Opinion ID: 1820945
Heading Depth: 1
Heading Rank: 1

Heading: First: Are the purported tax sales of the Stafford parcel open to present attack?

Text: In Farr v. Nordman, 346 Mich 266, two dissenting members of this Court held that a bidder at tax sale acquires no title when the allegedly delinquent tax or taxes, for which the sale was made, have actually been paid or tendered prior to such sale. Our majority on that occasion, relying principally on Odgers v. Lentz, 319 Mich 502, and the 1906 parents thereof ( Hayward v. O'Connor, 145 Mich 52 and Shaaf v. O'Connor, 146 Mich 504 [117 Am St Rep 652]), ruled (p 269) that When the owner of land has notice  no matter how he obtains that notice  that his land has been sold for taxes, he must, if he desires to have the sale set aside by the circuit court, take proceedings within 1 year. Once again we face and vote upon the same clearly drawn issue of disagreement, the chancellor below having relied on Odgers and the parental origin thereof. These holders in succession of sound record title had no notice, recognized by equity in this equity case, that the assessing officer was double-taxing  quite unlawfully  their property by including it in and with the required assessment of the adjoining Libka lands. Being legal strangers to the 1938 delinquent tax proceedings they were under no legal duty, at least until their title was brought into direct question by plaintiffs' instant bill (or, possibly, by trespass of plaintiffs), to attack this 1930 through 1940 record of wholly invalid tax proceedings. The reason is that such proceedings were, so far as same purportedly affected the Stafford parcel, void from the start. They remain so to this day. They were void because no lien for taxes attached to the Stafford parcel by force or virtue of the assessments to Libka and Seltz. Consider Rowland v. Doty, Harr Ch 3, 8, and Rayner v. Lee, 20 Mich 384. In both cases the facts establishing invalidity of the involved tax sales were not so forceful as shown here. In Rowland the question arose on demurrer to a bill alleging that the plaintiff's premises had been sold, some years prior to filing of the bill, for delinquent taxes; whereas such taxes had been duly paid. The Court posed the litigated question thus: Does the treasurer's deed to Wilson divest Rowland of his title, and is Rowland precluded by that deed from showing that the tax had been paid for which the lot was sold? Here (p 9) is the Court's ruling (note quotation of a part of this passage in the opinion of Mr. Justice SMITH, Farr v. Nordman, supra, 290): The conveyance from the treasurer vests `an absolute estate in fee simple' only where the proceedings throughout have been regular. The right to sell, being founded solely on the nonpayment of the tax, does not and cannot exist whenever the tax has been paid. A sale, therefore, when no tax is in fact due, is unauthorized, and the treasurer's deed on such unauthorized sale conveys no estate or title whatever. In Rayner the Court spoke through Mr. Justice COOLEY. There it was held that a sale of land for taxes, the land having been twice assessed for the same year with the tax paid once, was similarly invalid. The case is close, very close, to this case of Reed. Here the south part of lot 2 was assessed twice in 1930, and twice again in 1931 (The same practice, presently immaterial, has continued ever since.). One such assessment in each year was valid, and the other each year quite invalid. The rightful owner paid each of the 2 rightfully assessed levies. The result, then, in this case of Reed, should be the same as in Rayner. A scrutinized tax sale being void, this Court in former years did not hesitate to say so. See the consolidated cases of Saph v. Auditor General, 317 Mich 191, and McLouth v. State Land Office Board, 317 Mich 212, wherein apparently regular proceedings leading up to and including sale to the State of supposedly tax delinquent lands, and a subsequent land board sale of the same lands, were held void and open to collateral attack, the attack having been made years after the conclusion of such proceedings and sales. The reason for such adjudication of invalidity was that title to the subject premises had vested outright in the State (under then section 127 of the general property tax law [CL 1929, § 3520, as amended by PA 1931, No 50]) prior to the assessments for which the tax sale to the State was made. Such assessments in consequence were of no validity, and it was so adjudged. In McLouth the Court concluded thus (p 219): Having this day affirmed the lower court's 1946 decree in the Saph Case which voided the 1941 decree in that cause, there is no alternative but to hold that the 1942 tax sale, based upon the void 1941 decree, and the 1944 `scavenger' sale, were likewise void. Under the facts of this case, this being a