City Real Estate, Inc. v. Sullivan

• Decision Date: 07 April 1947
• Docket Number: 15265.
• Citation: 180 P.2d 504,116 Colo. 169
• Parties: CITY REAL ESTATE, Inc., v. SULLIVAN.
• Court: Colorado Supreme Court

180 P.2d 504

116 Colo. 169

CITY REAL ESTATE, Inc., v. SULLIVAN.

No. 15265.

Supreme Court of Colorado, en Banc.

April 7, 1947

Rehearing Denied May 12, 1947.

Error to District Court, Jefferson County; Osmer E. Smith, Judge.

Action to quiet title to certain lots by the City Real Estate, Inc. against John J. Sullivan, doing business as Sullivan & Co. and others. To review the adverse portions of the judgment plaintiff brings error.

Judgment reversed in part with directions.

HAYS J., dissenting in part; STONE and JACKSON, JJ., dissenting.

Where purported assignments of certain special improvement tax sale certificates which originally ran to town responsible for their issuance were executed by town clerk rather than by town treasurer as required by statute, the assignee was not competent to appear in opposition to action of holder of tax deed issued pursuant to a general levy to quiet title against the special improvement tax lien, especially in absence of evidence that assignee paid for the certificates according to statutory requirements. '35 C.S.A. c. 138, § 101.

Stevens Park Kinney, of Denver, for plaintiff in error.

Howard Roepnack, of Denver, for defendant in error.

Gail L. Ireland, Atty. Gen., H. Lawrence Hinkley, Deputy Atty. Gen., George K. Thomas, Asst. Atty. Gen., Malcolm Lindsey, City Atty. for City and County of Denver, of Denver, Charles M. Rose, of Pueblo, and Rodney J. Bardwell, Jr., Erskine R. Mayer, and Pershing Bosworth, Dick & Dawson, all of Denver, amici curiae.

HILLIARD Justice.

In an action to quiet title to certain lots in the Town of Mountain View, Berkeley, Jefferson County, there were numerous defendants, including the town, and, other than defendant in error, all disclaimed or suffered judgment of default. Plaintiff in error relied on tax sale deeds issued to it August 11, 1941, pursuant to tax sale certificates based on unpaid general tax levies for various years, 1929 to 1935, covering the several properties involved in the action. In the first instance, the certificates ran to the county, but March 4, 1941, they were assigned to plaintiff in error. In 1924, Mountain View had subjected the same properties to special sidewalk assessments, which became liens immediately. Those levies also were defaulted, and in 1937 there were tax sales on account thereof and certificates evidencing such sales were issued to the town.

Notwithstanding plaintiff in error's tax deeds, predicated on unpaid general levies on the property involved, as noted above, defendant in error, alleging that the town had assigned the special improvement tax sale certificates to him, pleaded them as existing and continuing liens thereon. In addition thereto, defendant in error alleged irregulatity in the issuance of the tax deeds of plaintiff in error's reliance, as well as the insufficiency thereof, and otherwise attacked them exhaustively. Other than to defendant in error's claim of lien, which was sustained, the trial court resolved all issues in favor of plaintiff in error, and quieted its title to the property involved, subject to said lien. Plaintiff in error's specification of points challenges defendant in error's adjudged lien, and since there is absence of cross specifications, the potency of that lien is the sole point for resolution on review.

