Squire v. McCarthy

The following, opinion on rehearing was filed May 24, 1907. Former judgment of affirmance vacated and judgment of district court reversed with directions:

1. Tax Lien: Fokeclosube: Redemption. Before a tax sale bad been bad by tbe county treasurer, Holt county brought an action to foreclose an alleged tax lien on tbe plaintiff’s land, wbicb action proceeded to decree and sheriff’s sale. After the sale and before tbe confirmation tbe plaintiff, in ignorance of these facts, paid to tbe county treasurer tbe full amount of tbe taxes and interest charged against tbe land. Tbe treasurer accepted the money and issued receipts in due form therefor without notifying tbe plaintiff of tbe pendency of tbe action wbicb was prematurely brought. Held, That tbe acceptance of tbe money by tbe county treasurer and tbe issuance of tbe tax receipts operated as a satisfaction of the decree so far as tbe plaintiff is concerned, and that be is entitled to have tbe sheriff’s deed set aside in equity, tbe land being still in tbe bands of tbe original purchaser.
2.-: -: Equity. In such case, tbe loss, if any, is attributable to tbe negligence of tbe county treasurer, and tbe wrongful act of tbe county in attempting to foreclose its lien before its right to do so legally accrued, not to tbe failure of tbe taxpayer who was within his legal right and should be protected.
Letton, J.

The plaintiff, who is a resident of Wisconsin, in 1891. became the owner of a tract of land in Holt connty, *432Nebraska. He has paid taxes on the same from 1892 to and including the year 1901, but he allowed the taxes for the years 1897, 1898 and 1899 to become delinquent. In May, 1900, he sent by mail to the county treasurer sufficient money to pay the taxes for each of these years, with accrued interest to date, and with one dollar extra fee for each receipt allowed by statute to the treasurer for payment of taxes by letter. In January, 1902, after he had sent the money for the payment of the taxes for 1901, he was informed by the county treasurer that the land had been assessed to M. H. McCarthy for the year 1901, and upon making further inquiry he received another letter from the county treasurer informing him that his land had been sold under tax foreclosure proceedings in 1900 to McCarthy, and that the sale had been confirmed and a deed made. He then brought this action to set aside the sale.

In January, 1900, the county attorney of Holt county began an action in the name of that county to foreclose a tax lien on the land for the delinquent taxes of 1897 and 1898.. A decree was rendered on March 13, 1900, upon constructive service for $2,782, the land was sold at sheriff’s sale on May 28 for $100.60, and on July 16 the sale was confirmed. The plaintiff sent the money to pay these taxes to the county treasurer in May, as he testifies, but the treasurer’s books show that the taxes Avere paid on the 4th day of June, 1900, so that after the sale and before the confirmation the county had accepted, through its treasurer, the payment of the taxes and interest. The action to foreclose was improperly and prematurely brought, for the reason that at the time it was begun the county had not acquired the right to maintain it by the purchase of the land at- treasurer’s sale. Logan County v. Carnahan, 66 Neb. 685, 693. If the land had been sold at treasurer’s sale for the tax of 1898 the right to foreclose would not have accrued- until November, 1900, more than six months after the payment by plaintiff. So that if the usual and orderly course of tax *433collection had been followed no action of this nature could have been begun until long after the time at which the plaintiff paid his taxes. By the negligence of the county treasurer the plaintiff was not notified of the pendency of the action when he paid the taxes, and was allowed to rest in apparent security until after the sale had been confirmed and a deed made to the purchaser. The title to the land has not passed from the purchaser at sheriff’s sale as was erroneously stated in the former opinion, but is still held by him in his own right. The .condition that presents itself then is: In whom is the superior equity? Is it with the owner of land who has paid his taxes before any sale of the land by the county treasurer upon which an action to foreclose might properly be begun, and who relied, and had the right to rely, upon the proper discharge of duty by the county officers, or is it with the purchaser at sheriff’s sale under a decree which was clearly erroneous, but not absolutely void, and whose purchase was confirmed by the court after the taxes had been paid and the money accepted by the plaintiff in the suit, and without knowledge on the part of the court of such facts as would have made it improper and unjust to confirm the same? The statute makes no specific provisions with reference to the manner of redemption by landowners when proceedings are pending to foreclose tax liens, nor is any person designated who may receive money in redemption other than the county treasurer; hence, the plaintiff, when he attempted to pay his taxes, had a right to rely upon information of any foreclosure proceedings being furnished him by the officer of the county charged by law with the duty of collecting taxes. The taxpayer apparently did everything that the law required him to do.. He paid to the proper officer the amount shown by the tax books that was chargeable against the land, with interest to date, and in addition paid the statutory fee which the treasurer is allowed to collect from nonresidents for the .payment of their taxes, and this he did before the land had *434been sold at tax sale by the treasurer and before anyone had a right to foreclose a tax lien. On the other hand, the county brought an unwarranted action, and obtained a decree which, though not justified by the facts, was not void for want of jurisdiction, under the ruling in Logan County v. McKinley-Lanning L. & T. Co., 70 Neb. 399. It was the plain duty of the county treasurer to give to the plaintiff, at the time he paid the taxes, information that such an action had been begun, and he should not be compelled to suffer on account of the nonperformance of tliis duty by the agent of the county. In a similar case the supreme court of Iowa has said:

