Armstrong Products Corp. v. Martin
| Decision Date | 15 June 1937 |
| Docket Number | 8630. |
| Citation | 192 S.E. 125,119 W.Va. 50 |
| Parties | ARMSTRONG PRODUCTS CORPORATION v. MARTIN, Assessor. |
| Court | West Virginia Supreme Court |
Submitted June 1, 1937.
Syllabus by the Court.
1. At a tax sale, when land is purchased by the state, its tax lien is merged in its purchased title.
2. In a bankruptcy proceeding, sale of land as free from the tax lien of the state does not free the land from the actual ownership of the state.
3. The state is not bound by the unauthorized act of a county officer.
4. The Constitution of West Virginia, article 13, § 3, excludes a claimant to land thereunder "for whose default the same may have been forfeited or returned delinquent."
Original proceeding in mandamus by the Armstrong Products Corporation against William M. Martin, assessor.
Writ refused and petition dismissed.
Vinson Thompson, Meek & Scherr, of Huntington, for relator.
E. E Winters, Jr., of Huntington, for respondent.
This is an original proceeding in mandamus.
An improved tract of three acres in Cabell county owned by Armstrong Electric & Manufacturing Corporation was delinquent for 1930 taxes. The tract was conveyed by its owner to Armstrong Appliance Corporation in February, 1931, the grantee covenanting to pay the 1930 taxes. This was not done and in December, 1931, the tract was sold for the delinquency by the sheriff, and was purchased by the state. The taxes for 1931 were also not paid and the tract was purportedly sold to the state at the tax sale therefor in December, 1932. The appliance corporation was adjudicated a bankrupt in 1934 by the United States District Court for Delaware, and on February 14, 1935, that court, by order directed "the tax authorities of the State of West Virginia" to appear before the referee in bankruptcy at Wilmington, Del., on March 4, 1935. This order was directed to be published and was served personally on the auditor of West Virginia and the sheriff of Cabell county. On March 14, 1935, the court ordered the tract to be sold free of liens, including taxes, and adjudicated that the liens should be transferred to the proceeds of the sale. The tract was sold April 3, 1935; the sale was confirmed and a deed executed by the trustee in bankruptcy on April 5, 1935, to the purchaser, who, on the same day, conveyed it to the petitioner, Armstrong Products Corporation.
The petition alleges that the sheriff "after collaborating with the State Auditor" filed and on April 30, 1935, received payment of a claim in the bankruptcy proceedings "for direct property taxes assessed and charged against said land and improvements for the years 1931, 1932, 1933, 1934 and 1935," which the sheriff represented were all the taxes due on the tract. The taxes for 1936 have been paid. The respondent, the assessor of Cabell county, now refuses to extend the taxes against the tract on the landbooks for 1937 because the tract has never been redeemed from the sale to the state in 1931 for the delinquency of 1930. Relator prays for a writ requiring the extension.
Relator relies largely on the established rule that, under some circumstances, a bankruptcy court may sell a bankrupt's land free from the lien of a state for taxes. See Van Huffel v. Harkelrode, 284 U.S. 225, 52 S.Ct. 115, 76 L.Ed. 256, 78 A.L.R. 453. The rule, however, does not apply here, for, when sale was attempted by the bankruptcy court, this land was not that of the bankrupt upon which the state had a mere lien, but was the land of the state. By its purchase at the tax sale in 1931, the state acquired the complete title of the manufacturing corporation subject only to the right of redemption. Code, 11-10-29; McGhee v. Sampselle, 47 W.Va. 352, 34 S.E. 815; Neal v. Wilson, 79 W.Va. 482, 92 S.E. 136; Hector Coal Land Co. v. Jones, 79 W.Va. 618, 92 S.E. 102. And thereupon, the state's lesser right as a lienholder was merged in its greater right as landowner. State v. Locke, 29 N.M. 148, 219 P. 790, 30 A.L.R. 407, 410; Carrier Lumber Co. v. Quitman County, 156 Miss. 396, 124 So. 437, 125 So. 416, 66 A.L.R. 614; Schneider v. Detroit, 135 Mich. 570, 98 N.W. 258; O'Connell v. Sanford, 256 Ill. 62, 99 N.E. 885; Gould v. St. Paul, 120 Minn. 172, 139 N.W. 293; Turk v. Skiles, 45 W.Va. 82, 30 S.E. 234; Kerns v. Carr, 82 W.Va. 78, 95 S.E. 606, L.R.A.1918E, 568; Burner v. Mutual Association (W.Va.) 185 S.E. 222; 61 C.J., subject Taxation, § 1215. The bankruptcy court could sell the bankrupt's equity of redemption in this tract. But no court could lawfully dispose of the state's land in a proceeding to which the state itself was not a party. The right of the redemptor, while substantial, was nevertheless a mere equity, "a mere grace to redeem." Morgan v. Pool, 76 W.Va. 534, 535, 85 S.E. 724; Early v. Berry, 115 W.Va. 105, 111, 175 S.E. 331. That right did not warrant continued tax assessments of the tract after 1931 in the name of the appliance corporation; and, if it was done, the assessments were void. Totten v. Nighbert, 41 W.Va. 800, 24 S.E. 627, 629. Stockton v. Craig, 56 W.Va. 464, 472, 49 S.E. 386. Re-entry on the landbooks of such a tract is not contemplated as long as the title remains in the state. Code, 11-10-34. Therefore, the concern of the sheriff in regard to the taxes should have ended with the assessment of 1931. Under the statutes then in effect, the tract could have been redeemed within one year from sale, by payment to the state treasurer of all the taxes assessed or accrued, etc., and afterwards, by such payment to the county commissioner of school lands, at any time before court confirmation of a sale...
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