Opinion
No. 32765.
June 7, 1937.
1. TAXATION.
Under statutes making title acquired under municipal tax sale subservient to that acquired under sale for state and county taxes and giving municipality which purchased at its own sale right to redeem from state and county taxes, city could not acquire title by tax sale while property was charged with state and county taxes, and hence could not claim title as against purchaser from state because city purchased at sale for city taxes one day before state purchased at sale for state and county taxes (Code 1930, sections 2588, 2589).
2. TAXATION.
Under act providing for continuance of special municipal benefit assessment lien after sale of land subject to lien to state, and resale, provision thereof that act should not affect claim or right arising prior to adoption of act did not make act inapplicable to resale by state, after adoption of act, of land purchased prior thereto, since only right or claim affected was that of state, which was benefitted by continuance of lien of its governmental agency (Laws 1936, chapter 174, sections 17, 33).
3. TAXATION.
Where land was sold to city for city taxes, including special municipal benefit assessment, and, one day later, to state for state and county taxes, and redemption period expired, city's claim was inchoate, under statutes, and became worthless, and hence city's foreclosure of assessment lien did not extinguish lien, but, under other statutes, lien was effective on resale by state (Code 1930, sections 2588, 2589; Laws 1936, chapter 174, sections 17, 33).
APPEAL from the chancery court of Hinds county. HON. V.J. STRICKER, Chancellor.
W.E. Morse, of Jackson, for appellant.
The property having sold to the state on April 5, 1932, and having sold to the city of April 4, 1932, the title vests in the city one day before it would in the state and the city would, therefore, be the owner of the property.
Alvis v. Hicks, 150 Miss. 306, 116 So. 612.
The case of Laurel v. Weems, 100 Miss. 335, 56 So. 451, was a case where the municipality acquired title to a piece of property after the lien of the state and county had attached thereto. The taxes were not paid and the property sold for taxes and Weems bought the title and after the period of redemption had expired, he filed suit to confirm his title and the court held that, as soon as the municipality acquired its title, the lien of the state automatically was cancelled. The case of Alvis v. Hicks, supra, holds that where the state acquired its title by purchase, tax sale or what not, the property automatically becomes exempt from state and county taxes and, as the tax is only a lien against the property, it is automatically cancelled. That is what happened in this case. The lien of the state was cancelled as of the 4th day of April, 1935.
The state, the sovereign, having sold the land according to chapter 174 of the Laws of the State of Mississippi of 1936, recognizes a lien of the City of Jackson therefor. The patent in this case states that it was sold under and by virtue of House Bill 275 of the Legislature of the State of Mississippi of 1936, which was chapter 174 of the Laws of 1936.
Carrier Lbr. Co. v. Quitman County, 125 So. 416; Homer v. Panola-Quitman Drainage District, 151 So. 154.
What the Legislature could have authorized to have been done in the first instance, they can ratify. This is especially true with reference to municipalities.
City of McComb v. Barron, 112 So. 875; Barron v. City of McComb, 141 So. 765.
The State of Mississippi, recognizing the position of the less fortunate taxing subdivisions, stated that they would recognize these liens. They so provided in section 17 of chapter 174 of the Laws of 1936. All of the liens were not exhausted. Each installment stands on its own bottom as a lien. If the court did hold that the city was not entitled to recover for the installments due since 1931, they should be entitled to recover for installments that were due after 1931. And certainly the court was in error in holding that recovery could not be made after the property was redeemed from the state. The appellee takes the position that by virtue of the state having acquired title to a tax sale prior to the enactment of chapter 174 of the Laws of 1936, that the municipality lost entirely its special assessment lien and that they take the property free from all encumbrances. If that is true, then the state did not mean anything when they sold the land under their patent and expressly referred to House Bill 275, which is chapter 174 of the Laws of 1936. The municipality takes the position that the state had the right to say on what terms it would sell the property, even though the property was acquired by the state prior to the enactment of chapter 174 of the Laws of 1936. In other words, the owner of the property has the right to impose limitations on the purchaser. The purchaser does not have to take it, but if he takes it, he takes it subject to the conditions laid down by the seller. In this case the seller expressly stated that this land sold subject to this act of the Legislature and the act states that where the state has acquired property against which there is a lien for special improvement, that the same is not to be abated, but shall remain in abeyance and whenever it is purchased from the state, that the same passes to the owner subject to the lien for special improvements. Howie, Howie McGowan, of Jackson, for appellee.
This property was subject to a lien for 1931 taxes, both to the State of Mississippi and to the City of Jackson. They both began their sales on the 4th day of April as the law directs. Section 3249, Code of 1930, provides that if the sale cannot be completed on the day it is begun, it shall be adjourned from day to day until it is completed.