“The purpose of the law, in divesting the estate of a landowner upon sales and deeds executed thereunder for delinquent taxes, is to coerce the negligent and unwilling citizens to obedience of the law in payment of their taxes. It is not directed against those who, in the exercise of proper diligence, and in good faith, attempt to obey the law and discharge their duty as good citizens by the payment of taxes levied upon their property. If the landowner pays, tenders, or in good faith and without negligence attempts to pay his taxes, and is defeated in his efforts to discharge them by the fault and negligence of the officers charged Avith the duty of receiving the money and making proper records thereof, a sale and deed of the property will not be enforced.” Corning Town Co. v. Davis, 44 Ia. 622.

And so in an Illinois case, the landowner called upon the county clerk, Avhose duty it AAras to inform him of the amount necessary to be paid to make redemption and whose duty it Avas to receive the money. The full amount which this officer required was paid and a certificate of redemption issued, but a subsequent tax had not been included upon Avhich a tax sale was afterwards had. The action was to set aside a deed based upon this subsequent sale. The court say: “Here Avas a mistake of an officer for which appellees were in no manner responsible. For this mistake shall they lose their land, or is it within *435the power of a court of equity to relieve as against that mistake, and thus protect appellees in the title to their land?” Gage v. Scales, 100 Ill. 218. See also Converse v. Rankin, 115 Ill. 398; Freeman v. Cornwell, 15 Atl. (Pa.) 873; Bubb v. Tompkins, 47 Pa. St. 359; Dietrick & Wilson v. Mason, 57 Pa. St. 40; Hintrager v. Mahoney, 78 Ia. 537, 43 N. W. 522. When the officer charged with the1 duty of collecting the taxes took from the plaintiff the full amount of the same, with interest, and issued his official receipt, he acknowledged the settlement of the claim of the county against the land, and what was done thereafter in the legal proceedings was as much without authority as if full redemption had been made. It was the fault of the officer, not of the plaintiff, that allowed the proceedings to continue, and the plaintiff should not suffer on account of the officer’s lapse. The confirmation was made by the court under a misapprehension of the facts, and is such a manifest wrong as equity will relieve against while the land is still in the hands of the original purchaser at the sale. Sayre v. Elyton Land Co., 73 Ala. 85.

If full payment had been made of the taxes, interest and costs, this would have constituted a full redemption of the property and the order of confirmation would have been made Avithout authority of law. 23 Cyc. 1495. We think, so far as the OAArner of the land is concerned, he is in the same situation as if he had made full payment. The order of confirmation was made without authority as against the plaintiff and he is entitled to bring this action in equity to set the same aside.

The county is not a party to this action and, hence, the equities cannot be fully adjusted as between the parties. It may be said, hoAvever, that the county is not entitled to a double payment of the taxes and the plaintiff may have recourse upon it by proper proceedings. The defendant is not shOAvn to have been at fault in any degree, while the plaintiff’s troubles Avould not have occurred had he paid his taxes before they became delinquent. As a *436condition of the relief, therefore, the plaintiff should be required to pay into court for the benefit of the defendant the amount of the purchase money paid for the land, with interest at 7 per cent, from the date of payment, and also the costs of this action in the district court..

The former judgment of this court is vacated, and the judgment of the district court is reversed and the cause remanded, with directions to enter a decree quieting the title to the land in the plaintiff upon his complying with the foregoing conditions.

Judgment accoedinglt.