Court Opinion

ID: 3681596
Source: CourtListenerOpinion
Date Created: 2016-07-06 06:27:08.322925+00
Date Added: 2024-06-11T15:29:11.607540
License: Public Domain

In a petition for rehearing counsel for the respondent lay special emphasis upon § 2196 of the Compiled Laws of 1913, arguing that that section clearly permits mortgagees to become purchasers at tax sales and confers upon them all the rights of any other purchaser. The further contention is, in substance, that this statutory recognition of the rights of a mortgagee as a purchaser is inconsistent with the equities of the situation, as defined by this court in the case of Finlayson v. Peterson,11 N.D. 45, 89 N.W. 855; and, as the statute was not involved in Finlayson v. Peterson, supra, its mandate should now be followed rather than the equitable theories announced in that case. *Page 178 
The difficulty is largely due to a striking peculiarity in the wording of the statute, § 2196, supra. That portion of the statute in which the peculiarity is manifested reads:
"Any person except county auditors, county treasurers, and each of their deputies or clerks, may become the purchaser at such sale. If the owner purchase, the sale shall have the effect to pass to him (subject to redemption as herein provided) every right, title and interest of any and every person, company or corporation, free from any claim, lien or incumbrance, as the owner so purchasing may be legally or equitably bound to protect against such sale, or the taxes for which such sale was made; . . ."
This statute when enacted was § 81 of chapter 126 of the Session Laws of 1897. The chapter was a comprehensive act relating to revenue and taxation. It covers more than forty printed pages in the session laws. The legislative journals show that the entire act was inserted as a committee report amending House Bill No. 3. It appears from the session laws of that year that some days before the committee report embodying this act was presented the legislature had passed another bill relating specifically to delinquent taxes prior to the year 1895, chapter 67, Session Laws of 1897. Section 17 of that act reads:
"Any person may become the purchaser at such sale. If the owner purchase, the sale shall have the effect to pass to him (subject to redemption as herein provided) every right, title and interest of any and every person, company or corporation, free from any claims, lien or incumbrance, except such right, title, interest,claim, lien or incumbrance, as the owner so purchasing may be legally or equitably bound to protect against such sale, or the taxes for which such sale was made." (We have italicized the portion which does not appear in the section under consideration, § 2196).
It will be seen that the second sentences in each of the above quoted sections are identical but for the omission in the former of the following language, "except such right, title, interest, claim, lien or incumbrance," immediately following the word "incumbrance." Further research establishes that § 81, chapter 126 of the Session Laws of 1897 (Comp. Laws of 1913, § 2196) is identical, except for the same omission, with section 75 of chapter 132 of the Session Laws of North Dakota for 1890 and § 87 of chapter 1 of the General Laws of Minnesota *Page 179 
for 1878. Clearly, then, the Minnesota statute is the forerunner of § 75 of chapter 132 of the Session Laws of North Dakota for 1890, of § 17, chapter 67, Laws of 1897, and of § 81, chapter 126, Laws of 1897. What is the meaning of the statute with the exception included, as in Minnesota, in our own act of 1890 and in § 17, chapter 67, supra, and what is the meaning with the exception eliminated? Was the omission of the exception inadvertent or, if the inadvertence of the omission does not clearly appear, is it permissible, as a matter of statutory construction, to read the statute as though it embodied the exception?
