Case Name: Simpson v. Reinman
Court: Arkansas Supreme Court
Jurisdiction: Arkansas
Decision Date: 1920-12-13
Citations: 146 Ark. 417
Docket Number: 
Parties: Simpson v. Reinman.
Judges: McCulloch:, C. J., and Smith, J., dissent.
Reporter: Arkansas Reports
Volume: 146
Pages: 417–438

Head Matter:
Simpson v. Reinman.
Opinion delivered December 13, 1920.
1. Action — proceedings in rem and quasi in rem distinguished. —A proceeding “in rem” is a proceeding against the property, while a proceeding “quasi in rem” is a proceeding against a person in respect to the property.
2. Taxation — validity op tax sales. — Tax sales are made exclusively under statutory power, and, in order to divest the owner of Ms property, every substantial requisite of the statute must be complied with.
3. Highways — collection op assessments — proceeding quasi in rem. — Under Acts 1909, p. 1163, § 20, providing- that proceedings to enforce road district assessments shall be in the nature of proceedings in rem, and it shall be immaterial that the ownership of lands proceeded against be incorrectly alleged in said proceedings, and that notice of said proceedings shall be given to the “supposed” owner by publication, “each supposed owner having been set opposite Ms, her, or its property,” etc., held that a proceeding and judgment against a “supposed owner” who had and claimed no interest in the land was not binding on the true owner of the land, who was not named, and was in actual possession of the land by a tenant.
4. Highways — collection of assessments — designation op supposed OWNER.- — Under Acts 1909, p. 1163,' § 20, requiring the commissioners to give notice by publication to the “supposed owner” of delinquent land of a proceeding to collect delinquent assessments, the statute is not complied with by naming as “supposed owner” a person having no claim of interest'in the land, where such land was in the actual possession of the true owner, or his tenant.
Appeal from Pulaski Chancery Court; John E. Martineau, Chancellor;
reversed.
statement op pacts.
George G. Worthen, Louis Beinman and Louis Wolfort brought ail action of unlawful detainer in the circuit court against Tillman Green to recover possession of about ninety acres of land.
Dr. B. A. Simpson filed what he calls an “intervention” in which he states that he is the owner and in possession of the lands involved in this suit; that the plain-tics are claiming- title by virtue of a tax deed issued to them by a commissioner under proceedings by -a road district to foreclose the lien for unpaid road taxes. It is1 alleged that the lands are worth $5,000, and that they were purchased at the tax foreclosure proceedings for the sum of $132. Other allegations of the intervention will appear in the statement of facts.
The prayer of the intervener is that he be made a party to the suit; that the cause be transferred to equity; that the tax deed be canceled, and that the interest of the plaintiffs be divested out of them, and that the title to the land be forever quieted in him.
Without objection, the cause was transferred to equity and heard upon substantially the following facts: The lands in question comprise about ninety acres and are situated on the banks of the Arkansas River in Pulaski County,-Arkansas, within the boundaries of Road Improvement District No. 3 of Pulaski County, Arkansas. On August 25, 1913, Improvement District No. 3 of Pulaski County filed a proceeding under the statute for the collection of the delinquent road taxes due on the lands. In the complaint filed in the .action in the Pulaski Chancery Court, the lands involved in this action are described and the style of the suit is against the lands to collect the delinquent taxes and A. E. Adams, “ostensible owner,” is also made defendant. The body of the complaint also describes the lands in controversy, and alleges that one A. E. Adams is the ostensible owner of them. The complaint alleges that no part of the road taxes for the years 1910, 1911 and 1912 had been paid. For the years 1910 and 1911, the taxes are $22.25 for each year and $11.13 for the year 1912, making -a total of $69.54 as the amount of the unpaid taxes for the three years.
The notice with regard to the suit was published in the Argenta Times, a weekly newspaper published in North Little Rock, or Argenta as it was then called, in Pulaski County, Arkansas. The first publication was made on the 30th day of September, 1913, the publication being inserted weekly for four consecutive weeks. The notice is in the form prescribed by the statute. A decree of foreclosure for the unpaid taxes was entered of record in the chancery court on the 21st day of October, 1913, and a commissioner was appointed to sell the lands in satisfaction of the unpaid taxes and costs unless payment was made within thirty days from the date of the decree. The lands were duly advertised and sold by the commissioner to George G. Wortlien, Louis Reinman and Louis Wolfort for the sum of $112.75. The sale was duly confirmed by the court, and a commissioner’s deed was executed to the purchasers under orders of the court.
