Court Opinion

ID: 8017959
Source: CourtListenerOpinion
Date Created: 2022-09-09 02:07:02.740277+00
Date Added: 2024-06-11T16:36:28.674143
License: Public Domain

DISSENTING- OPINION.
KENNISH, J.
The principles of law announced in the foregoing .opinion, and upon which the case is decided, are so at variance with the conclusions arrived at by tbe writer after a thorough examination of the subject, as to require that I give expression to my views.
There is but one question in the case and that is, as stated in the opinion, “Under the charter of the city of St. Louis, has the lien of a special taxbill, issued for street improvements, priority over a deed of trust which antedates the bill?” Notwithstanding the singleness of the issue thus in judgment, the majority opinion, in deciding the case, states and affirms the following proposition: “In this State' both general *263and-special tax liens have priority (a) in the absence of statutory direction to the contrary, and (b) .such priority of the special tax lien is fairly inferable from the language of the statute (charter)- creating the lien.” In this case the litigants are private persons, one claiming under a trust deed taken as security for a, loan when the property was clear and unincumbered, and the other claiming under a special taxbill for street improvements subsequently made. Neither the State nor any subdivision thereof is seeking to enforce a lien for general taxes levied for the support of the government, nor is even a party to the proceeding. It follows that no question as to the lien for general taxes is before us and any pronouncement as to the law applicable -thereto cannot be authoritatively decided in this case. The two kinds of taxes, general and special, differ in many respects, and as there is an abundance of authority upon the one question in this case — priority as between the special taxbill and the prior incumbrance — it is difficult to understand wherein the issue to be decided is simplified by combining it with a proposition as to taxes not in anywise involved in this suit.
As to the two propositions (a) and (b) above referred to, it should be stated at the outset that if the special tax lien has priority in the absence of a statute to the contrary, that ends the controversy, for it is not pretended that such a statute exists under the facts of this case. If that contenion is sound law it is unnecessary, as it is inconsistent, to invoke the doctrine that such priority is fairly inferable from the provisions of the charter. On the other hand, if the priority of the special tax lien is fairly to be inferred from the charter, no issue of law remains, because appellants eoncede that if such priority is expressed in the charter or can be deduced therefrom by fair inference, then the lien of the special tax must prevail. The questions before us, therefore, are two: (1) Is the *264special taxbill a superior lien over a pre-existing' incumbrance, in the absence of a statute giving it such priority, and if not (2) does tbe charter fairly imply an intent to give such priority? I say fairly imply such intent, because there is no claim that it does so expressly.
Taking up these two propositions in their order, it should be observed that the first stated is not a question of first impression, to be reasoned out without the aid of adjudications and of those writers who have made a specialty of this branch of the law. Although there is an abundance of such authority in the boobs, as will be shown presently, it is noticeable that not a single text-book or writer upon the subject is cited (or can.be cited) in support of the opinion of the court herein. The following excerpts will show the views of the great jurists who have written upon the subject:
“The genera] rule is that taxes are not a lien unless expressly made so; and when liens are expressly created they are not to be enlarged by construction. . . . Not only is it competent for the State to charge land with a lien for the taxes imposed thereupon, but the Legislature may, if it shall deem it proper or necessary to do so, make the lien a first claim on the property, with precedence of all other claims and liens whatsoever, whether created by judgment, mortgage, execution or otherwise, and whether arising before or after .the execution of the tax. When that is done the lien does not stand.on the same footing with an ordinary incumbrance, but attaches itself to the res without regard to individual ownership, and if enforced by sale of the land the purchaser will take a valid and unimpeachable title.” [2 Cooley on Taxation, (3 Ed.), pp. 865-866.]
“The provisions of the statute determine the question of the priority between the lien of an assessment and other liens upon realty, if both liens are *265created after the enactment of such statute. . . . If it is so provided by statute, the lien of an assessment may have priority over a lien which is earlier in point of time, such as a mortgage lien. In some cases the right of a mortgagee as against an assessment lien has been discussed, but not decided. A statute may make the lien of an assessment superior to the liens of existing incumbrances, since all property-owners hold in subordination to the taxing power. In the absence of a statute giving an assessment priority over an earlier mortgage lien, an assessment has no such priority.” [2 Page & Jones on Taxation by Assessment, sec. 1068.]
