Court Opinion

ID: 5144438
Source: CourtListenerOpinion
Date Created: 2022-01-02 01:23:55.831109+00
Date Added: 2024-06-11T13:42:30.097116
License: Public Domain

The stipulation on which the case was tried recites that on March 17, 1925, the bid of J.A. Bodovitz "for thepurchase" of the land was approved and a receipt for one-fourth of the "purchase price" was issued to him, and that upon the acceptance of his contract of "purchase" he was entitled to the use and possession of the land, and that he accordingly took possession thereof. The deferred installments drew interest. Thus, the payments were treated as part of the purchase price, not as consideration for an option. When the bid was approved and the down payment was made, the transaction became an executory contract of sale, not a mere option to purchase, and the equitable title then vested in Bodovitz, despite the fact that the Secretary of the Interior reserved the right, in hisdiscretion (which was not exercised), to rescind the contract for failure to pay the deferred installments when due. Whether the equitable title should ever ripen into a legal title depended entirely upon compliance by the purchaser with the terms of sale, which is always the case in executory contracts of sale. No provision in the regulations is called to our attention to the effect that the sole remedy of he Secretary of the Interior was to rescind the contract on failure to pay the deferred installments when due. On default in making any such payment, the Secretary of the Interior could, in his discretion, either rescind the contract and forfeit all payments made or enforce payment of the delinquent installments. In support of these rules, see 55 Am. Jur. 496, 782, 853, 904; 66 C. J. 490, 708, 751, 1210; S.R.A. Inc. v. State of Minnesota, 66 S.Ct. 749, 90 L.Ed. 851; Gompert v. Frost, 188 Iowa 1039, 177 N.W. 71; Dunn v. Yakish,10 Okla. 388, 61 P. 926; Leedy v. Ellis County Fair Ass'n,188 Okla. 348, 110 P.2d 1099.
In holding that when nontaxable government or Indian land is sold under an executory contract of sale the full purchase price must be paid before the equitable title is vested in the purchaser so as to be subject to state taxation, the majority opinion is contrary to the rule that has obtained in this state since 1909, when the decision in Bowls v. Oklahoma City,24 Okla. 579, 104 P. 902, was rendered. This rule was adhered to in Morris v. Board of Com'rs, 74 Okla. 199, 177 P. 900. The cases of Rose v. Stalcup, 78 Okla. 268, 190 P. 396, and Hoskins v. Abbott, 191 Okla. 158, 127 P.2d 815, relied upon in the majority opinion, are not contrary to this view, since in both cases the purchase price was fully paid before the lands were assessed, and any statement intimating that such lands were not taxable before the deferred payments were fully made was obiter dictum. Furthermore, Hoskins v. Abbott followed Rose v. Stalcup, which in turn cited with approval the Bowls and Morris Cases.
Here the legal title remained in the Indian Nations only as security for the payment of the balance of the purchase price, and the situation was no different in effect than it would have been had a deed been delivered and a mortgage taken back for the balance of the purchase price. Such was the view expressed *Page 282 
by the United States Supreme Court in S.R.A., Inc., v. Minnesota, above, which holds that the states may ordinarily assess land sold by the Federal Government under an executory contract of sale while part of the purchase price remains unpaid and where the purchaser is not entitled to a deed until the purchase price is fully paid, despite the fact that the purchase contract may be rescinded and the consideration forfeited for failure to pay deferred installments when due. The court there distinguished the case of sale of an abandoned post office site from cases, such as Irwin v. Wright,258 U.S. 219, 42 S.Ct. 293, dealing with the taxability of land under the homestead laws, where the public policy prevents the homesteads from being taxed before final payment is made. No such public policy is involved in the instant case.
The majority opinion fails to give effect to sections 5, 6, and 8 of article 10 of the State Constitution, and sections 12317, 12319, and 12581 of the 1931 Compiled Statutes, which were in effect when the taxes here involved were levied. The equitable title of the purchaser constituted "property" subject to taxation under said constitutional and statutory provisions. The result would be that if the land should be sold for taxes prior to the final payment, the purchaser would take title burdened with the unpaid installments, just as a resale for ad valorem taxes, without purporting to sell for the delinquent special assessments, is subject to the lien for the special assessments (Board of Commissioners v. City of Wewoka,191 Okla. 142, 127 P.2d 826), and just as the resale of oil or gas producing land is subject to the mineral rights (McNaughton v. Beattie, 181 Okla. 603, 75 P.2d 400), despite the fact that the statute (68 O. S. 1941 § 432f) provides that a valid resale shall vest in the purchaser "an absolute and perfect title in fee simple." Obviously, the purchaser at a tax sale gets title to only such estate as is assessed and to which the tax lien attaches. McNaughton v. Beattie, above. Thus, where an undivided interest in land is subject to taxation and the remaining interest is exempt, the undivided interest subject to taxation is properly assessed and the lien attaches only to that interest. 68 O. S. 1941 § 15.9.
If the rule announced in the majority opinion is to be adhered to, the result will probably be that when the Federal Government sells the many tracts of land acquired recently for naval bases, air bases, powder plants, etc., the lands will remain off the tax rolls until they are fully paid for, despite the fact that there is no Federal policy against its assessment as held in S.R.A., Inc., v. Minnesota, above. The schools and other local subdivisions will thereby be deprived of much needed revenue, or that much greater burden will fall upon the other property owners. To hold that the vendee having the beneficial use of the property can, by failing to pay the last dollar due on the purchase price, keep the property off the tax rolls indefinitely is unreasonable and contrary to the public interest and invites tax evasion.
For the foregoing reason, I respectfully dissent.