Court Opinion

ID: 3986243
Source: CourtListenerOpinion
Date Created: 2016-07-06 10:42:22.907067+00
Date Added: 2024-06-11T07:44:02.633943
License: Public Domain

There is no controversy in this case as to the facts. Some of the facts are stipulated; others are established by documentary evidence. They are as follows: The defendant Benjamin drainage district was organized in May, 1918, for drainage purposes pursuant to the laws of Utah. Drainage benefits were assessed and equalized against the 27.01 acres of land involved in this controversy in the sum of $100 per acre, or the total sum of $2,701. During the years from 1918 to 1931, both years inclusive, defendant drainage district expended $133,000, or approximately $29 per acre, on the lands within the district in constructing and maintaining a drainage system for the purpose of benefiting the property within the district. During each of the years 1922 to 1930, both years inclusive, the drainage district levied assessments on the lands therein, including the lands in controversy. The taxes and assessments so levied were not paid during such years, except as will presently appear. On December 18, 1919, Francis A. Peay and his wife, Rena Hone Peay, executed a mortgage for $5,000 in favor of the Payson Exchange  Savings Bank. On March 15, 1927, an auditor's tax deed was issued to Utah county, Utah, because the state, county, school, road, and bounty taxes levied for the year 1922 had not been paid. On August 14, 1928, Francis A. Peay and Rena Hone Peay, his wife, conveyed to the trustee of the Payson Exchange  Savings Bank the lands in question. The conveyance was by quitclaim deed which recited that the consideration was in payment of a note for $5,000 dated December 18, 1919, and that the "deed is given subject to all delinquent taxes, water assessments and drainage taxes on above described property." As a party of the transaction whereby Peay and his wife conveyed the land in question *Page 99 
to the trustee of the Payson Exchange  Savings Bank, the bank in turn released the mortgage which the Peays had given to the bank to secure the $5,000 note. Pursuant to a resolution of the board of county commissioners of Utah county, approved July 1, 1929, the county clerk of Utah county, acting for and on behalf of such county, executed the so-called quitclaim deed whereby the county quitclaimed all its interest in the land in question to the Payson Exchange  Savings Bank and released the auditor's deed by which the land was conveyed to the county. The consideration paid by the bank for the deed was $215.75, which was the amount of state, county, school, road, and bounty taxes levied against the premises conveyed during the years 1922, 1923, 1924, and 1926. The consideration paid did not include the penalties and interest on the taxes levied against the premises.
Upon the foregoing facts, appellants contend that they are entitled to the land in controversy free from any and all liens of the drainage district for assessments or taxes levied against such land. On the contrary, the drainage district contends that the land is subject to its lien for all drainage assessments which have been levied against such land. While the parties have discussed a number of minor matters, in the final analysis that is the sole question which divides the parties to this litigation. Counsel in their respective briefs have argued at some length the question of whether or not the plaintiffs have established the regularity of the proceedings pursuant to which Utah county issued its tax deed to the Payson Exchange  Savings Bank. For the purpose of this case it may be assumed that such proceedings were in all respects in conformity with law. Considerable is also said in the briefs of counsel with respect to the duty or lack of duty of the Payson Exchange  Savings Bank to pay the drainage assessments levied against the land covered by its mortgage. At the time the bank received the quitclaim deed from Utah county it was not a mortgagee of the land in question but was the owner of a defeasible equity of redemption thereof. Such equity of redemption was inferior and *Page 100 
subject to the claims of the county and the drainage district for taxes and assessments. At the time the bank paid the taxes and received the quitclaim deed, there was in effect a statute which provided that, "The board of county commissioners may, at any time after the period of redemption has expired * * * permit a redemption from any sale where the property has been sold to the county." Laws Utah 1921, chap. 140, p. 384, now R.S. Utah 1933, 80-10-68. The county is by this provision permitted, if not required, to recognize an outstanding equity notwithstanding an auditor's tax deed has issued to the county. Thus the bank, being the sole owner of the outstanding equity, was entitled to redeem the property from the tax sale even though the time for redemption had expired. The only other outstanding claim against the premises, so far as is made to appear, other than that of the county, was the lien of the drainage district for its assessments. Therefore, the only one who could redeem, other than the drainage district, was the bank. When the Peays quitclaimed to the bank they parted with their right to redeem. The right of the bank to redeem was not founded upon the fact that it had formerly held a mortgage on the premises because that mortgage had been released. Its right to redeem was based upon the fact that it held a defeasible equity in the property subject to the claim of the county and the drainage district. It had such right by reason of the quitclaim deed from the Peays.
As will be seen from the cases cited in the prevailing opinion, one who owes a duty to pay taxes cannot strengthen his title by purchasing a title at a tax sale. Appellants recognize that rule as being sound law, but contend that no such duty rested upon the bank at the time it received the quitclaim deed from the county. That the bank was not personally liable for the payment of the taxes and assessments is clear. The same was true with respect to the Peays, who owned the land when the taxes and assessments were levied. The Peays having conveyed the land to the bank subject to the taxes and assessments, they were under no duty, legal or otherwise, to pay the taxes and assessments. Unless that *Page 101 
duty entirely ceased to exist, it passed to the bank when it accepted the conveyance of the land subject to the taxes and assessments.