Reading the statute with the exception included, it clearly permits an owner to purchase at tax sale and it provides that the sale shall have the effect to pass to him every right of every other person, free from any incumbrance, etc., except such as the owner may be bound to protect against the tax sale or the taxes. In other words, the owner by purchasing at the tax sale does not thereby obtain any advantage over any incumbrancer whom he was bound to protect. Their contract relations are respected and given free scope. With the exception omitted, the statute awkwardly expresses, apparently, an entirely different idea. It says that the owner purchasing acquires every right of every other person free from any incumbrance "as" he may be legally or equitably bound to protect against such sale, or the taxes for which the sale was made. It does not say that he acquires the interest of every other person free from every claim or incumbrance but only free from claims, liens, or incumbrances"as" he, the owner, is legally or equitably bound to protect against such sale. To illustrate: Let us assume two instances of owners purchasing their own property at tax sale upon which there are outstanding liens, — in the one case, a lien which such owner is legally obligated to protect and, in the other, one which he is neither legally nor equitably bound to protect. (One) An owner purchases at tax sale property upon which he has given an outstanding first mortgage securing a personal obligation — the mortgage embodying an express contract to pay the taxes. The awkward wording of the statute says that his purchase has the effect of passing the property to him free from the lien of this mortgage — working a direct interference with their contract. (Two) An owner has acquired property by the payment of the full agreed consideration therefor. *Page 180 
The property was known to be subject to a small first mortgage. For reasons satisfactory to the parties, the seller assumed this mortgage, warranted the title against it, and the purchaser, who is now the owner, neither assumed it nor withheld the amount from the seller. He is neither legally nor equitably bound to pay this mortgage. The owner subsequently becomes the purchaser at tax sale. He acquires the right, title and interest of any and every person free from any lien or incumbrance that he (the owner) may be legally or equitably bound to protect against the sale, which would not include the mortgage in question as he was under no legal or equitable obligation to protect it. In other words, construing the statute literally, an owner, by purchasing at tax sale, acquires a right superior to mortgagees toward whom he is under direct legal or equitable obligation with regard to the taxes but not necessarily superior to those toward whom he sustains no such obligation — a palpable absurdity. Furthermore, the literal meaning of the statute, without the exception, defines the purchasing owner's right to be one free from the taxes for which such sale was made. The clause "or the taxes for which such sale was made" becomes meaningless since he becomes a purchaser only by paying the amount of those taxes. This clause has meaning only when it refers to an obligation of the owner in favor of other parties to pay the taxes for which the sale was made.
If it is possible to deduce a full literal meaning from an act of the legislature containing such awkward expressions as § 2196, supra, with the significant exception omitted, it would be that the legislature has said that an owner purchasing his own property at tax sale takes every right and interest of third parties therein, free from such incumbrances as he is bound to protect against the sale. By way of emphasizing the extent to which the literal interpretation contended for may interfere with the operation of contracts of the parties and effect a shifting of the primary burden resting upon each individual to pay his own taxes, note the following: Elsewhere in the act, § 62, chapter 126, Laws of 1897, it was provided that delinquent personal taxes might be entered against the real property, and become a lien thereon, and their collection enforced by a sale in the same manner as if originally charged against the lands. Personal taxes are otherwise fixed as personal obligations or debts of the person against whom the *Page 181 
assessment is made. If we assume a tax sale of real property against which the personal tax of the owner has been spread, and a purchase of the property at the sale by the owner, his purchase cuts out the first mortgage, and the rights of such mortgagee are entirely lost unless he shall redeem by paying into the county treasury for such owner the entire amount of the original real property tax plus the personal tax of such owner so spread, which amount is then paid to the owner and added to the first mortgage. Clearly, if the statute be thus "literally" applied, it would have the effect of further abridging the right of contract between mortgagors and mortgagees by permitting a mortgagor to defeat the lien of his mortgage through the breach of an obligation that he had voluntarily undertaken and which he owed both to the public and to the mortgagee.
If it be suggested that the lien of a first mortgage may be affected to the same extent, whether the purchaser at the tax sale be an owner or a third person, a stranger to the title, and whether the personal taxes be included or not, the obvious answer is that a sale to a third person stands upon an entirely different footing. It is but a resort to a reasonable and necessary method of foreclosing a superior lien for taxes and does not purport to affect the contract relations of the Mortgagor and mortgagee as between themselves. By a sale to a third person, either or both will suffer by reason of the failure to discharge the paramount tax lien; whereas, the co-called literal interpretation of § 2196, supra, necessarily fixes the rights of the parties in a manner which contradicts their own express contract provisions and places the defaulting owner who purchases at tax sale in even a stronger position than a stranger, in that he may use his certificate as a weapon to defeat his own mortgage. If to avoid this result the mortgagee redeem, he (the owner) is permitted to shift the primary obligation for the taxes from his own shoulders to the shoulders of one whom he has agreed in advance to relieve of the burden. The purchase of a tax certificate by a stranger to the title in no way affects his own primary tax obligations. It is difficult to perceive how the statute, so construed, could operate uniformly as to owners of mortgaged and unmortgaged property.
