Cavalier County v. Gestson

Defendants have petitioned for rehearing. The petition is in effect a reargument of the case. It is contended that the court was in error in holding that it is an action to declare and establish a lien. It is further contended and argued that a lien is not an estate or interest in land and consequently that this action is not one which falls within the provisions of ND Rev Code 1943, § 28-0401.

The allegations of the complaint and the prayer for relief as summarized in the former opinion show that the purpose of the action and indeed the sole relief sought is to have certain taxes "assessed against a certain tract of land situated in Cavalier County, North Dakota, declared and adjudged to be valid liens upon the land." Specifically in the complaint, "Plaintiff prays for Judgment as follows: That the taxes for the years 1939 and 1940 upon the premises described in the complaint herein be declared a legal and valid lien upon the said premises as provided for by law and that the purported order of abatement be set aside, cancelled and declared null and void."

The defendants have cited authorities in support of the contention that a lien is not an estate or interest in land. Few of the authorities cited involve a question of venue. None of them seem to have been decided under a statute like ours. Most of the cases involve liens to secure the payment of a certain indebtedness. Cases where the debt was the principal thing and the lien the incident. Among the cases cited are Smith v. Barr,76 Minn. 513, 79 N.W. 507, and State ex rel. Child v. District Ct.85 Minn. 283, 88 N.W. 755. In each of these cases, as pointed out by the Supreme Court of Nebraska, the primary object was relief against the person with the real estate merely incidentally affected. See Stuckey v. Stuckey, 143 Neb. 610, 616, 617, 10 N.W.2d 458, 461.

In considering the effect of the various holdings in Minnesota relating to venue the Supreme Court of that state in State ex rel. Nyquist v. District Ct. 164 Minn. 433, 205 N.W. 284, said:

"The prior decisions may not be entirely consistent in all respects, yet they establish these general rules: That, where the subject-matter of an action is land only, and the primary and principal relief sought relates to the land, the action is local and must be tried where the land is situated; that, where the subject-matter is a contract, and the primary and principal relief sought is to enforce it, or to determine the rights and obligations growing out of it, or to have it annulled as invalid, the action is transitory, and must be tried where the defendant resides, although it may also involve the determination of rights in or title to real estate."

The Supreme Court of Arkansas held that:

"If relief asked operates upon land itself, it is a `proceeding in rem' and is a `local action' which must be brought in county where land is situated." Bell v. Wadley, 206 Ark. 569,177 S.W.2d 403.

"The nature of the action is local, and must be tried in the county where the land is situated, where it turns on the title to the property as distinct from the personal obligation, and the decree operates ex proprio vigore." Neet v. Holmes, 19 Cal. 2d 605, 122 P.2d 557.

In 40 Cyc p 58, it is said:

"The action must be brought where the land lies if these two things concur; (1) If the subject of inquiry is a right or interest in the land; and (2) if the judgment in the case will operate directly upon this right or interest."

In 40 Cyc p 63, it is said:

"The real question in all these cases is as to the true nature of the action: Does it turn on the personal obligation or on the title? Does it take immediate effect in personam or upon the interest in the land? And the test here is found, not in any formal characteristic, but in the substantial nature of the action as shown in the pleading, and the kind of judgment which may be rendered."

It will be noted that § 28-0401, supra, is not restricted to an action for the recovery of real property "or of an estate or interest therein." It provides further that it applies to an action "for the determination in any form of such right or interest."

"The clause relating to the recovery of real property or of an estate or interest therein also contains the provision `or for the determination in any form, of such right or interest.' This is a broad provision which seems intended to cover other cases, no matter what their form, which actually involve a real or substantial interest in real property although, technically, they may not fall within the classes which are specifically named." Kaluzok v. Brisson (Cal App) 161 P.2d 64.