The present suit was instituted on January 4, 1917. Tillman Green first rented the land for the year 1912, from J. C. Budd, who then owned it. On .the 1st day of January, 1913, Tillman Green entered into a written lease with J. C. Budd for the lands for five years for $250 for the first year and $300 for each subsequent year. Green went into possession of the lands under this lease and was in possession of them at the time plaintiffs commenced suit against him for the possession of the lands. Subsequently the lands were sold in an attachment proceeding against J. C. Budd. Dr. R. A. Simpson became the purchaser at the sale. Subsequently J. C. Budd executed to him a quitclaim deed for said lands. Doctor Simpson has owned and been in possession of the lands through his tenant, Tillman Green, ever since he purchased them. At the time the tax proceedings above set forth were hlad, J. C. Budd had the legal title to the lands, and was in possession of them through his tenant, Tillman Green.
R. A. Simpson tendered to the plaintiffs the amount of taxes, penalties and costs due upon the lands, being the amount paid by them in the purchase of the lands.
The chancellor found the issues in favor of the plaintiffs, and the intervention of Dr. R. A. Simpson was dismissed for want of equity. To reverse that decree, R. A. Simpson has duly prosecuted an appeal to this court.
B. W. Leslie, for appellant.
1. The proceedings on which plaintiffs base their title and ownership are so defective and irregular as to make the commissioner’s deed based thereon void. The name of the defendant is not given in the caption of the complaint and only forty acres of land is given in the caption as defendant and A. E. Adams is given as the ostensible owner, not tbe supposed owner, and the land is given as in Pulaski County, Arkansas. In the body of the complaint, and in all subsequent proceedings, all that part of the land attempted to be described as in the southeast quarter of section 36 is described as “fractional north part fractional southwest quarter and southeast quarter (fractional) of section 36. In the publication of the notice upon which the court must base jurisdiction there is no attempt to notify any defendant given in the complaint. No owner, ostensible or supposed, is given. The notice is only directed to “Delinquent Lands.” The description is unintelligible. It was alleged and shown at the trial that A. E. Adams had parted with his title to said lands and that J. C. Budd was the owner. Act 502, Acts 1909, provides that the notice and proceedings must be against the supposed owner of the lands. This proceeding is not against the supposed owner but the ostensible owner. This act of 1909 is a special act and should be construed as such and in contravention of article 5 of the amendment to the Constitution of the United States and of the Constitution of Arkansas. Any process is not “due process of law.” 96 U. S. 97, 620. Section 21 of the act provides that neither an attorney ad litem or guardian ad litem shall be appointed, nor any other provision of Kirby’s Digest, § 5164, shall be required. An attorney ad litem• is very important and more effectual than the publication. The question as to due process of law was raised or passed upon in 74 Aide. 178. Under the provision of this act, while it is termed a proceeding in rem, it can not be contended that it is a suit against land alone. The process here was not directed ag'-ainst the owner, the ostensible owner, the supposed owner or the owner as appears of record. 74 Ark. 174, does not apply. The description was fatally defective, and the special act of 1909 should not be held to deprive a person of his land without notice. These irregular defective proceedings should not be held to support the jurisdiction of the courts. 118 Ark. 448; 124 Id. 278. Our statutes provide for notice to the owner of lands and lie shall he made a defendant if known; if not known, that fact shall he •stated in the complaint and the suit shall proceed in rem. Kirby’s Digest, §§ 5691-6. Possession or occupation is sufficient to put on inquiry every person seeking adversary interest in the property and is constructive notice of such title as the occupant or possessor has. 16 Ark. 340; 90 Id. 149; 118 S. W. 414. Where the owner is known, a proceeding against the unknown owner avoids a rule thereunder. 58 Ala. 46.
