Kreigh v. State Bank of Alamogordo , 37 N.M. 360 ( 1933 )

While Mr. Justice SADLER'S opinion does not reflect the decision of the court, the statement of the case and of the facts is satisfactory, and the views hereinafter expressed are based thereon.

I am in accord with that portion of the opinion of Mr. Justice SADLER which declares that there is nothing in other of our decisions or in section 478, chapter 133, Laws 1921, which detracts from the statement quoted from Williams v. Van Pelt,35 N.M. 286, 295 P. 418, as follows: "(a) It seems to be conceded by the parties, and we understand the rule to be, that the law in effect at the time of sale governs the matter of redemption and acquiring title after failure to redeem. Cooley on Taxation (4th Ed.) par. 1384. Appellee insisted below, and the court held,that the statute of 1921, under which the sale was made, governedthe matter. This is correct. [Italics ours.] When the 1921 Act became effective March 12, 1921, the first half of the taxes of 1920 were past due, but the last half was not yet payable. Under such circumstances, the Legislature had the undoubted power to change the procedure for enforcing delinquent taxes and to make that procedure applicable to the taxes for 1920. There had been no sale and consequently no right of redemption had arisen. Sales to be thereafter made were within the prospective scope of the act whether they were for past or future years. The taxpayer whose property had not been sold prior to the passage of the statute had no vested right in the former procedure to enforce collection. He was not yet the subject of suit. He could avoid sale by paying what the law required. He could insist that the validity of the assessment should be determined by the law in force when it was made. And the law so provided. Section 478, c. 133, Laws of 1921."

I am of the opinion that all that was "saved" by said section 478 is that, in a suit brought or judgment rendered affecting taxes assessed or which were delinquent at the date of the approval of the 1921 act, "the validity of such delinquent taxes shall be determined by the law in force at the time of making the assessments therefor." See Chambers v. Bessent, 17 N.M. 487,134 P. 237.

I advance the further proposition that section 478 should be considered in connection with and as modified by sections 509 and 602 as the opinion of the court suggests, and when so considered appears to save only such portions of repealed statutes as may be necessary to effectuate the enforcement of and securing penalties, obligations, and rights already accrued under the repealed statutes, and that there is no repealed statute dealing with the effect as evidence of a tax deed, and hence none such could have been intended to be saved.

Section 509 declares: "All acts repealed shall be continued in force as far as is necessary to enforce penalties or obligations."

Section 602 provides: "All laws and parts of laws repealed by Sections 109, 237, 317, 478 and 509 of this act shall remain in force for the recovery of penalties, civil or criminal, already incurred, * * * and so far as may be necessary to enforce theassessment, levy and payment of taxes for the years 1920 and1921, or to enforce or secure rights or liabilities already accrued thereunder."

If the italicized portion of section 602 is the antecedent of "accrued thereunder," it appears that the repealed statutes,which were adaptable for enforcing or securing rights orliabilities affecting taxes assessed or which were delinquentprior to 1920 and 1921, were not saved by section 478. If, on the other hand, "accrued thereunder" means rights and liabilities which had accrued for any prior years, then it would appear that the Legislature did not consider that they had saved, by section 478, any of the repealed statutes which were adaptable "to enforce the assessment, levy and payment of taxes, * * * or to enforce or secure rights or liabilities," for such prior years, but saved them by sections 509 and 602.

