STRAUS V. FOXWORTH, 1911-NMSC-045, 16
N.M. 442, 117 P. 831 (S. Ct. 1911)
A. STRAUS, Appellant,
vs.
W. L. FOXWORTH, Appellee
SUPREME COURT OF NEW MEXICO
1911-NMSC-045, 16 N.M. 442, 117 P. 831
Appeal from the District Court for Quay
County, before E. R. Wright, Associate Justice.
1. A tax certificate issued under Laws 1899, Chapter 22,
Section 31, providing for the sale without a judgment of court, of property for
delinquent taxes for amounts less than twenty-five dollars, vests a title in
the purchaser which can be invalidated only on the grounds that the taxes,
penalties, interest and costs had been paid before the sale, or that the
property was not subject to tax, and not for irregularities in the proceedings
leading up to the sale, unless they are fraudulent or amount to jurisdictional
defects.
Reid & Hervey for Appellant.
Statutes authorizing the sale of property
for non-payment of taxes must be construed strictly in favor of the citizen. 36
Cyc. 1190; Laws 1899, chap. 22, sec. 25; Parker v. Overman, 18 How. 137; C. L.
1897, secs. 4079, 4080, 4084, 4091; Cooley on Taxation, 3 ed. 936; Games v.
Stiles, 14 Pet. 322; Martin v. Barbour, 34 Fed. Rep. 701; Rustin v. Merchants,
etc. Co., 23 Col. 351; Salinger v. Gunn, 61 Ark. 414; Martin v. Allard, 55 Ark.
218; Coit v. Wells, 2 Vt. 318; Bannon v. Barnes, 39 Fed. 895; Murray's Lessee
v. Improvement Co., 18 How. 276; Lufkin v. Galveston, 11 S. W. Rep. 340; McCready
v. Sexton, 29 Ia. 356; Treadwell v. Patterson, 51 Cal. 637; Huse v. Merrim, 2
Greenl. 375; Case v. Dean, 16 Mich. 12; Martin v. Barber, 140 U.S. 644; Cooley
on Taxation, 3 ed. 518; Marx v. Hanthorn, 148 U.S. 172; DeTreville v. Smalls,
98 U.S. 517; Keeley v. Sanders, 99 U.S. 441; 12 U.S. Statutes 422, 640; 2
Cooley on Taxation 899.
A tax deed can not be made conclusive
evidence of title in the grantee. Marx v. Hanthorn, 148 U.S. 172; Taylor v.
Deveaux, 100 Mich. 581; McKinnon v. Weston, 104 Mich. 642; Weeks v. Merkle, 6
Okla. 714; Wilson v. Wood, 61 Pac. Rep. 1045, Okla.; Kelly v. Ferrall, 20 Fed.
Rep. 364; Bannon v. Burns, 39 Fed. Rep. 892; McCready v. Sexton, 29 Iowa 356;
Railroad Co. v. Galvin, 85 Fed. Rep. 811; Cairo etc. R. Co. v. Parks, 32 Ark.
131; Little Rock etc. R. Co. v. Payne, 33 Ark. 816; Wampole v. Foote, 2 Dak. 1;
Dickerson v. Acosta, 15 Fla. 614; White v. Flynn, 23 Ind. 46; Corbin v. Hill,
21 Iowa 70; Powers v. Fuller, 30 Iowa 476; Taylor v. Miles, 5 Kas. 498;
Baumgardner v. Fowler, 82 Md. 631; Groesbeck v. Seeley, 13 Mich. 329; Case v.
Dean, 16 Mich. 12; Dawson v. Peter, 119 Mich. 274; Abbott v. Lindenbauer, 42
Mo. 162; Roth v. Gabert, 123 Mo. 29; Wright v. Cradlebaugh, 3 Nev. 341; Young
v. Beardsley, 11 Paige 493; East Kingston v. Fowle, 48 N. H. 57; Sheets v.
