James v. Blanton

Opinion op the Court by

Judge Hobson

— Reversiag.

In April, 1893, tire sheriff of Franklin county sold certain property of Mrs. Alice Blanton at public sale to make the taxes due the state and county for the year 1892; and, no one else bidding, the property was bid in for the state. Similar sales were made in the years 1895 and 1896. In the year 19.08 the property was sold in a suit against Mrs. Blanton, and was bought by J. B. Blanton and others. In January, 1909, James A. Violett, a state revenue agent, acting under 'the direction of the Auditor, advertised the land for sale for the taxes for 1892, 1895, and 1896, for which the property had been bid in by the state at the sheriff’s sales above referred to. Thereupon J. B. Blanton and others brought this suit to enjoin the Auditor and Yiolett, as revenue agent, from making the sale of the property for the taxes, alleging in their petition that they were the owners of the property by reason of their purchase at the judicial sale; that more than 15 years had elapsed since the cause of action accrued in favor of the state as to the taxes for 1892, that more than 5 years had elapsed since the accrual of the cause of action as to taxes for 1895 and 1896, and that the whole claim was barred by limitation; that since 1896 the property had been assessed and the taxes paid year by year by Mrs. Blanton and those claiming under her; and that the commonwealth is estopped now to claim the ownership of the land. The petition also contained this allegation: “Plaintiffs say that the commonwealth of Kentucky did not, nor did any of its agents, employes, or representatives, within 80 days or at any other time, after the alleged sale for the alleged taxes was made, ever institute any proceeding to recover possession of said property or collect the alleged tax. Plaintiffs state that the alleged tax claimed to be due on said land was never demanded of them, or Mrs. Alice B. Blanton, or any one else, either by mail or otherwise; that said alleged sale for said alleged tax was null, void, and of no effect.”

The Auditor filed a demurrer to the petition which' was overruled.. He then filed an answer, in which he admitted the purchase of the property by the plaintiffs in the proceeding against Mrs. Blanton, but pleaded that at the time of their purchase the records of the county clerk’s office showed the sheriff’s sale of the land and 'the purchase by the state, and that they, took the property with notice of the state’s rights. He admitted that Mrs. Blanton and those ■claiming under her had been in possession of the property since 'its purchase by the state, .and had paid the annual taxes for the years since 1896, and that no proceeding had been instituted by the state to re-' cover the land or the taxes. He alleged that he was only endeavoring on behalf of the state to collect the taxes, interest, and penalties, and offered to release all right or title of the state 'to the property upon the payment of the taxes. The circuit court sustained a demurrer to the answer, and perpetuated the injunction which had been granted by the clerk. The commonwealth appeals.

The ruling of the circuit court was apparently based upon the ground that the commonwealth, by its purchase of the land at the tax sale, acquired only a lien upon it for its taxes, and that this lien which is created by statute was barred by the limitation of five years. It has been held that taxes are claims created by statute, and are barred after five years from the time the cause of the action accrued. On the other hand, if the title to the property vested in the commonwealth by the tax sale, then its right of action was not barred until 15 years after it accrued. In holding that the ptate acquired only a lien by virtue of its purchase at the tax sale, the circuit court apparently followed Husbands v. Polivick, 128 Ky. 652, 96 S. W. 825, 29 Ky. Law Rep. 890. The effect of a tax sale will depend upon the statute under which it is made. The sales in question in that case were made for the year 1884, and were necessarily governed by the law then in force. The court in its opinion quotes the provisions of these statutes, and shows that under them the Legislature only intended that the state should acquire a lien for the taxes by its purchase at 'the tax sale. But in that opinion it was clearly intimated that the Legislature might provide otherwise if it saw fit to do so. The present statutes are materially different from the statutes then in force. Sections 4152, 4153, and 4154, Ky. St., under which the sales here in controversy were made, provide as follows:

“Sec. 4152. If no one will 'bid for and purchase such land at the amount of tax, the charges due and the cost of sale including the cost of advertising, it. shall be the duty of the sheriff or collector to purchase the same for the state of Kentucky for the amount of the tax due and the commission thereon, and shall make return to the county clerk, who shall record the same in a book kept for that purpose, and the clerk shall certify the same to the Auditor of Public Accounts, and the sheriff or tax collector shall have a credit for the same in his settlement with the Auditor. The clerk shall have a fee of twenty-five cents for making such entry. The owner of such real estate, his representatives, heirs or assigns, shall have the right to redeem the same from the state, or any other purchaser at any time within two years after the day of sale, by paying the purchase money, with interest at the rate of thirty per cent, per annum, and in addition, fifteen per cent, upon the total amount of the purchase price and the amount of the clerk’s cost if any. The state shall have the right of possession of lands purchased by it at any time after the expiration of thirty days from the giving of the notice provided for in the next section, and the purchaser other than the state, shall have the.right of possession of lands purchased by him at any time after the expiration of six months from the giving of the notice provided for in the next section. In the redemption of lands sold to the state for delinquent taxes at any time within the period of two years after the sale, or until the revenue agent, under the direction of the Auditor, assumes charge of the collection 'by sale or otherwise, the county clerk is hereby vested with the authority to collect such delinquent taxes, interest and penalties as prescribed by law, and he shall make report thereof to the Auditor ’as often as the latter officer may require, and not less than once in every thirty days; and he shall pay into the treasury all moneys collected by him as herein authorized on the first day of every month, and oftener if required by the Auditor.

“Sec. 4153. It shall be the duty of the county attorney for each county within fifty days after sale to notify the owner of the land purchased by the -state, county and district of such purchase; and if the land so purchased be not redeemed within thirty days from such notification, he shall institute a proceeding for the recovery of possession of such land; and if such land be redeemed after such proceedings a,re. instituted, the owner -shall, in addition, pay the-.cost of such proceedings. The failure of the county attorney to give such notice and institute such proceedings within the time specified shall subject him to a fine of twenty dollars for each offense; and it is hereby made the duty of the county judge to report each and every such failure to the circuit court, at its next term thereafter, whereupon the circuit judge shall cause to- issue a rule against said county attorney -to show cause, if any, why said fines shall not be entered up against him ; and such fine, wh.en collected, shall be for the benefit of the state. In every case where such lands are redeemed from the state, county and district at any time within the period of two years allowed for redemption, the county attorney shall have as his commission, when he attends to his duties, twenty per cent, of the amount of the money paid to redeem such land, hut if he fail to attend to such duties, he shall receive no commission, and the whole of the redemption money shall belong to the state, county and district. It shall be the duty of the purchaser other than the state, county and district, within fifty days after the sale, to give notice in writing to the owner of the land purchased by him, of such purchase, and if such land be not redeemed within six months after such notice, he may institute such proceedings for the recovei*y of the possession of such land.

‘ Sec. 4154. If the land be not redeemed within two years allowed for that purpose, the fee-simple title thereto shall vest absolutely in the state, county and district, each having a joint interest therein, in proportion to the tax due them respectively; and if said lands purchased by the individuals be not redeemed within two years allowed for that purpose, the fee-simple title shall at once vest in such individual. The revenue agent, under the direction of the Auditor of Public Accounts, may, after the two years for redemption have expired, advertise and sell at public sale any of said lands forfeited to the state, and the Auditor may convey said lands by deed to the purchaser, and he shall pay to the county or district, or both, the amount of such tax due each. The revenue agent shall be allowed fifteen per centum for the collection and payment into the treasury of said delinquent taxes, the fifteen per centum to be collected from the delinquent or purchaser, as well as the fee for advertising.”

It will be seen that by section 4154 it is expressly provided that, if the land is not redeemed within the two years allowed for that purpose, the fee-simple title thereto shall vest absolutely in the state, county ana district, each having a joint interest therein in proportion to the tax due them, respectively, and that the revenue agent, under the direction of the Auditor, may, after the two years allowed for redemption have expired, sell the land, collect the purchase money and pay to the county or district the amount of tax due each. The language of the section shows an unmistakable intention on the part of the Legislature to change the rule theretofore existing, and to declare that,when the state bids at a tax sale, it shall take a fee-simple title to the land, if not redeemed within two years. When the 'state has purchased land under these statutes at tax sales, the state bias a lien on the land for the taxes and penalties until the two years allowed for redemption have expired; but, if the land is not redeemed within the two years, the fee-simple title then vests in the state. The statute is valid.

