From a decree for the appellee (plaintiff below) against appellants (defendants below) quieting title to certain real estate, this appeal has been prosecuted. Only one proposition requires discussion.
The complaint contains a statutory action to quiet title. An answer was filed by one of the defendants (appellant), containing denials and certain affirmative allegations assailing the validity of a tax deed relied upon by plaintiff as the source of his title. A demurrer was filed to the affirmative portions of the answer upon the ground principally that the allegations thereof fail to state facts sufficient to constitute a defense to the cause of action set forth in plaintiff's complaint. This demurrer was sustained and appellant declined to amend; whereupon judgment was entered for appellee.
We assume that when the court ruled upon the demurrer there was presented to him the same picture that is presented to *Page 237 us in the pleadings and briefs of counsel for appellant. So viewing it, it appears that the appellant had been the owner of the property involved; that said property was sold for delinquent taxes and never redeemed; that a tax sale certificate describing said property was issued to Curry county, filed for record, and thereafter by the county sold and delivered to Walter W. Mayes, one of the attorneys for appellee, who delivered same to the treasurer and tax collector of Curry county, who, in turn, issued the tax deed in exchange therefor to appellee; that the said Walter W. Mayes attempted to assign the certificate to plaintiff by indorsement; that said indorsement by Mayes was made in blank; that the name of plaintiff did not appear therein; that it was not dated; that no consideration was specified therein; that the name of plaintiff to whom the tax deed in question was issued appeared no place in the tax proceedings until he appears as grantee in the tax deed. It is assumed that plaintiff, the physical holder of the certificate, presented it to the treasurer and demanded the deed which was issued to him, or that said certificate was presented to the treasurer and demand made by his attorney, Walter W. Mayes, that deed be executed to plaintiff. From these representations, it is claimed that the county treasurer acted in an unwarranted and illegal manner in delivering a tax deed to the plaintiff, and that consequently said tax deed is void.
Appellant relies almost exclusively on the decision of the Territorial Supreme Court in Territory v. Perea, 6 N.M. 531,30 P. 928. It was held: "In a proceeding by mandamus, by a holder of a certificate of tax sale, indorsed in blank by the original purchaser, to compel the sheriff and ex officio collector of Bernalillo county to execute and deliver to him a deed to the land sold, where it appeared that the defendant, by the order of the board of county commissioners, had previously made and delivered to the administrator and legatee of the original purchaser a deed to the land, after the time of redemption had expired; that the proceedings before the board were regular; and that, at the time of the execution and delivery of the deed, there was no assignment of such certificate of record in the office of the probate clerk, — Held: The sheriff had no power to execute a second deed to the land, while the first deed remained uncanceled, and the court below properly refused to grant a peremptory writ of mandamus to compel him to do so." Not only is that decision not a binding precedent in the case at bar, but the reasoning therein has been rendered inapplicable because of the changes made in the tax statutes since the time that decision was rendered. The real question decided by the court in that case was that the respondent had no power to issue another tax deed for the reason that by the issuance of the tax deed previously issued he had exhausted his legal authority and that compliance with the alternative writ was legally impossible. The court, speaking of the deed which the collector had been ordered by the county commissioners *Page 238 to make, said: "The sheriff was powerless to resist the order of the board. It was his duty to make the deed. The remedy provided by statute was strictly pursued, and the deed was made as required by law. The sheriff, by the execution of that deed, exhausted his power in the premises, and, so long as that deed remains uncanceled, it is clear that the respondent has no power to execute a deed to the relator."
It is likewise to be noted that the court put much emphasis on the fact that the application of the statute relative to assignment of tax sale certificates was made to a mandamus case and not to a suit in equity.
