Opinion
No. 71-266 (Supreme Court No. 24150)
Decided December 14, 1971.
Trial court held holder of tax certificate issued following tax sale in 1900 had superior title to holder of tax deed issued following second tax sale in 1926. Holder of tax deed appealed.
Reversed
1. TAXATION — Tax Lien — Extinguished — Issuance — Tax Deed — Subsequent Sale. A tax lien held by virtue of a certificate issued as result of a tax sale is extinguished by the issuance of a tax deed by the county on a subsequent sale.
Error to the District Court of Pitkin County, Honorable James J. Carter, Judge.
Holland Hart, Robert L. VerSchure, Dennis M. Jackson, Kenneth D. Hubbard, for plaintiff in error.
John A. F. Wendt, for defendant in error Coriolanus Corporation.
This case was transferred from the Supreme Court pursuant to statute.
The above action was filed by plaintiff, Coriolanus Corporation, against the Board of County Commissioners of Pitkin County and Helen Zordel, as Treasurer of Pitkin County, to force her to assign to plaintiff certain tax sale certificates held by the county, including tax sale certificate No. 66 issued by the County Treasurer as a result of a tax sale in 1900. In a preliminary order, the trial court directed that persons claiming to be the present owners of land covered by the certificates sought to be assigned also be joined as parties defendant. Benedict was joined as one of these defendants, because he claimed to be the owner of land described in tax certificate No. 66, which certificate was held by Pitkin County Commissioners and which certificate the County Treasurer refused to assign to plaintiff upon tender of the balance due under the tax certificate.
Benedict filed an answer and counterclaim against the Board of County Commissioners and County Treasurer and crossclaimed against the plaintiff, alleging that he had quieted title to his property on December 8, 1950, against the Board of County Commissioners and the County Treasurer, and that the lien created by tax certificate No. 66 had been extinguished; and requested that the court declare certificate No. 66 void and deny plaintiff's request for an assignment of tax certificate No. 66 to it.
The evidence disclosed that there was a tax sale of property in 1900, which property was assessed to Martha J. Adair as shown in tax certificate No. 66, which certificate was held by the county at the time of trial. The real property which Benedict claimed to own, described in certificate No. 66, was again sold for taxes in 1926, for taxes assessed in 1925. A tax certificate was issued as a result of the 1926 sale and was assigned to one Fred Gagnon, who applied for and obtained a treasurer's deed to the property, dated February 4, 1941. In 1945, he conveyed the property to Benedict by quitclaim deed. Benedict quieted title to his property in himself and recorded the quiet title decree on December 8, 1950. In the quiet title decree, he had joined as defendants the Board of County Commissioners of the County of Pitkin County; Phillip J. Crosley, as County Treasurer of Pitkin County, Colorado; and Martha J. Adair, the person to whom the property had been assessed prior to the tax deed and the apparent record owner of the fee at the time the tax deed was issued. The decree quieted title in Benedict as against the claims of all of these defendants.
From 1941 to 1945, inclusive, taxes were paid by Fred Gagnon, and all subsequent taxes were paid by Benedict.
At the conclusion of the trial, the trial court ruled that the treasurer's deed was "void because it was based on a tax sale subsequent to 1900"; that the quiet title suit was ineffective to terminate the interest of the county; and that Benedict did not have sufficient title to enable him to redeem the property from the 1900 sale and that "the intervening application of plaintiff to purchase the pertinent tax certificate [No. 66 of 1900] must be preferred in this instance."
Benedict is the only party appealing the judgment of the trial court. He alleges that the trial court erred in making the above rulings. We agree.
The basic error made by the trial court was its ruling that the tax deed issued in 1941 was void because certificate No. 66 from the sale of 1900 was outstanding at the time.
[1] The basic rule is that a tax lien held by virtue of a certificate issued as result of sale is extinguished by the issuance of a tax deed by the county on a subsequent sale. The rule is well stated in Whitehead v. Desserich, 71 Colo. 327, 206 P. 384:
"The next assignment of error is that the court erred in not recognizing defendant's certificates of sale as giving him a perpetual lien which could not be destroyed by a subsequent sale. This ignores the rule that a tax sale cuts off the lien of any earlier levied tax. Bennett v. City County of Denver, 70 Colo. 77, 197 Pac. 768. Were the defendant's theory to be accepted, the state would, in many cases, be unable to collect its taxes by a tax sale, since the buyer must pay all back taxes, or redeem from all tax sales."
See also Harrison v. Everett, 135 Colo. 55, 308 P.2d 216; Newmyer v. Tax Service Corp., 87 Colo. 474, 289 P. 365; City of Boulder v. Plains Loan, Realty Investment Co., 75 Colo. 86, 224 P. 233; Bennett v. City and County of Denver, 70 Colo. 77, 197 P. 768.
Therefore, the tax lien held by the county by virtue of tax certificate No. 66 issued as result of the 1900 sale was extinguished by the execution and delivery of the tax deed in 1941. The quiet title decree did not extinguish the lien created by the tax certificate since at that time there was no lien to be extinguished. It had been extinguished by the execution and delivery of the 1941 tax deed.
The right to redeem and other matter raised on appeal need not be discussed herein as the above ruling is determinative of all the issues raised.
Judgment reversed with directions that the trial court enter a decree declaring tax certificate No. 66, issued as evidence of the tax sale of 1900, void; and further decreeing that the property owned by Benedict described in tax sale certificate No. 66 is free and clear of any lien imposed by virtue of said certificate.
JUDGE DWYER and JUDGE DUFFORD concur.