Floyd v. Gilbreath

Gregu, J.,

dissenting says:

James C. Gilbreath and twelve others, in behalf ot themselves and all other tax payers of Scott county, presented their bill of complaint against the appellant, to enjoin him from the collection of an excess of one-fourth of one percent, tax for public buildings, and one-half of one per cent, in par funds, for officers’ fees.

The complainants allege that they arc' severally the owners of considerable real and personal estate, liable to taxation in said county. They recite the various provisions of law, authorizing the County Court to assess taxes, and aver, that at the time and place fixed by law, said County Court met and made an assessment for the year 1871; that said court assessed the full amount allowed by law, for county purposes and for public buildings, and over said amounts they assessed and ordered collected one-half of one per'cent., in par funds, to pay officers’ fees, and one-fourth of one per cent, for a jail tax, which sums, among the legal taxes, were extended on the tax-books, and charged to them, and as an exhibit of the sum charged to each, they refer to the tax book and the sums carried out under the heads of such taxes; that the said tax books, with these illegal taxes thereon, lias.been made up in the usual form of law, with an execution thereto attached, and delivered to said appellant, as such sheriff and collector of Scott county, and he is proceeding to collect the whole of the tax on said book, that which is illegal, as well as that which is legal; that they are ready and willing, and offer to pay all the taxes legally assessed; that if said illegal taxes are not paid, said appellant threatens to, and lie will, sell their property, unless lie is restrained from so doing by an order of coui’t; that said illegal levy is oppressive upon appellees, and that they ought not to be subject to the expense and annoyance of bringing á multitude of suits to prevent their property from being levied upon and sold for such illegal assessments. That under the present system of practice, in this fcitate, they have no remedy, save by the exercise of the equity powers of tlie court, to restrain tlie appellant from carrying into effect the oppressive and illegal orders of the County Court, and closed with the usual prayer of injunction.

There is no question but the law limited the County Court in their assessment for public buildings to one-fourtli of one per cent., and in this instance they attempted to levy double that, and their attempt to assess one-half of one per cent, for officers’ fees, all likewise agree, was without the shadow of authority.

Cur only disagreement is upon the power of a court of equity to grant relief in such cases, and I may further state that upon many of the abstract propositions of law announced by the majority, we do not disagree", and so far as such legal, propositions tend to sustain the conclusions at which they have arrived, I am willing to concede their full force and extent.

I am willing to argue this case upon their strongest grounds, and grant all that is claimed by Mr. Justice Field, in the well known case of Hows against the city of Chicago, 11 WaL, 109, and few opinions in able coui’ts have dealt in more general terms, or declined relief in stronger cases. lie says: “No court of equity will, therefore, allow its injunction to issue to restrain their action, except where it may be necessary to protect the rights of the citizen, whose property is taxed, and he lias no adequate remedy by the ordinary process of the law. It must appear that the enforcement of the tax would lead to a multiplicity of suits, or produce irreparable injury, or where the property is real estate, throw a cloud upon the title of the complainant before the aid of a court of equity can be invoked.”

Now the majority say that each case must fall under some one of those heads of equity jurisprudence; and at present we assume to face them upon this ground.

Some decisions favor tlicir conclusions, if we do not consider our peculiar statutes, and different judges take different views upon this, as they necessarily will upon all important questions litigated in so many forms, arising upon statutes having the same object, but widely differing in detail, and involving most important /interests. And by far the greater number of apparent conflicts are attributable to the different judicial systems in which they are found. Tt is well known that in the various States of the Union our revenue systems are like the laws of descent, dower or homestead, fashioned after the changing will of a Legislature, and subject to all the uncertainty, dubiety and imperfections of hasty action, and we cannot arrive at a correct conclusion without a careful consideration of our own tax laws, and a clear view of our system of rights and remedies as they depend upon these rovenue statutes. Thus considering, if this case comes under any of the above heads of equity jurisdiction, the judgment should be affirmed, wo will consider them.

The ownership of real as well as personal property is averred; the assessment and the proceedings to collect in the forms of law are alleged.

It seems these citizens should not, under all circumstances, be compelled to pay this illegal assessment, which might involve the sacrifice of the very lands they arc justly seeking to protect. The sheriff was proceeding to sell the lands, under the color of law, at the time and in the manner prescribed for the non-payment of taxes.

And under the execution annexed to the tax-book, he would collect taxes,..penalty and costs, and the purchaser would receive a certificate for title. See Secs. 75, 98, 100, 105, Rev. Act, 1871.

Then a redemption can only be had (Sec. 116.) by the owner depositing with the county treasurer an amount of money equal, to that for which the land was sold for tax, penalty and costs and the taxes subsequently paid thereon, together with interest, and one hundred per centum penalty on the whole amount so paid.