I invite attention also to the principle that: "The saving clause must have been intended to save something, which would have been otherwise destroyed; to save something out of that, which was repealed." Colby v. Dennis, 36 Me. 9, 12, cited in Lewis' Sutherland Statutory Construction (2d Ed.) sec. 287. Assuming that section 4101, C.L. 1897, making a tax deed prima facie evidence of certain facts was repealed by omission from the 1915 Code, then the only provision for a tax deed existing in the 1915 Codification is section 5506 thereof, which merely provides that the treasurer "shall execute and deliver to him [purchaser] a deed for the real estate sold." Chapter 80 of Laws of 1917 contains no provision with reference to deeds, except that more than one tract sold may be included in one deed. None of the sections of earlier statutes repealed by sections 109, 237, 316, 478, and 509, of chapter 133, Laws 1921, pertain to the effect of a tax deed with respect to its being prima facie evidence of the facts recited in the deed or of any facts. So, in considering the saving clauses of the 1921 act, we would not be able to discover that such saving clauses referred at all to any statute relating to the rule of evidence with respect to tax deeds. It might be appropriate to say that the Legislature, by the enactment of section 455, had changed the common-law rule, but I contend that we do not derive any assistance from such circumstance of change in construing the saving clauses themselves in order to arrive at the legislative intent.

The opinion of Mr. Justice SADLER holds in effect that, if suit were brought under the provisions of the 1921 act for taxes delinquent at the date of the approval thereof, the provisions of said act would be applicable and would not be limited merely to the bringing of the suit or the rendering of judgment, but would include the provisions relative to the advertisement for sale, sale, issuance of certificate of sale and the effect thereof, the manner of applying for the tax deed, the issuance and delivery of the deed, and the effect thereof, but would exclude such provisions as affect the determination of the validity of such delinquent taxes. This is correct.

But so far as section 478 is concerned, I see no reason to deny the applicability of the provisions of the 1921 act to "any proceedings" growing out of or incident to the enforcement of the payment of such delinquent taxes which do not affect the determination of the validity of such delinquent taxes, even though proceedings may have been instituted for the collection of such delinquent taxes or establishment of a lien therefor, prior to the effective date of the 1921 act.

In the case at bar, the sale having been ordered before the 1921 act went into effect, and the sale made after its effective date, it is possible that, under section 509 or 602 or both, the officials in charge might employ the provisions of the repealed acts in so far as necessary to enforce penalties and obligations and enforce or secure rights or liabilities already accrued thereunder.

For such purposes, such provisions of the new act as would be available might be employed. In the case at bar, it is admitted by the appellant that the sale was advertised under the provisions of the repealed statute. So far as the time element is concerned, if the officers had seen fit, they could have advertised the sale of April 5, 1921, under the provisions of the 1921 act to have sold property ordered sold on March 9th.

Turning to sections 509 and 602, and applying them to the facts in the case at bar, as far as disclosed, we find the repealed laws are to be employed only in "so far as is necessary" to "enforce obligations" or "to enforce or secure rights or liabilities." It is fundamental that the procedure to enforce or secure rights or liabilities may be changed. In other words, that no person has a vested right in procedural law. This statement is subject to the qualification embodied in section 34 of article 4 of our Constitution, which declares: "No act of the legislature shall affect the right or remedy of either party, or change the rules of evidence or procedure, in any pending case."

I take it that it is the state that is the party interested in the enforcing of the liabilities of the taxpayer, and in securing the state's right to enforce payment of delinquent taxes. After sale, a right I think which the delinquent taxpayer, who is being proceeded against for the enforcement of the payment of delinquent taxes, has, is to have the right to redeem preserved without more onerous conditions. This consequence does not occur in the case at bar. The protection of section 34 of article 4 of the Constitution, supra, is not peculiar to taxpayers who are litigants. It protects all litigants.

Under the provisions of both the new and the repealed acts, the certificate of sale, when recorded, vests in the purchaser, his heirs or assigns, a complete legal title to the property therein described subject to redemption as provided by law.

This right to redeem and the right to have the validity of the delinquent taxes determined "by the law in force at the time of making the assessments therefor" are rights of the delinquent taxpayer. The exercise of the right to redeem by payment of the sum stipulated in the statute is not the payment of the delinquent taxes. The taxes have dropped out of the picture, and the former owner having suffered the property to be sold for the delinquent taxes, and seeking to redeem, is simply in the situation of repurchasing the property from the state or county or its successors or assigns. See Lewis v. Tipton, 29 N.M. 269,222 P. 661.