If the owner neglect to purchase at the sale and a stranger becomes the purchaser, the owner could then protect against the consequences *Page 182 
of the sale either by redeeming or by purchasing the tax certificate. If he should adopt the latter method, there is no substantial reason why his equitable position as against the mortgagee should be any weaker than as though he had been the original purchaser. But it would be a monstrous doctrine that would permit an owner, who is under a primary obligation to both the public and the mortgagee to pay the taxes upon his own property, to defeat his own mortgage through the purchase of a tax certificate. Of course, such a doctrine would not be sanctioned by any court, except under the unambiguous provisions of an express statute. The statute in question does not purport to say that an owner, taking a tax certificate by assignment, shall acquire a right superior to mortgages upon which he is obligated.
What is said above with respect to the rights of owners as purchasers, is said in view of the fact that owners are specifically mentioned in the statute. Of course, the statute, by clear implication, recognizes that mortgagees may likewise become purchasers and the effect of the purchase by a mortgagee must necessarily be considered in light of what is said in the statute with reference to owners. This is, in substance, the argument of the petitioner and its soundness must be conceded. However, as pointed out in the principal opinion herein, any contention that a mortgagee, by becoming a purchaser, acquires a right superior to the right of another mortgagee, toward whom he sustained either a legal or equitable obligation to pay the tax, must be examined in light of the express declaration in § 2211, Compiled Laws of 1913, which was likewise a part of the original enactment of 1897. This says that the amount of a tax paid by a mortgagee "shall constitute an additional lien on such land to the amount therein stated, and the amount so paid and the interest thereon at the rate specified in the mortgage or other instrument, shall be collected with, as part of, and in the same manner as the amount secured by the original lien." This section in no way seems to recognize that a lien holder should be able, by becoming a purchaser at tax sale, to freeze out other lien holders toward whom he sustained either a legal or equitable obligation to pay the tax. The right and the remedy given are apparently exclusive. It is a right to add the amount of the tax to the existing lien, which, of course, would have the effect of keeping alive all subsisting equities attaching as against the particular mortgagee in favor of other persons. *Page 183 
To this extent this provision is inconsistent with the so-called literal interpretation of § 2196.
We recognize that "To enable the court to insert in a statute omitted words or read in it different words from those found in it, the intent thus to have it read must be plainly deducible from other parts of the statute." 2 Lewis's Sutherland, Stat. Constr. 2d ed. § 411. But "Legislative enactments are not any more than any other writings to be defeated on account of mistakes, errors or omissions, provided the intention of the legislature can be collected from the whole statute. . . ." 2 Lewis's Sutherland, Stat. Constr. 2d ed. § 410. We are of the opinion that where, as here, the origin of the statute plainly appears, it having been copied verbatim from a former statute and from the statute of another state but for the omission of a clause, and, in addition to this, it having been copied in another enactment at the same session of the legislature with the clause included, where the same procedure was given a limited application; and where the omission renders at least one clause of the statute meaningless and renders the whole, when given an attempted literal interpretation, inconsistent with other provisions of the same statute and gives it a meaning which works a substantial denial of the liberty of contract, and one which is abhorrent to natural justice and opposed to fundamental conceptions of equality of obligation of owners of property in meeting the burden of taxation; and where the difficulty arises wholly through the omission of a clause in the statute immediately following a recurring word, so that its omission may be readily accounted for as an inadvertent mistake of a copyist; and where the whole difficulty is remedied and the meaning of the statute and of every clause therein rendered clear and consistent by reading into it the portion omitted, the statute should be read as though the omitted clause were included.
The petition for rehearing is denied.
NUESSLE, Ch. J., and BIRDZELL, BURKE, and BURR, JJ., concur.