If such deposit is not made within two years, under section 125, the county clerk shall execute a deed to the purchaser or his assigns for the whole tract of land or lot sold, which deed, in the usual form, shall he acknowledged and recorded, and shall vest in the grantee, his heirs and assigns, the title in the real estate described, and shall be received in all courts and places where such title is involved as conclusive evidence that each and every act and thing required to be done, under the imovisions of the revenue law, had been done; and the party offering such deed shall not be required to produce the assessment, appraisement, notice or sale, or any other thing, as evidence to sustain such title, and the party controverting such deed can only show that the land conveyed was Aot subject to taxation.

Second. That the taxes due, had been paid before the sale.

Third. That such land had been duly redeemed according to law, before the execution of the deed; or

Fourth. That the laud was the property of a feme coverte, minor, insane person, or one in imprisonment at the date of the sale and deed.

Now it will be readily seen by examining the provisions of these sections, that the statute gives no legal remedy to stop proceedings, or to stop or set aside a sale because of any opj>ressive or illegal levy or collection, but prescribes a direct channel through which acts shall proceed until an absolute deed is made for the lands, by one acting in the forms of, and under color of law, and by these statutes, this deed is not only relieved from reciting the appraisement, levy, notice, sale, etc., but it is expressly provided that the holder shall not be required to prove anything of the kind, and that his deed shall be conclusive evidence, unless the other party affirmatively show that the lands could not be taxed; that the tax or redemption money was paid, or the owner, under legal disaability; thus cutting off, not merely defenses for informality, but for illegality, extortions and other gross wrongs. In this case depriving the parties of all redress, unless they first paid out their money. And can it be said such a deed, outstanding under these statutes, is no cloud upon the occupant’s title? And it is no answer, in this case, to say, the complainants had personal property out of which the tax could have been made, because, our statutes, so unlike most others, that preserve real estate, (section 92), expressly prohibit the sheriff from making a distress and sale of personal property for any taxes due on land, and requires such taxes to be made only out of the lands; how then shall the owner avoid the shadow overhanging his title ? He, being in possession, cannot sue in ejectment, and of course it cannot be insisted that he could file a bill to remove the cloud from the title, because equity will never entertain such a bill, unless there is a real cloud existing, and to admit that, at any time, such cloud does arise upon his title, would be to admit all the most persistent, against tax injunctions, have ever said was necessary to authorize a chancellor to interpose by the prohibitory process of injunction.

And further, section 123, provides that “all actions to test the validity of any proceeding in the appraisement, assessment or levying of taxes upon any land or lot or part thereof, •etc., shall be commenced .within two years from date of sale and not afterwards.” Thus making the limitation to all suits ■absolute upon the expiration of the period of redemption, a very remarkable limitation of only two years for real estate-actions.

Beyond all this, section 178, provides that, “upon the sale of any land or town or city lot, or part thereof for taxes then due, if such sale should prove invalid on account of any informality in the proceeding of any officer having any duty to perform in relation thereto, the purchaser a,t such sale, shall be entitled to receive from the proprietor of such land ■or land or lot, the amount of taxes, interest, penalties and costs of advertising with interest thereon from the payment thereof, and the amount of taxes paid thereon by the purchaser, subsequent to such sale, and such land or lot shall be bound for the payment thereof,” etc. Here it is declared that certain sales, are so far in violation of law that the courts must set them aside, vet tlie proprietor must pay upon a levy and collection not valid in law, or lie must forfeit and pay all these costs and penalties, which are made a lien upon his land. This is creating a very striking cloud upon his title, as well as showing a very inadequate remedy at law. Such provisions as cited — two years of limitation, no redemption, without paying double the amount, no recitals required in a deed, the deed made absolute and by law declared conclusive evidence in all courts, seem to becloud the title so a chancellor might restrain, where the attempted collection is clearly illegal, as it is conceded to be in this ease; hence we are of opinion the court had jurisdiction.

We will refer to some good authority, but not attempt to notice numerous decisions that have been rendered sustaining this view.

Mr. Hilliard, in his work on injunctions says : “An execution sale may be enjoined where it would cause a cloud on the title of the complainant,” {page 234;) and in laying down what lie says has been held to bo the law, on page 455, lie says r “and though tax deeds of the land would be void, yet they would bo a cloud on the title, and the issuing them may be restrained.”

Mr. Blackwell, in his work on tax titles, second edition, page 481, speaking of an officer proceeding to sell without sufficient authority says: “The execution of the power under such circumstances is calculated to cast a cloud upon the title of the owner, and to render it unmarketable in the equitable sense of that term. * * * * When the owner is in posr session of the land at the. time illegal proceeding is about to take place, ho has' no remedy in a court of law which would indemnify him for the threatened wrong to his title. * * * * Surely under such circumstances a court of equity would grant relief upon the familiar principles of action in that court.” Upon this and .succeeding pages this able author reviews many decisions, and announces the doctrine that courts of equity have jurisdiction to enjoin the collection of illegal taxes.

