Hayes v. Gibbs , 110 Utah 54 ( 1946 )

I concur. I have serious doubts, however, if the real reason why an easement is not extinguished by a valid tax procedure is founded on the assessment. It is true that the assessment is the basic step in tax procedure but the really vexatious question in this regard is why valid tax foreclosure proceedings should cleanse the property of "mortgages, liens, rights of dower and similar interests" and not of easements or building restrictions. We have no trouble respecting mortgage and other liens. They are not interests in land. They are ordinarily contractual rights to resort to land if a debt is not paid. And the reason they are extinguished by valid tax foreclosure sale, at least in this state even though not expressly made inferior by statute to the tax lien, is because of public necessity. Robinson v. Hanson, 75 Utah 30, 282 P. 782. Tax collecting machinery must be workable. Public necessity so dictates. Very few persons would buy property from the county on tax title if they had to buy it subject to mortgages or other liens for the payment of money. Moreover, a lienholder may protect himself by the payment of the taxes and by adding it to the amount owing from his debtor. Not so with easements or restrictions. But when it comes to "dower and similar interests" we have more difficulty. Dower has been called an interest in land although its enjoyment is contingent, and while contingent has somewhat the nature of a lien — a right to call on the land for a portion contingent on a wife surviving her husband. Certainly a remainder interest after a life tenancy is an interest in land. In some states the tax foreclosure procedure does extinguish dower interests; in others not. Much, of course, depends on the statutes. The matter has given the courts some difficulty. See Lucas v. Purdy, 142 Iowa 359, 120 N.W. 1063, 24 L.R.A., N.S. 1294, 19 Ann. Cas. 974; Shell v. Duncan, 1889, 31 S.E. 547, 10 S.E. 330, 5 L.R.A. 821, a well considered case with an illuminating concurring and dissenting opinion.Blevins et al v. Smith, 1891, 104 Mo. 583, 16 S.W. 213, 13 L.R.A. 441, another case with an informative dissent. What gives me pause in the rationale of the court's opinion in this case is that I cannot see any logical basis for differentiating on the one hand between a dower or a remainder interest in land and on the other hand an easement, except that the land taken in by the county at tax sales would not readily get back on the tax rolls and the tax revenue therefrom actually obtained would be decreased if the land was sold subject to dower rights or remainder rights. That is not very often the case where an easement is involved. Only in the rare case of a very burdensome easement would it happen. But "dower and similar interests in land" can be considered just as much carved out of land as an easement. Therefore, without being dogmatic or too sure of my ground, I am constrained to place my conclusion on the more fundamental and broader ground of public necessity and workability of the tax laws rather than the nature of the encumbrance, except as that affects the salability of the property.

By this I do not mean to imply that even the public necessity of raising revenue to run the government would permit the sale of property under taxation procedure without due process of law. For the argument I am assuming that due process of law, in methods and procedure has been prescribed by the Legislature and that such have been complied with by those charged with the administration of the tax laws. But apparently the publication of delinquent property by correct description before certificate of sale together with the names of the record owners is notice to the world and therefore notice to all persons having an interest therein and therefore due process. In any event what I say regarding the public necessity of cleansing property of some types of incumbrances and not of others to make it saleable presumes due process.

The opinion says:

"It must be conclusively presumed in the assessment of the lots that their value was fixed subject to the covenant."

It is practically impossible for a county assessor to know of all easements, building restrictions and the like which exist in his county. Indeed in this very case the assessor testified that he acted in ignorance of the building restrictions here involved. Land owners themselves are ofttimes, as in this case, so confused as to the existence of such interests in land that they have to go to the courts to get them settled. The conclusive presumption that the assessor considers the effect of all existing easements and like property interests when he fixes the value of a particular lot has little basis in fact, and, I think, should not be indulged in. Such a presumption is not necessary for the determination of this case.

As to the proposition that only the servient estate less the burden of the easement is assessed, I call attention to the following passage appearing in Cooley on Taxation, 3d Ed., p. 739; 4th Ed., Sec. 1069, p. 2170, reading:

"In a majority of the states the rule prescribed by the statutes is that lands and other real estate shall be assessed as such, irrespective of the separate estates that individuals may have in them. Under such a practice, he who, for the time being, enjoys the possession of the real estate and the pernancy of the profits may be charged with the tax. The practice, however, has not been universal; in some states, and particularly in some special proceedings, the statutes have required separate interests to be separately assessed. When the whole is assessed as an entirety, provision is usually made under which the respective owners may pay their proportions of the tax, and have their respective interests discharged of the lien."

In case of a life tenant, the rule is generally according to Cooley on Taxation, 3d Ed., p. 723, that he

"should be assessed as owner during the continuance of the life estate."

It would seem that the measure of the tax against the life tenant is the leviable portion of the full value of the land. We do not have a statute requiring the assessor to separate interests.