Paine, 86 N. W. Rep. 117, N. D.; Dever v. Cornwell, 86 N. W. Rep. 227, N. D.;
Strode v. Washer, 17 Or. 50; Mather v. Darst, 13 S. D. 75; Harness v. Cravens,
126 Mo. 233; Bettison v. Budd, 21 Ark. 578; Shimmin v. Inman, 26 Me. 332; Del
Castillo v. McConnico, 163 U.S. 674; Alvord v. Collin, 20 Pick. 418;
Workingman's Bank v. Lannes, 30 La. Ann. 871; Turpin v. Lemon, 187 U.S. 551;
Pierce v. Engelkemeier, 61 Pac. 1046, Okla.; Martin v. Barbour, 34 Fed. Rep.
701; Tracy v. Reed, 38 Fed. Rep. 69; Bannon v. Burns, 39 Fed. Rep. 892; Davis
v. Minge, 56 Ala. 121; Oliver v. Robinson, 58 Ala. 46; Radcliffe v. Scruggs, 46
Ark. 96; Townsend v. Martin, 55 Ark. 192; Cooper v. Freeman Lumber Co., 61 Ark.
36; Ramish v. Hartwell, 126 Cal. 443; Dickerson v. Acosta, 16 Fla. 614;
Manguiar v. Henry, 84 Ky. 1; Larson v. Dickey, 39 Neb. 463; Roberts v. First
Nat. Bank, 8 N. D. 504; Simpson v. Meyers, 197 Pa. St. 522; Salmer v. Lathrop,
10 S. D. 216; State v. Dugan, 105 Tenn. 245; Virginia Coal Co. v. Thomas, 97
Va. 527.
Where property is sold for more than is
due, whether the excess is due to an illegal levy or illegal penalties, and
costs, the officer has no jurisdiction to sell, and it is void notwithstanding
curative statutes. Lufkin v. City of Galveston, 11 S. W. Rep. 340; Treadwell v.
Patterson, 51 Cal. 637; Huse v. Merrim, 2 Greenl. 375; Case v. Dean, 16 Mich.
12; Eustis v. Henrietta, 91 Tex. 325; Alexander v. Gordon, 101 Fed. 91; Ensign
v. Barse, 107 N. Y. 329; Harper v. Rowe, 53 Cal. 233; Warden v. Brown, 98 Pac.
252, Cal.; Devoe v. Cornell, 10 N. D. 123.
Sale was void because it was made at a
time not authorized by statute. Redfield v. Parks, 132 U.S. 239; Coulton v.
Stafford, 56 Fed. 569; Rickett v. Knight, 16 S. D. 395; Rush v. Lewis &
Clark Co., 95 Pac. 836, Mont.; Hannerkratt v. Hamil, 10 Okla. 219; Magill v.
Martin, 14 Kas. 7; Dyke v. White, 17 Colo. 296; Laws 1899, chap. 22, sec. 23.
R. P. Barnes and Hawkins & Franklin
for Appellant, by special leave of court.
Curative statutes in tax legislation.
Cooley on Taxation, 297; Laws 1897, secs. 4092, 4101; Laws 1899, chap. 22;
Ontario Land Co. v. Yordy, 212 U.S. 152; Shipley, v. Gaffner, 93 Pac. 211,
Wash.; Keely v. Sanders, 99 U.S. 441; De Treville v. Smalls, 98 U.S. 517; Marx
v. Hanthorn, 148 U.S. 172; R. S. U. S., sec. 3224.
Statute of Limitations. Saranac Land
& Timber Co. v. Roberts, 177 U.S. 318; Turner v. New York, 168 U.S. 90;
Callahan v. Hurley, 93 U.S. 387.
Tax statutes must be construed strictly.
French v. Edwards, 13 Wall. 506; Lyon v. Alley, 130 U.S. 184; Rokendorff v.
Taylor, 4 Pet. 349; Stead v. Course, 4 Cranch 403; Thatcher v. Powell, 6 Wheat.
119; Early v. Doe, 15 How. 610; Slater v. Maxwell, 6 Wall. 268; Games v. Dunn,
14 Pet. 322; Marx v. Hanthorn, 148 U.S. 172; Moore v. Brown, 18 How. 414.
Harry H. McElroy, Reed Holloman, C. C.