Mr. Dillon, in Ms valuable work on municipal corporations, page 682 section. 731 says: “In tins country the right of property holders or taxable inhabitants to resort to equity to restrain municipal corporations and tlicir officers from transcending their lawful powers, or violating their legal duties, in any mode Avhicli Avill injuriously affect the taxpayers, such as * * * * leAying and collecting void and illegal taxes and assessments, under the circumstances, presently to he explained, has been affirmed or recognized in numerous eases, in many of the States. It is the prevailing doctrine on this subject,” etc.

Mr. High, in bis Aery late Avork'oii injunctions, section 367, says: “ The most generally recognized exception to the rule that equity will not interfere Avith the collection of the revenue, because of defects or illegalities in the proceedings, is in casos where the proceedings, if not enjoined, would result in clouding the title to real estate. * * * So, too, Avliere a city charter declares a tax a lien upon the premises on Avhich it is assessed, the tax, if illegal, creates such a cloud upon the title as to 'warrant an injunction, * * * and the jurisdiction to thus interfere for the prevention of a cloud upon title, is regarded as pertaining to tlie Avell settled powers of equity, which Avill interfere to prevent such a cloud as tends to diminish the value of the property or cast a doubt upon the title.” And in the next section, when speaking of proceedings, by law, void on their face, he says : “But where by statute a tax deed is made prima facie evidence of the regularity of all the proceedings incident to the assessment and sale, if the tax has been imposed contrary to law, such a cloud upon the title will result as to warrant the interference of equity.” In the case at bar, no one here- questions the fact that the tax Avas imposed contrary to laAV, and the deed would not only be prima facie but conclusive.

Irreparable injury justifies equitable jurisdiction. It is not the great extent of the injury that is known as irreparable, hut au injury that cannot be redressed or properly estimated and relieved against, and if tlie costs, "■penalties and illegal taxes assessed against the appellees, could not have all been relieved against by process of law; and, under these peculiar statutes, I incline to that opinion, this would afford grounds for equitable relief'.

To prevent a multiplicity of suits, taking the propositions inversely as above stated, is the third head of equitable jurisdiction, and this has been presented in so many leading cases that we do not feel called upon to rc-argue it. In Burr vs. Denison, 17 N. H., 170, seventeen persons sued for all the taxpayers of the district, and had a judgment enjoined, and also the tax to pay it. In Smith vs. Swamstedt, 16 IIow., a few Methodist preachers sued for themselves and many others, etc. In Page vs. The Inhabitants of Halifax, 12 Gash. (Mass.), 410, a few tax-payers sued for all, and obtained an injunction, etc. See Howard et al. vs. Mayor of Linn, 1 Allen, 103. In Nevett vs. Galispe, 1 How. (Miss.), the court said: “Courts of equity will interfere to prevent a multiplicity of suits where the subject matter of contest is held by one individual in opposition to a number of persons who controvert his right, and who hold separate and distinct interests, depending upon a common source.” But a reference to the elementary works does away with the necessity of referring to numerous decisions.

The last general head is the inadequacy of the remedy at law. A careful review of the authorities will show that where a proceeding is being had for the sale of lands occupied by a tax-payer, any remedy at law is almost universally held to be inadequate, because, even an illegal levy so far creates a cloud upon the title as to injure the value, and especially is this so where a deed by statute is made prima facie evidence of the regularity of the proceedings, and the party in possession has no legal remedy to remove the cloud from his title. And our peculiar laws declare the deed conclusive evidence in all courts; that everything has been done necessary to a perfect title, and forbids the proper owner making proof to the contrary, except proof t-liat the lands were not taxable; that the taxes were unpaid, or the owner uuder legal disabilities. And. those statutes give no remedy against illegal assessments, prescribe no mode of procedure to get rid of illegal or fraudulent action on the part of tax-officers. Then, with no mode of redress pointed out by statute, the owner is forced to pay and risk a suit for a return of liis money, or his lands will be sold, a cloud thrown upon his title, or he would be compelled to pay out his money and take the risk and pay the expense of a suit to recover it back. The case of Bull et, al. vs. Heed, et al., 13 Gratten, 86, is so full and direct upon all the main points in this case, that a reference thereto ought to have been sufficient argument.

As a general rule, courts should not enjoin the collection of State taxes, unless the complainants show a case of great wrong, without adequate remedy at law. Municipal taxes, and other local assessments are not so highly favored, and. some distinctions are made between personal and real estate— the nature of the former renders it easily marketable, and its loss can be justly estimated in damages.

Real estate is fixed; the title depends more upon decrees, deeds and other writings ; its value may be affected by liens and by local surroundings, and a deed in form (if not teehnichally valid), outstanding, may lessen its worth, and especially so when such deed has been executed in the usual, course of law, and hence the necessity for the rule allowing a court of equity to restrain where the law has prescribed nc adequate remedy. Burnett vs. Cincinnati, 3 Hammond, 73; Vanoree et al. vs. Justices of the Inferior Court, 27 Georgia, 356; Osborn vs. U. S. Bank, 9 Pet., 739; Story’s Eq. Pl., secs. 97, 112, 126; Civil Code, sec. 33.