The delinquent taxpayer whose property has been sold according to law, and who has failed to redeem, has no further rights in the matter, as counsel for appellant correctly asserts. Of course, "in all controversies and suits in relation to the rights of the purchaser, his heirs or assigns to the lands" (section 455), the former owner may contest the validity of the taxes and within certain limits assail the proceedings taken to enforce the collection thereof. Section 455 merely affords a rule of evidence in lawsuits involving titles to land. It might as well have been in the Code of Civil Procedure. It was not inappropriate for it to be in the Revenue Act. Substantially the same provision was contained in the Act of March 1, 1882 (section 4101, C.L. 1897), and was never expressly repealed by the Legislature, its repeal, I assume, being accomplished by virtue of its omission from the 1915 codification. The enactment of this provision (section 455) in 1921 merely served to shift the burden of proof which, according to the authorities cited in the court's opinion, rested on the claimant of the tax title, to the shoulders of the assailant of such tax title. It was competent for the Legislature to do this, except in pending cases. The Supreme Court of, the United States in Turpin v. Lemon, 187 U.S. 51, 23 S. Ct. 20, 23,47 L. Ed. 70, said: "Assuming the common-law rule to be, as stated by the elementary writers upon taxation, that the purchaser at a tax sale is bound to take upon himself the burden of showing the regularity of all proceedings prior thereto, it is entirely clear that statutes declaring the tax deed to be prima facie evidence, not only of regularity in the sale, but of all prior proceedings and of title in the purchaser, are valid, since the only effect of such statutes is to change the burden of proof, which rested at common law upon the purchaser, and cast it upon the party who contests the sale."

The very language of section 455 shows that it is intended for the benefit of the purchaser. The policy of making such a provision for the benefit of the purchaser is reflected in a number of decisions of the courts. In Blakeley v. Mann, 153 Minn. 415, 190 N.W. 797, 798, the court said: "In construing and applying these provisions, this court has held that the rights of parties in tax proceedings are to be determined by the law in force at the time of the tax sale (State v. Krahmer, 105 Minn. 422, 117 N.W. 780, 21 L.R.A. (N.S.) 157); that a statute giving to the purchaser the right to a refundment if the sale was adjudged void, entered into, and formed a substantial part of his contract (State v. Krahmer, 112 Minn. 372, 128 N.W. 288); that these provisions are an essential part of the system by which the state obtains its revenue, and are inducements for the purchaser to buy (State v. County of Chisago, 115 Minn. 6, 131 N.W. 792, Ann. Cas. 1912d 669); and that it is the policy of the state to protect purchasers by providing a method for their reimbursement where the title fails, and to deprive them of the state's lien upon the adjudication of the invalidity of the tax title would be a radical departure from this policy, which would effectually discourage or bring to an end all tax purchases (Downing v. Lucy,121 Minn. 301, 141 N.W. 183, Ann. Cas. 1914C, 755). Presumably all these considerations were in the minds of the lawmakers when the amendments were enacted. It is not to be supposed that they intended to enact a law which would trench upon the obligation of contracts between the state and purchasers at tax sales. Rather it should be presumed that they intended to respect and preserve the contract rights of such purchasers and that the amendments should not apply to liens theretofore acquired." See Chisholm v. Bujac, 27 N.M. 375, 202 P. 126; Harris v. Friend, 24 N.M. 627,175 P. 722.

