Title: CITY OF SOUTHWEST FARGO URBAN RENEW. AG. v. Lenthe

State: north-dakota

Issuer: North Dakota Supreme Court

Document:

149 N.W.2d 373 (1967) CITY OF SOUTHWEST FARGO URBAN RENEWAL AGENCY, a public body, corporate and politic, Plaintiff and Respondent, v. Edmund L. LENTHE et al., Defendants, Marvin A. Emery et al., Defendants and Appellants. CITY OF SOUTHWEST FARGO URBAN RENEWAL AGENCY, a public body, corporate and politic, Plaintiff and Respondent, v. R. V. POWERS et al., Defendants, R. V. Powers, Defendant and Appellant. CITY OF SOUTHWEST FARGO URBAN RENEWAL AGENCY, a public body, corporate and politic, Plaintiff and Respondent, v. Jacob M. SCHMIERER et al., Defendants, Wallace A. Beaton et al., Defendants and Appellants. Nos. 8370-8372. Supreme Court of North Dakota. March 2, 1967. Rehearing Denied March 30, 1967. *374 Nilles, Oehlert & Nilles, Fargo, for defendants and appellants. Ralph B. Maxwell, West Fargo, for plaintiff and respondent. E. T. Conmy, Sr., Fargo, for defendant and respondent City of Southwest Fargo. ERICKSTAD, Judge. Three separate condemnation proceedings initiated by the City of Southwest Fargo Urban Renewal Agency were combined for trial. Following the verdicts of the jury separate judgments were entered in each proceeding. No appeals were taken from the judgments. Each judgment provided that the Urban Renewal Agency acquired title "in fee simple absolute as set forth in the complaint of the plaintiff, free and clear of all liens and encumbrances, including liens for taxes and special assessments." After the entry of the judgments the Urban Renewal Agency deposited with the Clerk of the District Court of Cass County the amounts of the verdicts. Thereafter, on February 26, 1963, the appellant landowners moved that the district court issue its order distributing the moneys on deposit with the clerk of the district court to those entitled to them. Pursuant to a stipulation entered into by the Urban Renewal Agency, the City of Southwest Fargo, and the appellant landowners, the district court on March 12, 1963, ordered the clerk to disperse all of the funds held by the clerk except those amounts which represented the amount of the unpaid special assessments claimed by the City of Southwest Fargo. By a number of orders dated June 5, 1963, the district court ordered that the funds held by the clerk of the district court in sums of the unpaid special assessments on the various parcels of land condemned be dispersed by the clerk to the City of Southwest Fargo. It is from these orders that the landowners Wallace A. Beaton, Violet F. Beaton, Alfred R. Tollefson, Elaine B. Tollefson, Marvin A. Emery, Berthold E. Sackman, Anita Sackman, Kenneth W. Crooks, Dorothy E. Crooks, and R. V. Powers have appealed. The issue before us is whether the trial court was correct in deducting from the compensation awarded the landowners the amount of the uncertified and unreturned special assessments levied against the property. Three statutes are pertinent in a consideration of this question: The amendments made in 1965 to §§ 40-24-02 and 40-24-03 have no bearing on this appeal. It is the contention of the landowners that they are the vendors and that the Urban Renewal Agency is the vendee and that, accordingly, § 40-24-03 applies, so that they as vendors are not liable for the payment of the uncertified and unreturned special assessments. The trial court pointed out in his memorandum decision that it is undisputed by the parties that the unpaid special improvement assessments arose out of certain improvements made in the city, which were completed between October 1, 1959, and October 1, 1960, and that the assessment list was approved and confirmed by the governing body of the city on December 7, 1959, as shown by the affidavit of J. M. Dahle, Auditor of the City of Southwest Fargo. Applying §§ 40-24-01 and 40-24-02, the trial court concluded that the special assessments became a lien upon the property on December 7, 1959, and became due and payable ten days thereafter, and that since the condemnation of the various parcels did not take place until 1963, the unpaid special assessments were liens upon the various parcels of land and payable out of the respective condemnation awards. The trial court, referring to 45 A.L.R.2d 529, acknowledged that there was authority to support the contentions of the landowners, but in rejecting that authority described the authority which was to the contrary as being respectable. We have carefully reviewed the authority referred to in the trial court's memorandum decision, which is relied on by both the condemning agency and the City of Southwest Fargo, as well as the authority referred to by the landowners in their briefs and have come to the