Opinion
No. 2225
November 24, 1942
JOINDER OF ACTIONS — TAX SALES — REDEMPTION — JUDICIAL NOTICE — STATUTORY CONSTRUCTION — CONSTITUTIONAL LAW.
1. Equitable action to remove a cloud on title to realty was properly joined with a legal action to recover possession of the realty and for other relief to clear up title to the realty. 2. Statute providing that realty sold for delinquent taxes may prior to certain date be redeemed, where county was the purchaser at tax sale and is "still owner of" the realty or certificate of purchase, should not be construed to mean that county, at time redemption is sought to be made, is the owner of the realty, but the quoted words should be held to refer to the time the statute became operative (Laws 1937, c. 70, § 1). 3. Statutes conferring the right to redeem land sold for taxes should be liberally construed. 4. The Supreme Court would take judicial notice that prior to 1937 there had been in existence for some years oppressive economic conditions and that large bodies of realty had passed from private ownership into the hands of the counties of the state and off the tax rolls. 5. In ascertaining the legislative intent in enacting a statute, a court must look to the mischief that statute was intended to cure, historical setting surrounding its enactment, the state's public policy, the conditions of the law, and all other prior and contemporaneous facts and circumstances that would enable the court intelligently to determine the Legislature's intention. 6. Where time for redemption of realty which had been sold for delinquent taxes to county had not expired when record owner undertook to redeem the realty prior to January 1, 1938, and paid treasurer of county the sum demanded by the treasurer, board of county commissioners had no right to dispose of the realty, and its deed to third person was void (Laws 1937, c. 70, §§ 1, 2). 7. The statute providing that realty sold for delinquent taxes may, prior to certain date, be redeemed where county was the purchaser at tax sale and is still owner of the realty or certificate of purchase, without payment of interest, penalties and costs, does not violate the constitutional provision that the Legislature shall not pass "local laws" or "special laws" relinquishing or extinguishing, in whole or in part, the indebtedness, liabilities or obligations of a person to the state or to any municipal corporation therein (Laws 1937, c. 70, §§ 1, 2; Const. art. 3, § 27).
APPEAL from District Court, Hot Springs County; P.W. METZ, Judge.
For the plaintiff in error, there was a brief and oral argument by Lin I. Noble of Thermopolis.
Plaintiff in error seeks a review and reversal of a judgment rendered by the District Court of Hot Springs County, in favor of defendant in error and against plaintiff in error, involving a title to real estate, which judgment appears in the Bill of Exceptions. The petition of defendant in error contained two causes of action, one in ejectment and the other to quiet title. A demurrer to said petition was overruled and exception taken. The ruling of the court was erroneous. 51 C.J. 230, Section 175. The first count of the petition alleges that plaintiff in error was in possession. Defendant in error fails to allege it was in possession by itself or tenant. The judgment was therefore erroneous. Sec. 89-3901, R.S. 1931; Baldwin v. McDonald, 24 Wyo. 108. The action was barred by limitation. Sec. 115-309, R.S. 1931; Beebe v. Doster (Kan.) 14 P. 150; Electrolytic Copper Co. v. Mines Corp. (Wyo.) 243 P. 126. The period within which the owner must bring his action must be reckoned from the date of sale for taxes, which would be July 11, 1932. Little v. Emmett Irrigation District (Ida.) 263 P. 40. The Thompson Realty Company had a half dozen remedies which it might have pursued after July 11, 1932. State Commissioner v. Spanish Fork (Utah) 100 P.2d 575; McMullin v. Shields (Mont.) 29 P.2d 652; Osterholm v. Mining Company, 107 P. 499. No effort was made to redeem the property until more than five years after the date of sale. The law in force at the time of the sale governs. Barrett v. Barrett, 23 P.2d 857. Under the law existing at the time of the sale, the redemption period expired July 11, 1935. Defendant in error claims to have redeemed the property under the provisions of Chapter 70 of the Session Laws of 1937. There seems to be a conflict of authority as to the constitutionality of statutes such as Chapter 70, Session