Court Opinion

ID: 9559564
Source: CourtListenerOpinion
Date Created: 2023-08-21 17:31:22.02444+00
Date Added: 2024-06-11T09:10:33.272028
License: Public Domain

CARTER, J., concurring.
The question presented for consideration is whether section 3574 of the Revenue and Taxation Code, adopted by the Legislature in 1941, imposes more onerous conditions upon the right to redeem property from a delinquent tax sale made prior to the adoption of such section, and if so, did the Legislature have the power to impose such conditions so as to affect the right of redemption of property covered by such prior sales?
In my opinion, said section does impose more onerous conditions on the right of redemption, as it purports to limit the time within which redemption may be made to a period of four months after notice instead of permitting the owner to exercise the right of redemption at any time until the property is sold by the state to a third person. Such being the case, I shall proceed with the consideration of the question as to whether or not the Legislature had the power to impose such conditions so as to affect tax sales made prior to the adoption of such section.
This court has held in numerous cases, and it appears to be in agreement with the weight of authority, that the general relationship of sovereign and taxpayer is not founded on, nor does it create, any contractual rights; and the obligation of the citizen to pay taxes is purely of statutory creation, and taxes can be levied, assessed and collected only in the method provided by express statute. (Southern Service Co., Ltd. v. Los Angeles, 15 Cal.2d 1, 11 [97 P.2d 963]; Perry v. Washburn, 20 Cal. 318; Spurrier v. Neumiller, 37 Cal.App. 683 [174 P. 338].) It has also been held by this court that the *281power of taxation is not founded upon consent or agreement but, rather, that tax proceedings are in invitum, and has given that as its reason why all tax proceedings should be strictly construed. Judge Cooley in his work on taxation points out that as between the owner of property and the sovereign power imposing the tax there is no relationship based upon contract and that as to the owner, “the remedy by redemption which the statute gives him, like remedies in general, is subject to legislative discretion.” (Cooley on Taxation, vol. 4, 4th ed., sec. 1561, p. 3068.)
Section 327 of the Political Code reads as follows:
“Any statute may be repealed at any time, except when it is otherwise provided therein. Persons acting under any statute are deemed to have acted in contemplation of this power of repeal.”
It appears to be well settled in this state that the right of recovery upon a purely statutory right can be impaired or abrogated without violation of any right guaranteed by the state or federal Constitutions. (Southern Service Co., Ltd. v. Los Angeles, supra; Penziner v. West American Finance Co., 10 Cal.2d 160 [74 P.2d 252]; Krause v. Rarity, 210 Cal. 644 [293 P. 62, 77 A.L.R. 1327]; Berg v. Traeger, 210 Cal. 323 [292 P. 495]; Callet v. Alioto, 210 Cal. 65 [290 P. 438]; Moss v. Smith, 171 Cal. 777 [155 P. 90]; People v. Bank of San Luis Obispo, 159 Cal. 65 [112 P. 866, Ann.Cas.1912B 1148, 37 L.R.A.N.S. 934]; Napa State Hospital v. Flaherty, 134 Cal. 315 [66 P. 322].)
The rule established by these cases is clearly stated by this court in the case of Krause v. Rarity, supra, at page 652, as follows:
“The defendant Rarity contends that by reason of the enactment of the foregoing statute the cause of action of the plaintiffs has been wiped out; that section 377 of the Code of Civil Procedure and section 2096 of the Civil Code have been repealed in whole or in part by the enactment of section 141% of the California Vehicle Act and that the rule of law to be applied is laid down in such cases as People v. Bank of San Luis Obispo, 159 Cal. 65 [Ann.Cas.1912B 1148, 37 L.R.A. N.S. 934, 112 P. 866]; Wilcox v. Edwards, 162 Cal. 455 [Ann.Cas.1913C 1392, 123 P. 276]; Moss v. Smith, 171 Cal. 777 [155 P. 90]; Freeman v. Glenn County Tel. Co., 184 Cal. 508 [194 P. 705], and Chenoweth v. Chambers, 33 Cal.App. 104 [164 P. 428], By those cases the rule obtaining elsewhere *282has become thoroughly established in the law of this state that when a right of action does not exist at common law, but depends solely upon a statute, the repeal of the statute destroys the right unless the right has been reduced to final judgment or unless the repealing statute contains a saving clause protecting the right in a pending litigation. In the case at bar the cause of action depended solely on the statute. There is no saving clause and the action is still pending.”