In considering the views of the Supreme Court of Iowa, for which our court manifested a respect, and in differentiating it, the first thing Judge McFie said after the citation (Swan v. Whaley, 75 Iowa, 623, 35 N.W. 440) was: "This was an action in equity to cancel a deed." That was one distinguishing feature. The court emphasized this in concluding its argument on the subject by saying: "We do not hold that the signing of the name on the back of the certificate, for a valuable consideration, with the intention of transferring the certificate, would not give the holder such an equitable interest in the certificate and the rights accruing by virtue of it as would enable him to enforce them in a court of equity, but we are of the opinion that the transfer of the certificate, under the circumstances shownin this case, did not operate to convey the legal title therein to the relator, so as to enable him to maintain an action ofmandamus." (Italics ours.)
Black on Tax Titles, in section 316, says: "But in some of the states, it has been provided by statute that such certificates `shall be assignable by indorsement.' There is, however, some difference of opinion as to the proper construction of such a statutory provision. We find one case holding that the mere writing of his name by the purchaser on the back of the certificate does not constitute an `indorsement,' and that a person to whom the certificate is delivered by the purchaser, with his name so written upon it, has no authority, by virtue of such delivery, to write a formal assignment thereof above the signature. But this view is not sustained by the weight of authority. On the contrary, the authorities appear to agree that the design of such a statute is to make the certificate quasi negotiable, so that it may pass from hand to hand, carrying all rights with it, by a mere indorsement in blank."
The one case cited is Territory v. Perea, supra. However, we do not quarrel with the dictum of Judge McFie in that case. We merely say it is not persuasive in the case at bar.
There are a number of distinguishing features between that mandamus action and the case at bar, which is a suit in equity. Some of them are of greater importance than others, but we will mention several. The indications are that our Territorial Supreme Court would have been inclined to adopt the holding of the Iowa *Page 239 Supreme Court in Swan v. Whaley et al., 75 Iowa, 623,35 N.W. 440, if it had before it for consideration a case to be determined upon equitable principles. In disposing of that case as affording a precedent in the mandamus case, our court called attention to the fact that the Iowa Code provided that when the assignment of the certificate is made the right and title of the assignor immediately vests in the assignee without depending upon any further or future contingency. Our then existing territorial statute (Comp. Laws § 2885) provided to the contrary; it therein being declared: "When the assignment of a certificate is entered upon the record of sales in the office of the probate clerk, it shall vest in the assignee or his legal representatives all the right and title of the original purchaser." Judge McFie went on to say: "The assignment, therefore, under the statute of New Mexico, is conditional upon something being done by the assignee to have the right and title of the original purchaser vest in him, and, until this is done, the right and title of the original purchaser does not pass to the assignee. * * * `A certificate of purchase at a tax sale does not convey a legal title. It is, however, evidence of an equitable title to the land, and enables the purchaser to call in the legal title.' These certificates are the foundation of title, and may ripen into full and complete legal title. * * * Assignments of such certificates are required to be entered of record in this territory before the title to them vests in the assignee." Our Territorial Supreme Court was considering statutes existing in 1892. In 1921 our Taxation Code was entirely overhauled and rewritten, being chapter 133, Session Laws 1921, which controls the case at bar. By section 442, the effect of the tax sale certificate was declared as follows: "The tax sale certificate, when recorded, shall vest in the purchaser, his heirs or assigns * * * a complete legal title to the property described therein, subject to redemption as provided by law." The effect was to convey a complete legal title subject to defeasance by redemption, which was directly contrary to the effect of the statutes under consideration in the Perea Case; there the certificate being merely evidence of an equitable title which would ripen into a complete legal title only after the period of redemption had expired. Furthermore, the requirement of the statutes existing at the time of the Perea decision that assignments be recorded was dropped when the 1921 Tax Code was formulated, or prior thereto. We discover nothing in the Tax Code requiring the recordation of assignments. The law requires that the tax sale certificate be recorded and recordation of the certificate is requisite for the vesting of complete legal title "in the purchaser, his heirs or assigns." We discover no requirements for further recordation of the certificate of sale after an assignment or successive assignments have been indorsed thereon. The change in our system of effectuating tax titles since the decision in the Perea Case has minimized the importance *Page 240 of that case to a degree, particularly as some of the reasons for the decision no longer exist.