2. Even if this is a collateral attack, the decision is wrong. Kirby’s Dig., § 4431; 166 S. W. 250; 101 Ark. 142; 141 S. W. 501; 79 Ark. 289. The allegation and proof of the relation of landlord and tenant between plaintiff and Tillman Green must defeat plaintiff’s action. 105 Ark. 630. The transfer to chancery does not dispense with this rule. Equity follows the law. Either in law or equity, the intervener is entitled to a decree. The offer to reimburse plaintiffs is more than fair.
Reid, Burrow & McDonnell, for appellees.
1. Act 402, Acts 1909, is constitution'al, and the proceedings under which appellees acquired title were in accordance with the act. The lands were sufficiently described. 117 Ark. 151. The notice follows the act and is sufficient. 66 Ark. 422. If the description was defective, it was cured by the sale and confirmation. 90 Ark. 166. A decree in chancery can not be collaterally attacked for mere errors or irregularities. 118 Ark. 488. There is nothing in the contention concerning the words “ostensible” and “supposed” owner of the land. The act expressly provides that the proceedings shall be against the land shall be in the nature of a proceeding in rem, and it is immaterial if the ownership of the land is incorrectly alleged.
2. This act is constitutional. 74 Ark. 174; 4 Wallace (U. S.) 217; 187 U. S. 51; 193 Id. 79; 204 Id. 241. This is a collateral attack on a decree of a court of supe perior jurisdiction for mere errors or irregularities. 118 Ark. 449; 94 Ark. 588 ; 118 Icl. 449; 124 Icl. 278. These cases are conclusive against appellant’s contentions.

Opinion:
Hart, J.
(after stating the facts). The decision of this case depends upon the construction of the statute under which the tax foreclosure proceedings were had. The Legislature of 1909 passed an act for the creation of road improvement districts. Acts of 1909, page 1151. Section 20 of the act provides that, if the taxes due on the assessments made are not paid within sixty days, a penalty of 25 per cent, shall attach for such delinquencies, and the board of directors shall enforce the collection thereof by proceedings in the chancery court of the proper county, and that the court shall give judgment against the lands for the amount of taxes, penalty and costs. The section continues as follows: "Said proceedings and judgment shall be in the nature of a proceeding in rem, and it shall be immaterial that the ownership of said lands be incorrectly alleged in said proceeding, and said judgment shall be enforced wholly against said lands and not against any other property of said defendant. All or any part of said delinquent lands or real property within the district may be included in one suit instituted for the collection of said delinquent taxes, penalty and costs, as aforesaid; and notice of the pend-ency of such suit shall be given by publication weekly for four weeks before a judgment is entered for the sale of said lands, in some newspaper published in the county of said district, which published notice may be in the following form:
"NOTICE.
Board of Directors of Road Improvement District No.
.of the County of..............................
' vs.
Delinquent Lands.
"All persons, firms or corporations having or claiming any interest in any of the following described lands, or real property, are hereby notified that suit is pending in the chancery court of.................................county, Arkansas, to enforce the collection of certain road improvement district taxes on the subjoined list of lands and real property, each supposed owner having been set opposite his, her or its property, together with the amount severally due from each, towit: (Then shall follow a list of supposed owners with a descriptive list of said delinquent lands and the amount due thereon respectively as aforesaid), and such published list may continue in the following form: All persons, firms and corporations, interested in the said property, are hereby notified that they are required by law to appear within four weeks and make defense to said suit, or the same will be taken for confessed, and final judgment will be entered directing the sale of said lands, for the purpose of collecting said taxes, together with all of the interest, penalty and costs allowed by law. ' '
It is contended that the decree of the chancellor should be upheld under the authority of Cassady v. Norris, 118 Ark. 449, which was followed in the subsequent case of Cabell v. Board of Imp. of Imp. Dist. No. 10 of Texarkama, 124 Ark. 278. In those cases the court had under consideration foreclosure proceedings by a board of commissioners of an improvement district in a city when section 5694 of Kirby's Digest was in force. That section says that the owner of the property assessed shall be made a defendant if he is known; if he is not known, that fact shall be stated in the complaint, and the suit shall proceed as a proceeding in rem against the property assessed. In each of those cases the owner of the property was in possession of it and had no knowledge that foreclosure proceedings had been instituted against his property for unpaid assessments. The owner did not even know that the improvement district had been formed and that his property was within its boundaries. The complaint in each case stated that the owner was unknown, and the general notice 'authorized by the statute in proceedings of this kind was given. The court held that the suit was a proceeding in rem, and that the general notice required by the statute concluded the owner and that the purchaser at the sale under the statute acquired the legal title. It was there contended that the proceeding was a fraud on the court, and for that reason the decree should be set aside.
