and Weems v. City of Laurel cases. The record owner was conveying and the deeds were recorded.
A city, like a county board of supervisors, can act only by and through its minutes. The city at no time by ordinance or minute entry accepted the deeds or any of them, or the land, and now, if sued by some one for a defect in the premises, could defend upon the ground it is not the owner of the land.
Sections 2543, 2545, Code of 1930.
The record of the proceedings of a municipal body on which the members are required to vote is the only competent evidence of any act or proceeding of the body.
Byer v. Town of New Castle, 24 N.E. 578.
It is essential to validity of an ordinance that the vote on its passage be taken and recorded.
Schofield v. Tampico, 98 Ill. App. 324.
The record of the passage of an ordinance should set forth the yeas and nays. No other legal way exists for determining whether a majority has voted.
McCormick v. Bay City, 23 Mich. 457; Dean v. Senatobia, 142 Miss. 815.
Since a municipal council can speak only through its records, it should keep a correct record of its proceedings, and statutes imposing this duty are mandatory.
43 C.J. 513; Ross v. Wimberly, 60 Miss. 345; Campbell v. Hackensack, 98 A.L.R. 1225; 43 C.J. 516; Abbott Municipal Corporation, page 1444.
This court has recently rendered an original opinion, and a later one on suggestion of error, in Russell v. Russell Investment Co., 178 So. 815, and 182 So. 102, construing Chapter 196, Laws 1934. Of course it will be said by appellee that this property was exempt and that the statute is not applicable. The statute is one of short limitations. The appellee was charged with knowledge of the tax sale and, if it wanted to claim the land, must assert its claim within the statutory period and there give all reasons why the sale to the state should be set aside. This was not done but the whole matter is left hanging in the air with nobody knowing whether the city asserts any rights in the land or not. In our judgment, when appellee introduced the record of the sale to the state he put himself out of court.
Land can only be conveyed by deed. The assessor saw this land was owned by Charles. It was assessed and sold to the State September 1933. In 1936, for the first time, Charles conveys to the city. We submit that cannot be done. If the city could wait until 1936 to obtain a deed and claim the exemption reverted back to 1932, then the city could wait ten or a hundred years and make the same claim. The lien was on the land in 1932 and a deed from the owner to the city would have to be filed before the sale, to say the least. The Weems case and Alvis case are clearly distinguishable from the case at bar. If we may say so, this court used some magnaminity in the Weems case. In other words, the court abated the tax lien. Now it may be said the City did not have to accept the land by ordinance. It had no deed. The lower court took the position the City would have to accept by formal ordinance, but that this was a donation. The answer is it was a donation in 1932 by deed recorded in 1934, but the donor did not own the subject of the donation. If the Chancellor be correct then the City could become the owner without deed or minute entry regularly passed.
As to the proposition relative to Chapter 196 of the Laws of 1934, we do not want to appear technical and certainly do not contend a valid sale for taxes of exempt property could be made. However, in this case, there was nothing of record until May 19, 1936, which would justify a claim of exemption, and the tax sale was on its face in all things valid. Therefore, our point is the City would have to file a bill within the time limited by Chapter 196, Laws of 1934, and seek to set aside the sale because of the hidden claim of exemption. The purpose of the statute was to speedily settle the title of the State and the State's grantees.
J.D. Stennis, Jr., and W.L. Guice, both of Biloxi, for appellee.
In answer to the argument advanced by the able counsel for appellants, we respectfully submit to the court that there is but one question before the court for consideration, that is: "Does a municipality, whose property used for municipal purposes is exempt from taxation, in order to be entitled to the exemption, have to have its deeds to said property recorded at the time of the tax sale?" In answer to this question, we respectfully submit that it does not.
City of Meridian v. Phillips, 65 Miss. 362; City of Laurel v. Weems, 100 Miss. 335; Alvis v. Hicks, 150 Miss. 306; Section 3108, Code of 1930.
This court has, in these cases above cited, decided beyond any question of doubt that if a municipality is the owner of property at the time of a tax sale, regardless of whether or not taxes may have, during the year that the municipality acquired same, attached as a lien, when the municipality acquired the property, its acquisition cancelled such lien for the obvious reason that the statute fixing a day upon which a lien attached for a given year's taxes had no application, if before those taxes became collectible or the lien enforceable, a municipality acquired the property. If the property then be exempt from taxation if owned by the municipality, it is not necessary that the municipality's deed through which it acquired title and became the owner of the property be of record.
Counsel for appellants advance the argument that it became the duty of appellee under Chapter 196, Laws of 1934, to file a bill within the time limited by said chapter to seek to set aside the tax sale in question if it should attempt to claim title to said property and if said sale was for any reason void. We respectfully submit to the court that said chapter applies to any defects, irregularities or illegality in the assessment levy or sale of land for delinquent taxes and that the lower court properly held that this chapter had no application to a sale where there were no taxes due upon the property for the reason that the property was exempt and where the sale was void and a nullity.
Argued orally by M.M. McGowan, for appellant and by J.D. Stennis and W.L. Guice, for appellee.
