City of Tacoma v. Fletcher Realty Co.

• Citation: 146 Wash. 671,264 P. 997
• Decision Date: 05 March 1928
• Docket Number: 20925.
• Parties: CITY OF TACOMA v. FLETCHER REALTY CO. et al.
• Court: United States State Supreme Court of Washington

264 P. 997

146 Wash. 671

CITY OF TACOMA v. FLETCHER REALTY CO. et al.

No. 20925.

Supreme Court of Washington

March 5, 1928

Department 1.

Appeal from Superior Court, Pierce County; Card, Judge.

Action by the City of Tacoma against Fletcher Realty Company and others. Judgment for plaintiff, and certain defendants appeal. Reversed, with instructions to dismiss the action.

Tolman and Parker, JJ., dissenting.

Carroll Hendron, of Seattle, for appellants.

E. K Murray, Leo Teats, and Bartlett Rummell, all of Tacoma, for respondent.

FRENCH J.

There is but one question in this case: i. e., does a purchaser at a county tax foreclosure sale, where the city has been regularly served, take title subject to local improvement assessments? We have held:

'* * * By the provisions of Rem. & Bal. Code, § 9230 (P C. 501, § 205), the lien of general taxes is declared to be superior to all other liens and claims upon the property against which such taxes are charged. The regular foreclosure of such a lien as was concededly had against this lot has, under our revenue law, all the force of a proceeding in rem ( Continental Distributing Co. v Smith, 74 Wash. 10, 132 P. 631), and vests in a purchaser at a sale held under such foreclosure a new title independent of all previous titles or claims of title to the property ( Hanson v. Carr, 66 Wash. 81, 118 P. 927). Manifestly, both record and possessory titles are equally absolutely destroyed by such a foreclosure. Such is the theory upon which the following decisions of this court were rendered, though they involved only the question of superiority of general tax liens over local assessment liens. McMillan v. Tacoma, 26 Wash. 358, 67 P. 68; Keene v. Seattle, 31 Wash. 202, 71 P. 769; Ballard v. Way, 34 Wash. 116, 74 P. 1067, 101 Am St. 993; Pennsylvania Co. v. Tacoma, 36 Wash. 656, 79 P. 306; Black, Tax Titles (2d Ed.), sec. 420.' Gustaveson v. Dwyer, 78 Wash. 336, 139 P. 194.

Also in McMillan v. Tacoma, supra, we said:

'* * * Section 93, p. 316, Laws 1891, contains the following: 'The said lien shall have priority to and shall be fully paid and satisfied before any recognizance, mortgage, judgment, debt, obligation or responsibility to or with which said real estate may become charged or liable.' Stronger language could not be employed to declare the general tax lien paramount over every other possible lien or burden to which property may be subjected. The identical language above employed has been carried forward into subsequent statutes, and is found in the following session laws: Laws 1893, p. 358, § 79; Laws 1895, p. 516, § 19; Laws 1897, p. 174, § 78. There has been no repeal or modification of the statute as it was left in 1897, and the same is now the law. Under that declaration of the Legislature, it must be held that the holder of a delinquent general tax certificate is not required to pay local street assessment liens before he can proceed to foreclose and sell under his general tax lien. He is entitled to a decree establishing his tax lien as paramount and superior to all other liens or charges against the property.'

This same section is still in our revenue laws. Section 99, c. 130, p. 291, Laws Ex. Sess. 1925. Section 9393, Rem Comp. Stat., provides:

'The holder of any certificate of delinquency for general taxes shall, before commencing any action to foreclose the lien of such certificate pay in full all local assessments or installments thereof outstanding against the whole or any portion of the property included in such certificate of delinquency, or, he may elect to proceed to acquire title to such property subject to certain or all local assessments a lien thereon, in which case the complaint, decree of foreclosure, order of sale, sale, certificate of sale and deed shall so state. If such holder shall pay such local assessments, he shall be entitled to fifteen per cent. interest per annum on the amount of the delinquent assessments or delinquent installments thereof so paid, from date of payment.

'In any action to foreclose any lien for general taxes upon any property a copy of the complaint shall be served on the treasurer of the city or town within which such property is situate within five days after such complaint is filed. In any case where any property shall be struck off to or bid in by the county at any sale for general taxes, and such property shall subsequently be sold by the county, the proceeds of such sale shall first be applied to discharge in full the lien or liens for general taxes for which the same was sold, and the remainder, or such portion thereof as may be necessary, shall be paid to the city to discharge all local assessment liens upon such property, and the surplus, in any, shall be distributed among the proper county funds.'

In construing this statute, this court, in Maryland Realty Co. v. Tacoma, 121 Wash. 230, 209 P. 1, said:

'Appellants contend that this last quoted section applies to foreclosures and purchases made by counties as well as those made by private individuals, and that consequently it was necessary that the county before foreclosing should pay the local assessments or bid in the property subject thereto. We cannot so hold. Before the passage of section 9393 by the 1911 Legislature we had consistently held that the payment of local assessments was not a prerequisite to foreclosure of certificates of delinquency for general taxes, whether such suit be by a county or by private individuals. McMillan v. Tacoma, 26 Wash. 358, 67 P. 68; Ballard v. Way, 34 Wash. 116, 74 P. 1067, 101 Am. St. 993; Pennsylvania Co. v. Tacoma, 36 Wash. 656, 79 P. 306; Ballard v. Ross, 38 Wash. 209, 80 P. 439. It was after the rendition of these decisions that the Legislature passed section 9393. It was the legislative intent to preserve the lien of the local assessment where it could be done without sacrifice to the county and state. If private investors would take the property, they must pay both the delinquent general tax and the local assessments, but if the property be of such small value as that the county must buy it in, then the superiority of the lien for general taxes must be asserted, even to the point of destroying the lien of the local assessment. Any other construction of the statute would greatly hamper and hinder the state and county in securing funds by means of which they are enabled to carry out their constitutional and statutory functions.'

The record in this case shows that, at the commencement of the county tax sale at which the lands in this controversy were sold by the county, an announcement was made that 'all bids are subject to local improvements.' The record also shows that, at the time this announcement was made, appellants, the purchasers, were not present and had no knowledge thereof, and that there was nothing in the record or notice of sale to suggest that the land was being sold subject to local assessments. But this announcement can in no event alter the situation. The duty of the officials is to sell the land and collect the taxes. The Legislature prescribes that private holders of certificates of delinquency must foreclose subject to the lien of the local assessments.

But in all the rights and privileges granted to municipalities for the purpose of enabling them to collect their liens the state has uniformly insisted that the taxes due the county constitute a prior lien. A county, in collecting the tax, is but an arm or agency of the state, and it is the right and duty of the state, acting through its law-making body, to fix the priorities of the various kinds of taxes and to prescribe the manner and method of collection. In the final analysis there is but one way to enforce the collection of taxes, and that is by the sale of property, and this cannot and must not be made impossible by the unauthorized statements of those in charge of the sale. The duties of those conducting a sale are prescribed by statute; every step of the proceeding is plainly designated both...