"It is significant that the coverage of the statutes includes a mere `interest' as well as an `estate' in lands. `The word "interest" is the broadest term applicable to claims in or upon real estate. In its ordinary signification among men of all classes it is broad enough to include any right, title, or estate in, or lien upon, real estate. One who holds a mortgage upon a piece of land for half its value is commonly and truthfully said to be interested, to have an interest, in it.' Ormsby v. Ottman (CCA8th) 85 F 492, 497; 4 Words Phrases, p 3699." Hatlestad v. Mutual Trust L. Ins. Co. 197 Minn. 640, 268 N.W. 665, 667.

In this state "taxes upon real property are a perpetual paramount lien thereon against all persons, except the United States and this state." ND Rev Code 1943, § 57-0240.

In the case of Due v. Bankhardt, 151 Ky. 624, 152 S.W. 786, the Supreme Court of Kentucky held,

"A lien on land is an `interest in the land.'"

Tax certificates have been held to constitute an interest in land:

Absecon Land Co. v. Keernes, 101 NJ Eq 227, 137 A. 429, 431; Clark v. Darlington, 7 S.D. 148, 63 N.W. 771, 772, 58 Am St Rep 835.

See also Dowdle v. Byrd, 201 Ark. 775, 147 S.W.2d 343, 345.

"A lien is said to be a qualified right, which, in a given case, may be exercised over the property of another. Lickbarrow v. Mason, 6 East 20, note, 100 Eng Reprint 35, 4 ERC 756. It attaches to the subjects of property, and follows them in their transmission to others." Advance Thresher Co. v. Beck, 21 N.D. 55, 59, 128 N.W. 315, Ann Cas 1913B 517.

The Supreme Court of the United States in considering the nature and effect of a lien given by statute for labor performed or materials furnished in the construction or repair of a ship said that such lien is "really a property in the thing"; that it is "a right of property, and not a mere matter of procedure"; that such lien "confers, however, upon its holder such a right in the thing, that he may subject it to condemnation and sale to satisfy his claims or damages. . . . The only object of the proceedings in rem is to make this right, where it exists, available — to carry it into effect. It subserves no other purpose." The J.E. Rumbell, 148 U.S. 1, 10-12, 37 L ed 345, 346, 347, 13 S. Ct. 498.

In Clark v. Dennis, 172 Ark. 1096, 291 S.W. 807, the Supreme Court of Arkansas held that a suit to impose a lien on an oil and gas lease is not a transitory but a local cause of action properly brought in the county where the land is located.

In Miles v. Martin, 103 Neb. 261, 171 N.W. 907, the Supreme Court of Nebraska held that the venue of an action to establish a lien in the nature of an equitable mortgage is in the county where the land is situated under the provisions of a statute similar to but somewhat more restrictive in language than Section 28-0401, supra. The Nebraska statute reads "for the recovery of real property or of an estate or interest therein" but does not contain the additional clause found in our statute "or for the determination in any form of such right or interest." Revised Statute Nebraska 1913, § 7612.

An action to determine adverse claims may be maintained by any person having an estate or interest in or lien or encumbrance upon real property whether in or out of possession thereof. ND Rev Code 1943, § 32-1701. There is no statute specifically fixing the venue of such an action. It has always been assumed that the venue in such action lies in the county in which the real property is situated. In other words, if a person having a lien upon a tract of land brings an action to determine adverse claims, the action must be brought in the county in which the land is situated.

The general taxes against the land which were cancelled by the Board of County Commissioners of the plaintiff county and which it is alleged were cancelled by the Board as a result of fraud or false representations will, if established, constitute a first lien upon the specific land in question. They will not constitute a debt on the part of the defendants. The action is purely one in rem. If the taxes are established and the former abatements and cancellations are set aside they will constitute a first and paramount lien upon the property. They will be enforceable against the property alone and the judgment will in no sense operate upon the persons of any of the defendants.

We adhere to the views expressed in our original opinion. Such lien will constitute an interest in the land within the purview of the statute in question and the present action is one involving the determination in some form of such interest.

A rehearing is denied.

CHRISTIANSON, Ch. J., and BURKE and NUESSLE, JJ., concur.

BURR and MORRIS, JJ., did not participate.