#### Petition of Wausau Investment Company and others.

*December 11, 1915*

May *23, 1916.*

*Taxation: Exemptions: Lands acquired "by the state: Prior tax liens: Enforcement: When taxes are ‘‘levied:’’ Assessment roll, when completed: Constitutional law: Political questions: Actions against state.*

1. Under sec. 1038, Stats., property owned exclusively by the state is exempt from taxation; but tax liens which have already accrued at the time the state becomes the owner do not thereupon cease to exist.

2. In sec. 1034, Stats. — providing that “taxes shall be levied upon all property in this state except such as is exempted therefrom,”— the word “levy” is not used in its strict sense.

3. Under our statutes the assessment roll is to be deemed completed, except for the correction of mistakes and clerical errors, on the *284first Monday in August when, under sec. 1064, it is to be delivered to the clerk for filing; and .the subsequent levy of taxes must be considered as relating back to said date.

4. Lands deeded to the state prior to the first Monday in August in any year are exempt from taxation for that year, but lands of which the state becomes owner after that date are not exempt for that year.

5. The question as to how, if at. all, valid tax liens upon lands to which the state has acquired- title shall be enforced as against the state is one which the legislature ought first to consider and pass upon, and it is therefore, in this case (involving lands purchased 'under the forest reserve legislation), left undecided until the legislature shall have had an opportunity to determine what the policy of the state should be.

6. The state cannot be sued without its consent; and sec. 3200, Stats., does not apply to equitable claims, such as the- claim that the state should redeem lands acquired by it from sales thereof for taxes levied prior to such acquisition.

ApplicatioN in the action of *State ex rel. Owen v. Donald*(160 Wis. 21, 151 N. W. 331).

*Continued.*

The facts are stated in the opinion.

For the petitioners there was a brief by *Edgar & Johnson*and *Amos Radcliffe,*and oral argument by *O. T. Edgar.*

On behalf of *JR. B. Tweedy*there was a brief by *Goggins & Brazeau,*and oral argument by *B. B. Goggins.*

On behalf of *Vilas County*there was a brief by *C. II. WeV gand,*district attorney, and *Curtis, Van Doren & Cole,*of counsel, and oral argument by *George Curtis, Jr.*

For the *State*there was a brief by the *Attorney General*and *Winfield W. Gilman,*assistant attorney general, and oral argument by *Mr. Gilman.*

Winslow, C. J.

This proceeding is an application to the court in the action of *State ex rel. Owen v. Donald*(160 Wis. 21, 151 N. W. 331), made by the *Wausau Investment Company,*the *Wisconsin Realty Company,*and *F. I. Carpenter,*holders of certificates of tax sale upon lands in *Vilas County*purchased by the state for forestry purposes and involved in *285bbe action aforesaid (hereinafter referred to as tbe forestry .action), asking that an order be made in that action requiring tbe state to redeem said tax certificates out of state funds with interest at fifteen per cent, per- annum or that such other order be made with relation to tbe redemption of said certificates as may be equitable. Upon tbe filing of this petition, it appearing to tbe court that other persons and corporations .held tax certificates upon certain of tbe lands involved in said forestry action and were in similar situation, it was ordered that all of such persons and corporations be made parties to tbe proceedings and that they be required to appear and exhibit their claims. At tbe same time it was ordered that tbe .state and *Vilas County*be required to appear and make answer to tbe petition. Pursuant to this order tbe state and *Vilas County*appeared and filed answers and tbe other holders of' tax certificates on said lands also appeared and submitted their claims to tbe court, without, however, waiving their claims against *Vilas County*therefor. On tbe part of the state tbe principal contention was that tbe lands were exempt from taxation because exclusively owned by tbe state and hence that tbe state should not be required to redeem. On tbe part of *Vilas County*it was claimed that on equitable principles tbe tax certificates should be redeemed either by tbe state or by tbe vendors of tbe lands.

There was no substantial dispute as to tbe facts and tbe matter was submitted upon tbe allegations of tbe petition and tbe various answers. In view of tbe conclusions which we have reached it is not deemed necessary now to attempt to make an itemized or detailed statement of tbe facts as to tbe claims made by tbe various petitioners, but only to state in a .general way tbe fundamental facts essential to an understanding of tbe legal questions which are raised and now decided.

