Court Opinion

ID: 3986240
Source: CourtListenerOpinion
Date Created: 2016-07-06 10:42:22.888096+00
Date Added: 2024-06-11T07:44:02.636678
License: Public Domain

The prevailing opinion decides that a mortgagee who purchases a county's title after auditor's deed has been issued to the county after tax sale is merely a redemptioner and not a purchaser of the title. The question of the construction and validity of the county's deed to the bank is not decided, but it is held that a deed from the county in any *Page 104 
form conveying its interest to one who was a mortgagee of the property is merely a redemption and not a conveyance of title. I doubt the correctness of this view. In the recent case ofHanson v. Burris, 86 Utah 424, 439; 46 P.2d 400, 407, this court, speaking through Mr. Justice Moffat, stated:
"The purchaser from the county (not a redemptioner) takes title free and clear of liens, otherwise the county would be hampered in collection of taxes and prevented from again having the property returned to the assessment rolls."
And again speaking of a mortgage holder:
"If he then permits the redemption period to expire and the title to become vested in the county or a purchaser after the redemption period expired, his mortgage lien is extinguished, although the contract and debt obligation between the mortgagor and mortgagee may still subsist. The same principle applies to special assessment liens for local municipal improvements. The same principle must of necessity apply to drainage tax assessments or liens."
In that case it was held that the plaintiff, a stranger to the title, obtained by purchase of the county's tax deed a new title by independent grant from the sovereign authority cleansed of all prior tax liens and incumbrances.
The question here resolves itself to whether, under the facts of this case, the bank by obtaining the county's deed by purchase thereby became a purchaser or a redemptioner. If it was a redemptioner merely, the prevailing opinion is right; but if it was a purchaser, then a different result would follow. I am inclined to the belief, under the statutes of this state, that the status of the bank was that of a purchaser, and as such, when it took title from the county, it obtained a complete title to the land free and clear of all liens.
The statute, R.S. Utah 1933, 80-10-36, provides that after sale to the county and before time for redemption "the county treasurer is authorized and required, at private sale, at his office, to sell and assign the interest of the county in any of the real estate sold to the county for delinquent taxes *Page 105 
to any person holding a recorded mortgage or other lien against such real estate, upon payment of the amount of the delinquent taxes, interest, penalty and costs thereon." This particular provision was written into the law in 1919 by amendment to Comp. Laws Utah 1917, § 6023, by chapter 122, Laws of Utah 1919, and accompanied the change in the method of sale whereby sales for taxes were made only to the county and to the exclusion of private bidders. By R.S. Utah 1933, 80-10-66, the assignee of a certificate of sale, if the property had not been redeemed within the four-year period, was entitled to demand and obtain an auditor's deed conveying the property to such assignee, his heirs or assigns, on presentation and delivery of the certificate of sale. These sections of the statute would seem to be authority for the proposition that the holder of a recorded mortgage may become a purchaser of the title of the county. If such mortgagee can become a purchaser prior to passing of auditor's deed to the county, there is no reason why he cannot do so after auditor's deed has been issued. The right is not less after the period of redemption has expired and auditor's deed has passed. The only difference indicated by statute between a mortgagee and a stranger purchasing from the county is that the mortgagee may purchase before the period of redemption has expired while a stranger may not purchase until after auditor's deed has been issued to the county and the property has been advertised and offered for sale at the May sale. R.S. Utah 1933, 80-10-68, as amended by chapter 62, Laws Utah 1933, p. 111. There is no specific statutory expression nor any implication arising from statutory language to the effect that a mortgagee is in any worse position than a stranger in acquiring title from the county. Indeed, the express provision granting to a mortgagee the right to purchase at any time after sale and before redemption would seem to mitigate in his favor rather than against him, and to give preference over a mere stranger or the mortgagor; neither of whom being given by statute the right to purchase title from the county prior to *Page 106 
redemption. The mortgagee having been granted the right to purchase the mortgaged property after sale and before period of redemption has expired and to take title of the county and other taxing units, he should be held to have the right as a purchaser to take title after period of redemption has expired and the auditor's deed has issued to the county thereby extinguishing all claims and encumbrances. The title so obtained is, if he be regarded as a purchaser, the whole title of the county and the several taxing units. It is not a mere redemption of the property from delinquent taxes. Unless this be the meaning and effect of the provisions of the statute above cited authorizing the county treasurer to sell and assign the county's interest to a mortgagee or lienholder of record, such provision has no meaning or effect whatsoever. Under other provisions of the statute a mortgagee or other person interested has a right to redeem within the same time and subject to the same terms and conditions as the owner. R.S. Utah 1933, 80-10-59, as amended by Laws Utah 1933, chap. 61, p. 111. That the legislative intent was to confer a privilege on the mortgagee or lienholder of record different from, and in addition to, the right of redemption by anyone interested is further indicated in the last mentioned section wherein it is provided that the redemption may be made, by any person interested, from a sale to the county where the county's interest has been assigned to some mortgagee or lienholder pursuant to R.S. Utah 1933, 80-10-36.
It will be noted that the tax sale to the county of the property involved was of date January 6, 1923. The four-year period of redemption expired January 6, 1927, and auditor's deed was issued to the county March 15, 1927. Under the provisions of Comp. Laws Utah 1917, § 6056, as amended by Laws Utah 1921, p. 384, c. 140, any person interested had the right to redeem within the four-year redemption period, and a further privilege of redemption by permission of the board of county commissioners at least up to the time of the May sale. The auditor's deed, if the *Page 107 
proceedings were regular, vested title in the county and, as we have already held, created a new title free and clear of liens. The title of the former owner was thereby extinguished and cut off subject only to the limited right of redemption heretofore mentioned. On August 14, 1928, about one and one-half years after the vesting of title in the county, the bank obtained from Peay and his wife their quitclaim deed to the property. No title passed by this deed since title was then vested in the county. At best only a possible right or equity of redemption was conveyed. The deed from the county to the bank of date July 1, 1929, conveyed all the right, title, and interest of the county, and the various taxing units represented by it in the tax sale, to the grantee. The ambiguous language in the deed with reference to the release of taxes seems to me to be surplusage. There is no evidence in the record that the bank was in possession of the property at any time. A possible inference might arise that it took possession after obtaining Peay's deed August 14, 1928, but the bank was at no time under any contractual or other duty to the mortgagor or to the drainage district to pay any of the taxes for which the property was sold. The following statement of the law from 26 R.C.L. p. 414, is therefore applicable here:
"The mere fact that the purchaser at a tax sale had at the time the tax was assessed an estate or interest in the land sold or an incumbrance upon it does not prevent him from acquiring a new and paramount title to the property to the exclusion of those having other estates or interests therein, if he was under no obligation to pay the taxes for which the property was sold."
It is my view that the bank was under no infirmity when it acquired the deed from the county, and by such conveyance it became vested with the new title freed from all liens, that its status was that of a purchaser and one at least on an equality with a stranger who might at that time have purchased the property from the county. It no longer bore any relation to the title as a mortgagee, since *Page 108 
its lien had been cut off by the sale and conveyance to the county.
The prevailing opinion may express a sound public policy, but it seems to me to run counter to the statute.