MITCHELL and FRENCH, JJ., dissent. This cause was heretofore heard by a Department of this court and its opinion will be found in 146 Wash. 671, 264 P. 997. After the filing of the Departmental opinion, a petition for a rehearing was filed and granted, and the cause was again argued before the court sitting En Banc.
A majority of the court has now reached the conclusion that the Departmental opinion cannot be sustained, and that the judgment of the trial court must be affirmed.
[1] The facts are not now in issue and need not be restated. The sole question is whether or not a purchaser at a general county tax foreclosure sale takes title freed from the liens of local assessments, the city under whose authority such local assessment liens were created having been made a party to the foreclosure proceeding.
We cheerfully accept, without reservation, that part of the Departmental opinion which holds, in accord with our prior decisions and the statute, that general taxes are superior and paramount to all other liens and claims, including the lien of local assessments, but that only brings us to the threshold of the present question.
The legislature, in the light of the early decisions of this court, which are cited in the Departmental opinion, and to cure the situation which was pointed out by those decisions, enacted what is now Rem. Comp. Stat., § 9393, as we see it, for the purpose, and the sole purpose, *Page 35 of preventing and avoiding the extinguishment of the liens of local assessments until the very last moment. That section reads:
"The holder of any certificate of delinquency for general taxes shall, before commencing any action to foreclose the lien of such certificate pay in full all local assessments or installments thereof outstanding against the whole or any portion of the property included in such certificate of delinquency, or, he may elect to proceed to acquire title to such property subject to certain or all local assessments a lien thereon, in which case the complaint, decree of foreclosure, order of sale, sale, certificate of sale and deed shall so state. If such holder shall pay such local assessments, he shall be entitled to fifteen per cent interest per annum on the amount of the delinquent assessments or delinquent installments thereof so paid, from date of payment.
"In any action to foreclose any lien for general taxes upon any property a copy of the complaint shall be served on the treasurer of the city or town within which such property is situate within five days after such complaint is filed. In any case where any property shall be struck off to or bid in by the county at any sale for general taxes, and such property shall subsequently be sold by the county, the proceeds of such sale shall first be applied to discharge in full the lien or liens for general taxes for which the same was sold, and the remainder, or such portion thereof as may be necessary, shall be paid to the city to discharge all local assessment liens upon such property, and the surplus, if any, shall be distributed among the proper county funds."
This statute was considered by this court in Maryland RealtyCo. v. Tacoma, 121 Wash. 230, 209 P. 1, where it was said:
"Appellants contend that this last quoted section applies to foreclosures and purchases made by counties as well as those made by private individuals, and that consequently it was necessary that the county before foreclosing should pay the local assessments or *Page 36 bid in the property subject thereto. We cannot so hold. Before the passage of § 9393 by the 1911 legislature we had consistently held that the payment of local assessments was not a prerequisite to foreclosure of certificates of delinquency for general taxes, whether such suit be by a county or by private individuals.McMillan v. Tacoma, 26 Wash. 358, 67 P. 68; Ballard v. Way,34 Wash. 116, 74 P. 1067, 101 Am. St. 993; Pennsylvania Co. v.Tacoma, 36 Wash. 656, 79 P. 306; Ballard v. Ross, 38 Wash. 209,80 P. 439. It was after the rendition of these decisions that the legislature passed § 9393. It was the legislative intent to preserve the lien of the local assessment where it could be done without sacrifice to the county and state. If private investors would take the property, they must pay both the delinquent general tax and the local assessments, but if the property be of such small value as that the county must buy it in, then the superiority of the lien for general taxes must be asserted, even to the point of destroying the lien of the local assessment. Any other construction of the statute would greatly hamper and hinder the state and county in securing funds by means of which they are enabled to carry out their constitutional and statutory functions."
By the statute quoted and the construction given it, as shown, we are committed to the doctrine that the lien of local assessments must be preserved and maintained up to the point where to further preserve such a lien would cause a sacrifice on the part of the county and the state; or, in other words, that though the municipality which created the local assessment liens may be made a party to the statutory foreclosure suit, that is not done for the purpose of then immediately extinguishing the liens of the local assessments by foreclosure, but for the purpose of limiting those liens as the statute in terms, provides, i.e.:
"In any case where any property shall be struck off to or bid in by the county at any sale for general taxes, and such property shall subsequently be sold by the county, the proceeds of such sale shall first be applied *Page 37 to discharge in full the lien or liens for general taxes for which the same was sold, and the remainder, or such portion thereof as may be necessary, shall be paid to the city to discharge all local assessment liens upon such property, and the surplus, if any, shall be distributed among the proper county funds."
By the foreclosure, the city loses its own right to foreclose its local assessment liens and loses all control over the situation, save only as it may have the right to require diligence on the part of the county to raise funds by a resale, and save as the fund so acquired by resale immediately, by the language of the statute, becomes subject, so far as it is in excess of the general tax, to the lien of the local assessment. Or in other words, by the resale, the still unextinguished lien is by the statute transferred from the property to the fund acquired by its resale. Or, restated in still another way, by the act of 1911, the legislature plainly provided and intended to provide that the local assessment liens should not be extinguished by the decree of foreclosure, and if not extinguished by the decree, we can hardly hold that the bidding at the sale following the decree, by a private individual, can be given the effect of a judicial act which will cut off the lien which has existed up to that moment.
Taking the statute as a whole, the legislative intent is clearly discernible that a private person, whether he proceeds by the purchase of a certificate of delinquency and himself forecloses it, or becomes a purchaser at the county's sale, may in either event pay the local assessments or acquire title subject to them, but he has no other choice. There is no word in the statute to indicate that either course will enable him to defeat a lien superior to every other except the general tax lien, and we know of no reason why a private purchaser can, or should, acquire greater rights as a purchaser at a county tax sale than the county itself *Page 38 can acquire. Surely, if the county, which is acting for itself and the state in collecting the revenue required to maintain the general government, must still take the property charged with the duty to resell it, if possible, so as to pay both the general tax and the assessment, and that privilege is not extended to a private purchaser, he cannot take it freed entirely of the lien of the local assessment, but must either pay the lien or take subject to it.
[2] But it is argued that we have held that, by a tax sale, a new title is initiated, and that a new title can only be initiated at the time of the entry of the decree of foreclosure when the parties are before the court for the purpose of having their respective rights adjudicated. The statement as to our previous holdings is too broad.
"Where the county forecloses a certificate of delinquency on account of general taxes and buys in at the sale and later sells the property to a private individual, it initiates and creates a new title to the property, which the private individual takes free and clear of any kind or character of prior liens."Maryland Realty Co. v. Tacoma, supra.
The new title is therefore not initiated until the final resale of the property, because the statute itself preserves both the general tax lien and the local assessment lien on the property until that time. We see no logical reason why the liens may not be so preserved and continued after foreclosure just as statutory rights of redemption are preserved in the ordinary mortgage foreclosure decree.
Finding no statutory provision for the discharge of the lien of local assessments, save only by payment in full or by the county alone on resale in the manner indicated, and having in mind the clear legislative intent to preserve the liens of local assessments up to *Page 39 the point where to further preserve them would demand a sacrifice by the county or state, we are convinced that the judgment appealed from is right and it is therefore affirmed.
FULLERTON, C.J., PARKER, BEALS, MAIN, and HOLCOMB, JJ., concur.