Laws 1937. Our Constitution requires uniformity of assessment. Article III, Section 27, Constitution. Plaintiff in error received a deed for said real estate from the County Commissioners on September 7, 1937. On September 11, 1937, defendant in error redeemed said property from the county, having in mind the provisions of Section 115-2329, R.S. 1931, that real property sold at tax sale may be redeemed at any time before the expiration of three years from the time of sale, and that the law in force at the time of sale shall govern. There is a serious doubt as to the constitutionality of Chapter 70, Session Laws of 1937. Under the law existing at the time of sale, the redemption period expired July 11, 1935, no matter whether the County or a private individual was the purchaser. This law of 1937 authorizes redemption by the payment of an amount equal to the delinquent tax only, including the amount for which said property was sold and subsequent delinquent taxes, exclusive of accumulated interest, penalty and costs, but limits the time for such redemption to January 31, 1938. It would therefore seem to be a local or special law, because it extinguishes the indebtedness due the state and county. Article III, Section 27, Constitution. A similar law was condemned by the Supreme Court of Montana. State v. Fischl, Treas. (Mont.) 20 P.2d 1057. The Montana Court cited and followed with approval a Texas decision involving a similar statute. Ollivier v. Houston, 54 S.W. 942; Sanderson v. Bateman (Mont.) 253 P. 1101; State v. Leslie (Mont.) 101 A.L.R. 1329. This court has held that a tax is a personal obligation of the party whose property is assessed for taxation. 61 C.J. 592. Section 115-2303 having provided that "Interest on unpaid taxes shall become delinquent and draw interest at the rate of fifteen per centum per annum until paid or collected by distress or sale * * *" how can it be said that it is not a debt of the state? It is therefore clear that Chapter 70 of the Session Laws of 1937 violates two provisions of the Constitution, viz: the one requiring uniformity of taxation, and that forbidding special laws extinguishing indebtedness due the county or state. However, if Chapter 70, Laws 1937 be approved as constitutional, let us consider its language. It provides for redemption from sales for delinquent taxes at any time prior to January 31, 1938, in cases where the county was the purchaser and is still the owner of said property or the certificate of purchase thereof. When defendant in error attempted to redeem the property on September 11, 1937, the county was not the owner thereof, for the reason that it had sold the property to Dr. Carter, plaintiff in error, on September 7, four days prior thereto. The County had lawful authority to sell the property at any time at public or private sale. It was not required to hold the property until January 1, 1938. Section 115-2342, R.S. 1931; Section 115-2342, Laws 1933. It is therefore clear under the law that redemption rights under the Act of 1937 must be exercised while the county is still the owner thereof. Attention is directed to the fact that defendant in error paid only the face of the tax for 1931. The law says that he must pay an amount equal to the delinquent taxes, including the amount for which the property was sold, and all subsequent delinquent taxes. The certificate is therefore void. In cases of this character, plaintiff must recover on the strength of his own title. Sidlo, Simmons, Day Co. v. Phillips (Wyo.) 49 P.2d 243. Defendant in error failed to prove by competent evidence the allegations of its petition. The pleadings in this case disclose that plaintiff was an occupying claimant of the land in question by virtue of a tax sale conducted by the County Treasurer of Hot Springs County, on July 11, 1932, at which sale, the County became the purchaser and therefore sold the land to Dr. Carter. Under Section 89-3908, plaintiff in error was an occupying claimant, and as such claimant he filed a written request for a journal entry of his claim. It was the duty of the court to cause such a journal entry to be made. Section 89-3910, R.S. This was not done. The trial court erred in entering judgment in favor of defendant in error and it should be reversed and such further orders made herein as this court may deem necessary and proper.
For the defendant in error, there was a brief by Ingle and Ingle of Thermopolis, and oral argument by C.R. Ingle.
