Dillman v. Foster

*981HALL, Chief Justice

(dissenting):

I respectfully dissent for the reason that the main opinion confuses the long-established principles of law applicable to tax titles and adverse possession.

The majority of the Court concludes that plaintiff R. Earl Dillman, in purchasing the subject property at tax sale, did so as a constructive trustee for all claimants of title acquired thereafter. I deem that conclusion to be without substance or support.

The main opinion espouses a public policy in opposition to Dillman’s contention of nonliability for the payment of the 1964 taxes, when the opinion states that such contention is “contrary to public policy and good sense” because “the collection of taxes for the common welfare would be hindered if it were the duty of the county treasurer to collect taxes from someone other than the individual to whom the property was assessed.” This is not only ipse dixit but a non sequitur.

The majority opinion cites no authority in support of its departure from the more realistic statutorily prescribed, or permissible, procedure generally followed, which is to assess the property on or before April 15,1 notify the owner of record of the amount of tax assessed against the property,2 and make no specific effort to collect the tax assessed, but to accept payment of the tax from whatever source, be it from the owner, an agent, escrow, or for that matter, from a nonowner. The assertion that such a procedure hinders the collection of taxes is clearly without substance when viewed in light of the ultimate and highly effectual means of collection afforded by statute which provides for the sale of the property for unpaid taxes.3

The main opinion cites U.C.A., 1953, 59-10-1 in support of its assertion that: “The legislature has made clear its intention that the person taxed be held responsible for the payment of the tax.” However, this Court has heretofore held to the contrary, concluding that the legislature omitted expressing any intent that there should be a personal judgment, and further concluding that the tax upon real property is a charge upon the property, and not in the nature of an in personam obligation of the owner.4 §

The particular facts in this case further point up the fallacy in the thesis adopted by the main opinion. Plaintiff R. Earl Dillman was the sole owner of the property on January 1, 1964.5 In February, 1964, prior to the time the property was assessed,6 and also prior to the time that the 1964 taxes were levied against the property,7 Dillman conveyed the property to Richfield Enterprises Incorporated. Therefore, during the time Dillman owned the property, he could not have paid the taxes because the amount thereof had not yet been determined. Just such a set of circumstances points up the apparent, realistic and practical reason the legislature has not seen fit to charge the various counties with the responsibility of collecting taxes on real property other than by a sale thereof should taxes be left unpaid.

I now address the two causes of action alleged in the complaint and suggest that they are sound and call for a reversal of the judgment of the trial court.

FIRST CAUSE OF ACTION

This cause has to do with title acquired at the May sale, based on U.C.A., 1953, § 78-12-5.2, which reads as follows:

*982No action or defense for the recovery or possession of real property or to quiet title or determine the ownership thereof shall be commenced or interposed against the holder of a tax title after the expiration of four years from the date of the sale, conveyance or transfer of such tax title to any county, or directly to any other purchase thereof at any public or private tax sale and after the expiration of one year from the date of this act. Provided, however, that this section shall not bar any action or defense by the owner of the legal title to such property where he or his predecessor has actually occupied or been in actual possession of such property within four years from the commencement or interposition of such action or defense. [Emphasis added.]

At the time Dillman purchased the title at the 1969 May sale, he became the owner in fee, unless, as provided under the foregoing statute, “the owner of the legal title ... or his predecessor has actually occupied or been in actual possession of such property within four years from the commencement or interposition of such action or defense.” There is absolutely nothing in the pleading or proof claiming compliance with or relief under the said statute.

Neither the Fosters, their predecessors, nor anyone claiming under them have claimed or offered proof of having “actually occupied” or been in “actual possession” of the property during any period of time. The statute, being absolute in its terms, gave Dillman title, subject only to the conditions stated therein. Anyone desiring to contest Dillman’s title would have had to do so by showing occupation or possession within the critical proscribed statutory time.

The Fosters were the owners of record at the time of the May sale, but they did not appear at the sale, and there is no evidence that they ever occupied or possessed the property under statutory requirements. In fact, the record is to the contrary, showing that they were residents of California. This placed them in the category of claimants who are barred of any action or defense if they sit by and do nothing for four years. This is precisely the type of case toward which U.C.A., 1953, § 78-12-5.2 is directed, and which prompted this Court to say in Frederiksen v. LaFleur8 quoting from Peterson v. Callister,9 that:

Title 78-12-5.1 ... is not unlike other statutes of limitation .... It is a statute of repose, obviously intended to lay at rest claims against tax titles which are asserted more than four years after acquisition of the tax title under statutory proceedings, and where the record owner has not had possession during that period.