Davidson and Dougherty & Griffith for Appellee.
In matters of taxation, the federal
courts will follow the rulings of the state courts. Bardon v. Land & River
Imp. Co., 157 U.S. 327; Ballard v. Hunter, 204 U.S. 241.
Due process of law. King v. Mullens, 171
U.S. 404; King v. West Virginia, 216 U.S. 92; Fay v. Cozer, 217 U.S. 456;
Saranac Land Co. v. Comptroller, 177 U.S. 318; Turner v. New York, 168 U.S. 90;
DeTreville v. Smalls, 98 U.S. 517; Keely v. Sanders, 99 U.S. 441; Sherry v.
McKinley, 99 U.S. 497; Springer v. U. S., 102 U.S. 586; Marx v. Hanthorn, 148
U.S. 184; Castillo v. McConnino, 168 U.S. 684; Witherspoon v. Duncan, 4 Wall.
210; Turpin v. Lemon, 187 U.S. 51; Spencer v. Merchant, 125 U.S. 345; Hiling v.
Kaw Valley Railway, 130 U.S. 559; Hagar v. Reclamation District, 111 U.S. 701;
Paulsen v. Portland, 149 U.S. 30; Martin v. Barber, 140 U.S. 644; Ontario Land
Co. v. Yordy, 212 U.S. 152; Bannon v. Burns, 39 Fed. 895; Marsh v. Fulton Co.,
10 Wall. 683; Railroad Co. v. Parks, 32 Ark. 131; Radcliffe v. Scruggs, 46 Ark.
96; Beggs v. Paine, 109 N. W. 327, N. D.; Gwyme v. Neiswander, 18 Ohio 400;
Allen v. Armstrong, 16 Iowa 508; Callahan v. Hurley, 93 U.S. 387.
Notice. Railroad v. Commonwealth, 33 L.
ed. U.S. 892; Laws 1899, chap. 22.
States as a general rule have the right
of determining the manner of levying and collecting taxes. Memphis Gaslight Co.
v. Shelly Co. Taxing Dis., 27 L. ed. U. S.; Witherspoon v. Duncan, 18 L. ed.
339; State v. Sponaugle, 43 L. R. A. 727; Railroad v. Kentucky, 29 L. ed. U.S.
414; Williams v. Supervisors, 122 U.S. 154; Keely v. Sanders, 99 U.S. 441;
DeTreville v. Small, 98 U.S. 517; Callahan v. Hurley, 93 U.S. 387; Castillo v.
McConnico, 168 U.S. 683; Springer v. U. S., 102 U.S. 594; Sherry v. McKinley,
et al., 99 U.S. 330; Carson v. Titlow, 80 Pac. 299; State v. Whittesey, 50 Pac.
119, Wash.; Ontario Land Co. v. Yordy, 212 U.S. 152; Trust Co. v. Wall, 106 N.
W. 160, Iowa; Sams v. King, 18 Fla. 557; Allen v. Armstrong, 16 Iowa 506; Rima
v. Cowan, 31 Iowa 125; Virdin v. Bowers, 55 Miss. 1; In re Douglas, 41 La. Ann.
768; Henderson v. Ellerman, 47 La. Ann. 314; Winning v. Eakin, 28 S. E. 757, W.
Va.; Moore v. Byrd, 23 S. E. 968; Turpin v. Lemon, 187 U.S. 551; Doremus v.
Cameron, 22 Atl. 802 (N. J.); In re Lake, 40 La. Ann. 142; McMullen v.
Anderson, 95 U.S. 37; Saranac Land & Timber Co. v. Roberts, 44 L. ed. 786.
Statute of Limitation. Cooley on Taxation
521; Turpin v. Lemon, 187 U.S. 51.
Construction of statute. New Lamp Chimney
Co. v. Ansonia Brass & Copper Co., 91 U.S. 656; Ontario Land Co. v. Yordy,
53 L. ed. 449; Castillo v. McConnico, 168 U.S. 683; 36 Cyc. 1128; Minnie v. U.
S., 13 Pet. 445; C. L. 1897, secs. 4022, 4100; 36 Cyc. 110; U. S. v.
