Opinion
No. 30239.
November 28, 1932.
1. MUNICIPAL CORPORATIONS.
Purchaser at city's ad valorem tax sale takes title subject to the city's lien for special improvement assessment installments (Code 1906, section 3428; Laws 1924, chapter 194, section 6).
2. MUNICIPAL CORPORATIONS.
Municipalities have no powers except those delegated to them by state.
3. MUNICIPAL CORPORATIONS.
Statutes construed as not freeing title acquired at city's sale for ad valorem taxes from lien for special improvement assessment do not violate constitutional provision respecting laws exempting property from taxation (Laws 1924, chapter 194, section 6; Code 1906, section 3428; Const. 1890, section 90, par. (h)).
4. TAXATION.
Statutes construed as not freeing title acquired at city's sale for ad valorem taxes from lien for special improvement assessment do not violate constitutional provision requiring uniform and equal taxation (Code 1906, section 3428; Laws 1924, chapter 194, section 6; Const. 1890, section 112).
5. EQUITY.
Equity follows law in allowing city to maintain paramount lien for special improvements against purchaser at ad valorem tax sale (Code 1906, section 3428; Laws 1924, chapter 194, section 6).
APPEAL from chancery court of Hinds county. HON. V.J. STRICKER, Chancellor.
Howie Howie, of Jackson, for appellant.
Under our scheme of taxation the statutes provide that a tax deed shall vest the purchaser with the immediate right of possession to the land sold for taxes.
Section 3273, Code of 1930.
The municipal authorities of the City of Jackson were vested with the same right to sell property for taxes due to the city and make conveyances to the purchasers thereof with the same force and effect as deeds from the county tax collector, except that a sale by the city would be subordinate to a sale of the same year by the county.
Section 3428, Code of 1906.
Taxes, both state and county, assessed upon lands or personal property, shall bind the same, and be entitled to preference over all judgments, executions, encumbrances, or liens, whensoever created; and all taxes assessed shall be a lien upon and bind the property assessed, from the first day of January of the year in which the assessment shall be made; and no property shall be exempt from distress and sale for taxes.
Section 3120, Code of 1930.
Our statute uses the words "a perfect title." The word "perfect" is absolute and unequivocal in meaning. When a situation arises where a title is inferior to a lien or encumbrance, or is subject to charges or defects, or a superior interest is vested in some other party, then it ceases to be perfect.
The statute vested the appellant with a perfect title under his tax deed. In order to vest him with a perfect title all other liens and claims of the City of Jackson were cancelled and obliterated.
It is held in most jurisdictions that the title conveyed by a sale for nonpayment of taxes is not merely the title of the person who has been assessed for the taxes and had neglected to pay them, but a new and paramount title to the land in fee simple absolute created by an independent grant from the sovereign and free from all equities and encumbrances existing prior to the sale upon the title of the previous owner. Under this view the sale extinguishes all prior encumbrances on the land or interests in it, though held by persons who were not liable for the tax or in default for not paying it, such as the lien of pre-existing mortgages, and judgments, landlord's liens and inchoate rights of dower.
26 R.C.L. 401; Franklin Securities Co. v. Clay, 293 P. 529; Lucas v. Purdy, 120 N.W. 1063; McMillian v. Tacoma, 26 Wn. 358, 67 P. 68; City of Ballars v. Way, 74 P. 1067; Dougherty v. Henarie, 47 Cal. 9; Bennett v. Denver, Colo., 197 P. 768; Maryland Realty Co. v. City of Tacoma, 209 P. 1; Collins v. City of Spokane, 212 P. 150; Loveless v. City of Chehalis, 233 P. 301; City of Tacoma v. Fletcher Realty Co., 264 P. 997; State v. Jefferies, 270 P. 638; White v. Thomas, 98 N.W. 101; Clark v. Zaleski, 253 Ill. 63; Studley v. Luse, 173 P. 1182.
Where the statute makes the state taxes a superior lien to municipal taxes and local assessments, or where both classes of taxes are to be collected in the same manner and by the same proceedings, those of the latter class will be cut off and their lien extinguished by a sale for state taxes in which the local taxes or assessments might have been included.
37 Cyc. 1478.
The holding of the court below is in violation of sections 90 and 112 of the Constitution itself.