The court in the Perea Case invoked the argument that it would be a dangerous thing to permit a person claiming to be the holder of a certificate to write a formal assignment over the alleged signature of the assignor after his death. The court suggested that as an assignment is a conveyance, the form of the assignment might be explained by testimony which would disclose whether his act of indorsement on the certificate was intended to be a conveyance or not. Manifestly under the facts in the Perea Case and in a mandamus action, where the officer could not be required to perform an act other than ministerial, and not then unless it was clearly his duty to perform it, and concerning which he would have no discretion to refuse performance, the fact that Moore, the purchaser at the tax sale and the holder of the certificate, was dead before the assignment was written in above Moore's signature on the certificate was an important factor in the court's conclusion. The court said that since Moore's mouth was closed, the adversary of his heirs or personal representative ought not to be permitted by his acts to reflect facts which had occurred before Moore's death. A much less strict view can be taken in the case at bar. Here it appears from the record in an equity case that Walter W. Mayes, to whom the tax sale certificate had been originally issued and who had assigned it in blank to Cavender, the plaintiff, was in court as Cavender's counsel. Not only was Mayes' mouth not closed, but he was opening it to urge the integrity of his assignment of the certificate to Cavender. These differences in circumstances existing in the Perea Case and in the case at bar reflect the differences in the effect that the application of principles may have to divergent situations.
Portions of the decision in the Perea Case may still be useful in another mandamus case, but it places no restraint upon us in the case at bar. The difference between the way the matter comes up, whether in a mandamus case or in an equity suit, may be very important.
We think our decision in State ex rel. McFann v. Hately,34 N.M. 86, 278 P. 206, affords illustration of this. We there held that one who had no interest in real estate, but desires to purchase a tax title thereon, could not complain because the county treasurer permitted the original owner or lienholder to redeem after the expiration of the statutory period of redemption but before such prospective purchaser had acquired any right in the certificate. We said that we did not wish to be understood as holding that the treasurer has the power to extend the period of redemption by oral agreement with the taxpayer, nor waive the utmost diligence and readiness to pay required by law, but we held that where the tax sale certificate was still held and owned by the county and no third person's interests were involved, although the statutory period of *Page 241 redemption may have previously expired and the county treasurer had accepted the amount which was due from one otherwise having a right to redeem, the rights of the redeemor could not be assailed by one not showing a better right. The action of the county treasurer under the facts in that case involved some exercise of discretion. It is to be very much doubted if the holding in that case would support mandamus to require the county treasurer against his refusal to receive tendered redemption money and permit a redemption after the statutory period of redemption had expired.
In the Perea Case Judge McFie distinguished the Iowa case because the Iowa court said that no assignment was necessary to warrant the treasurer in executing the deed, inasmuch as an Iowa law (Code 1873, § 894) provided that the "lawful holder" was entitled to the deed upon producing the certificate. Section 4100, C.L. 1897, controlling in the Perea Case, provided: "On demand of the purchaser, his heirs or assigns, and on presentation of the certificate of sale, the collector * * * shall make out a deed," etc. If Judge McFie properly appraised the Iowa decision as above noted, then it would more nearly fit our law as it now exists than at that time, because section 452, c. 133, L. 1921, provides that under designated circumstances, "on demand of the holder of the tax sale certificate, presentation thereof to the county treasurer," a deed shall be issued, etc. We think that the object of this provision is to afford the treasurer certain evidence of who is entitled to the deed when the right to one accrues. If, however, he should, without having the statutory evidence of assignment, execute a deed to the one who in fact and in law was entitled to receive it, the question of its validity would not be affected by the fact that he acted without such evidence. See Swan v. Whaley et al., 75 Iowa, 623, 35 N.W. 440. Of course, this is not to say that if the person who presented the certificate and made demand that a deed be issued to him is not in fact and in law the owner of the certificate, he would acquire any rights in the property involved by virtue of the execution of a deed to him. The real owner of the certificate doubtless could assert his right, title, and interest in and to the property as against a fraudulent interloper or his privies.