On September 18, 1933, Lots 1, 2 and 3 of Block 2, Miramar Subdivision in the city of Biloxi, Mississippi, were sold by the sheriff and tax collector of Harrison county to the State of Mississippi for unpaid taxes for the year 1932. On September 19, 1936, the period of redemption having expired, the state patented the land to Margie Edwards, who on October 8, 1936, conveyed the land to D.M. and J.H. White. Britt Davis, an auctioneer, was scheduled to auction lands in Harrison county on August 30, 1937, including the land here involved. The city applied for, and obtained, an injunction against Davis, Edwards and D.M. and J.H. White, enjoining the sale, the city claiming that on July 8, 1931, Harriet Sayre Keeney and Albert F. Keeney conveyed the lands to the city for school purposes. The deed of Keeney was not of record in 1933, and the record showed that the lands were then owned by one Glenn R. Charles on the date of the assessment and sale. It was shown that the school trustees accepted the land which was given by the Keeneys to the City of Biloxi for school purposes, and that the Keeneys made a deed to the city; but that this deed was not placed of record at the time the sale was made for the taxes.
The contention of the city in this case is that although when the lands were assessed for taxes in 1931 and 1932, and the lien accrued as against private persons on the first day of January, 1932, that the lien for taxes ceased to exist when it was conveyed to the city in 1932, before the sale for taxes was made, the deed from the Keeneys to the city being dated August 19, 1932.
The city relies upon the case of the City of Laurel v. Weems, 100 Miss. 335, 56 So. 451, Ann. Cas. 1914A, 159, in which the Court held that although the taxes had been assessed to, and accrued on, the property in the hands of the private owner before the city acquired title when the city acquired title, prior to the sale of the land for taxes, the tax lien was discharged by reason of the acquisition of title by the city; that the property being exempt from taxes when owned by the city, the exemption in favor of the city being made because of the public use of the property, and in furtherance of the public policy, displaced the tax lien which had accrued against the private owner and the property in the hands of such owner. In the course of this opinion the Court said "The exemption of the property of a municipality is founded on the fact that the municipality is a governmental agency of the state, vested by the state with a part of its sovereignty, and employed in aiding the state in matters of government and the execution of its laws. It is undisputed law that the general rule is that statutes granting exemptions from taxation must be strictly construed, and must not be extended beyond what the terms clearly express; but this rule of construction has no application to the property of the state, county, or municipality when it is sought to collect a tax on the property of either, or to take away their property because of a failure to pay the tax claimed, followed by a sale of same on account of the delinquency. The rule of strict construction of the statute may apply to religious and charitable institutions, and to all subjects of exemption save those belonging to a governmental agency of the state." The Court ruled that there was a distinction between the case then before it and the case of McHenry Baptist Church v. McNeal, 86 Miss. 22, 38 So. 195, and held that a tax sale, made after the city had acquired title, was void, and that the purchaser at the tax sale secured no title.
In the case of Alvis et al. v. Hicks, 150 Miss. 306, 116 So. 612, where the title of the municipality arose through its tax sale which had matured when the property was sold by the sheriff and tax collector for county and state taxes, the Court reaffirmed the doctrine that when the city had acquired title before the sale for taxes was made, the acquirement of the title by the city extinguished the assessment, and the purchaser at such tax sale secured no title as against the city. It was held in that case that it made no difference whether the property was acquired by the city for governmental purposes, or in its proprietary capacity — that the property of the city was exempt from taxation under the law; and reapproved the case of City of Laurel v. Weems, supra.
The city also relied upon the case of City of Meridian v. Phillips, 65 Miss. 362, 4 So. 119, where the city had purchased a tract of land and erected thereon a pesthouse, the land was assessed to the city, and approved by the board of supervisors without objection, and the land sold to the state for taxes claimed to be due thereon. The Court held in favor of the city, and in the course of its opinion said: "The judgment of the court below cannot be maintained. It is not disputed that the property in controversy belonged to appellant when it was attempted to be sold for taxes. Section 468 of the Code exempts from taxation, among other things, property belonging to the United States, or to the state, or to any county, or to any incorporated city or town in the state. Liability of property to taxation is the basis of the power to sell it for taxes; and, where property is exempt by law from taxation, it cannot be subjected thereto by any action of the board of supervisors, or the officers charged with the assessment and collection of taxes, and a sale of it for taxes under such circumstances is void" (citing cases).
It is argued here that the basis of distinction between the present case and the cases referred to is that the purchaser acquired his title in ignorance of the acquirement of title by the city, and that the city's claim of title had not been placed of record at the time of the sale and the property was subject to taxes on the first of January, 1932, and was thereafter assessed to the then owner, and that the rule should not be extended beyond the facts in the decision referred to, and that to now hold that the city's purchase extinguished the title, or the assessment of the property, would be to extend the decisions beyond what has heretofore been held.
We do not think that the record of the title of the city cuts any figure in the matter. The city had title when it procured its deed, and the property then became exempt from taxation under the cases referred to. The failure to put the deed on record, so far as the tax title is concerned, is, in our opinion, of no consequence. It turns upon the question of ownership, and the title of the city was complete without such recording. The purpose of the record is merely to give notice to subsequent purchasers or encumbrancers of the property, and we do not think this applies to the tax sale proceedings, and the validity of the assessment. Under the cases cited, the acquirement of title by the city extinguished the assessment, and thereafter it had no force or validity, so far as tax proceedings were concerned.
The court below held in accordance with these views, and its judgment is affirmed.
Affirmed.