It can reasonably be inferred that the sheriff and tax collector of Hinds county found it a physical impossibility to conduct all the sales on opening day, and he merely adjourned over until working hours of the next day.
The court has granted to the municipalities an undoubted dispensation in holding that matured titles procured by them before the state makes a sale for taxes will discharge a pending state lien. It would be most unreasonable to extend this to the extreme degree as proposed by appellant here.
The Legislature at its 1936 session undertook to revise completely chapter 153, Code of 1930, which is entitled "Public Lands." Among other things, there appears for the first time section 17 of the said chapter 174. This act was approved on March 26, 1936. The lands here involved became liable to the state of Mississippi for an ad valorem tax on the first day of January 1931. On the 5th day of April 1932 the land was sold to the state of Mississippi for the said tax. By virtue of the act extending the redemption of lands, this title matured in the State of Mississippi on the 5th day of April 1935, approximately one year before the act here considered became a law.
The lands were purchased from the state of Mississippi by appellee's assignor on the 6th day of June 1936, shortly after this law went into effect. In other words, the property sold to the state approximately four years before the act was passed and matured in the state approximately one year before the act was passed.
The act provides that when land is situated in a municipality and is subject to any special municipal benefit assessment which is secured by a lien on the land, such lien shall not be abated or cancelled on account of the sale of such land to the state for delinquent taxes. Now the only one of the qualifications set out in the act which would attach to this parcel of land is that it is situated in a municipality. That is all. At the time of the passage of this act this land was not subject to any special municipal benefit assessment, because it had sold to the state four years before the act was passed, and had matured in the state one year before the act was passed, lacking ten days. There was no lien on the land because the land was the property of the state of Mississippi. The state owned this land just as fully and completely as it owns the Capitol Building and grounds, the farm at Parchman, or any other lands.
The act has no reference to lands held or owned by the state of Mississippi. It has no reference to lands owned and held by any one by virtue of a former sale. Considering the language and tenses used in the statute no such intent could be given to the statute as is proposed by appellant except by arbitrarily imposing the same thereon.
Appellee respectfully submits that the state did not, by the language used in this statute, limit or restrict or impose any qualifications upon the title to lands then owned by it.
Appellant's contention that the appellee bought this land subject to each and every condition or provision that might have been mentioned or set forth in chapter 174, Laws of 1936, and hence subject to the provisions as set forth in the section relied upon, is without merit.
There is another reason why there was no paving lien or special assessment lien against these lands at the time they were purchased by appellee. That is because the lien that once existed against the said land was completely extinguished and obliterated by the City of Jackson itself on the 4th day of April, 1932. It is elemental that a lien is forever extinguished by a foreclosure. The pleadings in this case and all the proof show that the City of Jackson proceeded to sell the land to itself on the 4th day of April 1932, for the paving lien and that on the 18th day of September, 1933, the City of Jackson sold the land to itself for an ad valorem tax. A foreclosure worked a complete extinguishment of a lien.
37 C.J., sec. 58; Howie v. Panola-Quitman Drainage District, 151 So. 154.
Statutes are always presumed to be intended to operate prospectively and should never be construed as having a retroactive effect unless their terms clearly show a legislative intention that they should so operate.
New England Mortgage Security Co. v. Board of Revenue, 81 Ala. 110, 1 So. 30; McCarty v. Harris, 23 Fla. 508, 2 So. 819; Cassard v. Tracey, 52 La. Ann. 835, 27 So. 368, 49 L.R.A. 272; Richards v. City Lbr. Co., 101 Miss. 678, 57 So. 977.
If the court should hold that the statute, section 17, chapter 174 of the Laws of 1936, has a retroactive effect the result would be that thereby a mortgage, lien or encumbrance on many thousands of dollars would be fastened to and imposed upon lands owned in fee simple by the State at the time the act was passed. This would plainly be in derogation of the state's sovereignty.
Under the decisions of our court a statute in derogation of the State's sovereignty must be strictly construed.
Potter v. Fidelity Deposit Co., 101 Miss. 823, 58 So. 713; Robertson v. Miller, 144 Miss. 614, 109 So. 900; Power v. Calvert, 112 Miss. 319, 73 So. 51; Adams v. Tonella, 14 So. 17; Bank of Mississippi v. Duncan Marshall, 56 Miss. 166.
The statute here involved undoubtedly falls within that group of statutes which our decisions have determined must be strictly construed. The appellee respectfully submits that a retroactive effect cannot be reasonably given to the statute here under discussion.
We conclude by submitting that the State in this instance evidently took perfect title to this land when it sold the same to itself on the 5th of April 1932, and that the title matured and became absolute on the 5th of April, 1935, and that the statute we have under consideration, section 17, chapter 174 of the Session Laws of 1936, does not impose any condition, limitation or restriction upon the title to the lands owned outright by the state of Mississippi at the time the act was passed. The statute plainly has reference to future sales. Every word, phrase and the entire intendment of the act is in the future. The act looks only to the future.