“A lien for public taxes and assessments is upon the property, and is paramount to all liens acquired by personal contract, when so provided by statute. . . . Although the lien of a prior recorded mortgage is superior to that of a special assessment, it is within the power of the Legislature to change the rule, and make the mortgage lien secondary to that of the assessment.” [Hamilton on Law of Special Assessments, sec. 708.]
“There is no common-law rule which makes a levy and assessment of taxes ex proprio vigore a lien on property of the taxpayer. Such liens owe their existence wholly to statute; and their duration, limitation and priorities, together with the property to which they attach, must be determined by the statutes creating them.” [27 Am. & Eng. Ency. Law (2 Ed.), 735.]
‘ ‘ Taxes and assessments levied upon land which is already subject to a mortgage do not displace or outrank the lien of the mortgage in the absence of an express legislative declaration that they shall constitute a paramount lien.” [27 Cyc. 1176.]
“It is, for those reasons, often proper to deduce from the general language of the statute giving a lien the conclusion that it gives a paramount lien to which *266mortgage estates or judgment liens must yield. But this conclusion cannot, perhaps, be inferred where no provision is made for giving those who hold such interests a hearing, and where there are no words declaring the superiority of the lien.” [2 Elliott, Roads and Streets (3 Ed.), sec. 749.]
The learned author last cited, writing the opinion in the case of State ex rel. v. Insurance Co., 117 Ind. 251, and discussing the subject of the lien of a special tax created by statute, said:
“The statute does not declare that the assessment shall be a prior lien, but simply provides that the assessment shall Te a lien from the date of filing the report of the commissioners.’ [Acts of 1883, p. 173, sec. 5.]
“We do not doubt that it would have been within the power of the Legislature to provide by express words that the lien should have priority over pre-existing mortgages. [Provident Institution v. Jersey City, 113 U. S. 506.] But there is no such provision in our statute, and the question is whether the courts can put one there.
“We appreciate the force of the appellant’s argument, but think it one that should be addressed to the Legislature rather than the courts. We can readily perceive that there are cases in which the adjudication in favor of the priority of a mortgage lien would seriously interfere with the prosecution of a work for the promotion of the public welfare, but the creation of liens and their incidents is a legislative matter, and the courts cannot create such liens. [1 Jones, Liens, secs. 97-112.]
“The statute must determine the character and extent of the lien. [1 Jones, Liens, sec. 105.] It is not necessary that it should in express terms declare that the lien shall be a paramount one, for if the intention can be gathered from the general words and purpose of the statute, the courts will give it effect. *267The statute under consideration does not contain any provision indicating an intention to make the Hen paramount to that of a pre-existing mortgage.”
These authorities, as might reasonably be expected from the fact that they so state the law, are supported by the weight of adjudications of the courts of last resort. We shall not encumber this opinion by citing the cases. They will be found in the footnotes of the foregoing works.
In the case of Everett v. Marston, 186 Mo. l. c. 599, discussing tax liens, this court, quoting with approval from one of the above authorities, said: “There is no common law rule which makes a levy and assessment of taxes, ex proprio vigore a Hen on the property of the taxpayer. Such Hens owe their existence wholly to statute; and their duration, limitation and priorities, together with the property to which they attach, must be determined by the statutes creating them. ’ ’
Without admitting that a general tax due the State and a special tax due a private citizen stand upon the same footing as to priority, some reference should be made to the law of this State as to the Hens for general and special taxes. It is provided by section 11499, Revised Statutes 1909, that the judgment for general taxes shall be a prior Hen. Many other statutes expressly provide for the priority of a Hen for special assessments and other taxes. ‘See sections 11517, 11588, 9347, 9049, 9296, 9297, 5523, 5524, 5599; 5722 and 6267, Revised Statutes 19091. If the tax Hen has priority of its own force and without the aid of any statute,, it is plain that the Legislature did not so understand it. But it is said that the act making a judgment for general taxes a prior Hen was passed in the year 1877, and that until then such taxes were uniformly given priority by the courts, without a statute so providing. The limits of this dissent preclude a discussion of all the various statutory provisions as to the Hen for taxes during the history of this State, *268but an examination of them has left no doubt that the law, by nécessátry inference, has at all times recognized the priority and dominant character of the statutory lien for general taxes. In the several revisions of the statutes the following appear:
Missouri Territorial Laws, 1804-24, vol. 1, p. 737, provides that a deed under a sale for taxes ‘ ‘ shall vest in the purchaser, his heirs and assigns, all the right, title, claim and interest of the said lands (the right of the United States only excepted) to the part so sold. ’ ’ Revised Statutes 1835-, pp. 542 and 543, provides that the lands upon which the taxes are not paid within the time prescribed “shall be forfeited to the State,” and that a sale of such lands for taxes shall “ convey to the purchaser all the right, title and interest of the State, in and to the land sold.” Revised Statutes 1845, p. 948, speaks of lands on which taxes shall not be paid within the time prescribed as “forfeited to the State,” and at page 952 provides that the register of lands shall “execute good and sufficient deeds of conveyance” to the persons purchasing lands at tax sales. Revised Statutes 1855-, p. 1360, sec. 34, provides that the deed delivered to the purchaser at a tax sale £ £ shall be prima facie evidence of title in. fee simple.” In the General Statutes of 1865, p. 127, it is provided that the tax deed “ shall vest in the grantee, his heirs and assigns, the title to the real estate herein described. ’ ’ And at' page 128, after providing that when lands offered for sale by the collector shall not be sold for want of bidders, the same shall be forfeited to the State of Missouri, it is said “and thenceforth all right, title and interest of every person whomsoever in and to such land or lot shall be considered as transferred to and vested absolutely in the State.” In 2 Wagner’s Statutes of 1872, p. 1197, it is provided that the collector shall give notice of an application to the court to sell lands upon which there are delinquent taxes. The form of notice is prescribed in the statute, and *269begins as follows: “Notice is hereby given to all persons interested that the undersigned collector . . . will make application to the county court . . . for a judgment to enforce the lien of the State of Missouri against the tracts of land . . . described in the foregoing list and for an order to sell so much of said real property,” etc. And at page 1199' it is provided that “any person interested in any of said lands or lots” may make a defense to the proceeding. The form of the judgment is also set out in the statutes, and concludes as follows: “It is further ordered, adjudged and decreed that the several tracts of land . . . severally be condemned and be sold to satisfy the same as the law directs.”
From the foregoing it is clear that the law of this State always has recognized the priority of the State’s lien for taxes, and it follows that the cases cited in the opinion of the court herein as holding the priority of the lien of general taxes, are merely in accord with the statutory law, and are not in point as supporting the doctrine that the lien of a special tax is a prior lien in “the absence of a statute.
The ease of Stafford v. Fizer, 82 Mo. 393, written by Commissioner Martin, is discussed at length in the opinion of the court herein, and announces the law (as to general taxes) that the tax lien is prior in the absence of a statute. The cases it cites do not warrant that conclusion. One of those cases is Hopper v. Malleson, 16 N. J. Eq. 382. The contest in that case was between a prior mortgagee and the the owner of a tax title acquired under a sale for taxes levied after the execution of the mortgage. The court held in favor of the mortgagee, saying in the course of the opinion, 1. c. 386: “The power of the Legislature, by virtue of its sovereignty, to make the tax a charge upon the estate of all parties interested in the land,, and to make the tax title paramount to all other and prior claims and encumbrances, is not- questioned. But has that *270power been exercised in the act under consideration? Was it tbe intention of the Legislature that the tax deed should operate to destroy all prior interests in the estate, vested or contingent, executed or executory, in possession or expectancy?”
Before passing from this branch of the case reference should be made to the case of Dressman v. Farmers ’ Bank, 100 Ky. 571, the leading authority relied upon by respondent. That a mistake was made in that case is placed beyond a doubt by the fact that although the sole question involved was priority as between the lien of a special assessment and that of an antecedent incumbrance, the court said: “The attention of the court has not been directed to an adjudicated case where the precise question involved in this appeal has been passed upon;” and cited in the opinion the very section of Elliott on Roads and Streets, supra, which states the law directly to the contrary.
The question remains, does the charter, by fair inference, make the lien of the taxbill prior to that of an existing mortgage?