court of equity, we reserve the right to determine the validity of such decree and sales, particularly so where there has been no intervention of the rights of third parties. See Tromble v. Hoffman, 130 Mich 676; Horton v. Salling, 155 Mich 502; Porter v. Auditor General, 255 Mich 526. The reasoning of Horton v. Salling , cited in McLouth above, was applied a year later in McQuade v. State Land Office Board, 321 Mich 235. In McQuade  as in this case  the 1-year limitation of venerable section 70 of the general property tax law [] was relied upon to protect another invalid tax sale from the scrutiny of equity. Speaking through Mr. Justice CARR, the Court quoted at length from Horton and concluded (see text, 61 CJ, Taxation, § 1526, pp 1127, 1128) that a tax sale is invalid for every purpose unless the property was at the time liable for all the taxes for which it was sold. Here is the way Horton was utilized in McQuade (p 244): However, failure to file objections within the specified period after the sale does not preclude an attack thereon, if such sale is void because of a want of jurisdiction to make it. This Court in Horton v. Salling, 155 Mich 502, held that a deed of State tax land was void because the auditor general accepted interest on the State's claim for taxes at a rate lower than that prescribed by the statute. In support of its conclusions, Horton v. Helmholtz, 149 Mich 227, was cited. In holding that plaintiff was not precluded under the provisions of section 70 of the general property tax law from seeking a decree in equity to quiet his title to the property there in question, it was said (p 505): `The provision quoted from section 70 was designed to confer and limit, in tax cases, the general discretionary power, lodged in courts of equity to set aside sales, made in the same proceeding, for an inadequate price bid, or because of irregularities, and was not aimed at the authority of courts in general to hear and determine the validity of decrees and sales. This subject was discussed in the case of Spaulding v. O'Connor, 119 Mich 45. This sale being absolutely void, complainant might treat it so, and raise the question in ejectment (in a proper case) or by this proceeding.' Odgers v. Lentz, supra , and the 2 O'Connor Cases of 1906 (145 Mich 52 and 146 Mich 504 [117 Am St Rep 652]), are not opposed to the conclusion I would reach. That conclusion is that assessment of the 2 separately owned parcels as one, and the successive sales of both as one for delinquency of such assessment, being void, are open to attack by defendant Welsch regardless of said section 70. In Odgers, as in both O'Connor Cases, taxes were validly levied on the subject premises. Such validly levied taxes came to delinquency and so the jurisdiction of the court over the subject property, to which the tax lien had validly attached, was at least duly invoked by the respective statutory petitions. But here, as in Saph and McLouth, the court which assumed to authorize sale of the subject premises for delinquent taxes had no jurisdiction to proceed for want of valid assessment in the first place. This bill to quiet title fails for want of title in plaintiffs to the Stafford parcel. It fails because the proceedings by which the State assumed to sell to Libka, on which plaintiffs necessarily depend, were wholly invalid (so far, of course, as concerns this nondelinquent and doubly-assessed Stafford parcel). And it fails because no man's rightful title to land may be divested in the manner claimed here, section 70 notwithstanding. [] Any other holding would raise grave question whether section 70, in application of its limitation, denies due process and equal protection. The auditor general's annual petition, filed under former or present section 61 of the general property tax law (CL 1929, § 3452; CL 1948, § 211.61 [CLS 1956, § 211.61, Stat Ann 1950 Rev § 7.105, Stat Ann 1957 Cum Supp § 7.105]) for the sale of specific property as tax delinquent, when of judicially noticed record in the county treasurer's office there is no such delinquency, confers no jurisdiction over such property and authorizes no decree for sale thereof. In such case the owner, whether apprised or not of the proceeding, may stand on his firm right and wait until it is attacked by actionable trespass or direct suit. This is the rule of Horton and of the cited cases which follow Horton. It makes good legal sense, and it appeals to the conscience of equity. There is one sure way to make of this case a worthy and reliable precedent. It is to openly say, with a deferential tip of each freshman's hat to the learning of Horton, Saph, McLouth, and McQuade, that a tax sale is void for every purpose unless the property was at the time actually subject to the tax lien for which the authorities presumed to sell it. Second: The Question of Laches. In