The City of Jackson cannot be heard in equity to assert any claim to defeat its own deed.
The ad valorem taxes were a part of the claims held by the city and a sale for that wiped out all claims.
42 C.J. 245, 246; 41 C.J. 892.
One holding several liens upon the same property, and so causing the same to be sold in satisfaction of one of these liens without having secured in the foreclosure decree any protection for the preservation of the other lien, cannot maintain a subsequent suit to foreclose such other lien, and the purchaser at the sale took the property discharged of the other lien. The doctrine of these cases it seems should apply to tax liens.
State v. Liles, 212 S.W. 517.
W.E. Morse, of Jackson, for appellee.
The governing authorities shall by resolution, approve and confirm all assessments as finally fixed and adjusted at said hearing and such assessments shall, from the date of such confirmation, constitute a lien upon the respective lots or parcels of land and other real estate upon which they are levied, superior to all other liens except those for state and county taxes.
Section 2563, Code of 1930.
The assessment for special improvements is a lien paramount to all other liens, state and county taxes excepted, and is a lien that would be superior to one in favor of a county for sixteenth section school funds even though the latter was prior in date to the lien for special improvements.
City of Pascagoula v. Valverde, 103 So. 198.
It is generally held that where a statute makes a local or special assessment a lien on property and is silent as to its priority the lien so created may be given priority over any and all other liens whether prior or subsequent to the assessment if such an intention can be gathered from the act, but not otherwise.
25 R.C.L. 188.
If the Legislature had not intended to make the special improvement liens superior to the city ad valorem tax it simply would have passed an act making such lien superior to all other liens save that of ad valorem taxes, but it specified: "Superior to all other liens, state and county taxes excepted."
A lien upon land for special assessments levied against it may by statute be made paramount to all other claims or liens against the property. A statutory exception of state and county liens from the priority otherwise given to an assessment lien does not, in some jurisdiction, apply to a lien in favor of a county or contract with the state other than for taxes.
44 C.J. 806.
The statute states that the lien for special improvements shall be superior to all other liens, state and county taxes excepted.
Section 3273, Code of 1930.
In this instance, both liens are created by the city and the legislature states that the special improvement lien, being a lien for which the property received benefit, is superior to the ad valorem tax.
The statute authorizes the sale on any one installment of special improvement tax and allows a period of redemption of two years for each sale, but the statute specifically says: "Such redemption shall not discharge said property from the lien of unmatured installments or assessments levied thereon, and said property shall remain subject to such lien as if no sale had been made.
Section 2565, Code of 1930.
Argued orally by Virgil Howie and William Fontaine, for appellant, and by W.E. Morse, for appellee.
By the bill and demurrer in this case, the question for decision here is, Does the purchaser at a city tax sale of lands for delinquent and unpaid ad valorem taxes acquire title on delivery of the deed pursuant thereto, freed from the lien of the city for unmatured and unpaid installments of assessments for special improvements?
On April 7, 1930, the city of Jackson caused to be legally sold a certain lot for ad valorem taxes thereon regularly and legally assessed, and Seward, the appellant, was the purchaser, and, after April 7, 1932, the city delivered to him deed thereto.
At the same time the same lot was sold for past-due and unpaid assessments for special improvements legally and regularly assessed in the year 1927 by the governing authorities of the city, and, in pursuance of these sales, Seward acquired deeds therefor in due course of time.
Seward filed his bill, asserting that, in virtue of the above sales, he acquired the perfect, legal title to the lot of land superior to and in extinguishment of any future installments of the assessment by the city in 1927 against said lot for special improvements.
There is no question raised as to the assessment and sale for ad valorem taxes, and likewise the assessment in 1927 for special improvements, to be paid in installments thereafter.
The applicable part of section 3120, Code 1930, is as follows: "Taxes, both state and county, assessed upon lands or personal property, shall bind the same, and be entitled to preference over all judgments, executions, encumbrances, or liens, whensoever created; and all taxes assessed shall be a lien upon and bind the property assessed, from the first day of January of the year in which the assessment shall be made; and no property shall be exempt from distress and sale for taxes."