Ninety-Nine Diamonds, 139 Fed. 961; Laws 1899, chap. 22; Blackwell v. Bank of
Albuquerque, 10 N.M. 561; Territory v. Perea, 6 N.M. 531.
Abbott, A. J. Mechem, J., having been of
counsel in the court below, did not participate.
{*446} STATEMENT OF
THE CASE.
{1} The plaintiff was the
owner of certain land in Quay County, title to which the defendant claimed to
have obtained through certain tax certificates, followed by a tax deed, all
given by the treasurer of said county. This {*447}
action was brought by the plaintiff against the defendant to remove the
cloud on his title created by said tax deed. In his complaint he set up certain
irregularities in the proceedings on which the sale for delinquent taxes, made
March 5th, 1906, was based, alleging failure to comply with provisions of law
bearing on the question of notice as to all but one, which was the sale of the
land for the amount claimed to be due of $ 4.02, whereas the actual amount
levied was $ 3.78. To the complaint the defendant demurred, alleging that the
statutes of New Mexico do not permit a title acquired through a tax certificate
issued under Section 31, ch. 22, Laws of 1899, to be attacked or invalidated
except on the ground that the taxes, penalties, interest and costs had been
paid before the sale, or that the property was not subject to the assessment,
and that neither of these two grounds was set up in the plaintiff's complaint.
The demurrer was sustained, the plaintiff elected to stand on his complaint and
a judgment of dismissal was entered, from which the plaintiff appealed to this
court.
{2} The provisions of law
which the appellee claims have the effect of limiting the right to attack tax
titles, as above stated, are found in Section 25 of the Act above named construed
in connection with other sections referred to in the opinion. Section 25 is as
follows: "It is hereby made the duty of every person, firm or corporation,
owning or having any interest, legal or equitable, in any real estate or other
property, in this territory, on the first day of March of any year, to see that
such property is properly listed for taxation on the assessment roll for such
year in the county in which the same is situated; and if such property is
described in the assessment roll and delinquent tax list for any year by such
description as will serve to identify the same, the sale of such property for
taxes as provided in this act shall not be void or set aside on account of any
error or irregularity in listing the same upon such roll or list either as to
the name or names of the owner or owners thereof, or by reason of its being
listed in the name of the wrong person; and no bill of review or other action
attacking the title to any property
{*448} sold
at tax sale in accordance with this act shall be entertained by any court, nor
shall such sale or title be invalidated by any proceedings except upon the
ground that the taxes, penalties, interest and costs, had been paid before the
sale, or that the property was not subject to taxation. In case any tract or
legal sub-division of real estate, be sold as hereinbefore provided, upon a
part of which the taxes had been paid, such sale and certificate shall
nevertheless vest a complete and perfect title in the purchaser and his assigns
to such portion of said tract or subdivision upon which the taxes had not been
paid."
{3} Counsel for the appellant
claim, in the first place, that Section 25, above quoted, should be restricted
in its application to errors and irregularities in listing property for
taxation, and was not meant to apply to defects in the assessment,
advertisement and sale of land for taxes. The fact that immediately before the
words which specifically limit the right of attack, there is a limitation of
the effect of irregularities in listing does not, we think, have the effect
claimed for it by the appellant. The argument for the opposite effect would be
stronger. So far as listing was concerned, it was not to be expected that
anything more would be said. The statement on that subject was complete.