It has been said that the purpose of provisions so beneficial to the purchaser is to secure to the state the most advantageous sales that may be made after the taxpayer has failed to exercise his right to redeem. In the case of Nelson v. Rountree.23 Wis. 367, the court decided: "A tax deed must be allowed all the effect as evidence given by the law in force at the time of thesale." In the course of the opinion the court cited Smith v. Cleveland, 17 Wis. 556, in which the court remarked that the effect of a deed issued to the purchaser was most material and important to him and could not have escaped his attention. Chief Justice Dixon, who wrote the opinion in that case, directed the reporter to print, in connection with his opinion, the opinion of Judge Miller of the United States Circuit Court for the District of Wisconsin in the case of Lord v. Milwaukee Mississippi R.R. Co. I quote here a portion of the opinion of Judge Miller so appended as being very illuminative as to the question of state policy: "The predominant policy of the legislature, in passing the act of April 19, 1852, is to secure the collection of revenue for public uses. The precise directions given in the law, as to the mode of assessing, advertising and selling, and all other things prescribed to be done by the public officers, should yet be followed strictly and substantially, although they are but directory. As the system was carried on by various officers, changed frequently by public election, and not always conversant with the necessary modes of carrying on complicated plans of taxation and sale, or sufficiently cautious to do it accurately, it was seen that these directions were not strictly pursued, and that loose, irregular and defective methods had been fallen upon in practice. It was determined therefore by the legislature, to consider the provisions of the law as directory merely, and to protect the purchaser against the neglects, imperfections and malfeasance of public officers. The act therefore prescribes, in strong terms, that the deed shall be conclusive in the hands of the grantee as to all things in their character directory. While the door was open for the legal owner to contest the proceedings, they were considered essential; and the courts, in their decisions, were reduced to the necessity of overruling the tax title merely on account of some slight irregularity or deviation from the terms of the law. From this they are relieved by the overruling and sweeping provisions of the act of April, 1852. Many hard cases, no doubt, will occur under this law; but it is considered, by the representatives of the people, expedient that individual loss should be submitted to in order to carry out a measure of public policy. If the owner will not exercise the ordinary vigilance required by law in paying his taxes, or in redeeming his land within the time allowed, he neglects a duty at the peril of having it applied for the purpose of defraying the expenses of government. Every person, whether resident or non-resident who owns land located in this state, knows that it is subject to taxation, and to sale for the payment of taxes annually assessed. He is presumed to know the times prescribed by law for the sale of his land and for its redemption, and also the conditions of the sale and the effects of non-redemption. Ignorance of the law should not in this matter excuse a man. The legislature has, after much imperfect legislation, adopted the wise policy of requiring the owners of lands to pay the taxes annually assessed thereon, and thereby contribute punctually to the support of government. Land is wisely made the debtor of the taxes, and subject to a statute lien, to be extinguished by a summary proceeding in rem, whereby the title of the owner is divested upon neglect to redeem, after the long time allowed by law for that purpose. A due regard to the interests of the tax paying citizens, and to the improvement of the state, required the enactment of the law; and courts should enforce it, as tosales made subsequent to its publication."

As I have said, section 455 affording a rule of evidence regarding the burden of proof might as well have been in the procedural code. It was perhaps inserted in the Revenue Act in order to direct the attention of the purchaser at tax sales to the benefits thereof provided.

In the case at bar, the execution and delivery of the tax deed set out in appellant's answer was admitted by appellee. I discover nothing in the saving clauses adverted to in the opinion of SADLER, J., or in the discussion, to indicate an intention by the Legislature in enacting chapter 133, Laws 1921, to "save" a rule of evidence said to prevail between the adoption of the 1915 Code and the effective date of the 1921 act. Such rule of evidence (section 455) was not a "provision of this act" (chapter 133, Laws 1921) inconsistent with any provisions of prior acts repealed which might by any construction be said to be saved by the saving clauses.

The controversy and suit "in relation to the rights of the purchaser" in the case at bar came on for determination about ten years after the tax sale of the land in question and about seven years after the time for redemption had expired. The trial and determination of the suit and controversy in the case at bar was to be had according to the rules prevailing at the time of the trial, and not such as may have prevailed when the taxes were assessed.

Being satisfied with Brother SADLER'S argument and conclusions in the main, I think they should lead to a reversal of the judgment, and that the cause should be remanded, with directions that judgment be rendered in favor of appellant, and two of the justices being in accord with this view, so far as the disposition of the cause is concerned, it is so ordered.