conclusion that a condemnation proceeding is a compulsory sale wherein the landowner is the involuntary vendor and the condemning agency is the vendee, and thus that § 40-24-03 applies to a condemnation proceeding. The application of that section to this case requires a reversal of the trial court's orders. This court has in effect construed § 40-24-03 in Halvorson v. Boehm, 76 N.W.2d 178 (N.D.1956), and an earlier statute which had similar provisions in Murray Bros. v. Buttles, 32 N.D. 565, 156 N.W. 207. Neither of those cases involved condemnation proceedings; we believe, however, that they are helpful in determining the basic issue in this case. In Murray Bros. this court affirmed the trial court's holding that unpaid and unmatured installments of county drain assessments did "not constitute a lien or incumbrance upon the property such as were covered by the general warranties found in the deed against incumbrances upon the land." In construing § 40-2403, N.D.R.C. of 1943, this court discussed its predecessor, Chapter 35 of the 1903 Session Laws, as follows: The only question, therefore, that these cases leave open is whether § 40-24-03, N.D.C.C., should apply in the case of a condemnation proceeding. As we have earlier stated, we have concluded that the section does apply. In reaching this conclusion we follow in the footsteps of Minnesota, Oklahoma, and Washington, in Independent-Consolidated School Dist. v. Waldron, 241 Minn. 326, 63 N.W.2d 555; Allen v. Henshaw, 197 Okl. 123, 168 P.2d 625; and Bethany Presbyterian Church v. City of Seattle, 154 Wash. 529, 282 P. 922. In Independent-Consolidated the Minnesota Supreme Court in 1954 held that a condemnation proceeding created a grantor-grantee relationship. The court said: In arriving at the conclusion that the general taxes at issue therein did not constitute a lien on the condemnation award, the Minnesota court emphasized that real estate taxes do not constitute a personal obligation of the landowner but are merely a lien in favor of the state on the land only; that the duration and extent of such a lien is controlled exclusively by statute; that generally tax statutes are to be construed strictly against the taxing authorities; and that the statute suggested nothing to indicate that the legislature intended the lien for the taxes to extend not only to the land but also to an award made for its condemnation. We believe that similar reasoning could be applied to the special assessments uncertified and unreturned involved in this case, and that, applying said reasoning, we must reverse the trial court's order. Included among the cases relied on by the trial court is that of United States v. 3 Parcels of Land in Woodbury Co., Iowa, 198 F. Supp. 529 (N.D.Iowa 1961). In that case Judge Graven said: It appears from that statement of the court that the controlling reason for holding that the Iowa vendor-purchaser statute (which is equivalent to our vendor-vendee statute) did not apply to the condemnation of the land by the United States, was that the lien could not be enforced against the United States. It has been similarly argued in this appeal by the Urban Renewal Agency and the City of Southwest Fargo that the Urban Renewal Agency is exempt from the payment of special assessments, and that we therefore must arrive at the same conclusion that Judge Graven reached in 3 Parcels of Land; otherwise, the city is deprived of the revenue to pay the bonds. With this contention we do not agree. The statute relied on by the Agency and the City, § 40-58-12, reads as follows: North Dakota Century Code. *378 It will be noted from a study of the statute that urban renewal property is "exempt from all taxes of the municipality, the county, the state or any political subdivision thereof." Had the legislature intended that the urban renewal property be exempt from special assessments, the usual language to accomplish that would have been "all taxes and special assessments." The failure to make reference to special assessments, we believe, was intentional. Our view is supported by the fact that the legislature, in discussing the powers given to an urban renewal agency under § 40-58-07(8), empowered the agency to "levy taxes and assessments." Section 40-23-07 further supports our view. The pertinent part of that section reads as follows: North Dakota Century Code. Although urban renewal agencies are not specifically mentioned therein, cities are, and their property is made specifically not exempt from special assessments. Accordingly, we conclude that the orders of the trial court must be reversed. TEIGEN, C. J., and KNUDSON and STRUTZ, JJ., concur. PAULSON, J., not being a member of the Court at the time of submission of these cases, did not participate.