At various dates between tbe 1st day of April, 1908, and the 31st day of July, 1912, tbe state in form purchased from various lumbering corporations more than 90,000 acres of cut-*286over lands for forestry purposes. The purchases were generally, if not universally, made in the form of land contracts, payment to be made in instalments in the future, as was the case with the lands purchased of the G. F. Sanborn Company which were directly involved in the forestry case. The San-born contract covers more than 25,000 acres of land. It was dated June 1, 1911, and at the time of the commencement of the forestry action all of the purchase price except the last in-stalment of $20,000 had been paid. That action was brought to compel the payment of this last instalment, but this court held the contract void on various grounds not necessary to be related here. The court also held in that decision that, notwithstanding the invalidity of the contract in question and all other contracts of like nature, the state possessed an equitable lien on the lands covered by the contracts for the money already paid thereon. By administrative orders since that' decree, claims have been allowed and ordered to be audited and paid for the respective balances remaining unpaid on the Sanborn contract and on other similar contracts to protect the lien of the state upon the lands covered by the contract and deeds have been received by the state for such lands so paid for. So, notwithstanding the invalidity of the contracts as- • state obligations, the lands covered by them have largely come into the possession and ownership of the state. The forestry law provided for the taxation of the so-called forestry lands and for the payment of -the taxes so assessed out of the general funds of the state; it also contained a number of special provisions restricting the powers of counties north of town 33 with regard to the taking of tax deeds upon lands. All of these provisions were held invalid by the decision in the forestry ease.

It appears by the petition and answers which are now before us that there are outstanding tax certificates held by the various petitioners and respondents who have appeared in this proceeding to the amount of nearly $8,000 upon the lands-*287>coyered by tbe various contracts, tbe certificates having been issued upon tbe tax sales of 1912 to 1915 inclusive.

Tbe fact appears that tbe greater part of tbe land covered .by tbe certificates (if not all of it) is now owned by tbe state in fee.

Sec. 1038, Stats., provides tbat property owned exclusively 'by tbe United States or by this state shall be exempt from ¡taxation. Tbe broad claim is made on behalf of tbe state, under this provision, tbat tbe instant tbe state becomes tbe ■owner of any property tbe tax laws cease to affect tbat property no matter what stage tbe process of taxation may have reached, or, in other words, tbat if tbe state becomes tbe owner •at any time before a tax deed is- executed tbe tax becomes void. On tbe other band it is claimed by *Vilas County*tbat the lands involved here never became tbe property of tbe state ■■until tbe entry of tbe decree in tbe present action (February, 1915) and tbat such title did not relate back to tbe inception •of tbe void contracts, consequently tbat tbe lands were not ex•empt from taxation when tbe various taxes in question were levied, and tbat, as between tbe county and tbe state, tbe state .should equitably be required to redeem tbe tax certificates. On behalf of tbe state it is suggested further tbat there are •no funds from which any state officer is authorized to take tbe -money to make these redemptions. On tbe major contention made by tbe state, reliance is .placed on tbe case of *Gasaway v.*Seattle, 52 Wash. 444, 100 Pac. 991, 21 L. R. A. N. s. 68, in which it was held tbat under the laws of Washington where •a city condemns land for public use it will obtain title free from existing tax liens. It is not necessary either to affirm •or disaffirm tbe doctrine of tbat case here. Doubtless tbe state by virtue of its sovereign power (which of course in•cludes complete control over taxation proceedings) could expressly or impliedly, provide tbat all tax liens should cease •upon tbe acquisition of tbe property by tbe state or by a municipality. We do not, however, discover any such intention *288here. Our statute (see. 1034) provides that “Taxes shall be levied upon all property in this state except such as is exempted therefrom,” and then, in sec. 1038, names forty-one classes of property which are exempt, the first class being “that owned exclusively by the United States or by this state;” after this class follow the other classes, including municipal property, church and educational property, and many other kinds. Now we apprehend that no one would seriously contend that if real estate were acquired by a church or an educational institution after a tax lien had accrued thereon but before the issuance of a deed the lien would cease to exist, and yet property so acquired. is made exempt by precisely the-same provision as that governing the exemption of property acquired bj*- the state. The direction of the statute is to levy taxes upon all property except that which is exempt. The-question then is, When is the levy made so that a transfer thereafter does not affect the tax lien? The word “levy”' here cannot, we think, be used in its strict sense. The local assessment rolls are completed (subject only to the correction of clerical errors) months before the levy of the tax by the county board in November, and the town clerk must, “upon a uniform percentage, calculate and carry out in one item opposite to each valuation in the tax roll” the amount necessary to raise the taxes levied for all purposes (sec. 1019, Stats.). If during the time between the final closing of the assessment roll and the formal levy by the county board great blocks of' land like those involved in the present case could be taken from the taxable property of the town by transferring them to an exempt class, it is evident that great confusion and embarrassment would result in the transaction of the town business. The tax must be apportioned to the property listed on. the completed roll, and the roll is completed, except for the correction of clerical errors, in the month of August; hence, if property can escape taxation by passing into the exempt class after completion of the roll, there would necessarily re-*289suit in every such ease a deficiency in the revenues of the town for that year. We do not think there was any legislative intention of this nature.