The statutes cited in support of the conclusion reached in the main opinion, that the record owner on January 1 is liable for the taxes for that particular year, are incompatible with U.C.A., 1953, § 78-12-5, which is superior thereto, and mutually exclusive thereof. This statute, to which the former pertain and are subservient, deals with a different type of procedure and subject matter. Said section 78-12-5 applies to the duty of every kind of tax obligor and owner of property prior to the May sale, and affords a defense against any such claim by passage of time and absolute legislative interdiction.

The defense raised in this case that Dill-man bought the property at the May sale for the benefit of Fosters, and all others claiming under them, is but a myth, and it should be adjudged that Dillman is the rightful owner.

The main opinion contains a disarming recitation of some of the facts occurring after the May sale (which could apply to this first cause of action as well as the second or “adverse possession” cause of action addressed infra). The statement is *983made that “at least twice .. . the Fosters ... attempted to pay the taxes,” but that “Earl Dillman, a former Duchesne County Attorney, discovered this payment and instructed the Duchesne County Treasurer [Maxine Taylor] to return the check to the sender [a firm of attorneys] and to accept his payment instead.” There appears to be no such officious interference by Dillman in the record, nor the attendant implication that there was deceit or collusion on his part. Such implication is found only in defendants’ brief and is restated in substance in the main opinion.

The record shows that Taylor testified and introduced communications to some California attorneys representing themselves or someone else, including the Fosters, whose claim was barred by the 1969 May sale, in which Taylor “refunded” a check on Dillman’s recommendation as owner and a person, not an attorney, her action being prompted only by such considerations. She stated that she returned the check, having ascertained it to be a “double payment,” duplicating an amount “paid by R. Earl Dillman.”

There is no evidence whatever suggesting that Dillman, who paid all the taxes from 1961, including those due at the time of the May sale, and all of the taxes since — a period of 17 years — lulled anyone into a false sense of security to purloin property from another. There is nothing in the record that suggests conflicting interests in the property that would create a fiduciary duty Dillman owed a mortgagor, a lienholder, a judgment creditor, or even an easement holder, that would require him to hold title to the property in trust for their benefit. He owed no duty to any person claiming ownership at the time of the May sale, or their predecessors.

The main opinion has confused a statutory tax title with one based on conflicting co-existent interests. This is clearly demonstrated when it cites no case that supports invalidity of Dillman’s tax title, but cites a number that are inapposite.

All of the cases cited have to do with a fiduciary relation existing at the time title is claimed to have been acquired, unlike the present case, where no such relationship existed. Witness the following cases cited in the main opinion:

1. San Juan County v. Jen10 does not support defendants’ position, since it not only lacks any fiduciary factor, but is simply a case that actually supports Dillman’s cause in two respects, holding that a) a tax is not a charge against the owner, but against the property, and b) that enforcement in collecting taxes is strictly statutory. Both factors are resolved in favor of Dillman’s contention, not those of the main opinion.

2. Crofts v. Johnson11 simply holds that a mortgagee could not destroy a mortgagor’s legal title by buying the property at a tax sale, and without foreclosing the property. It is obvious that there was a common, existing ownership with obligations and rights in the same property, nonexistent in the instant case, so that Crofts is not pertinent here.

3. Free v. Farnworth12 is a case where one, through deception, purchased at tax sale for the purpose of wiping out a lien which at the time encumbered his title. It was a design to profit the then owner through deception by removing a legitimate encumbrance on the property, at the expense of a legitimate, then-existing lien-holder. That case is not pertinent either, since the instant case does not have to do with the destruction of an existing, legitimate right that equity should preserve against one seeking to destroy it by taking advantage. Nor is there a deceit factor. In the instant case, a limitations statute effectively protects one against persons who have no legitimate claim against the property because of failure to comply with statutory proscriptions.

The additional cases cited in defendants’ brief on this same point are equally inappo-site:

*9841. Hadlock v. Benjamin Drainage District13 is a case similar to Free v. Farnworth, supra, where a mortgagor in a devious way purchased at a tax sale to cut off a lienholder’s legitimate right, which equity would not permit. It is a case where there were two interests of equal statute existing against property. There was no question as to cutting off rights by limitation of time, as is the case here, but only a denial of rights by equity, based on absence of fair play and presence of deception.

2. McCready v. Fredericksen14 is simply a case that holds that a tenant in common cannot obtain title against a fellow tenant. This case has no similarity whatever to the plaintiffs’ first cause of action, which is based on section 78-12-5, the “limitations” statute, and there is no existing tenancy involved at all. It had to do with “advers-ing” a fellow co-tenant under an entirely different statute, section 78-12-7, and its holding was merely that the facts did not satisfy the requirements of that statute.

