Commerce Trust Co. v. Lot Co. and Johnson

ON MOTION FOR REHEARING. The tax bills sought to be enforced herein were issued by Kansas City on December 28, 1915, being upon special assessments for local street improvements. Appellant Johnson's title is derived through two tax deeds, executed by the city to him on December 4, 1919, under two sales of the property for general city taxes, one sale being for the taxes of the years 1910 to 1913 both inclusive, and the other for the taxes of 1914 to 1919 both inclusive, all of which Johnson paid as also the general taxes for the succeeding years. The suit to enforce the tax bills was filed June 24, 1920. The trial court enforced them as a first lien on the property thereby making the lien of the tax bills superior to the title of appellant Johnson. The question is whether Johnson's title, having been obtained from the lien for general city taxes, should be made subordinate to the lien of the tax bills for local street improvements?

The question turns upon the construction and effect to be given that clause in section 39, article 5 of the City Charter, relative to the tax deed to be executed to the purchaser at a sale for delinquent general city taxes which reads as follows:

"Which deed shall vest in the grantee an absolute estate in fee simple in the real property described therein, and shall convey all the right, title and estate of the former owner or owners, free from any and all incumbrances of whatsoever kind or nature,subject, however, to all unpaid State, county and city taxes,general and special taxes or assessments which are a lien thereon."

One of the contentions of appellant was that the foregoing clause does not refer to nor include special assessments for local street improvements, but has reference only to such taxes and assessments as are levied for special city public purposes, such as those for the establishment of City Parks, a City Market, City Hall, etc., all of which are for a special purpose, and therefore may be denominated special taxes or assessments, and yet they nevertheless partake so far of the nature and importance of general taxes, which are for the support of the city government, as that they could well be made and declared to be taxes of equal rank and validity as those for general city revenue purposes, but which is not accorded to special assessments for local street improvements.

Judge BLAND'S opinion, however, construes the above clause of the charter against such contention and holds that the clause does include the latter. Having thus construed the said clause of the charter, the opinion then dismisses the question of the validity of said clause, namely, whether such clause conforms to the Constitution and Statutes of the State, by saying that such is a constitutional question which appellant did not raise in time.

Appellant complains of this and says that as the case was submitted on an agreed statement of facts, the question of whether the charter clause conformed to the Constitution and Statutes of the State was in the case from the start; that anyway it is not a question of the construction of the Constitution but of the city charter and whether it is to be made to conform to the State laws or not; and that the need for the invocation of the Constitution did not arise until the opinion above mentioned refused to go into the question on that ground.

There is no question but that appellant in this court attacks the validity as well as the meaning of the charter clause. But the case as pleaded in the petition was the ordinary proceeding to enforce the lien of the tax bills and the answer of appellant did not invoke the Constitution nor did he "put his finger" on any specific provision thereof claimed to have been violated and on which violation he relied for a defense. The agreed statement of facts, as we understand it, merely took the place of evidence in the case, and did not obviate the necessity of invoking the Constitution, if a constitutional question is involved in the appellant's contention that his title is superior to the lien of the tax bills. We have been cited to no case where an agreed statement of facts obviated the necessity of raising the constitutional question at the earliest possible moment.

In the absence of any statutory provision to the contrary, it is generally held that the lien for general taxes takes precedence over a lien for a special assessment. [Missouri, etc., Co. v. Burri, 216 S.W. 570; Ballard v. Way, 34 Wash. 116, 122; McMillam v. Tacoma, 26 Wash. 358; White v. Knowlton,84 Minn. 141; White v. Thomas, 91 Minn. 395.] In all of these cases there was no statutory provision to the contrary, and in some of them there were provisions which impliedly authorized such ruling. In Minnesota, since 1905, there is a statute which provides that the lien of a special assessment for a local improvement in cities containing a certain population shall be of equal rank with the lien of the State for taxes, and under that statute, the purchaser at the foreclosure of the State's lien for taxes takes the property subject to the lien of the special assessment. [Gould v. St. Paul, 110 Minn. 324.]

In Excelsior Springs v. Henry, 99 Mo. App. 450, this court held that a tax sale in 1897 for the delinquent State and county taxes of 1890 did not affect the lien of a special assessment which attached in 1984.

In Dougherty v. Henarie, 47 Cal. 9, it was held, under a section of the revenue law of that State, that a purchaser at a sale for State and county taxes took the same free from a prior lien a special assessment.

In McCollum v. Uhl, 128 Ind. 304, 308, it was held, without reference to any statute and apparently on general principles, that the lien of the State for taxes is paramount and superior to the lien of an assessment for a ditch, but that as no attempt had been made to foreclose the ditch lien at the time the State's lien was foreclosed, the purchaser took the land subject to the assessment lien.

In Indianapolis v. City Bond Co., 42 Ind. App. 470, it was held that a tax sale and the execution of a deed thereunder did not destroy the lien of a special assessment as the effect of the statute giving an absolute estate in fee simple merely defined the quality of the estate and did not release it from valid liens.