Appellee filed his bill against the appellant in the chancery court of Hinds county to quiet the title claimed by him to certain lots in the City of Jackson. The clause was heard on bill, answer, and proofs, resulting in a decree in appellee's favor. From that decree the city appeals.
The material facts are undisputed. The city held against the lots in question a lien for a certain municipal benefit assessment, payable in installments covering a period of several years. The owner of the lots defaulted in the payment of the 1931 installment, also in the payment of both state and municipal ad valorem taxes assessed against the property that year. On April 4, 1932, the sale of lands for their delinquent state, county, and municipal taxes for the year 1931 was held. The property involved was purchased by the city at its sale. The sale for state and county taxes was not completed on that day, and for that reason continued the next day, the 5th of April, when it was sold and purchased by the state. The period of redemption had been extended to a period of three years, therefore the state's title matured on the 5th day of April, 1935. The city contends that its title matured a day earlier than the state's because it had purchased the property a day earlier.
Under sections 2588 and 2589, Code of 1930, the city could not acquire title by tax sale while the property was charged with the state and county taxes. The last clause of the latter section provides that the title acquired under municipal sale shall be subservient to that acquired under sale for state and county taxes; and the first section provides that where the municipality purchases at its own tax sales it shall have the right to redeem from state and county tax sales.
Alvis v. Hicks, 150 Miss. 306, 116 So. 612, is referred to as supporting the city's contention. That case is not in point. There the court held that where the tax title of a municipality had become perfect the property was not subject to state and county taxes. That principle has nothing to do with this case. Here, when the state purchased, the municipality had no title and the rights it did acquire by its purchase were entirely subservient to those of the state.
The city contends that the court erred in quieting appellee's title as to the municipal special assessment against the property. Section 17, of chapter 174, Laws of 1936, provides, among other things, that, where land in a municipality is subject to special municipal benefit assessment, secured by a lien on the land, such lien shall not be abated or canceled on account of the sale of the land to the state for delinquent taxes, but such lien shall be held in abeyance during the period the property is owned by the state, and immediately upon the title to the state passing from it by virtue of a sale such lien shall again become effective.
Appellee purchased from the state after this statute was adopted; and contends (1) that the statute has no application because it was prospective and not retroactive in its effect — that it applied to future tax sales, not to past tax sales; (2) that the tax sale to the city for the special assessment extinguished the lien for the payment of the assessment, therefore there was no lien to revive. The first proposition was involved and disposed of in the City of Biloxi v. R.J. Lowery (Miss.) 175 So. 200, in which a suggestion of error was filed and overruled, the opinion overruling it goes down with this case. We will add this, however, to what was said in that case. Section 33 of the act is the reliance; it provides that nothing in it shall affect any claim, right, or remedy which arose previous to the adoption of the act, but that such claims, rights, and remedies shall remain in full force and effect unless otherwise provided by the act. Under section 17 the only right or claim affected by the act is that of the state, and the effect is not prejudicial to the state but rather beneficial. Municipalities are governmental agencies of the state; they exercise part of the state's sovereignty. Many of them had issued special benefit assessment bonds. One of the objects of section 17 was to some extent to insure the payment of these bonds. The state lost nothing by adding to the price of its lands these benefit assessments.
The principle relied on that the foreclosure of a lien extinguishes the lien has no application here, because by the city's foreclosure and purchase it received nothing except an inchoate title that was entirely subservient to the rights of the state; the state's title became perfect and the city's inchoate claim became worthless. It turned out, therefore, that nothing was sold and nothing was purchased at the sale.
We do not think there is any merit in either one of these contentions.
Reversed and remanded.
I concur, with some doubt as to whether the sale by the city for special improvements did not extinguish the lien to that extent, but I have decided that the purpose of section 17, chapter 174, Laws of 1936, is to burden the sale from the state with the amount of the money due to the city for special improvements. In my view, it is a just and proper burden on the land sold by the state after the passage of this act, as a condition of sale.
In my judgment, there is no constitutional provision which prevents the state from imposing such conditions as it sees proper in making sales of its own property.
I do not agree that the city received nothing by the sale; by the sale for special improvements, the city secured an imperfect title which would become perfect after it paid off the state's claims, or redeemed the land from the sale to the state within the statutory period. If the statute in favor of its own sale against the owner makes it perfect, it would get a complete title. In other words, it would have all the rights had it followed up the conditions given it by the law to secure full title to the property.
The fact that it became worthless by the state's title maturing did not affect its validity at the time of the sale.