Case Name: Thomas White et al., App'lts, v. The City of Brooklyn, Resp't
Court: New York Court of Appeals
Jurisdiction: New York
Decision Date: 1890-10-07
Citations: 33 N.Y. St. Rep. 307
Docket Number: 
Parties: Thomas White et al., App’lts, v. The City of Brooklyn, Resp’t.
Judges: 
Reporter: New York State Reporter
Volume: 33
Pages: 307–312

Head Matter:
Thomas White et al., App’lts, v. The City of Brooklyn, Resp’t.
(Court of Appeals, Second Division,
Filed October 7, 1890.)
Tax certificate—Limitation.
Plaintiff held certain tax sale certificates issued by defendant, which stated that the purchaser was entitled to a lease “ of the said premises for the term aforesaid, after the expiration of two years from the date hereof, unless said premises be redeemed within that time, or any irregularity shall be discovered in the proceedings prior to said sale, in which case said purchase and all sums paid for taxes or assessments on said premises shall be repaid to said purchaser or his assigns.” Ho redemption was made, nor leases given, although demanded, and repayment of purchase price was also refused in July, 1883. In December, 1882, irregularities in proceedings prior to the sale were discovered, rendering the sales invalid, and this action was br ught in July, 1883. Held, that the right to recover the money paid for the certificates did not accrue at the expiration of the time for redemption, 1866, but at the time of the discovery of the irregularity (1882), at which time the statute of limitation would begin to run.
Appeal from judgment of the general term of the city court of Brooklyn, affirming judgment entered upon decision of the special term, dismissing the plaintiffs’ complaint.
This action was brought upon the contracts of the defendant, contained in several certificates of sales by its collector of taxes and assessments of certain lands in the city of Brooklyn, made in 1860, 1861, 1862,1863 and 1864, for taxes assessed npon them from 1851 to 1862, inclusive. The certificates are held by the plaintiffs. They bear’ even dates with the sales respectively, are subscribed by such collector and are in the form following: '• I hereby certify that at public auction held by me this day, at the city hall, in the city of Brooklyn, for the sale of property for unpaid taxes, pursuant to an act entitled ‘An act to consolidate the cities of Brooklyn and Williamsburgh and town of Bushwiclr into one municipal government, and to incorporate the same,” passed April 17, 1854, and the'acts amendatory thereof * * * purchased the lot,” etc., “ assessed for the tax of * * * for the term of * * * years, for which he then paid the sum of * * * dollars, and which said purchase entitles him to a lease of the said premises for the term aforesaid after the expiration of two years from the date hereof, unless said premises be redeemed within that time, or any irregularity shall be discovered in the proceedings prior to said sale, in which case said purchase and all sums paid for taxes or assessments on said premises shall be repaid to said purchaser or his assigns, provided this certificate shall be surrendered to the collector of taxes and assessments, and no further or other damages shall be claimed by said purchaser.” The plaintiffs held some of such certificates as purchasers, but the most of them as assignees of the purchasers mentioned in them. Ho redemption was made. In May and August, 1882, the plaintiffs demanded leases which were not given, and in July, 1883, they demanded repayment to them of the purchase money, which was refused. In December, 1882, it was discovered that there were irregularities in the proceedings prior to the sales, by which the sales were rendered invalid. This action was commenced in July, 1883.
W. M Osborn, for app’lts; William T. Gilberi, for resp’t.

Opinion:
Bradley, J.
When the two years from the times of the respective sales had expired, and the premises were not redeemed, the right of the purchasers or their assigns was to take conveyances for the terms of years mentioned in the certificates, unless some irregularity was discovered in the proceedings prior to the sales, and in that case to have the purchase money refunded. This right was effectually given by the terms of the certificate. Brevoort v. City of Brooklyn, 89 N. Y., 128. It turned out that such irregularities did exist; and that as the consequence the sales in question were void. The purpose of this provision in the certificate for repayment evidently was for the benefit of the purchaser, and for the restoration to him of the amount paid, if it appeared that the city was unable to give effect to the sale by the conveyance which it undertook to make. The discovery of the defect in the proceedings prior to the sale, and not its existence merely, was the fact which it was contemplated would deny to the defendant the right to make the conveyance, and afford to the purchaser the right to reimbursement.
