Opinion
File No. 6947
Opinion filed December 26, 1944. Rehearing denied January 3, 1945
Appeal from the District Court of Ward County, Hon. A.J. Gronna, J.
Affirmed.
Alvin C. Strutz, Attorney General, and C.E. Brace, Assistant Attorney General, for appellant.
A county is strictly a political corporation. It is not designed for pecuniary profit, nor has it any powers but such as pertain to its strict municipal and public character. Treadway v. Schnauber, 1 Dak 236, 46 N.W. 464.
Counties are political subdivisions of the state. They are quasi corporations through which the state functions. Hadler v. North West Agri. Live Stock Fair Asso. 61 N.D. 647, 239 N.W. 736; Sherman v. Shobe, 94 Tex 126, 58 S.W. 949, 86 Am St Rep 825; Ward County v. Balerud, 72 N.D. 173, 5 N.W.2d 425; 20 CJS 753-5; Ætna Casualty S. Co. v. Bramwell, 12 F.2d 307.
Laws or rules governing private corporations do not apply to counties. Osborne County v. Osborne, 104 Kan. 671, 180 P. 233.
A county is not a public corporation as is a city or village. State ex rel. Alexander v. Oviatt, 4 Ohio NPNS 481; Metcalfe County Ct. v. Scott, 8 Ky Ops 628.
A municipality is merely a department of the state, a political subdivision created as a convenient agency for the exercise of such governmental powers as may be entrusted to it. Trenton v. New Jersey, 262 U.S. 182, 67 L ed 937, 43 S Ct 534, 29 ALR 1471; Monaghan v. Armitage, ___ Minn ___, 15 N.W.2d 241.
The proceeds of a tax sale are applied in the discharge of delinquent taxes against the property for which the land was sold, and of interest, costs and penalties, in the manner and order directed by statute. Any surplus remaining after the payment of the taxes, interest, costs and penalties must ordinarily be paid over to the land owner. 51 Am Jur 897; United States v. Lawton, 110 U.S. 146, 28 L ed 100, 3 S Ct 545.
A tax on real estate in its nature is not a debt but a monetary burden for the support of the government laid upon the owner and secured by a lien upon the real estate. Johnson v. Revere Building, 276 Mass. 546, 177 N.E. 577; Sapulpa v. Land, 101 Okla. 22, 223 P. 640; 2 Desty, Taxation, 732.
A tax lien is statutory. At common law there was no lien. . . . The purpose of granting the lien is to allow the land to be taken or sold for non-payment of taxes. Cassidy v. Aroostook Hotel, ___ Me ___, 186 A. 665.
Property which is acquired by the state in its sovereign capacity is thereupon absolved and freed of a further liability for the taxes previously assessed against it and a subsequent sale thereof for such taxes is void. State v. Locke, 29 N.M. 148, 219 P. 790; Gassaway v. Seattle, 52 Wn. 444, 100 P. 991; Ricks v. Baskett, 68 Miss. 250, 8 So. 514; Smith v. Santa Monica, 162 Cal. 221, 121 P. 920.
General tax acts of a state are never without the clearest words, held to include its own property, or that of its municipal corporations, although not in terms exempted from taxation. State ex rel. Hoover v. Minidoka County, 50 Idaho 419, 298 P. 366; State v. Divide County, 68 N.D. 708, 283 N.W. 184.
Joseph J. Funke, States Attorney, and B.A. Dickinson, Assistant States Attorney, for respondents.
Counties are political subdivisions of the state. They are quasi corporations through which the state itself functions. Hadler v. North West Agri. Live Stock Fair Asso. 61 N.D. 647, 239 N.W. 736.
A county is a legal entity that may contract, and may sue and be sued. Ward County v. Balerud, 72 N.D. 173, 5 N.W.2d 425.
The lien for taxes is a lien of the state, and the state, through this lien, does not impair the lien which it already holds by reason of its mortgage. State v. Divide County, 68 N.D. 708, 283 N.W. 184.