The court held that the allegations in the complaint that the owner was unknown were sufficient to give the court jurisdiction, and that, although the allegations were untrue, the court had the power to inquire into its own jurisdiction and to determine whether or not the allegation was true. The court then said that on collateral attack it must presume that the court made inquiry as to its jurisdiction to proceed against the property and found facts sufficient to justify its action.
We do not think the decision in Cassady v. Norris, supra, concludes the present case. When the complaint in that case alleged that the owner was unknown, the statute in express terms provided that the suit should proceed as a proceeding in rem against the property assessed, and the owner was concluded because the general notice required by the statute was given. The present statute is essentially different. It provides for notice against the "supposed owner" and provides that the action shall be in the nature of a proceeding in rem. That is to say, it is a proceeding "quasi in rem." A proceeding in rem has been defined to be a proceeding against the property, while a proceeding quasi in rem is a proceeding against the person in respect to the property.
Tax sales are made exclusively under statutory power, and in order to divest the owner of his property every substantial requisite of the statute must be complied with. On this question Judge Cooley said: "Defects in the conditions to a statutory authority can not be aided by the courts; if they have not been observed, the courts can not dispense'with them, and thus bring into existence a power which the statute only permits when the conditions have been fully complied with. Neither, as a general rule, can the courts aid the defective execution of a statutory power; they may do this when the power has been created by the owner himself, and when such action would presumptively be in furtherance of his purpose in creating it; but a statutory power must be executed according to the ¡Statutory directions, and 'presumptively any other execution is opposed to the legislative will, instead of in furtherance of it. It is therefore accepted as an axiom, when tax sales are under consideration, that a fundamental condition to their validity is that there should have been a substantial compliance with the law in all the proceedings of which the sale Was the culmination. This would be the general rule in all cases in which a man is to be divested of his freehold by adversary proceedings; but special reasons make it peculiarly applicable-to the case of tax sales." Cooley on Taxation (3 ed.), vol. 2, pp. 912-913.
As we have just seen, the statute requires the notice to be given to the supposed owner. The dictionary meaning of ' ' supposed" is, " accepted as true, or believed. ' ' Then the statute requires notice to be given to the person believed by the commissioners to be the owner. At the time the foreclosure proceedings were had by the commissioners in the chancery court A. E. Adams was named as the supposed owner. At that time J. C. Budd was the owner of the property and in possession of it. The property was a valuable farm of ninety acres situated on the bank of the Arkansas River and worth about $5,000.
We think the facts presented by the record bring the case within the rule announced in Farmers & Merchants Bank v. Layson Lumber Co., 87 Ark. 607. In that case the commissioners of an improvement district in a city commenced proceedings against J. E. Eubanks as the owner of a lot to enforce the payment of the unpaid assessment. There was a sale of the property under the proceedings, and a deed was executed by the -commissioner-to the Farmers & Merchants Bank as the pur chaser at the sale, -which was approved by .the court. Eubanks did not own the lot at the time the foreclosure proceedings were had, but had conveyed it to another. The court held that the decree in the suit .against Eu-banks did not affect the owner of the lot and those holding under him, they not being parties to the suit, and the suit not being in rem. Therefore, it was held that a proceeding against Eubanks to collect an assessment of a local improvement district under Kirby's Digest, section 5694, is notice .only to him, and that the decree affects only his interest in the lands, and that no one else is bound by it. It seems that the holding in that case applies here. As we have already seen, the foreclosure proceedings were under the statute. It will be borne in mind that the statute does not designate the suit to foreclose as a proceeding in rem as in the case of an unknown owner, but it in express terms provides that the proceedings and judgment shall be of the nature of a proceeding in rem. It further provides that notice shall be given to the "supposed owner."
Where the proceedings are strictly in rem under the statute, all persons who have an interest in the property are bound because the land itself is brought before the court. The reason is that no persons are made parties to the suit, but the land itself is brought before the courts, and its status ascertained. In cases where the owners, real or supposed, are made parties under the statute, no one else is concluded except the party who is made a party to the proceedings.