The action is one brought by Thompson Realty Company in the nature of ejectment, for recovery of mesne damages, possession, and to remove a cloud from title, by the cancellation of a deed made by the County Commissioners to Dr. Carter, plaintiff in error. By mesne conveyances, the title passed from Althea T. Wheeler to defendant in error, who also holds a tax deed from the Treasurer of Hot Springs County. Althea T. Wheeler acquired title under a decree of distribution in probate that cannot be attacked collaterally. 2 Church Probate, pp. 1830, 1853, and cases cited. It is proper to join a cause of action in ejectment with a cause for a decree quieting title, 51 C.J. Section 171, p. 229, where both relate to the same parties and the same property. Kruenski v. Neuendorf, 74 N.W. 974; Keens v. Goslin, 38 N.W. 797, Session Laws of Wyoming, 1939, p. 57; Stock Growers Bank v. Newton, 22 P. 444; 3 Bancroft's Code Pleading, Section 1374; Pfister v. Dascey, 4 P. 393; Doyle v. Temple, 136 P. 103; 51 C.J. 183; Chesney v. Valley Livestock Co., 244 P. 216. The trial court did not err in overruling Carter's demurrer. The action was not barred by Section 115-309, R.S. 1931. Carter received no deed from the Commissioners until September, 1937, and he did not take possession until he received said deed. Thompson Realty Company could not bring a suit against Carter or the County Commissioners until one or the other asserted title. The six year limitation period did not commence to run until Carter received his deed in September, 1937. Davis v. Baptist Convention (Wyo.) 16 P.2d 151; 61 C.J. 1421, Electrolytic Copper v. Rambler Consol., 243 P. 126; Gallagher v. Head, 79 N.W. 387; LaRue v. King, 37 N.W. 374; Perry v. Marbury Lumber, 103 So. 580. As a matter of law, the Statute of Limitations did not begin to run until the tax deed received by the County was recorded, and in this case the tax deed to the County was not recorded. Emerson v. Valdez, 135 P. 136; Empire Ranch v. Langley, 127 P. 451; 61 C.J. 1422 and cases cited under note 75. No deed could be issued by the Treasurer to the County under Section 115-2343, R.S., until notice had been given and proof filed as required by statute. The only notice given in this case by the Treasurer was a notice stamped on the certificate. If this notice constitutes any notice at all, which we do not concede, it fixed January 1, 1936 as the time within which the Thompson Realty Company might redeem. Burns v. State, 173 P. 55; Barrett v. Barrett, 23 P.2d 861; 61 C.J. 1335 and cases cited. The signing and sealing of the deed by the Treasurer could not affect the title until its delivery and recording. David v. Whitehead, 79 P. 21. An admission in a complaint that the Treasurer's deed had been lost and that its contents could not be proven is fatal. In order to establish a lost instrument, the substance of its contents must be averred and proven. 37 C.J. 257. The commissioners had no authority to sell the property to Dr. Carter until the Treasurer's deed had been delivered to the Clerk and recorded. It is urged by plaintiff in error that Chapter 70, Laws 1937, is unconstitutional, as being in violation of Article III, Section 27, State Constitution. In support of this two Montana cases are cited — Kain v. Fischl, 20 P.2d 1057 and Sanderson v. Bateman, 253 P. 1100, but these two cases were overruled in the case of State v. Hitsman, 44 P.2d 747. The Montana constitutional provisions are almost identical with the provisions of the Wyoming Constitution. The views of the Montana court are somewhat supported by this Court in the case of Board of Commissioners v. Bench Canal (Wyo.) 108 P.2d 590, where it was held that a tax is not to be considered as a debt, and non-collection after ten years is not violative of the provision prohibiting the release or remission of taxes. Islais Company v. Matheson, 35 P.2d 1051; Biles v. Robey, 30 P.2d 841; Henry v. McKay, 3 P.2d 145. It is contended by plaintiff in error that Chapter 70, Laws 1937 is prohibitive only in cases where the county has been a purchaser and is "still" the owner up to January 1, 1938. A similar discussion arose in the case of State ex rel. v. Hyslop, 107 P.2d 1088. It was there held that redemption could be made, provided the County Treasurer held the tax sale certificate when the act became effective. It is also urged that the trial court erred in not allowing plaintiff in error for improvements under the occupying claimant's statute. No proof was offered at any time as to improvements and no order of the court was made refusing to receive proof. An occupying claimant must allege and prove facts essential to his right of recovery for improvements, 31 C.J. 346, and the owner has a right to set off rents and profits against the allowance of the occupying claimant. 31 C.J. 338. Unless a man in the possession of property of another makes a claim for taxes and improvements made on the land in the action brought for the recovery of the land, he is barred. Brewer v. Folsom Bros., 5 P.2d 283; Raymond v. Ross, 40 Ohio State 343; Webster v. Stewart, 6 Iowa 401. Plaintiff in error therefore cannot recover for any alleged improvements.
This cause is brought here by proceedings in error to review a judgment of the district court of Hot Springs County. In that court the Thompson Realty Company was plaintiff, and for convenience will either be so designated hereinafter or as the "Realty Company". C. Dana Carter was the defendant in the action, and he will be mentioned subsequently as such or by his surname.
The action, to summarize it briefly, was in the nature of ejectment, for the recovery of, possession of and damages for withholding the real property involved; also to have plaintiff declared the owner of said premises, to have his title quieted thereto and at the same time cleared by the cancellation of a certain County Commissioners' deed asserted by plaintiff to be void and which had been issued to the defendant, and also to have plaintiff's redemption of said property from a certain tax sale, presently to be referred to, duly confirmed.