In the circumstances appearing, our decisions are to the effect that holders of tax deeds issued pursuant to general levies enjoy title to the property described therein, freed from liens of special improvement tax levies, and certificates of tax sales, if any, issued because of defaulted payment thereof. Fishel v. City and County of Denver, 105 Colo. 120, 95 P.2d 1; City of Boulder v. Plains, Loan, Realty & Investment Co., 75 Colo. 86, 224 P. 233; Whitehead v. Desserich, 71 Colo. 327, 206 P. 384; Bennett v. City and County of Denver, 70 Colo. 77, 197 P. 768. But notwithstanding the foregoing decisions, two statutory enactments are called to our attention, one of which is emphasized, in justification of the trial court's determination. In order of enactment the statutes are section 3, chapter 142, '35 C.S.A., S.L.1911, p. 565, § 1, and section 83, chapter 138, '35 C.S.A., S.L.1923, c. 180, § 19. The 1911 act, a part of which we italicize, reads as follows: 'All taxes shall be levied for the fiscal year which shall end with November thirtieth. Taxes levied upon any real estate shall be a perpetual lien upon such real estate, until such taxes and any penalty, charges and interest which may accrue thereon shall be paid, and such liens shall have priority over all other liens except such liens as then exist which have been created by special assessments for public improvements; and any property, real, personal or mixed, which has, by mistake or oversight, been omitted from the tax list for any year or years shall be subject to assessment for all back taxes properly chargeable thereon.' Other than as to the italicized language, incorporated therein by the 1911 act, the statute dates from 1902, S.L.1902, p. 43, § 3. The 1923 act, an original conception, entitled, 'Relating to Local Improvements in Cities and Towns,' provided that special improvement assessments made pursuant thereto, shall 'constitute a perpetual lien on a parity with the tax lien for general state, city, town or school taxes, and no sale of such property to enforce any general state, county, town or school tax or other lien shall extinguish the perpetual lien of such assessments.' § 19. The 1911 act was in force, and considered at the time of the several pronouncements in the cases cited above, and tax deeds based on general tax levies were held to have primacy over special improvement tax certificates notwithstanding; and the 1923 act was in force, but not mentioned, when opinions in the two last cases were promulgated.

General tax levies have genesis in the Constitution; that of special improvement tax levies in statutory enactments 'The general assembly,' reads the Constitution, 'shall provide by law for an annual tax sufficient, with other resources, to defray the estimated expenses of the state government for each fiscal year.' Const. art. X, § 2. 'No county, city, town or other municipal corporation, the inhabitants thereof, nor the property therein,' continues the Constitution, 'shall be released or discharged from their or its proportionate share of taxes to be levied for state purposes.' Ibid. § 8. The general assembly in enacting the original statutory provision, the 1902 portion of section 3, chapter 142, '35 C.S.A., already quoted, conforming to the constitutional conception, made general tax levies a 'perpetual lien' on real estate, 'until such taxes and any penalty,' etc., 'shall be paid,' and said nothing of special improvement levies. By the 1911 amendment to the 1902 act, italicized in the above quotation, there was legislative attempt to place special tax liens on equality with general tax liens. Proceeding on the theory that the general assembly had such power, holders of tax certificates issued pursuant to tax sales for defaulted special improvement levies, sought in the several cases cited, supra, to maintain such levies as against tax deeds regularly issued for general levy defaults. What must have been the legal principle that moved us to hold adversely to that claim? The legislative amendment, its context considered, justified the faith of those relying thereon. Why, then, were they unsuccessful? The controlling reason, although not specifically stated in our opinions, necessarily had basis in the constitutional provisions set forth above, that is to say, that through no visitation of special improvement tax shall general tax levies be impaired. The Constitution contemplates the levy of an annual general tax, to cover 'expenses * * * for each fiscal year.' Also, the Organic Law, section 8, supra, makes clear that no county, or city, or town, or the 'inhabitants thereof, nor the property therein, shall be released or discharged from their or its proportionate share of taxes to be levied for state purposes' from year to year. Statutes familiar to tax levying and tax collecting public officials, as well as to the legal profession, provide that real property on which general taxes, levied in the spirit of the Constitution, have not been paid, is subject to tax sale, potentially, in the absence of redemption, to eventuate into tax deeds. The situation here instances the procedure. After we had announced the equivalent of the foregoing in Bennett v. City and County of Denver and Whitehead v. Desserich, supra, and on authority thereof, we stated in City of Boulder v. Plains, Loan, Realty & Investment Co., supra, that the doctrine in this state had become 'stare decisis,' and in Fishel v. City and County of Denver, supra [105 Colo. 120, 95 P.2d 2], again adverting to the matter, that it had become a 'rule of property.'

But says defendant in error, and in this he is ably supported by some of amici curiae, the 1923 act provides not only that a special improvement assessment shall 'constitute a perpetual lien on a parity with the tax lien for general * * * taxes,' but that 'no sale of such property to enforce any general * * * tax * * * shall extinguish the perpetual lien of such assessments,' and, therefore, plaintiff in error's tax title continues to be burdened with the special assessment levy. We doubt the soundness of that statement. It is to be observed that the statute of defendant in error's dependence does not provide there shall not be sales for unpaid general taxes, but only that no such sale shall extinguish the perpetual lien of special improvements. Other statutes, however, as we have seen, do provide for tax sales in aid of the enforcement of general levies...