In Dye v. Miller and Viele,15 this Court affirmed prior cases in point here, and in Frederiksen v. LaFleur,16 we surveyed the prior May sale cases and reaffirmed the purpose of section 78-12-5 as being legislation long delayed in putting at rest titles to property in a progressively complex area of the law. Those cases are dispositive here, and demand a reversal of the trial court. By so doing, we would continue to respect the status of continued ownership and adhere to the principle of strict statutory construction in favor of the tax debtor, “except” as stated in LaFleur, supra, “to the extent it has been limited by statutory enactment,” which is the precise situation which exists in this case.

A further assertion in the main opinion that clearly reflects that it has misconstrued not only the purpose of section 78-12-5, but its very language reads as follows:

It should be noted that even if the plaintiffs had acquired a tax title, it is questionable whether their claim would be protected under the tax title statutes. Both § 78-12-5.1 and § 78-12-5.2, U.C.A., 1958, allow a defense against a tax title to be raised by one who has been in actual occupation or possession.

The opinion then asserts that defendants had “possession” by permission of Fosters and Winterton. The only “possession” involved in this case, and referred to in the main opinion, is the “possession” of the defendants claimed in opposition to Dill-man. The main opinion’s contention that defendants’ “possession” was “adverse” falls when it is shown in the record that defendants themselves affirmatively testified they were in possession by permission of the plaintiffs and even offered to buy the property from Dillman, who also, without dispute, testified that he refused to sell, but permitted defendants to use the property for pasture purposes, even permitting them to do some fencing for their own purposes.

SECOND CAUSE OF ACTION

As to plaintiffs’ second alleged cause of action, the basis for establishment of title in Dillman is not factually as clear as that in the first cause. Nonetheless, it is not only supported by, but is established partly on the particular undisputed facts stated above and on facts which differ from, or are not considered in the main opinion.

In the second cause, plaintiffs claim occupation and payment of taxes continuously for seven years adverse to everyone else.

The main opinion concedes that the defendants had possession by somebody’s permission, which is uncontradicted, and which would in no way impede Dillman’s claim of full title and possession with full claim of right for seven years. Nevertheless, the main opinion then reasons that Dillman did not comply with section 78-12-7, the seven-year adverse possession statute, because he *985failed to give the defendants sufficient notice of his claim of ownership. This contention is wholly inconsistent with the uncon-tradicted fact that Dillman, as owner, had permitted defendants to use the property, thereby clearly indicating his claim of ownership. The defendants, who claimed to have had such permissive possession, which is additional ample notice of ownership by Dillmans, also could have looked at the public record, of which they are presumed to have knowledge, and in doing so could have seen that Dillman had paid all the taxes on the property since the year 1961. The sole point of the main opinion is lack of notice of Dillman’s claim of title. It is wholly unsupported by the record, which is abundantly clear to the contrary. No other claim has been pressed that would obstruct acquisition of title under section 78-12-7, and since no other facts are shown or pointed to in the record that would prove an impediment to such acquisition of title, it is suggested that Dillman has a dual root-title source for unencumbered title under sections 78-12-5 and 78-12-7 that compels reversal of the trial court’s dismissal of plaintiffs’ complaint and granting title to defendants on their counterclaim.

HOWE, J., concurs in the dissenting opinion of HALL, C.J.

. Pursuant to U.C.A., 1953, § 59-5-4.

. Pursuant to U.C.A., 1953, § 59-10-10.

. Pursuant to U.C.A., 1953, § 78-12-51.

. San Juan County v. Jen, Inc., 16 Utah 2d 394, 401 P.2d 952 (1965); the main opinion acknowledges the holding in this case but chooses to disavow it.

.Notwithstanding the recitation in the main opinion that “plaintiffs” were the owners on that date.

. U.C.A., 1953, § 59-5^1 requires assessment on or before April 15.

. U.C.A., 1953, § 59-9-6.3 requires taxes to be levied between the last Monday in the seventh month and the second Monday in the eighth month of each fiscal year.

. Utah, 632 P.2d 827 (1981).

. 6 Utah 2d 359, 313 P.2d 814 (1957); other cases in agreement: Dye v. Miller and Viele, Utah, 587 P.2d 139 (1978); Kanawha v. Carbon County, Utah, 535 P.2d 1139 (1975); Layton v. Holt, 22 Utah 2d 138, 449 P.2d 986 (1969); Pender v. Brown, 11 Utah 2d 58, 354 P.2d 1066 (1960); Hansen v. Morris, 3 Utah 2d 310, 283 P.2d 884 (1955).

. Supra, n. 4.

. 6 Utah 2d 350, 313 P.2d 808 (1957).

. 105 Utah 583, 144 P.2d 532 (1943).

. 89 Utah 94, 53 P.2d 1156 (1936).

. 41 Utah 388, 126 P. 316 (1912).

. Supra, n. 9.

. Supra, n. 8.