If, therefore, without such discovery the conveyance had been made to him, the remedy of the purchaser to obtain repayment would have been defeated, although such irregularity, prior to the sale, had in fact existed. Coffin v. City of Brooklyn, 116 N. Y., 159; 26 N. Y. State Rep., 421. The first condition upon which repayment was made to depend did not arise. The irregularity did exist and was discovered. The plaintiffs' right to reim-. bursement was not defeated by any conveyance pursuant to the sale and certificate. The view of the court below was that the plaintiffs' right to recover was barred by the statute of limitations, which seems to jie the leading question here for consideration. If the right of the plaintiffs was dependent solely upon the fact that such irregularity existed, it is clear that the statute commenced running on the expiration of the time for redemption, and operated as a bar at the end of six years thereafter, although the plaintiffs were ignorant of the existence of the fact which entitled them to the remedy. Allen v. Mille, 17 Wend., 202. While a certificate of the character of those in question is in some sense similar to that of an executory contract of sale, the right to recover the purchase money paid does not arise from any breach of the contract, but is in its enforcement. The case here, therefore, differs somewhat from the remedy given by refusal or inability of the vendor in the ordinary contract for the sale of land. There the remedy for recovery by way of reimbursement of the purchase money is founded upon the breach of the contract. Here the contract gives the only right the plaintiffs have for that purpose. When the time for redemption expired the fact existed which, if then discovered, would have entitled the purchasers or their assigns to repayment of the purchase money. The discovery of the irregularity not then having been made, the defendant, in compliance with the certificate, could, and probably would, if called upon to do so, have made the contemplated conveyance. If, therefore, such conveyance could have been made in performance of the contract according to its terms, can it be said that a right of action had in fact accrued to recover the purchase money ? Both conditions did not exist at the same time. But when, within the fair meaning of the contract, the right to reimbursement arose, the right of the defendant to malcet he conveyance pursuant to the contract terminated. And it was not intended by the contract that the defendant should be embarrassed in making a conveyance pursuant to it by the mere fact that a defect existed in the proceedings prior to the sale, but that the denial of that right and liability to repay the purchase money should be dependent upon discovery of the defect.
This view would seem to lead to the conclusion that the discovery was the fact upon which the right of action for the reimbursement depended, and that then the cause of action for such relief should first arise. But the time within which such cause may accrue and the remedy be made available must have some relation to that in which the lien, and, perhaps, the right to specific performance, would otherwise exist. For it evidently was not in the contemplation that any remedy would survive the period during which the lien given by a valid certificate would continue. The right of action for specific performance, unless saved by some statute, would be barred at the end of ten years after the expiration of the time for redemption. Bruce v. Tilson, 25 N. Y., 194. That ten years expired before this action was commenced. T.he statute of limitations has relation to the remedy only, and while it might be made available to defeat the remedy, it would not affect or curtail the lien of a valid sale. Waltermire v. Westover, 14 N. Y., 16. That is supposed to continue twenty years. Fisher v. Mayor, 67 N. Y., 73. The statute providing the means by which a person claiming an interest in the premises sold for taxes in the city of Brooklyn may by filing of notice limit the time for taking the conveyance pursuant to such a sale, also provides that such term is extended until the expiration of six months from the time of filing the notice, when the lien shall cease. Laws 1865, chap. 721, § 12.
This statute does not have the effect when no notice is filed to' extend the lien of a certificate given on a sale for taxes beyond the time which it otherwise 'would continue; but it may be construed in such event to so extend the time within which a conveyance may be required as to obviate the ten years' statute of limitations in seeking specific performance. The time to seek conveyances was not limited by any notice, and, within the meaning of the statute, if the certificate had been valid, the right to obtain such conveyance, unless terminated by such notice, would1 continue during the existence of the lien.
It is, however, suggested that this statute has no application to the certificates in the present case, because they never were liens upon the premises mentioned in them. It is true they were not liens; but in the contemplation of the parties when the certificates were made, and until their invalidity was discovered, conveyances were to be made and taken pursuant to the contract; and while in that view it was assumed that such right continued, it may be seen that the discovery of the irregularity which defeated the ability of the defendant to convey produced the remedy to recover back the purchase money. We have thus far proceeded as if no time was designated by the contract for its performance; and that therefore the discovery of such irregularity at any time during which the lien of valid certificates would continue enabled the purchaser to assert his claim for reimbursement of the purchase money. In view of the statute on the subject, as well as by the terms of a certificate like those here, the time of performance of the contract represented by it was on the expiration of two years from the time of the sale.