This brings us to the question of whether A. E. Adams could be sued as the ' supposed owner. " It is not shown that he ever had any title to the property or that he was in possession of it, or made any claim thereto at the time the foreclosure proceedings were had. J. C. Budd at that time had the paper title to the property and was in possession of it through his tenant. He was no more bound by proceedings against A. E. Adams as the "supposed owner" than the real owner was in the case last referred to by the proceedings against Eubanks as owner, who had disposed of the property before the foreclosure proceedings were commenced. But it is claimed that such holding ignores that portion of the statute which provides that it shall be immaterial that the ownership of the lands be incorrectly alleged in the proceedings. We do not think so. If there had been any grounds for suing A. E. Adams as the supposed owner of the property, it would have been immaterial that his name was not correctly stated in the notice, or that he was not the actual owner of the property. It is true that the statute provides for a general notice to all persons interested in the property to appear within four weeks and make defense to the suit. But this does not make the suit strictly a proceeding in rent, so that all parties shall be bound by the proceedings. The reason is that the statute also provides that the "supposed owner" or the person believed to be the owner shall be a party to the proceedings. If the "supposed owner" is not made a party to the proceedings, then to take the property away from the owner without attempting to comply with this provision of the statute would be to deny him "due process of law." The proceeding did not comply with the statutory requirements, and for that reason does not constitute "due process of law" and therefore has no binding effect on Simpson, who has the record title by a quitclaim deed from Budd.
In Gilbreath v. Teufel, 15 N. Dak. 153, the Supreme Court of North Dakota held: "In an action to determine adverse claims to real property, although the proceedings may in all things comply in form with the provisions of the statute relative to the manner of obtaining jurisdiction, it is nevertheless an abuse of the statutory provisions, and is in effect a fraud upon the court and the adverse claimants to not disclose, and name as defendant, all adverse claimants whose names and places of residence could be readily ascertained."
In Scales v. Wren, 127 S. W. 164, the Supreme Court of Texas held that in a suit to quiet title where plaintiff's deed was on record, and gave his residence as in a certain county of the State, a judgment for taxes against the "unknown owner" did not conclude plaintiff's title, since he was entitled to service of citation if within the jurisdiction of the court, and, not being an unknown owner, he was not a party to the proceedings.
In Evans v. Robberson, 1 Am. St. Rep. 701, the Supreme Court of Missouri held that a tax sale, under the Missouri statute, in order to bind the interests of the owner, must show that he was made a party, if known, and, if not known, and not m'ade a party, then his interest can only be affected by making the party appearing by the record to be the owner a party to the suit.
But it is insisted that these decisions should have not control because they are contrary to the decision in the case of Cassady v. Norris, supra. If they would hold that a proceeding under a state of facts similar to the .one in the case at bar was not "due process of law" in a proceeding strictly in rem, and that- therefore the owner was not concluded by the judgment, it is readily apparent that the decisions would apply with greater force in a case where service is required to be had against the real or supposed owner, and in the proceeding's no attempt is made to serve'such person, but a party who has no interest in the land whatever was designated as the "supposed owner," or the man believed to be the owner. The time for redemption in the statute under consideration was one year, and it is readily seen how that time would soon pass away and that the land owner who was not familiar with land numbers would be lulled to sleep by his lands being advertised as belonging to some one who had no interest in them, and in this way his farm, however valuable, would be sold to pay a small amount of improvement taxes, as was done in the case at bar.
We do not impute any bad faith in the matter to the commissioners. They had no authority to institute pro ceedings to sell the lands except under the statute. The statute required that the "supposed owner" be made a party to the proceedings. This the commissioners did not do, but instituted proceedings against another person whom the record shows had no interest whatever in the lands, and made no claim to them, and on that account made no defense to the action.
It follows that the chancery court erred in not setting aside the sale, as it was asked to do by the petition filed by the owner in the case. Such was the relief granted in the case of Farmers & Merchants Bank v. Layson Lumber Co., 87 Ark. 607.
Therefore, the decree will be reversed and the cause remanded for further proceedings not inconsistent with this opinion.