another somewhat similar tax case ( Holmes v. Soule, 180 Mich 526) the auditor general's concededly valid tax deed to the defendant bidder was executed in pursuance of statutory proceedings based on tax delinquency for the years 1888 through 1891. However, the grantee and those claiming under him failed continuously to give the required notice of redemption to the plaintiff, the latter being holder of the original or government title. [] In Holmes, as here, neither of the title contenders took any step in court, until several years had elapsed, to perfect title or right according to their respective claims. In that case, too, neither party was in actual possession of the involved premises when the question of title was brought into court. Finally, and again as here, the claimants by tax title insisted that the holder of record title was guilty of laches. Consideration of the question of laches was, in Holmes, opened with this observation (p 531): Defendants are not aided, in law, by having occupied the land, if in fact they have occupied it (a fact not found by the trial court, and of which the testimony is not convincing), because they had no right to its possession. The subject was concluded in these words (pp 532, 533): Neither party having been in possession of the land, there is no controlling statute of limitations. Defendants and their grantor have done nothing in reliance upon the silence of complainant's grantor. They have paid the taxes, which they were obliged to do to protect their interest. Laches implies negligence  a neglect or failure to do what ought to be done under the circumstances to protect the rights of the parties to whom it is imputed, or involving injury to the opposite party through neglect to assert rights within a reasonable time. Usually one having an interest in land which is not in the actual possession of another is under no obligation to assert his interest until it is attacked, and there seems to be no good reason for saying that one having such a right as the complainant claims may not remain silent until his right is questioned. In any event there is no apparent reason for holding that the right is cut off and lost in favor of another who has taken ineffectual proceedings to divest it. The present plaintiffs, alleging as they do laches of defendant Welsch and her predecessors, themselves took no steps to perfect their claimed title as against the troublesome, nay formidable, record title derived through Mr. Stafford. In the meantime defendant Welsch was, to say the least, busily and doubtless angrily engaged in pursuit of the auditor general for execution by him of a statutory certificate of error. [] The above quoted doctrine, applied as it was in a tax case, is simply a continued reflection of equity's consistent rule that lapse of time alone is not sufficient to constitute laches. See Tilley v. Brady, 323 Mich 547, 551, and Boston-Edison Protective Association v. Teahen, 337 Mich 353, 358-360, in which the respective opinions were written for the Court by Mr. Justice CARR. In the second of these cases ( Teahen ) the rule of Angeloff v. Smith, 254 Mich 99 was considered and adopted as follows (p 360): Numerous cases involving questions analogous to those presented have heretofore been considered and determined by this Court. In Angeloff v. Smith, 254 Mich 99, 101, it was said: `The doctrine of laches is founded upon long inaction to assert a right, attended by such intermediate change of conditions as renders it inequitable to enforce the right. Epstean v. Mintz, 226 Mich 660. `Where the right is not an executory one but is a vested legal title, the doctrine of laches has little, if any, application. 21 CJ, Equity, § 213, p 215. This is particularly true where the title is of record for the world to see.' The perfectly good record title of defendant Welsch and her predecessors was similarly visible, for all the world to see, when Libka's conveyance to plaintiffs was made in 1941. It has remained so ever since. The rule of Angeloff applies here, there being no proof  and plaintiffs bear the burden thereof  of any intervening change of conditions as might render it inequitable to deny validity of plaintiffs' quite invalid tax title. There is, hence, no proof of laches on the part of the successive record owners of the south part of lot 2. I vote to reverse and remand for entry of decree dismissing plaintiffs' bill. To settle all matters in controversy according to the tenets of equity, the decree should adjudge validity of defendant Welsch's title to the south part of lot 2 as against plaintiffs. Costs to defendant Welsch should be awarded. As to the petition of defendant Welsch, filed as shown above in the 1938 tax sale proceeding, same should be dismissed below by order making appropriate reference to the final decree in the present chancery case.