The language of the charter is: “Said taxbill shall be and become a lien on the property charged therewith and may be collected of the owner of the land in the name of and by the contractor as any other claim in any court of competent jurisdiction,” etc. It cannot fairly be said that this language indicates an intention to give priority to a special taxbill, but it is said that the word “owner,” as used therein, was intended to include prior incumbrancers. That the word was not intended to have such meaning is evident. • In the last sentence of the section it is provided that “in case the owner of the ground is a nonresident of the State, suit may be brought by attachment, which shall be equivalent to notice and demand of payment.” The next section of the charter provides that “such certified taxbill shall in all cases be prima facie evidence ... of the liability of the *271person therein named as the owner of the land.” If the mortgagee is an owner, why the necessity of an attachment simply because the owner of the equity happens to be a non-resident? Why not bring the suit.in such case against the mortgagee? And as the foreclosure of the mortgage lien would carry full title, why make the owner of the equity a party at all? Again if owner means mortgagee, it follows that in all cases where the mortgage was held by a non-resident an .attachment would lie against the property, even though the owner of the equity lived upon it. The charter provides in detail the procedure for the collection of the taxbill by suit, but nowhere recognizes the right of the holder of the taxbill to make a prior incumbrancer a party to the proceeding. It is also said that the provision of the charter that “the owner or any person having an interest in the property charged with the taxbill may pay the same in full at any time within thirty days after notice of the taxbill, without interest, ’ ’ was intended to include prior incumbrancers and that by such language an intent is disclosed to give priority to the special tax. It is a matter of common knowledge that the building and improvement of property liable for the tax frequently goes on concurrently with the street improvement. In making such improvements, incumbrances may be placed upon the property by the owner, and liens of contractors or others, later in point of time.than the taxbill, may exist. Such persons would be directly interested in the payment of the special tax,, and the charter language would clearly be applicable to them. In view of the law as heretofore quoted from Cooley, that “when liens are expressly created they are not to be enlarged by construction.” it seems most unreasonable to hold that the language of the charter which is directly applicable to a class holding subject to the special tax was intended to subordinate the lien of a prior mort1 gage to that of a later special taxbill.
*272The case of Keating v. Craig, 73 Mo. 507, we are unable to understand in any other light than as authority against respondent. The case was almost identical in its facts with the case now before us, and the question for decision, as stated by this court, was: “Was the lien of the taxbill superior to the lien of the trust deeds?” This court then answered the question affirmatively and held in favor of the superiority of the lien of the taxbill, but the charter provision there construed and under which such ruling was made, was stated by the court as follows: “It is provided in section 3, article 9', of the city charter, that in suits to enforce the lien of a special taxbill, all or any of the owners of the land charged, or of any interest or estate therein, may be made defendants, and that a judgment in such suit shall bind all the right, title, interest and estate in the land that the defendants and each of them owned at the time the lien of the taxbill commenced or acquired afterward.” That provision expressly authorized the joining of a mortgagee as a defendant and by so doing gave priority to the lien of the taxbill. But no such provision, or one remotely kindred to it, can be found in the charter under- con- . sideration.
In the course of the opinion in the Keating case, the court said: “The lien of the special taxbill, like the lien for general taxes, is superior to any incumbrance with which the owner may charge his land. This is the evident meaning of that portion of section 3, above referred to, which declares the effect of a judgment on a special taxbill.” The court thus recognizes the priority of the lien for general taxes, which lien, as heretofore shown, was made prior by statute, and for a like reason holds the special tax a prior lien because made so by the charter.
The foregoing review of the law, it-is submitted, shows an array of authority in favor of the position maintained by appellants which should be controlling *273in the decision of this case. And .on reason why should it not be so where the legislative body has not acted, when by acting it would have served notice on the public of the priority of such taxes? A person residing in a distant part of this State, or in another State, may loan his money on property which in his opinion is adequate security for the loan. "Without any notice to him a special taxbill is issued against the property and is held by the contractor who made the improvement. Does this improvement increase the amount of the mortgagee’s loan or his rate of interest? All he can claim is what he could have gotten without the improvement. Wherein is he benefited that he should be postponed to the contractor? As to the latter, if the improvement benefits the property to the extent ”of the tax, he has the equity of the owner and the enhanced value to secure his taxbill. And in any event he knows when he undertakes the contract exactly what security he must rely upon. If the legislative body desires a different rule it is always in its power- to enact it. It has not done so under the facts of this case, and the judgment should be for the appellants.
Valliant, C. J., and Lamm, J., concur in this opinion.