In Harrington v. Valley Savings Bank, 119 Iowa 312, the special assessment became a lien from the commencement of the work and therefore such lien had not attached, and it was held that a purchaser at a sale of land for ordinary taxes took the title free from the lien of a special assessment which had not attached at the time of the sale.

In Fitzgerald v. Sioux City, 125 Iowa 396, it was held that a purchaser at a tax sale took the property free of the lien of certain assessments for street improvements, but in that case the sale was for both city and county taxes including the special assessments and the city accepted its pro rata share of the purchase price paid, and could not thereafter claim that this was merely a credit on such taxes.

In the case at bar, the only provision which authorizes the subjection of the title of the purchaser at a general tax sale to the lien of the special improvements, is the charter provision hereinabove quoted. But appellant contends that such provision in invalid; and he urges that the decision of the question whether it is invalid does not involve the decision of a constitutional question, but merely a construction of the charter and whether it conforms to the statutes and laws of the State as interpreted by the Supreme Court. The contention that the charter clause is invalid rests upon the following:

The statute gives the State a lien for all taxes, which shall continue and be enforced until they are fully paid or the land sold therefor. [Sec. 12757, R.S. 1919.] And under section 12964, Revised Statutes 1919, a lien is created on all real property for city taxes "the same as for State and county taxes." And section 12965, R.S. 1919, gives the city the same lien for its general taxes as the State has; and under section 19 of article 5 of the city charter, general city taxes upon real property are declared to be a perpetual lien thereon against all persons. The lien of the State for its taxes is paramount to all other liens, whether prior or subsequent. [Stafford v. Fizer, 82 Mo. 393; Finkelstein v. Baxter, 114 Mo. 493; Merriwether v. Overly,228 Mo. 218, 250; Morey, etc., Co. v. St. Louis, etc., Ice Rink Co.,242 Mo. 241, 254; Brown v. Brown, 124 Mo. 79; Williams v. Hudson,93 Mo. 524; Getchel v. Kleider, 84 Mo. 472; Sec. 12929, R.S. 1919.] Aside from the question of whether, in all of the cases, the "other liens" referred to are merely liens by private contract and not liens arising from governmental exercise of the taxing power, still there are no cases, of which we are aware, where the Supreme Court said this of two governmental liens in which there was a statutory provision such as the charter clause above referred to. So that appellant's contention that the said charter clause is invalid does not rest alone on the fact that the statutes have given the city the same lien for the general taxes as the State has, but upon the further fact, and in the last analysis, chiefly upon the fact, that the last two lines of section 16, article 9, of the Constitution says the city charter "shall always be in harmony with and subject to the Constitution and laws of the State." In other words, the ground upon which appellant claims the charter clause is invalid is that it violates this provision of the Constitution, and we are asked to declare its invalidity on that ground. We think a decision of that matter involves a constitutional question. If the aforesaid charter clause were astatute, the question of its constitutionality would undoubtedly be a constitutional question. And it would seem that a provision of the charter would have in this regard, at least the dignity and rank of a statute. For the power to frame the charter emanates from the Constitution, and the power of taxation, which otherwise is vested exclusively in the Legislature, is also conferred upon the municipality as an essential attribute for the purpose of its existence. [United States v. New Orleans, 98 U.S. 381, 395.] The Legislature has given the municipality the same lien for its taxes as the State has for its own taxes, but, so far as we are aware, it has never forbidden the city if it chooses, through its charter, to subordinate the title of a purchaser, at a sale of land for its general city taxes, to the lien of special improvements assessed at the time of such purchase. And the only provision where it is claimed such power is denied is in the Constitution. So that, manifestly, the question of whether the charter clause is invalid, is a constitutional question. [State ex rel. v. Smith,152 Mo. 444, 448.] But as appellant did not choose to raise it in any manner in his answer, it is not in the case. [Sheetz v. Iowa State Ins. Co., 226 Mo. 613, 618.]

As to the point that there was no constitutional question in the case until Judge BLAND'S opinion created that situation, and, therefore, appellant had no need to raise a constitutional question until the opinion did, we desire to say that the precedence of the lien of the tax bills over defendant's title was denied and attacked from the start, but no constitutional point was raised, as is required before it is properly in the case. The decision or conclusion reached under Judge BLAND'S opinion, was not based on a decision of such constitutional question. It was founded upon the wording of the charter, and its constitutionality not being properly raised, no such question was in the case. The decision is not like that referred to in the case of State ex rel. v. Smith, 152 Mo. 444, for there the decision of the Court of Appeals referred to was reached by the Court of Appeals deciding a constitutional question. Of course it had no jurisdiction to do this, and since its conclusion could be reached only by the decision of a constitutional question, the case should have been certified to the Supreme Court whether the constitutional question had been raised by the litigants or not. But that is not the case at bar, and since the constitutional question was not raised, it is not in the case. This answers the contention that the cause should be transferred to the Supreme Court, for the Supreme Court will not consider the constitutionality of a statute where the question is not raised on the record as prescribed by the Constitution. [Holland v. De Priest, 130 Mo. 89.]

It follows from what has been said that the motion for rehearing and also the motion to transfer should be overruled. And it is so ordered. The other judges concur.