We think the phrase employed in section 455, "assignee of the purchaser," is not limited to a person named as assignee in an indorsement on the tax sale certificate. We apprehend that the interests represented by the certificate being a thing of value may be assigned as a matter of law, as for instance to the personal representative of a deceased owner of a certificate, or through execution sale to a creditor of such owner, and that the phrase "holder of the tax sale certificate" to whom the deed may be issued under the provisions of section 452 is broad enough to cover "heir at law," who under section 455, if named as grantee in the tax deed, is presumptively entitled thereto. And such language would seem to be broad enough to embrace any one *Page 242 who is in law and in fact entitled to the interest represented by the certificate, such as an assignee by operation of law or by indorsement on the certificate. These considerations strongly support the view that "holder" is not limited to a person named in a formal assignment indorsed on the certificate.
It will be noted that section 455 does not say that the tax deed is prima facie evidence that the grantee is the holder of the certificate by indorsement thereof. It says that it is evidence that the grantee named in the deed was the purchaser, or his heir at law or his assignee, which suggests, as was held by the Iowa court in Swan v. Whaley, supra, that assignment of the certificate by indorsement affords the treasurer certain evidence of who is entitled to the deed, but is not the only evidence by which it may be established that the physical holder of the certificate is the assignee of the purchaser. See Christian v. Lockhart et al., 31 N.M. 331, 245 P. 249. It thus appears that the facts alleged in the answer do not fully negative the presumption that the grantee named in the tax deed is "heir at law or assignee of the purchaser."
In American Exch. Nat. Bank of City of New York v. Crooks,97 Iowa, 244, 66 N.W. 168, it was held: "Possession of a certificate of purchase at tax sale (which Code, § 888, declares shall be assignable by indorsement), indorsed with the name of the one to whom it was issued, is prima facie evidence of ownership." The court says: "The land was sold to Charles S. Hazlet, and the certificate of sale issued to him. It came into the possession of the defendant Crooks, and the name `Chas. S. Hazlet' is indorsed thereon. On the return of the certificate so indorsed, the tax deed issued to Crooks. The point is now made that there is no evidence that Hazlet ever parted with his title or interest in the certificate. We think the facts of possession by Crooks and the indorsement are prima facie evidence of ownership by Crooks. It is provided by Code, § 888, that the `certificate of purchase shall be assignable by indorsement.' It is conceded on the authority of Swan v. Whaley, 75 Iowa, 623, 35 N.W. 440, that such an indorsement conveys the title upon proof that the parties so intended, but it is thought that the indorsement and delivery are not sufficient evidence of the fact of such intent. The fact of possession alone is some evidence of ownership, and the known purpose of an indorsement generally, and its legal effect in particular cases, strengthen the evidence, so that it is at least a prima facie showing of ownership. The indorsement and delivery were for some purpose, and a transfer of the certificate is the presumable one where no other purpose appears."
We view the matter on the record before us much as did Mr. Justice David J. Brewer in an opinion prepared for the Supreme Court of Kansas in Gardenhire v. Mitchell, 21 Kan. 83. A statute of Kansas provided for transfer of the interest of a tax certificate holder "by a written assignment, indorsed upon or attached to the *Page 243 same," section 90, c. 107, Gen.St. of Kansas 1868, which we assume the court had under consideration. The action was one in ejectment. The defendant set up a tax deed, and the validity of this deed was the question for decision. In disposing of the contention that the assignment of the tax certificate was invalid, it was said:
"The second objection is, that there was no proof of the assignment of the sale certificate. The deed is itself prima facie evidence of everything, from the valuation of the land up to the execution of the deed, and that includes assignments of the sale certificate. (McCauslin v. McGuire, 14 Kan. 234; Hobson v. Dutton, 9 Kan. 477.)
