Opinion
No. 31043
Decided December 17, 1947.
Conservancy districts — Assessments — Lien not discharged in foreclosure proceeding — County treasurer made a party but failed to file answer — County treasurer only an instrumentality for collecting conservancy assessments — District not estopped from asserting assessment lien.
1. A conservancy district assessment lien is not discharged by the failure of the county treasurer to answer in a mortgage foreclosure action involving land charged with such lien, in which action the county treasurer was, although the conservancy district was not, made a party.
2. A county treasurer is only an instrumentality for the collection of conservancy assessments and is not such an agent of the conservancy district that his failure to set up the assessment liens of the conservancy district in a mortgage foreclosure action will estop the district from subsequently asserting such liens.
CERTIFIED by the Court of Appeals for Montgomery county.
This is an appeal from a judgment of the Court of Appeals affirming a judgment of the Court of Common Pleas sustaining demurrers filed respectively by defendants, treasurer of Montgomery county and the Miami Conservancy District, appellees herein, to the petition of plaintiff, Walter D. Shaw, appellant herein, in which he sought to restrain the treasurer from collecting certain assessments, claimed to be due the conservancy district, on real estate owned by plaintiff.
Plaintiff purchased such real estate at a mortgage foreclosure sale. In the foreclosure proceeding, the county treasurer was served personally, made a party defendant and directed to set up any claims he had for taxes or assessments. He failed to answer or set up any claims and a judgment by default was entered against him. The conservancy district was not made a party to the foreclosure proceeding.
Subsequently, the county treasurer claimed to have an accumulation of assessments, due the conservancy district, against such real estate, and threatened to enforce them. The plaintiff, feeling this constituted a cloud on his title, brought this suit for injunction, contending that such assessments were destroyed by the foreclosure sale and praying that the county treasurer be restrained from collecting such assessments, that the treasurer be required to remove them from his records, and that such assessments be cancelled.
The Court of Appeals affirmed the judgment of the trial court, on the grounds that such assessments were liens on the real estate until paid and were not destroyed by the mortgage foreclosure action.
The judges of the Court of Appeals, finding that the judgment, upon which they had agreed, to be in conflict with the judgment of the Court of Appeals of the First Appellate District in the case of Hilling v. City of Cincinnati, 54 Ohio App. 293, 7 N.E.2d 1, certified the record to this court for review and final determination.
Messrs. Marshall, Harlan Smith, for appellant.
Mr. Mathias H. Heck, prosecuting attorney, and Mr. Albert J. Dwyer, for appellee Treasurer of Montgomery county.
Mr. Alfred Swift Frank, for appellee Miami Conservancy District.
Are the conservancy assessments levied under authority of the Conservancy Act of Ohio, Sections 6828-1 to 6828-79, inclusive, General Code, a lien destroyed by a mortgage foreclosure action wherein the county treasurer to whom the assessments have been certified for collection is made a party, and wherein the petition prayed that defendant treasurer "be required to answer and set up any claim that he might have by virtue of unpaid taxes and assessments against the premises involved in said litigation," where the treasurer fails to set up any claims and allows a default judgment to be taken against him?
The Conservancy Act of Ohio was enacted under authority of Section 36, Article II of the Constitution of Ohio, adopted in 1912, which section provides that "laws may be passed * * * to provide for the conservation of the natural resources of the state, including streams, lakes, submerged and swamp lands and the development and regulation of water power and the formation of drainage and conservation districts * * *."
Conservancy districts are political subdivisions of the state; their functions are essentially those of the state, an exercise of part of the sovereign power for the welfare of the people. These districts are created and governed solely under the Conservancy Act of Ohio.