It is the duty of the county 'attorney, under section 4153, to notify the owner of the land within 50 days after the sale and to institute proceedings to recover possession of the land within 30 days thereafter. It is his duty to comply with this statute, and if he fails to comply with it he is subject to a fine of $20 for each offense; but his breach of duty in no wise affects the right of the state, in case the land is not redeemed within 2 years. Section 4153 merely provides an additional remedy by which the state may require the taxes paid at once, or get possession of the land; but the failure of its officer to institute this proceeding does not place the delinquent taxpayer in any better position that he would be if the proceeding was not provided for. The purpose of 'the provision is simply to secure a more prompt collection of the state revenues. That this is what the Legislature contemplated is shown by the provision that, in every case where the lands are redeemed at any time within two years, the county attorney shall have a commission of 20 per cent, when he attends to his duties, and a further provision that, if the land is not so redeemed, the fee-simple title shall vest in the state. The Legislature foresaw that cases might occur where the county attorney might neglect his duty, and intended that his neglect of duty should not give the delinquent taxpayer an advantage over the state. Commonwealth v. Rosenfield, 118 Ky. 374, 80 S. W. 1178, 82 S. W. 433, 25 Ky. Law Rep. 2229, 26 Ky. Law Rep. 726.

We therefore conclude that the commonwealth by the tax sales in question acquired a fee^simple title to the land, and not a mere lien on it, when it was not redeemed within two years after the sale. The first sale having been made on April 24, 1893, the fee-simple title vested in the state April 24, 1895; so this action, which was brought in January, 1909, was brought within fifteen years after the title vested in the state.

The taxes for the year 1892 were levied under an act practically the same u,s the present statute. See Gren. St. 1888, pp. 1077, 1078. The previous statutes contained no such provisions. It is not material that the taxes in question were not demanded by mail or otherwise. By section 4149, Ky. St., the sheriff may distrain without demand after the 1st day of July of the year for which the tax is due. It is not averred that Mrs. Blanton was a resident of Franklin county, and no demand is required except in case of a resident. It is not averred that the taxes have been paid, or that the land has been redeemed. No facts are alleged sufficent to invalidate the tax proceedings.

It will be observed that by section 4152 it is provided that, in the redemption of land sold to the state for delinquent taxes, the county clerk at any time within two years after the sale, or until the revenue agent under the direction of the Auditor assumes charge of the collection by sale or otherwise, is vested with authority to collect the delinquent taxes, interest and penalties. It will also be observed that by section -4154 the revenue agent shall be allowed_ 15 per cent, for the collection and payment into the treasury of the delinquent taxes, the 15 per cent, to be collected from the delinquent or purchaser, as well as the fee for advertising. From this provision it is manifest that the delinquent taxpayer is allowed to pay the taxes, with interest and penalties, after the expiration of two years, and until the sale by the Auditor’s agent, and thus save his land. The fee-simple title is vested in the state, but is subject to be divested on the payment of the taxes by the delinquent, and if the taxes are paid the title revests in the owner; for it is only where the land has been sold by the revenue agent that the Auditor may convey it by deed. The power given the county clerk to collect the taxes after the time for redemption has expired would otherwise be meaningless. So, also, would the provision that the revenue agent shall be allowed 15 per cent, where the money is collected from the delinquent. The statute was plainly intended to give the delinquent an opportunity to pay the revenue agent and thus arrest the sale of h'is land. It is presumed that the sheriff did his duty, and the burden under the present statutes is on the taxpayer to show that he did not do so. Alexander v. Aud., 121 Ky. 105, 88 S. W. 1103, 28 Ky. Law Rep. 69.

The petition stated no facts entitling the plaintiffs to relief. The demurrer to it should have been sustained. On the return of the case to the circuit court, either party may be allowed to amend his pleadings if he desires to do so. Section 4036, Ky. St., is as follows: “Whenever any person shall purchase property sold for delinquent taxes, and the sale shall be set aside because of any irregularity, the purchaser shall have a lien on the property for the amount of taxes and cost paid by him, and for which the property is liable, with legal interest from the time of such payment, which may be recovered from the owner of the property or person owning the same.” This section applies no less to sales at which land is bid in for the state than to sales to others.

Judgment reversed, and cause remanded for further proceedings consistent herewith.