Property which is acquired by the state in its sovereign capacity is thereupon absolved and freed of further liability for the taxes previously assessed against it and a subsequent sale thereof for such taxes is void. State v. Locke (NM) 219 P. 790; State v. Sheridan County, 72 N.D. 254, 6 N.W.2d 51.
This is an appeal from an order sustaining defendant's demurrer to plaintiff's complaint. The plaintiff seeks to quiet title to certain real estate situated in Ward County. The action is directed at liens for taxes levied for the years 1934 to 1938, inclusive, which are evidenced by tax certificates held by Ward County.
The complaint discloses that on December 1, 1919 the State of North Dakota, as trustee for the Permanent School Fund, took a mortgage on the premises in question from the then record owner. The validity and priority of the mortgage is conceded by the demurrer. It further appears from the complaint that the mortgage became in default and that the state instead of foreclosing it took a quit-claim deed from the owner on November 7, 1938. The deed was recorded shortly thereafter. It was taken by authority of and pursuant to the provisions of chap. 254, ND Sess Laws 1935.
The one issue is whether the deed to the state extinguished the tax liens held by the county. They are represented by certificates of tax sale which at the time of the commencement of the action had not yet ripened into a tax title.
The appellant contends that the acquisition of title by the state extinguishes the liens for taxes held by the county. Its counsel has ably briefed that point by citation of general authority. However, this authority does not govern this case and in fact is not in point. The question before us is purely one of statutory construction. We are dealing with a specific statute under which the state is permitted to acquire title to property upon which it has a mortgage, by direct conveyance from the owner. It is chap 254, ND Sess. Laws 1935 (Rev Code 1943, § 15-0314). We set forth and construed this statute in State v. Sheridan County, 72 N.D. 254, 6 N.W.2d 51, wherein we said:
"The statute, construed as a whole, clearly evidences a legislative intention that a deed taken pursuant to its provisions shall affect only the title, interest, and rights of the grantor in the deed, and does not affect any rights, estates, or liens subsequent or inferior to the mortgage held by the state. The object of the statute was to confer authority upon the Board of University and School Lands in any case where a mortgage is in default and foreclosure thereof is deemed advisable to accept from the owner of the land a deed of conveyance of the mortgaged land in lieu of foreclosure. The statute does not give to the deed of conveyance from the owner of the land the effect of a sheriff's deed, except as to the grantor. As to him the deed of conveyance operates to `extinguish all title, interest and right of redemption,' and it has the same legal effect as if it had been executed pursuant to a sale under a foreclosure of the mortgage by action in which the grantor was a party and duly served with process. But as to other persons the deed has no more effect than a deed would have that was executed pursuant to a sale under a foreclosure by action in which they were not made parties."
The only difference between the Sheridan County Case and the one at Bar is that in the former the tax liens had ripened into a tax title while in this case the liens were evidenced by tax certificates held and owned by the county.
A county is a creature of statute. It is a body corporate for civil and political purposes. ND Comp. Laws 1913, § 3250 (Rev. Code 1943, § 11-1001). It may sue and be sued, acquire and dispose of property and otherwise function in a corporate capacity as empowered by the Legislature within constitutional limitations. It may thus acquire rights and property as against the state. The tax liens in this case were paramount to the rights of the owner and inferior to the mortgage of the state. State v. Divide County, 68 N.D. 708, 283 N.W. 184. Chapter 254, supra, authorized the state to take a deed to the land from the owner which "shall extinguish all title, interest, and right of redemption of the grantor of said deed, but shall not extinguish the mortgage lien thereon."
The construction which we placed on the statute in the Sheridan County Case is equally applicable here. The deed transferred title from the owner to the state subject to all liens including those evidenced by the county's tax certificates. Had the Legislature intended otherwise it could easily have so specified.
The order sustaining the demurrer is affirmed.
CHRISTIANSON, BURR, NUESSLE, and BURKE, JJ., concur.