In the case of Napa State Hospital v. Flaherty, supra, at page 317, the rule is thus stated:
“It is a rule of almost universal application that, where a right is created solely by a statute, and is dependent upon the statute alone, and such right is still inchoate, and not reduced to possession, or perfected by final judgment, the repeal of the statute destroys the remedy, unless the appealing statute contains a saving clause.”
It appears to be a rule of universal acceptation that the clause of the federal Constitution and those of the several state Constitutions prohibiting the impairment of obligations of contracts runs only to conventional contracts created by the mutual consent of the parties and not to' quasi-contractual obligations imposed by the law and without procuring the consent of the party to be charged. (Louisiana v. Mayor of New Orleans, 109 U.S. 285 [3 S.Ct. 211, 27 L.Ed. 936]; Freeland v. Williams, 131 U.S. 405 [9 S.Ct. 763, 33 L.Ed. 193]; Garrison v. City of New York, 21 Wall. 196, at 203 [22 L.Ed 612]; Crane v. Hahlo, 258 U.S. 142, 146 [42 S.Ct. 214, 66 L.Ed. 514, 517]; Read v. Mississippi County, 69 Ark. 365 [63 S.W. 807, 86 Am.St.Rep. 202] (aff’d. 188 U.S. 739 [23 S.Ct. 849, 47 L.Ed. 677]); State v. New Orleans, 38 La.Ann. 119 [58 Am.Rep. 168]; Love v. Cavett, 26 Okla. 179 [109 P. 553]; Nottage v. City of Portland, 35 Ore. 539 [58 P. 883, 76 Am.St.Rep. 513]; Anders v. Nicholson, 111 Fla. 849 [150 So. 639]; State v. Smith, 58 S.D. 22 [234 N.W. 764].)
I am persuaded by the reasoning contained in the foregoing authorities that the tax liability of the owner of property is not predicated upon contract; that it is wholly of statutory creation and all rights and privileges granted to the property owner in connection therewith, including the enforcement of such rights, are founded upon statutory enactment. and such rights may be limited or entirely abrogated by the Legislature without violating constitutional provisions prohibiting the impairment of obligations of contracts.
*283Respondent relies most strongly upon the case of Teralta Land & Water Co. v. Shaffer, 116 Cal. 518 [48 P. 613, 58 Am.St.Rep. 194], in support of his contention that section 3574 of the Revenue Taxation Act is unconstitutional as being in violation of the impairment of contracts clauses of the state and federal Constitutions. While that case contains language supporting respondent’s position, it does not go as far as is necessary to support the position taken by respondent in this case. The reasoning of the Teralta ease was based upon decisions from other states and opinions of text writers dealing with the rights of purchasers from the state of tax-deeded lands. There can be no question but that such transactions rested upon contract and the rights of the purchasers therein were contractual and vested under ordinary common-law principles. The rule announced in the Teralta case is thoroughly sound, but was not applicable to the set of facts then before the court. The difference between sales to the state and sales to individuals has been discussed by this court in the case of Anglo California Nat. Bank v. Leland, 9 Cal.2d 347 [70 P.2d 937], But such distinction was not drawn in the Teralta case. An examination of the authorities relied upon in the Teralta case discloses that they do not support a rule applicable to the facts of that case. The decisions from other states are cited without any statement of facts, and with only one quotation from the cases and, hence, their inapplicability to the particular facts then before this court is not apparent until such cases are read and analyzed. The cases of Merrill v. Dearing, 32 Minn. 479 [21 N.W. 721]; Robinson v. Howe, 13 Wis. 380 (cited in the opinion as 13 Wis. 341), Conway v. Cable, 37 Ill. 82 [87 Am.Dec. 240], and Wolfe v. Henderson, 28 Ark. 304, all involved situations where the property was conveyed by tax deed to an individual rather than to a state. In addition, the Wisconsin case involved an extension of time to redeem rather than a shortening of the period, and the Arkansas case actually turned upon a question of statutory construction. The other Minnesota case, Goernen v. Schroeder, 8 Minn. 344 (cited in the opinion as 8 Minn. 387), did not involve a tax deed at all but involved a mortgage. The Iowa case, Negus v. Yancey, 22 Iowa 57, not only fails to support the Teralta case but holds quite to the contrary. True, the last cited case holds that the law in effect at the time of the sale controls, but the problem before the court did not involve a change in the *284law after the sale but a change in the law before the sale, and the question was whether the law at the time taxes accrue or the law in effect at the time of the sale should control. The court held that the redemptioner was bound by the change in the law, . . . the reason given, at page 59 of the opinion, being, “He (the redemptioner) has no vested rights or privileges in the terms or provisions of the law under which he is a defaulter. ’ ’
The case of Moody v. Hoskins, 64 Miss. 468 [1 So. 622], involved a situation where the right of redemption was terminated instantly by the repeal of a redemption statute without allowing a reasonable time, or any time, for the taxpayer to save his property. The court, without any citation of authority and relying only upon the injustice of such a statute, held it to be invalid. The other Mississippi case, Caruthers v. McLaran, 56 Miss. 371, involved only a question of statutory construction.