This court has not met the question before. It is true that in *Wis. Cent. R. Co. v. Lincoln Co.*57 Wis. 137, 15 N. W. 121, it is said that lands are properly assessable if “subject to taxation at any time before the fourth Monday in June . . . , otherwise not,” but the question of the exact date was not necessary to the decision in that case.

The conclusion that we now reach from examination of the taxation statutes is that the law contemplates that the assessment roll is to be completed, except for the correction of mistakes and clerical errors, on the first Monday in August when the assessor delivers the assessment roll to the town clerk for filing and preservation in his office. Sec. 1064, Stats. The assessor is required to begin the preparation of the roll on the 1st day of May. Personal property (with certain exceptions) must be assessed as of that date and no change of location or ownership thereafter affects the assessment thereof, but real property may be assessed at any time between that date and the sitting of the board of review. Sec. 1033 and sub. 8, sec. 1040. The board of review is required to sit on the last Monday of June and the assessor lays the roll before the board. Secs. 1060, 1061. This board has very complete power to hear complaints, take testimony, raise or lower assessments, correct errors, place omitted property on the roll, and in fact fully to complete the same. The statute fixes no date upon which real property is to be assessed, and in view of the very extensive powers of the board of review over the roll and the fact that it is in no sense a completed document until the board finishes its labors, we conclude that if real estate passes from the taxable class to the exempt class, or *vice*versa, at any time prior to the first Monday in August, when the roll is completed, verified by the assessor, and filed with the town clerk, it would be the duty of the board to change *290tbe roll by striking out or adding sucb real estate, as tbe case may be. No changes in tbe roll are authorized to be made thereafter except sucb as are necessary to correct mere errors or mistakes. Tbe inclusion therein of property then subject to taxation cannot be called an error or mistake. When tbe annual taxes are thereafter levied they are necessarily levied on tbe property *rightly*included in tbe roll on tbe first Monday in August and hence tbe levy must be considered as relating back to that date.

Lands which bad been deeded to tbe state prior to tbe first Monday in August in any year were unquestionably owned exclusively by tbe state and exempt from taxation for that year, and this is so even if sucb lands were incumbered by a mortgage or purchase-money lien. On tbe other band, lands which were not deeded to tbe state at that date, but were simply included in one of tbe,void contracts of sale, were not exclusively owned by the state and cannot be held to be exempt from taxation for that year. It follows that when tbe state thereafter obtained title in fee to sucb lands tbe tax liens thereon were not extinguished.

These conclusions, however, do not dispose of tbe most serious questions presented to us in this proceeding.

If it be granted that tbe state took title to sucb lands subject to tbe tax lien, tbe question as to bow that lien can be enforced as against tbe state, if indeed it can be enforced at all, is not easy of solution.

Can tbe certificate bolder compel tbe state to execute a tax deed upon its own lands, or can be maintain an action against tbe state to foreclose the lien ? Tbe state cannot be sued without its own consent, and sec. 8200, Stats., authorizing action against tbe state where tbe claim has been presented to and disallowed by tbe legislature, applies only to claims which, if valid, render tbe state a debtor, and not to equitable claims or claims for tort. Chicago, M. & *St. P. R. Co. v.*State, 53 *291Wis. 509, 10 N. W. 560; *Houston v. State,*98 Wis. 481, 74 N. W. 111.

It seems to us that the "question what the state should do with reference to the tax liens which, under the principles hereinbefore announced, are valid liens, is pre-eminently a question which the legislative branch of the state government ought first to consider and pass upon. We have therefore concluded to make no final disposition of this proceeding at the present time. The principles of law hereinbefore announced are deemed to be finally settled in the case, but the proceeding itself will be continued and action on the part of all the tax certificate holders looking towards enforcement of their certificates in any court enjoined until the further order of the court and until such time in the year 1917 as the legislature shall have opportunity to consider the situation and determine what the policy of the state ought to be in view of the facts and the law.

It will be necessary also for the information of the court as well as of the legislature that all the facts regarding the tax certificates in question be ascertained and tabulated so that the exact situation may be known in regard to every certificate, not only as to the ownership, amount, and date thereof, but also as to the specific parcel covered by it and the condition of the title to such parcel at the time of the levy of the tax represented thereby. A reference to ascertain these facts and any other facts deemed material to the questions at issue will be ordered by the court.

*By the Court.-*— Ordered that this proceeding be continued until further order of the court, and that all certificate holders who are parties to this proceeding be enjoined in the meantime from taking action to enforce their certificates in any court or tribunal.