The real property in question was taxed in the name of the plaintiff during the period covered by the tax proceedings attacked here. The Realty Company appears to have been the record owner named on the county assessment roll. The premises were sold on July 11, 1932, to Hot Springs County for non-payment of the 1931 general taxes. The certificate of purchase referred to in the record as "C598" was pursuant to such sale issued to the County. The premises appear to have remained in County ownership until September 7, 1937. On that date the Board of County Commissioners of Hot Springs County undertook to sell said property to Carter, and in accordance with such sale directed the issuance to him of a Commissioners' Quitclaim Deed of that date.
Four days later, to-wit, on September 11, 1937, the Realty Company aforesaid undertook to redeem its property thus sold and paid the Treasurer of the County of Hot Springs the sum demanded by him for that purpose, this sum being "the amount of taxes owing" and subsequent delinquent taxes. Certificate of Redemption No. 2172 was accordingly issued by this official to the Realty Company on the day last mentioned.
By its judgment rendered upon trial of the action before the court without a jury, the court found that certain taxes and moneys had been paid by Carter upon a subsequent tax certificate of purchase issued to him. The amount of money expended for these matters was found by the Court in its judgment aforesaid to be the total sum of $38.30. The Court further found in its judgment that the plaintiff's damages for the withholding of the premises from the plaintiff by the defendant were $67.68. Setting off the sum first mentioned against the last mentioned amount resulted in the sum of $29.38, which plaintiff was adjudged to be entitled to recover from the defendant.
There was a general finding by the district court in favor of the plaintiff, and there were additional findings that the Commissioners' Deed aforesaid was void for the reason that the Commissioners had no valid title to the property and hence they could not legally transfer it; that plaintiff was entitled to redeem the property, and it was also found that the redemption thereof, heretofore mentioned, was legal, the certificate to that effect valid and that plaintiff should have a judgment quieting his title against all claims on the part of the defendant. It is this judgment which this court is asked to review.
The pertinent portion of Section 1 of Chapter 70, Laws of Wyoming, 1937, approved February 20, 1937, reads:
"Any person being the owner or entitled to redeem real property sold for delinquent taxes may at any time prior to January 1, 1938, redeem said real property sold for delinquent taxes, in all cases where the county was the purchaser at the tax sale and is still the owner of said real property or the certificate of purchase thereof, by paying to the said county treasurer, or to the board of county commissioners, an amount equal to the delinquent taxes only, including the amount for which said property was sold and all subsequent delinquent taxes, said amount being exclusive of accumulated interest, penalties and costs. In all cases where the delinquent taxes are paid as herein provided the county treasurer shall immediately issue to the owner of said property, or the person entitled to redeem the same, a certificate of redemption."
This statute by Section 2 thereof applied "only to tax sales made prior to January 1, 1938," and provided that the Act should not in any way affect delinquent tax sales after that date. The law was to take effect and be in force from and after its passage.
We shall assume that the County aforesaid was in fact the owner of the property, although the Realty Company asserts that the County never legally received title to the premises involved. We do not find it necessary to determine the matter, entertaining the views to be presently announced.
It is insisted, as we understand the contention of the parties, that there was a misjoinder of the causes of action in plaintiff's petition, it being urged for the defendant Carter that plaintiff could not properly join an equitable action to remove a cloud upon the title to the property with a legal action to recover possession and other relief to clear up the title. In this, under the circumstances disclosed by the record before us, we think he is mistaken.
Citing a number of cases 51 C.J. 229, Section 171, declares that:
"But an equitable action to remove a cloud may be joined with a legal action to recover possession when both affect the same parties and the same property * * * *."
In Delfelder v. Teton Land Investment Co., 46 Wyo. 142, 217, 218, 24 P.2d 702, 26 P.2d 153, 159, this court pointed out that:
"The fact of possession is in many, if not most of the cases, but of minor significance. The point of importance ordinarily is the title. That is true here. We need not discuss or determine the full significance of that fact, except to say that in many, and perhaps most, jurisdictions, the action is no longer a purely possessory action, but is, where both the title and the right of possession are brought in question, one in which the title in question also is finally adjudicated."
There were many authorities cited subsequent to the quotation above made as sustaining this view.
However, it is not necessary to consider this contention of the plaintiff in error at any great length, for in our case of Johnson v. Sellers, 53 Wyo. 403, 84 P.2d 744, we held that under our statutes relating to the recovery of realty, "joinder of an action in ejectment with action to remove cloud from title to realty involved was proper," and the matter was discussed and authorities sustaining that view were examined at some length. That case was an action by Sellers against Johnson and another to recover possession of certain realty, to remove a cloud on the title of the real property affected and for the cancellation of two alleged void conveyances. After reviewing a number of authorities, we there said:
"The foregoing authorities announce with reasonable clearness the underlying idea of the practice codes to have parties settle their difficulties relative to the same subject-matter in one action if at all possible, and we can perceive no good reason why that should not be done in a case such as we now have before us."