While I am in agreement therefore with the result that easements and building restrictions are not extinguished by valid tax foreclosure procedure, I am doubtful as to the reason given for that result. In order to assure myself of the correct basis I would be compelled to make an exploration which would consume much effort and time. After all, the holding in this case rather than the ascertainment of the correct reasons for it is of paramount importance. The reason given in the court's opinion may be as sound and rational as any. But the whole field of taxation of real and personal property is an enormous one with many ramifications. It is ofttimes difficult to make theories accord with the actualities of the taxing process or at least so relate those theories as to present a logical fabric of the law of real estate taxation.

Illustrative of this, I quote from the opinion of Thomas, J., in the case of Blevins v. Smith, supra, as follows. [104 Mo. 583, 16 S.W. 216]

"We will, in the second place, inquire into the general rule in regard to the sale of land for taxes, and the title acquired by the purchaser at such sale. There are in the several states of this Union two methods of listing lands for taxation, — one is to list the lands `as the summation of all interests;' and the other is to list the interest of the owners of the land as set out in the assessment roll; and much depends on the method of the assessment as to the interest that passes to the purchaser at a tax-sale. Indeed, when the principles underlying the exercise of the taxing power, and the sale of lands for unpaid taxes, are examined, it will be found that the title conveyed at a tax-sale depends almost wholly on the theory upon which the land is listed and valued for taxation. On this subject Mr. Blackwell, in his work on Tax-Titles (5th Ed., § 954), says: `When the sale and deed are valid, and have their complete effect, * * * the interest conveyed depends upon the circumstances and the statutes. If a particular interest in the land is separately assessed as such, a sale of that does not pass the whole land, nor will a sale of the land pass such interest. If the land alone is assessed, as the summation of all interests, liens, incumbrances, etc., the general rule is that the deed carries a fee-simple absolute, a new and independent title, the land itself being conveyed; and all prior liens, incumbrances, and interests in, to, or upon the land are extinguished. * * * In those states where the tax is a charge upon the land alone, where no resort, in any event, is contemplated against the owner or his personal estate, and where the proceeding is strictly in rem, the tax-deed will undoubtedly have the effect to destroy all prior interests in the estate, whether vested or contingent, executed or executory, and those in possession, reversion, and remainder. * * * On the other hand, where the law requires the land to be listed in the name of the owner of the fee, or of any other interest in the estate, provides for a personal demand of the tax, and, in case of default, authorizes the seizure of the body or goods of the delinquent in satisfaction of the tax, and in terms, or upon a fair construction of the law, permits a sale of the land only when all other remedies have been exhausted, then the sale and conveyance by the officer pass only the interest of him in whose name it was listed, upon whom the demand was made, who had notice of the proceedings, and who alone can be regarded as legally delinquent. In such case the title is a derivative one, and the tax purchaser can recover in ejectment only such interest as he may prove to have been vested in the defaulter at the time of the assessment.' As we shall see later on, the method of listing lands for taxation and the sale of them for unpaid taxes in Missouri does not come under either of the categories mentioned by Mr. Blackwell, but partakes of the nature of both somewhat. Mr. Cooley, in his work on Taxation (2d Ed., p. 464), on this same subject says: `The usual method of enforcing the payment of taxes upon property is by putting the property up at public sale. No one questions the right to do this, and no one doubts that the sale, if fair and made in compliance with the law, and after all preliminary steps have been taken, vests a perfect title in the purchaser to the full extent that the statute has declared.'"

This quotation contains an oft quoted passage from Blackwell's work on Tax Titles. It appears that the interest which passes to the purchaser at the tax sale depends largely on the method of assessment. In view of that quotation from Blackwell, I take it that the correctness of the thesis of the main opinion depends on the assumption that in this state the tax is levied against the owner of the interest rather than as a charge against the land and that the owner's interest alone is assessed and taxed and sold for his tax indebtedness. In such case, says Mr. Blackwell, "the title is a derivative one, and the tax purchaser can recover in ejectment only such interest as he may prove to have been vested in the defaulter at the time of the assessment."

But this court has said in Welner v. Stearns, 40 Utah 185,120 P. 490, 493 Ann. Cas. 1914C, 1175,

"Under our statute, as under most of the state statutes of the Union, the tax sale initiates a new title, and has no relation with the previous chain of title", citing Cyc. 1473.

And I think this same statement has been made in several other of our opinions. But if such theory is correct it would seem, according to Blackwell,

"If a particular interest in the land is assessed as such, a sale of that does not pass the whole land, nor will a sale of the land pass such interest. If the land alone is assessed as a summation of all interests, liens, incumbrances, etc., the general rule is that the deed carries a fee-simple absolute, a new and independent title, the land itself being conveyed; and all prior liens, incumbrances and interests in, to, or upon the land are extinguished. * * *"

Now we have our court in at least one case founding its conclusion on the proposition that the tax sale initiates a new title from the sovereign and not one that is derivative which would seem to be a proposition that is at variance with the thesis of the main opinion. I am not sure, however, that in the case of Welner v. Stearns, supra, or any case decided by this court, any real investigation was made as to whether our tax statutes made the tax a charge against the land alone and the proceedings strictly in rem or whether separate interests were assessed and the title received by the tax purchaser therefore derivative or whether our tax statutes present a hybrid system. I can refer to a number of tax sections in our code which seem to make the tax a debt against the individual owning the property and a lien on his property rather than a charge against the property alone.

