Coughlin v. City of Pierre

• Decision Date: 10 July 1939
• Docket Number: 8180.
• Citation: 286 N.W. 877,66 S.D. 523
• Parties: COUGHLIN v. CITY OF PIERRE et al.
• Court: South Dakota Supreme Court

286 N.W. 877

66 S.D. 523

COUGHLIN v. CITY OF PIERRE et al.

No. 8180.

Supreme Court of South Dakota

July 10, 1939

Appeal from Circuit Court, Hughes County; John F. Hughes, Judge.

Action to quiet title by C. W. Coughlin against City of Pierre, a municipal corporation, and others. From an adverse judgment Zell Guthrie appeals.

Reversed.

Sutherland & Payne, of Pierre, for appellant.

Otto B Linstad, of Pierre, for respondent.

SMITH Judge.

Real property owned by defendant was sold at tax sale and thereafter deeded to the county. Eventually it was purchased by plaintiff from the county at a resale held pursuant to Chapter 83 of the Laws of 1937, and this action was brought to quiet title. The answer of defendant set up his title asserted the invalidity of the tax title, and prayed for equitable relief. The learned trial court concluded that the tax title was void, but conditioned its relief to defendant upon payment by defendant to plaintiff of the sum of $174.80 being the amount due as delinquent taxes at the time judgment was entered. The record discloses that plaintiff only actually paid the county $70 as the gross purchase price of the lot here involved and one other lot. The appeal is by the defendant. Defendant does not question the form of the judgment. Cf. Western Building Company v. J. C. Penney Company, et al., 60 S.D. 630, 245 N.W. 909. He implicitly assents to the propriety of a condition requiring him, as the owner, to pay to plaintiff, as a tax purchaser, the actual amount plaintiff paid to the county as the purchase price of defendant's lot, but by a single assignment contends that the learned trial court erred in granting plaintiff more than reimbursement for his purchase price. We are of the opinion that this contention of defendant must be sustained.

Plaintiff-respondent seeks to support the challenged judgment on three theories.

It is said that warrant for the judgment is found in equitable principles, and that such principles permit the court in its discretion to condition relief to the owner upon payment of the full amount of the delinquent tax to the holder of the invalid tax title. The rule of caveat emptor applies to tax sales, and the holder of a void tax title is without substantive rights in the premises (except as such rights arise by statute), but if the owner of the property seeks relief against him before a court of equity, the chancellor may and should require such owner to do equity as a condition to the relief granted. This is but an application of the ancient equitable principle of "He who seeks equity, must do equity." Section 48 of the Revised Code of 1919. The overwhelming weight of authority conditions such relief upon reimbursement not to exceed the amount of the delinquent tax plus interest. The cases are collected in 86 A.L.R. 1208, Holland v. Hotchkiss, 162 Cal. 366, 123 P. 258, L.R.A. 1915C, 492. Through the purchase at the tax sale a purchaser pays all or a portion of a tax which in equity and good conscience the owner should discharge in full if he is to assert ownership of the property. As between the purchaser and the owner, when the owner has repaid to the purchaser the amount of his expenditures, plus interest at the statutory rate, equity has been done. If in addition the purchaser is to be enriched, justification therefor must be found on other than the equitable principle now under consideration.

It is next said that the deed transferred the original tax lien of the county to the plaintiff. Unless it can be said that the deed transferred a legal title to the tax lien to plaintiff, such a contention can not avail him as support for the judgment below. Without deciding the point, if it be considered that the deed, having failed in its purpose, must be held to have created an equitable right in plaintiff in the tax lien of the county upon which such deed was based, such equitable interest must necessarily be measured by the equity of respondent which, in turn, would be measured by the amount of the purchase price plus interest. An equity will not advance the interests of a litigant to a point above its own level.

When Chapter 83, Laws of 1937, is read as a whole it reveals no intention to deal with the transfer of a legal title to a tax lien. It deals with a resale of lands acquired by tax deed. It proceeds upon the assumption that the county owns legal title to real property, and provides for the sale and the conveyance thereof. The dominant sentence of the chapter is phrased in these words: "Property so acquired may be sold and conveyed; and the County Commissioners of the several Counties are empowered to sell and convey such real property, belonging to their respective Counties, in the manner and upon the terms hereinafter provided." Section 1(a).

The mere fact that in defining the effect of the conveyance the Legislature said "* * * and shall vest in the grantee or grantees all of the right, title...