Section 3273, Code of 1930, as to tax collector's deed and effect thereof, in part is as follows: "When the period of redemption has expired the chancery clerk shall, on demand, execute deeds of conveyance to individuals purchasing lands at tax sales. . . . Such conveyance shall be attested by the seal of the office of the chancery clerk and shall be recordable when acknowledged as land deeds are recorded, and such conveyance shall vest in the purchaser a perfect title with the immediate right of possession to the land sold for taxes."
Section 3428, Code 1906 (controlling the case at bar), is in these words: "The deeds of the tax-collector to individuals, and the list of lands sold to the municipality, which shall be made as required to be made by the state and county collector, shall be filed within ten days after the tax-sale, with the municipal clerk; and each shall have the same force and effect, and confer the same right and entitle to the same remedies, as deeds and list made for delinquent taxes by the state and county tax-collector. But such title shall be subject to a title acquired under a sale for state and county taxes."
The procedure by a municipality to fix a lien for assessments for special improvements is found in chapter 194, Laws of 1924, and in section 6 thereof is found the following applicable and pertinent language: "The governing authority [of a municipality] shall, by resolution, approve and confirm all assessments as finally fixed and adjusted at the said hearing, and such assessments shall, from the date of such confirmation, constitute a lien upon the respective lots or parcels of lands and other real property upon which they are levied, superior to all other liens except those for state and county taxes."
We think it proper to note that, by section 7 of said act, the sale and procedure thereto was to be in the same manner and at the same time as for city ad valorem taxes. That section provided that, if an installment became delinquent, the entire assessment indebtedness should be and was accelerated and became due and payable. This provision was, however, amended by chapter 26, Laws Ex. Sess. 1929, and the above acceleration clause was omitted therefrom.
The power to levy and collect ad valorem taxes on the part of municipalities was conferred by the Legislature by section 2394, Code of 1930, which was in force long before the sale here involved, likewise the power to levy and collect assessments for special improvements is conferred on municipalities by chapter 194, Laws of 1924. The liens and priorities are also fixed by the Legislature, which is the only source of power controlling municipalities.
Setting forth the applicable parts of the statutes seems to answer the question fully, and from which we learn that state and county taxes are a lien paramount to municipal taxes or assessments, and the deed to a purchaser executed in pursuance thereto conveys a perfect title.
Construing the statute as to the lien for municipal or ad valorem taxes in connection with section 6 of the Laws of 1924, chapter 194, we find that the Legislature fixed the lien for state and county taxes as being paramount to all municipal taxes and assessments. By section 6, the city ad valorem taxes were specifically not excepted along with state and county taxes thereby creating the assessment lien therein provided for as superior to municipal ad valorem taxes, consequently the purchaser at a municipal ad valorem tax sale is advised that he buys the land subject to the lien for unmatured installments of assessments, and that lien is not affected by the sale for municipal ad valorem taxes, and so likewise as to the deed he receives. The Laws of 1924, chapter 194, amend or modify the law as to ad valorem tax liens to this extent.
The statutes quoted make clear the legislative intent, as plainly expressed, to subordinate municipal tax liens to special improvement liens.
It is equally clear that the sale for ad valorem taxes does not affect the assessment lien in any degree whatsoever, nor is the same accelerated or merged thereinto. They are independent of each other, and the statute preserves and sustains the priority therein announced.
Appellant, Seward, cities numerous decisions from various courts which are not in point, for the obvious reason that they are not based upon statutes like ours which fix the priority of the lien.
Municipalities have no powers except such as are delegated to them by the state. Hazlehurst v. Mayes, 96 Miss. 656, 51 So. 890; Wise v. Yazoo City, 96 Miss. 507, 51 So. 453, 26 L.R.A. (N.S.) 1130, Ann. Cas. 1912B 377.
Counsel for appellant asserts, without citing authority therefor, that the view we here announce is in conflict with section 112 of the Constitution of 1890, because this view destroys the equality of the lien, and he also urges that this view offends section 90, paragraph (h) of the Constitution, without citation of authorities or argument for the position. We are unable to perceive that either section is offended.
In the last place, he argues that it would be inequitable to allow the city to maintain a paramount lien as against him. The answer is that equity follows the law, and equity says to him: "You purchased at an ad valorem tax sale notified by the assessment improvement statute that the assessment lien now in force is superior to your title, and you take the land cum onere."
The lower court properly sustained the demurrer of the city of Jackson to Seward's bill of complaint.
Affirmed.