Our statutes provide (Sec. 80-5-4) that

"The county assessor must, before the 15th day of April of each year, ascertain the names of all taxable, inhabitants * * * and must assess such [taxable] property to the person by whom it was owned or claimed, or in whose possession or controlit was, at 12 o'clock m. of the first day of January next preceding, * * *." (Unless otherwise specified, the italics or emphasis in the quoted parts of the statutes are mine.)

Section 80-5-12 provides that

"* * * the property must be assessed to such name [owner or claimant]"

and Section 80-5-13 requires that

"when a person is assessed as agent, trustee, bailee, guardian,executor or administrator, his representative designation must be added to his name, * * *."

Here the express language seems to imply that the assessment is fundamentally against a person and not against the property regardless of person.

Likewise, Section 80-5-14, dealing with undistributed or unpartitioned property of deceased persons, may be assessed against their heirs, guardians, executors or administrators or any one of them, and the payment of taxes made by either bindsall of the parties in interest for their proportions. The assessment binds persons not the property except as security for its payment.

Also Section 80-5-18 provides that

"* * * any person claiming the same [lands already described on the assessment book] and desiring to be assessed therefor may have his name inserted with that of the person to whom suchland is assessed."

When we come to Sec. 80-10-1 we find that every tax has the effect of a judgment against the person and every lien created by this title

"has the force and effect of an execution duly levied againstall personal property of the delinquent."

And Sec. 80-10-3 provides that

"every tax upon real property is a lien against the property assessed; * * * which several liens attach as of the 1st day in January of each year."

Thus by Section 80-10-1 the lien created by Sec. 80-10-3

"has the force and effect of an execution duly levied against allpersonal property of the delinquent."

Certainly this smacks of an assessment against the person rather than a charge against the realty alone — the tax debt being a lien against the realty of the owner.

Section 6090-6092, Complied Laws of Utah 1917, provided for personal suit against a tax debtor for the delinquent tax when there was no sale of the property upon which the tax was a lien when said property was once offered for tax sale. These sections did not survive the 1933 revision of the statutes.

Personal suit for taxes by a county treasurer against a tax debtor who removed from one county to another after being assessed on personal property was authorized by Section 6048, Complied Laws of Utah 1917. This section, likewise, was left out of the 1933 revision of the statutes.

Under our present law, in certain circumstances, personal suit for taxes is authorized against owners or those having care and custody of livestock or honeybees. See Section 80-5-27, U.C.A. 1943.

There are other sections which could be pointed out which support this view. But if this is the theory of our tax code it would seem, according to Blackwell, that the tax is one against the person and the person is assessed and tax titles are derivative and not new titles from the sovereign. And in such case the reasoning of the main opinion would gain support. But until we do determine what the theory of our tax assessment really is, confusion will result. It may be that the tax is one against the person but the procedure to collect it confined to the sale of his property and in that sense a proceeding in rem although Sec. 80-10-3 and some of the other sections would seem to be somewhat against that view.

I have called attention to what appear to me to be inconsistencies in statements in our opinions to point out the danger of seizing on a particular theory to support a current decision without a survey of the whole field. Certainly the habit of seizing on a theory to serve an immediate result, only to find ourselves confronted by a contradictory theory in an earlier or later case when such contradictory theory serves the result in that case, leads to confusion. That is what prompts me to state that I think the pragmatic or functional approach should be used. The two paramount principles which control in the interpretation of statutory tax law where there is room for statutory construction are workability of tax proceeding and public necessity. These should be recognized as the main guides in interpretation rather than laying down underlying theories to support results which theories appear to be contradictory. Because of public necessity, I agree that mortgages and most other liens, including tax liens and most likely dower and some other interests, are extinguished byvalid tax foreclosure procedure but not easements.

I call attention, in concluding, to the fact that I have discussed easements in this case because they are analogous to building restrictions but I should add that easements themselves appear to be of two kinds, the negative easement like that for light and air which in effect prohibit the servient tenement owner from building on a part of his land and the affirmative easement which gives the owner of the dominant estate the right to use the other's land in a limited way. At bottom these may be the same because the owner of an easement for light and air may be using it for the transfer of light and air over the other's land instead of for the transfer of himself or his vehicles. But building restrictions appear to be more analogous to the negative than the positive easement. Whatever may be the reasoning which should be employed to support the result in this case, I concur, for correct results have been reached.

PRATT, J., not participating.