"But as to one lot, plaintiff offered in evidence the sale certificate, which showed a formal assignment from the county to one Arthur Storms, and on the back the name of Arthur Storms indorsed in blank. No formal assignment from Storms appeared anywhere on the paper, yet the tax deed ran to Jacob Grebe. Counsel contends that such blank indorsement was not an assignment, and that therefore the deed was executed to the wrong party. It will be noticed that neither the county nor Storms is questioning this deed or claiming any interest in the property, and we think the matter is one which does not concern the plaintiff. The county sold to Storms, and contracted at a certain time to give a deed to him or his assignee on surrender of the sale certificate. Grebe, claiming to be the owner, presents the certificate with Storms's name indorsed, and the deed is made. Now if Storms had not actually sold the certificate to Grebe, he and he alone is wronged, and he must come into court for relief. In Woodman v. Clapp, 21 Wis. [350] 354, the court says:
"`The deed recites that the defendant was the assignee of Comstock, who was the assignee of the county. The county is concluded by this recital. If not a ratification of the previously unauthorized act of the clerk, it certainly inures to the benefit of the defendant by way of estoppel; and so long as the county is concluded, it is not an objection of which the plaintiff can avail himself in this action.'
"That case goes beyond this, for here the only question is the fact of the assignment; there, in addition, the validity thereof."
In line with the views expressed by Judge Brewer that only one who has a right to challenge the sufficiency of a tax title may be heard to complain of irregularity in the proceedings, see Kreigh v. State Bank of Alamogordo, 37 N.M. 360, 23 P.2d 1085; Knollenberg v. State Bank of Alamogordo, 35 N.M. 427,299 P. 1077; Witt v. Evans, 36 N.M. 365, 16 P.2d 60.
Furthermore, we think the provisions of section 455 of the 1921 Taxation Code, when considered in the light of section 435 of said act, have a material bearing on the case. Section 455 provides in terms that tax deeds shall be prima facie evidence in all courts in all controversies and suits in relation to the rights of the purchaser, his heirs and assigns, to the lands *Page 244 thereby conveyed of certain facts. Nine are enumerated, some of which we quote:
"First. That the real estate conveyed was subject to taxation for the year, or years, stated in the deed.
"Second. That the taxes were not paid at any time before the sale. * * *
"Eighth. That the grantee named in the deed was the purchaser or the heir-at-law, or the assignee of the purchaser."
Section 435 provides that no attack on the title to any property sold at a tax sale in accordance with the provisions of said act shall be entertained by any court, nor shall such title be invalidated by any proceeding, except upon the ground that the taxes were paid before the sale or that the property was not subject to taxation.
It thus appears that the tax deed is properly only prima facie evidence of the first and second facts enumerated since they may be controverted. It would seem, however, that as to facts enumerated in section 455, which are not jurisdictional in their nature and which under section 435 may not be controverted, and the nonexistence of which may not be lawfully urged in any attack upon a tax sale or title, the effect of the tax deed is to make it more than prima facie evidence of such nonjurisdictional enumerated facts; in fact, construing section 435 with section 455, there is strong reason for claiming that the tax deed as to facts enumerated which do not fall within the class of "essentials of taxation" is conclusive evidence thereof.
We have several times held that the restriction of defenses to tax sales and titles to the fact that the tax had been paid or the property was not subject to taxation was a valid exercise of legislative power. See Manby v. Voorhees, 27 N.M. 511,203 P. 543; Witt v. Evans, supra; and the Iowa Supreme Court in Allen v. Armstrong, 16 Iowa, 508, upon the same argument expressed the view that it is competent for the Legislature to say that a deed shall in the purchaser's favor be conclusive evidence as to certain facts not falling within the class of essentials of taxation.
Finding no error, the judgment will be affirmed, and it is so ordered.
HUDSPETH, C.J., and SADLER and ZINN, JJ., concur.