Thus we find that not one of the cases cited supports the conclusion reached in the Teralta case, but, to the extent that they are applicable at all, go no further than to hold that where a tax sale is made to a private party, contractual and vested rights arise. And one case, not involving a deed to an individual, expressly held that the redemptioner was bound by the change in the law (Negus v. Yancey, supra.)
It is quite apparent, therefore, that the line of decisions represented by the Teralta case resulted from a failure to distinguish between sales to the state and sales to private parties, and that the distinction noted by this court in the Anglo California National Bank case requires the overruling of the Teralta case.
The precise problem involved in this case was recently considered by the Supreme Court of Michigan (Baker v. State Land Office Board (1940), 294 Mich. 587 [293 N.W. 763]). In that case the court said at page 767:
“Nor is Act No. 206, Pub. Acts 1893, as amended, unconstitutional as an ex post facto law, impairing the obligation of contract, as claimed by petitioner. Under the express provisions of the general property tax law of 1893, as amended by Act No. 325, Pub. Acts 1937, title to all lands within the borders of the State that had been sold and bid in by the State became vested in the State upon expiration of the 18-month period of redemption. It is contended that prior to the amending act the period of redemption was five years; that *285such an amendment, cutting off title of the owners in a lesser period of time, cannot apply retrospectively to taxes levied before the amendment. Counsel apparently refers to 1 Comp. Laws 1929, sec. 3520, as amended by Act No. 250, Pub. Acts 1933, which requires that lands be delinquent in taxes for a period of five years before the State can acquire title. The right of redemption, however, is not a constitutional right, but exists only as permitted by statute. Keely v. Sanders, 99 U.S. 441, 25 L.Ed. 327; Dumphey v. Hilton, 121 Mich. 315, 80 N.W. 1. Laws of retroactive character, affecting tax liens which attached prior to such an enactment, are not unconstitutional. City of Detroit v. Safety Investment Corp., 288 Mich. 511, 285 N.W. 42; and statutes affecting such liens, shortening the time previously fixed for sale or redemption, affect only a remedy for the delinquency of the taxpayer and do not impair contract obligations or vested rights. See Muir-head v. Sands, 111 Mich. 487, 69 N.W. 826; Board of Supervisors v. Hubinger, 137 Mich. 72, 100 N.W. 261, Ann. Cas. 792; Harsha v. City of Detroit, 261 Mich. 586, 246 N.W. 849, 90 A.L.R. 853.”
In conclusion, and to summarize the views expressed in the foregoing opinion, the relationship of sovereign and taxpayer is purely statutory and is not founded on contract, and the Legislature has the power at its discretion to change the mode or method of assessing, levying and collecting taxes, including the termination of the owner’s right of redemption from delinquent tax sales; that section 3574 of the Revenue and Taxation Code does not constitute a violation of any constitutional provision and is a valid exercise of the legislative power; that the case of Teralta Land & Water Co. v. Shaffer, 116 Cal. 518 [48 P. 613, 58 Am.St.Rep. 194], and any other cases in this state which purport to follow the erroneous doctrine announced in that case should be overruled, and that petitioner is entitled to the writ of mandate prayed for in its petition in this case.