Section 6828-76, General Code, reads as follows:
"All acts or parts of acts conflicting in any way with any of the provisions of this act, in regard to improvements of this or a similar character, or regulating or limiting power of taxation or assessment, or otherwise interfering with the execution of this law according to its terms, are hereby declared inoperative and ineffective as to this act, as if they did not exist. But all such laws and parts of laws shall not be in any other way affected by this law. This act shall not repeal the act passed April 10, 1913, and appoved [approved] April 12, 1913, (volume 103, page 141, Ohio Laws), but it shall be an additional remedy."
It clearly appears from the above section that it was the intent of the General Assembly that conservancy districts should be controlled solely by the Conservancy Act of Ohio, and we must, therefore, confine our consideration to such act in order to determine the status of conservancy assessments.
The Conservancy Act of Ohio among other things authorizes the districts to levy assessments upon property in the district. It further provides that conservancy assessments are, after certification, a lien upon the property until paid. Section 6828-53, General Code, which creates this lien, reads in part as follows:
"All conservancy assessments and taxes provided for in this chapter, together with all penalties for default in payment of the same, all costs in collecting the same, including a reasonable attorney's fee, to be fixed by the court and taxed as costs in the action brought to enforce payment, shall, from date of filing the certificate herein described in the office of the auditor for the county wherein the lands and properties or public corporations are situate, until paid, constitute a lien, to which only the lien of the state for general state, county, city, village, school and road taxes shall be paramount, upon all the lands and other property or public corporation against which such taxes shall be levied as is provided in this chapter." (Italics ours.)
The language of the above section is clear and unequivocal, and makes the lien of the assessments of a conservancy district, like the lien of the state for taxes, effective until paid, and secondary only to the state's paramount lien for taxes.
In the case of Grafton v. Mong, Aud., 134 Ohio St. 416, 17 N.E.2d 649, the plaintiff purchased land in Ohio, at a judicial sale, and paid to the sheriff the purchase price of the land upon delivery of the deed therefor. In the order confirming the sale, the court directed payment of the court costs and of the taxes which were then a lien on the real estate involved, and further directed the sheriff to withhold from the proceeds of the sale a sum sufficient for that purpose. Such taxes were not paid by the sheriff and were later placed upon the tax duplicate and certified for collection. Plaintiff contended that such certification constituted a cloud on his title to the premises purchased. In deciding that case, this court said on page 418:
"In the determination of this case it is necessary to recognize the plain language of Section 5671, General Code, passed in furtherance of the public interest, and reading:
" 'The lien of the state for taxes levied for all purposes, in each year, shall attach to all real property subject to such taxes on the day preceding the second Monday of April, annually, and continue until such taxes, with any penalties accruing thereon, are paid * * *.' (Italics ours.)
"Therefore, in the present case we have a situation where the court made an order that a part of the proceeds from a judicial sale of real estate, in the hands of the sheriff, should be applied by him to the payment of taxes. For some reason, undisclosed by the petition, he failed to comply with the order. Retention of the money by the sheriff was not payment to the treasurer, the official designated by law to receive tax moneys. The treasurer never got the money and, by the express terms of Section 5671, General Code, taxes continue a lien upon real property until paid."
By the express provisions of Section 6828-53, General Code, conservancy assessments remain a lien until paid.
The plaintiff contends that since the treasurer was made a party to the foreclosure action, the conservancy district is estopped from asserting its lien, on the theory that the treasurer was the agent of the district. It is the opinion of this court that by reason of the express language contained in Section 6828-53, General Code, neither the treasurer nor the conservancy district was a necessary party to the foreclosure action, and no act of the treasurer would destroy the lien of the conservancy district for its assessments. The treasurer, although he has a statutory duty to collect these assessments, is not such an agent of the conservancy district that his default would bind the conservancy district or destroy its lien.
Since we are of the opinion that plaintiff's petition does not state a cause of action against the county treasurer and the Miami Conservancy District, and that the courts below were correct in so holding, the judgment of the Court of Appeals is affirmed.
Judgment affirmed.
WEYGANDT, C.J., TURNER, MATTHIAS, HART, ZIMMERMAN and STEWART, JJ., concur.