Besides, the act in question is evidently meant to contain a system of taxation
practically complete in itself. The act consists of 34 sections; and while it
leaves some portions of the legislation previously in existence unrepealed
unless they are in conflict with Chapter 22, the reason for so doing is
manifest from the proviso in Section 34: "All acts or parts of acts in
conflict herewith, either general or special, are hereby repealed, and this act
shall take effect and be in force from and after its passage: Provided, that
the provisions of this act shall not affect or be applicable to taxes
heretofore assessed or which are delinquent at the date of the approval hereof,
except, that suit for the same may be brought and judgment thereon rendered in
the manner provided by this act, but the validity of such delinquent
{*449} taxes shall be determined by the law in
force at the time of making the assessment therefore. The time for the payment
of all taxes now delinquent is hereby extended until May 1, 1899, and when the
same may be in litigation at the date of the passage of this act until such
litigation shall be determined." In view, then, of the comprehensive
purpose of the act, of which the language last quoted leaves no doubt, it would
be a forced construction which should narrow the application of Section 25 to
errors in listing, leaving the much larger field of irregularities in
advertising, making sale, giving certificates of sale and tax deeds uncovered.
{4} It is claimed, too, that,
even if the limitation on attack found in Section 25 is not restricted to cases
of error in listing, yet by the words "sold at tax sale in accordance with
this act," it was meant to limit that restriction to those cases in which the
provisions for advertisement and sale contained in the act should be strictly
followed. We are satisfied, however, that it was meant by this provision to
afford deliverance from the evil of having tax sales held invalid for
irregularities which were not based on meritorious grounds, an evil which as a
matter of common knowledge had assumed such proportions not only in New Mexico,
but throughout the country, as seriously to interfere with the fair adjustment
of the burden of taxation. As pointed out by the Supreme Court of the United
States in De Treville v. Smalls, 98 U.S. 517, 25 L. Ed. 174, Blackwell in his
work on Tax Titles states that "of a thousand cases of tax sales in court
not twenty have been sustained." That the purpose of the act was what we have
suggested is further indicated, as it seems to us beyond question, by the
repetition in the act in various forms and connections of the declaration that
a tax title shall be good against all but really meritorious objections. In the
latter part of Section 23 it is provided that the judgment shall be
"conclusive except in cases where the taxes had been paid or the real
estate was not liable to the tax or assessment." In Section 25, after the
general statement already referred to, as if to make sure there should be no
escape from it, there is a provision that, if the taxes had been
{*450} paid on a portion of land sold,
nevertheless the sale and certificate shall vest a perfect title in the portion
on which the "taxes had not been paid." In Section 34 there are
provisions for mitigating what might be considered the rigors of the act
through leaving the validity of delinquent taxes to be determined by the law in
force when the assessment was made, and by extending the time of payment of
taxes then delinquent, or in litigation at the pass-sage of the act. This
measure of leniency toward defaults already made was superfluous, if no greater
degree of strictness was to be exercised toward defaults of the future. Bearing
in mind the familiar rule of statutory construction which gives to the
legislative intention controlling force, we are satisfied that the words
"in accordance with this act" -- not, it should be noticed, as having
perhaps some significance in accordance with the provisions of this act -- mean
no more than under or by authority of this act, and that the intention was
merely to limit the effect of Section 25 to cases coming under Chapter 22 as
distinguished from those to which the provisions of law left unrepealed by it
might apply.
{5} Still further, counsel
for the appellant contend that one of his reasons stated falls within one of
the grounds of attack permitted by the statute (chapter 22), and, that as the
tax levied was $ 3.78 and the sale was for $ 4.02, the land was not subject to
the tax for which the alleged sale was made. It is said in reply that the
difference between the two sums named would be covered by the interest and
expenses of sale which the law permits the county to add, and such, it seems
clear must have been the case. In Drennan v. Beierlein, 49 Mich. 272, 13 N.W.
587, Cooley, Jr., it was held, "in the absence of a clear showing to the
contrary, that the addition was lawfully made." But, even if it were not,
to hold that such a trivial defect invalidated the appellee's title, would be
to return to the old way, instead of following the new, in conformity to the
spirit and intention of the statute under consideration.
{6} This brings us to the
inquiry whether the legislature, having the will, had also the power to so
limit the right of attack on a tax title. It is not claimed for the appellee
{*451} that such a statutory limitation would
stand against fraud or lack of jurisdiction, but they do assert that the
irregularities set up in the complaint do not go to the jurisdiction, and there
is no claim of fraud made. The irregularities alleged are plainly
distinguishable from such as would defeat jurisdiction, as, for instance, that
there was no tax laid, or attempted to be laid, on the land in question.