It is also urged for the defendant Carter that Chapter 70, Laws of 1937, is inapplicable here because it is said that the words "still the owner of" in the statute as excerpted above, should be construed to mean that the County at the time the redemption is sought to be made is at that time the owner of the property affected. On the other hand, the Realty Company asserts that although the phraseology just quoted is literally susceptible of that construction, the true import of the words to be drawn from the Act in its entirety and the legislative intent, is that these words must be held to refer to the time the statute became operative, that is on February 20, 1937.
We think the latter construction of the law should be the one adopted by this court for several reasons. First, because the prevailing rule appears to be that statutes conferring the privilege or right of redemption should be "liberally and benignly" construed. Grieb, County Clerk, v. National Bank of Kentucky's Receiver, 252 Ky. 753, 68 S.W.2d 21. Second, the purpose of the statute as disclosed by its title was to extend the time of redemption of real property which had been sold to the County and in consequence to encourage owners, through relieving them from "interest, penalties and costs," to get back their properties into private ownership and thereby to have the same go back on the tax rolls of the county, thus benefiting both county and owner. Third, this court will take judicial notice that prior to the passage of the Act there had been existent for some years oppressive economic conditions and large bodies of real property had passed from private ownership into the hands of the several counties of the State and, of course, off their tax rolls. This is a matter of general knowledge of the economic conditions prevailing in this commonwealth at the time the Act was passed. Under the construction pressed upon us by the defendant, the time of redemption would not be extended to January 1, 1938, as the Act provides, but only to such time as the Treasurer or the County Commissioners would allow the redemption to occur, inasmuch as they might dispose of the property immediately the Act became effective, and so frustrate its fundamental purpose. This would produce a non-uniform operation of the law, something the legislature never intended, as we see it.
It is a familiar principle in ascertaining the legislative intent in enacting a statute that the court whose duty it becomes to construe it must look to he mischief the Act was intended to cure, the historical setting surrounding its enactment, the public policy of the state, the conditions of the law and all other prior and contemporaneous facts and circumstances that would enable the court intelligently to determine the intention of the lawmaking body. Grieb, County Clerk, v. National Bank of Kentucky's Receiver, supra, and cases there cited.
It follows from what we have said above that inasmuch as the time for redemption of the Realty Company's property had not expired, the Commissioners had no legal right to dispose of the property in question and their deed to Carter was void. As a corollary it follows that the district court correctly decided that the redemption undertaken to be made by the Realty Company was in fact "legal" and proper.
Finally, it is contended that Chapter 70 aforesaid is violative of Section 27, Article 3 of Wyoming's Constitution, which so far as is pertinent here reads:
"The Legislature shall not pass local or special laws in any of the following enumerated cases, that is to say * * * * refunding money paid into the state treasury, relinquishing or extinguishing, in whole or part, the indebtedness, liabilities or obligation of any corporation or person to this state, or to any municipal corporation therein, * * *."
The cases of State ex rel. Kain v. Fischl, County Treasurer, 94 Mont. 92, 20 P.2d 1057, and Sanderson v. Bateman, 78 Mont. 235, 253 P. 1100, are especially relied upon as supporting the view urged. It is true that these decisions do this, but as pointed out in Big Bend Drainage District v. State, 50 Wyo. 242, 60 P.2d 815, these cases were later overruled by the ruling announced in State ex rel. Sparling v. Hitsman, 99 Mont. 521, 44 P.2d 747, 751.
It was also indicated in the Big Bend Drainage District case, supra, that the Montana Constitution regarding the enactment of special laws carried language which was "exactly like ours" in Section 27, Article 3, above mentioned.
After a careful investigation we are inclined to think that the law as declared in the Hitsman case is more in accord with the trend of modern decisions. The court in that case very elaborately discussed the matter. We prefer to follow its ruling rather than the views declared in the earlier Montana decisions.
Other minor questions are rather extensively debated in the briefs of the parties, but entertaining the views above set forth, we do not believe this opinion should be extended by a consideration of the same. Accordingly the judgment of the district court will be affirmed and an order to that effect will be entered.
Affirmed.
KIMBALL and BLUME, JJ., concur.