Mo redemption of the premises being in the meantime made, the rights of the parties to the certificate may have been treated as then fixed, so as to entitle the purchaser to a conveyance, unless some irregularity in the proceedings prior to the sale was discovered. In the latter event he would be entitled to repayment of the purchase money. Mo such discovery in the cases in question having then been made, the collector of taxes and assessments may have fully discharged his duty and the liability of the defendant, by making to the purchasers instruments purporting to convey the estates mentioned in the certificates. This was contemplated by the statute as it then was, Laws 1854, chap. 384, title 5, § 33, and as it has since remained. Laws 1873, chap. 863, title 8, § 9. So far as appears the collector prior to the act of 1873 did not, nor did the registrar of arrears thereafter and before the discovery of the invalidating irregularity in the proceedings, make any such conveyance. There was nothing required by the statute or by the certificate of the purchaser to entitle him to the conveyance, or to move the collector or registrar of arrears to make it. And in that view the question may arise whether the omission to make the conveyances, as well as to seek to obtain them, may not be treated as an extension of the time of performance of the contracts by the acquiescence of the parties. Time was not necessarily of the essence of the contract as between the city and the purchasers. And the defendant did not nor did the purchasers do anything to make it so, or to terminate the time of performance until in 1882, when the plaintiffs first demanded conveyances, which were refused. The contracts, therefore, as against the defendant continued effectual, open and unperformed until the discovery, in that year, of the irregularity in the proceedings prior to the sales, which invalidated the certificates from the beginning. Gilbert v. Danforth, 6 N. Y., 585. After such discovery, performance could not be accomplished by making conveyances. If these views are correct it would seem that the right of the plaintiffs then arose to assert the claim for repayment of the purchase money as to the certificates to which they had title, and which if valid would have continued to be a lien. The irregularity was discovered in December, 1882. The demand of payment and tender of the certificates were made in July, 1883, and this action was commenced shortly thereafter and in the same month. It is urged that the plaintiffs had no title to the certificates which they claimed to own by virtue of the assignments made to them, because no notice was filed pursuant to the statute, which provided that, "no assignment of any certificate given on the sale of lands for any taxes or assessments shall have any effect until notice of the same, with the name and residence of the assignee, shall be filed in the office of the collector of taxes and assessments of the district in which said lands are situated." Laws 1854, chap. 384, title 5, § 26; Laws 1873, chap. 863, title 8, § 7. The certificates ran to the purchasers and their assigns. And while the defendant might, for the purpose of performance of the contract contained in them, treat the purchasers as the parties entitled to the benefit of them until such notice should be filed, the right upon which this action is founded is in practical effect the assignment of the claim to the moneys paid upon the purchases, or the liability of the defendant created by the contracts to pay it, and unless some relief is given by some intervening act of performance, which does not appear, we think that provision of the statute is not available as a defense. Chapman v. City of Brooklyn, 40 N. Y., 372.
These certificates are not negotiable instruments; and the mere endorsement of them by the purchasers would not be effectual to transfer them or the claim to the purchase money. This situation seems to have been applicable to a few only of the certificates held by the plaintiffs. As to them such endorsement alone was insufficient evidence to establish title in the plaintiffs. In the view taken it is not essential to refer to the legislation had and the action taken to supply the deficiency in funds for municipal purposes, occasioned by the individuality of assessments which had been made, although it was the subject of consideration in the court below. But it may be observed that in 1883 provision was by statute made to make assessments of arrears of unpaid taxes assessed prior to July 1, 1882 ; and it was provided that all taxes, assessments and water rates unpaid, for which sales had been made, which sales were for any reason invalid, should be deemed to be in arrears from the date when they were levied, or attempted to be levied or confirmed. Laws 1883, chap. 114. It is claimed on the part of the plaintiffs that thereupon the city proceeded to re-levy taxes and assessments upon the premises, and collected them, and thereby twice received payment of the moneys for which this action was brought. As found by the trial court, this was not necessarily so as to the whole amount. The court found that pursuant to that act of 1883, the city authorities levied upon each of the parcels of land a tax or assessment for some amount in lieu and stead of those in question, but that the amount so re-levied did not appear. These facts tend to show that the city made such assesssments, by way of re-levy, as were deemed essential to supply the deficiency caused by or resulting from the irregularities in previous assessments, including those for which sales had been made; and that the statute of 1883 was passed to meet that necessity. It is not seen that the plaintiffs were entitled to recover interest prior to the time the demand of payment was made. Nor were they entitled to recover anything by way of indemnity for costs incurred by them in defense of an action brought by one Barnard, in which they were made defendants, and in which was involved the question of the validity of the certificates as liens. They had no rights as against the defendant, except such as were given by the contracts contained in the certificates; and those were to a conveyance, unless irregularities were discovered in the proceedings prior to the sales, and in that case they were entitled to repayment of the amount of the purchase money as represented by the certificates, of which they had the title.
These views lead to the conclusion that the statute of limitations was not a bar to the action; and that the judgment should be reversed and a new trial granted, costs to abide the event
All concur.
Reversing 5 N. Y. State Rep., 868.