Assuming, then, that there is no jurisdictional defect in the case, we have to
determine the question of absolute right involved.
{7} It is settled that the
owner of real estate on which a tax has been laid is not entitled as a matter
of right to have it sold to satisfy the tax. It may be forfeited without a
sale. King v. Mullins, 171 U.S. 404, 43 L. Ed. 214, 18 S. Ct. 925; King v. West
Virginia, 216 U.S. 92, 54 L. Ed. 396, 30 S. Ct. 225; Fay v. Crozer, 217 U.S.
455, 54 L. Ed. 837, 30 S. Ct. 568; State v. Sponaugle, 45 W. Va. 415, 43 L. R.
A. 727, 32 S.E. 283. And it has been held by the Supreme Court of the United
State, whose decisions are controlling on this court, that, when a sale to
collect a delinquent tax is provided for by statute, it may also be provided
that the title acquired by such sale shall not be invalidated for
irregularities merely, but only on such substantial grounds as that the land
was not subject to the tax, that the tax had been paid, or the land redeemed
from the sale in the manner provided by law. De Treville v. Smalls, 98 U.S.
517, 25 L. Ed. 174; Keely v. Sanders, 99 U.S. 441, 25 L. Ed. 327; Springer v.
United States, 102 U.S. 586, 26 L. Ed. 253.
{8} It is contended by the
appellee that the Supreme Court has, in Marx v. Hanthorn, 148 U.S. 172, 37 L.
Ed. 410, 13 S. Ct. 508, overruled the doctrine of the three cases last cited.
We do not so understand that decision, but accept rather the view of it
expressed by the same court in Castillo v. McConnico, 168 U.S. 674, 42 L. Ed.
622, 18 S. Ct. 229, wherein it is said: "The case of Marx v. Hanthorn, 148
U.S. 172, 37 L. Ed. 410, 13 S. Ct. 508, in no way conflicts with the foregoing
considerations. That case came to this court on appeal from a Circuit Court of
the United States, and its decision involved ascertaining the meaning of the
tax laws of the state as interpreted by the court of last resort thereof. In
performing this duty the court adopted and followed the construction given to
the tax laws of the state
{*452} by the
Supreme Court of the state whence the case came." It is also contended for
the appellant that, even if the certificate and deed given in pursuance of a
judgment under Section 23, of Chapter 22, is protected from attack as in that
section provided, yet the certificate and deed given without a judgment under
Section 31 should not be held entitled to that protection. In terms the statute
gives it the same standing that the certificate following a judgment has. The
reason for selling without judgment in any case in which the tax delinquent
does not exceed $ 25 is doubtless that for so small a tax the costs of
obtaining judgment would be disproportionate. Bearing in mind that, as we have
seen, it is not essential that there should be a sale by parity of reasoning
there need be no judgment.
{9} In reaching our
conclusion we have not been unmindful of the hardship which may sometimes come
upon owners of real estate through the enforcement of such a statute. But the
course open to such an owner should, with a very moderate degree of care on his
part, protect him from harm. He is presumed to know that his property has been
taxed, and the time at which it becomes subject to tax. He has the right of
appeal from the assessment to the county board of equalization, and from it to
the territorial board. Even if the land is sold, he has the right for three
years to redeem it, by paying the tax, interest, etc. The statute provides for
similar publication of notice in each case, and it can make no substantial
difference to the party delinquent that on a tax of $ 25 or more he is notified
as one of a body of delinquents that at a certain time judgment will be
rendered in court against the entire class, or that at a certain time and place
his property will be sold for a delinquent tax.
{10} Numerous decisions for
and against the view we adopt are to be found in the exhaustive briefs
submitted, but, as this decision must stand or fall with our interpretation of
what the Supreme Court of the United States has said on the subject, we think
it would be useless to go further into the examination of authorities here.
{11} The judgment of the
trial court is affirmed.