Upon principle, I can see no basis for distinguishing between the position of the Peays with respect to their duty to pay the taxes and assessments during the time they were the owners of the land, and the duty owing by the bank during the time it was a mortgagee as well as after it accepted a conveyance of the premises. The cases generally hold that a mere purchase from the owner of premises, after levy of taxes thereon and sale thereof, imposes no obligation on such purchaser to pay the taxes and assessments which were levied prior to the time of purchase, and hence such a purchaser may strengthen his title by a tax deed. Among the cases so holding are Lybrand v. Haney, 31 Wis. 230, and Oswald v. Wolf, 129 Ill. 200, 21 N.E. 839. These cases and others of similar import deal with controversies between private individuals. The case in hand affects a public or quasi public interest. While drainage assessments are inferior to general taxes, none the less the former are impressed with a public interest. All of the landowners within the drainage district are affected whenever any land therein escapes the payment of its just proportion of the obligations of the district. A drainage district is not concerned with the relative rights of owners, mortgagees, tenants, etc., in and to the various tracts of land therein. Such notice as it takes of ownership is for the purpose of making assessments and for the information of the parties concerned. The drainage district, like the state and other taxing agencies, levies a tax or assessment upon every possible interest in the lands within the taxing unit. All parties who have an interest in the lands are equally obligated to pay drainage taxes, the same as they are under obligation to pay general taxes. The sole penalty for failure to pay such taxes and assessments is a forfeiture or sale of all rights. Contractual obligations may determine the relative rights of those who own interests in the lands within a drainage district as to who shall pay the taxes and assessments, but as all interests *Page 102 
are equally obligated to pay taxes and assessments, such contractual obligations are of no concern to the district. As thus viewed, the Payson Exchange  Savings Bank by reason of its mortgage was under the same obligation, so far as the drainage district is concerned, to pay the taxes during the years 1922, 1923, 1924, and 1926, as it would have been under had it owned the property during such years, and hence, as to the district, its title was not aided by the quitclaim deed from the county. Such are, in effect, the views expressed by the learned author of 3 Cooley on Taxation (4th Ed.) p. 2856. Moreover, it would seem that the county commissioners of Utah county in authorizing the execution of the quitclaim deed to the Payson Exchange  Savings Bank intended that the same should be effective merely as a redemption. The resolution of the county commissioners authorizing the conveyance provided that the "County Commissioners hereby authorize the County Auditor to issue a quitclaim deed to the Payson Exchange  Savings Bank and release the taxes on sale No. 1248 in the name of Francis A. Peay. Delinquent taxes for the years 1922, 1923, 1924 and 1926. The consideration of this sale is $218.65 which includes the cost of the quitclaim deed and the recording thereof. This sale is made for the best interest of Utah County and in complying with sections 6054 and 6056 of Compiled Laws of Utah 1917." It will be noted that the quitclaim deed was to "release the taxes," not to convey the title held by the county. The consideration to be paid was the amount of the delinquent taxes for the years mentioned together with the fees for making out the deed and the recording thereof, without any interest or penalty charges.
It is the duty of the county commissioners to assist in the collection of drainage assessments as well as general taxes. There can be no doubt upon this record but that the property in question could have been readily sold for ample to pay all taxes and assessments which were outstanding at the time of the so-called "sale." It is difficult to believe that the county commissioners were so forgetful of their duties *Page 103 
to the Benjamin drainage district as to intend to sell the tract of land to the Payson Exchange  Savings Bank for a fractional part of its value to the exclusion of the lien of the drainage district. Indeed it is, to say the least, very doubtful, if the county commissioners had had any such intentions, that their action in such respect could be sustained. Much may be said in favor of the view that such action on the part of the commissioners would constitute, as a matter of law, fraud upon the drainage district. The quitclaim deed was executed, not by the county auditor as directed by the county commissioners, but by the county clerk. Just what effect such fact would have upon the validity of the quitclaim deed, if the transaction is to be regarded as an attempted sale rather than as a redemption, is not, in the view I take, necessary to decide.
The quitclaim deed which the county gave to the bank is also open to the construction that it was intended as a mere release of general taxes. In one part of the deed it is recited that Utah county quitclaims the property to the Payson Exchange  Savings Bank. In another part it is recited that it "is given in pursuance to any order made by the board of county commissioners on the 1st day of July, 1929, and for a release of that certain tax deed bearing date of March 15, 1927." The latter expression tends to show that the quitclaim deed was intended as a release or redemption rather than a sale.
For these reasons, in addition to those expressed in the prevailing opinion, I concur in the affirmance of the judgment appealed from.