City of Miami v. Certain Lands , 126 Fla. 781 ( 1937 )

The foreclosure suit in the case at bar was commenced by the City of Miami, Florida, under Chapter 15038, Acts of 1931, which is a special statute applicable to cities and towns and authorizes municipalities to foreclose their own municipally held tax certificates and municipal assessment liens by an action inrem against the tax or assessment lien encumbered lands, without naming any parties defendant, and without serving any persons interested in the land as co-equal or superior lienors with formal process of any kind, advising the latter that their own separate rights may be affected or cut off or destroyed in the litigation.

Provision is made by Chapter 15038, Acts of 1931, for the enforcement by proceedings in chancery of municipal tax liens and assessments only in the name of the particular city or town whose revenue is involved. There is nothing in the statute that contemplates in any respect that the proceeding shall be anything more than a proceeding in rem involving the taxed or assessed lands and liens and claims subordinate to the tax lien or assessments. Neither notice nor process is provided in the statute adapted to the bringing in of claimants who hold outstanding tax certificates of equal dignity with those of the complainant municipality proceeding under the statute. See: City of Coral Gables v. Certain Lands, 110 Fla. 189, 149 Sou. Rep. 36.

As has been pointed out, Chapter 15038, Acts 1931, creates a special in rem procedure, applicable to municipalities only, as complainants, and omits to provide for service of summons or constructive service of process against holders of tax certificates that are of equal dignity to those of the complainant. Hence the scope of the foreclosure is limited by the Act itself to foreclosing the owner only, and those whose claims are derived from, or subordinate to, the delinquent owner who has neglected to pay his taxes by reason whereof his lands are allowed to be foreclosed. So this is a proceeding in rem which can bind only the delinquent land as the rem and not those who hold outstanding tax certificates on it that are of equal dignity to the tax claims of the municipality foreclosing under said Chapter 15038.

Chapter 15038, Acts 1931, is designed and framed to provide anin rem procedure that according to its terms can only be effective for adjudicating and cutting off the delinquent title holder, the mortgage holder, or other persons subordinately interested in the delinquent land itself, as distinguished from adverse tax certificate holders who have rights in the delinquent lands that are equal in dignity to the claims in suit. This is so because the Legislature has the constitutional power to provide a judicial process for cutting off, by an authorized in rem foreclosure against delinquent tax lands, the title holder, mortgagees and other persons holding subordinate proprietary or lien interest in delinquent tax lands, when such interests are admittedly inferior in dignity to the lien for taxes.

But the Legislature would have no right to thus impair and cut off adverse tax certificate lien holders possessing liens of equal dignity to those of the complainant municipal lienor that is authorized to prosecute in rem foreclosures under Chapter 15038, supra, only against the delinquent taxable interests in the tax encumbered lands involved.

The Chancellor correctly held in accordance with the precise limitations of the statute that since the subject of the suit was limited to a tax foreclosure against delinquent lands, it could not be extended to operate as an extinguishment of outstanding tax certificates on the same land that are in no respect themselves delinquent, but which are entitled to judicial protection and enforcement in appropriate proceedings of equal dignity to those of the municipality complainant under Chapter 15038.

The Garrison tax certificates involved in this case were issued in 1928 for the unpaid taxes of 1927. The nature of the contract made with the holder of those certificates is such that the state reserved the power to encumber the same taxed property withequal, but not superior, liens for unpaid subsequently assessed taxes.

Tax certificates on lands are designed to evidence mere statutory liens and are not, under the present statutes, made taxable property quoad hoc.

So in rem proceedings which are so contrived as to reach theres of particular delinquent tax lands, and subordinate encumbrances thereon, may appropriately adjudicate rights that are inferior to the lien of the taxes being foreclosed, but cannot, without being in violation of due process of law, be so enlarged and extended to bring in and destroy outstanding adverse tax certificates that are not inferior in dignity to the res of the suit, but are entitled to the protection of due process of law until they are either redeemed by some party interested in the lands, or are foreclosed simultaneously with other liens of equal dignity in some broader foreclosure proceedings appropriate to the adjudication of the res of equal tax liens, inter sese, as well as the statutory right of the municipality complainant to subject delinquent tax lands (the whole extent of the res dependent under Chapter 15038, Acts 1931) to the municipality's tax collecting processes as against subject matter (property rights) capable of being taxed by it.

The decree of the Chancellor which is consistent with the foregoing statement of law, should be affirmed.

WHITFIELD, C.J., and ELLIS, and TERRELL, J.J., concur.

BROWN and BUFORD, J.J., dissent.