Dancy Drainage Dist. v. Hanchett Bond Co. (In re Dancy Drainage Dist.)

• Citation: 199 Wis. 85,225 N.W. 873
• Parties: IN RE DANCY DRAINAGE DIST. DANCY DRAINAGE DIST. ET AL. v. HANCHETT BOND CO. ET AL.
• Decision Date: 04 June 1929
• Court: United States State Supreme Court of Wisconsin

199 Wis. 85

225 N.W. 873

IN RE DANCY DRAINAGE DIST.

DANCY DRAINAGE DIST. ET AL.

v.HANCHETT BOND CO. ET AL.

Supreme Court of Wisconsin.

June 4, 1929.

Appeal from an order of the Circuit Court for Marathon County; A. H. Reid, Circuit Judge. Affirmed.

Upon the petition of the holders of bonds against the Dancy Drainage District, the circuit court for Marathon county ordered a sale of the lands of said drainage district, upon which drainage certificates were outstanding and unredeemed, under the provisions of section 89.37 (4) (d), Stats. Such sale was held, the same confirmed, and a distribution of the proceeds of said sale directed. From the order of confirmation and distribution of the proceeds, the Hanchett Bond Company, a holder of bonds of said drainage district, and Portage County, within which a portion of the lands of said drainage district lie, appeal.B. M. Vaughan, of Wisconsin Rapids, and Walter B. Murat and W. E. Atwell, both of Stevens Point, for appellants.

Bird, Smith, Okoneski & Puchner, of Wausau, Mason, Priestley & Hopkins, of Madison, and G. J. Boileau, of Wausau (Goggins, Brazeau & Graves, of Wisconsin Rapids, and S. W. Dixon, of Chicago, Ill., of counsel), for respondents.

Wood, Warner & Tyrrell, of Milwaukee, amici curiæ.

OWEN, J.

Following the remittitur of the record, pursuant to the mandate of this court in Re Dancy Drainage District, 193 Wis. 118, 213 N. W. 885, certain holders of bonds of the Dancy drainage district made application to the circuit court for Marathon county for an order directing the treasurers of the counties of Marathon, Wood, and Portage to sell at public auction the lands of said drainage district falling within the calls of section 89.37 (4) (d), set forth in the margin.¹ The court then made an additional assessment for construction against the lands equal to the total assessed benefits and ordered the sale. The sales were conducted by the respective county treasurers, reports of such sales were made, and on motion, and notice to all parties interested, such sales were confirmed and distribution of the proceeds directed by order of the court. Portage county and the Hanchett Bond Company have appealed from that order. The interest of Portage county arises from the fact that prior to the sale that county had taken tax deeds based on general tax certificates on the lands lying within said drainage district in said Portage county. The court determined that these tax deeds operated as a payment of the general taxes against said land, and that Portage county was not entitled to any of the proceeds arising from such sale. Upon this appeal the county attacks the constitutionality of section 89.37 (4) (d), asserting it to be a private and local law, contravening article 4, § 31, State Constitution, prohibiting special or private laws for granting corporate powers or privileges, except to cities, or for assessment or collection of taxes, and article 4, § 23, providing that the Legislature shall establish but one system of town and county government, which shall be as nearly uniform as practicable.

[1] These contentions must fail. The act in question is clearly a general law, and, in common with the other provisions of the drainage law, applies to all parts of the state. Counsel cites and relies upon State ex rel. Baltzell v. Stewart, 74 Wis. 620, 43 N. W. 947, 6 L. R. A. 394, where a drainage law applying only to Dane county was held to be a special law and void. The only analogy between the present law and the law there considered is that they both relate to the subject of drainage. Our present drainage law, however, is statewide in its application, and its provisions may be invoked anywhere within the boundaries of the state. Section 89.37 (4) (d) may be invoked anywhere within the state where situations arise falling within its purview. Such an act cannot be considered as a special, local, or private law.

[2] It is next contended that, granting the constitutionality of the law, the court violated its provisions in denying to Portage county any portion of the proceeds of the sale for the general taxes due the county upon the lands upon which it had taken a tax deed. It is here conceded and later determined that the lien of general taxes is superior to the lien of special drainage assessments, and that upon a sale of lands under the provisions of section 89.37 (4) (d) there should first be deducted “any unpaid general taxes due the county.” Such are the explicit provisions of section 89.37 (4) (d). The court withheld from the county the general taxes claimed, because the taking of the tax deed by the county extinguished the tax. There was no tax due the county. This is held in Spooner v. Washburn County, 124 Wis. 24, 102 N. W. 325, in which it was specifically decided that by taking a tax deed it was the duty of the county to settle with the town, not only for delinquent taxes represented by the certificate upon which the tax deed was taken, but upon all subsequent certificates held by it upon the same lands, and in Van Ostrand v. Cole, 131 Wis. 446, 110 N. W. 891, we find in the statement of facts the assertion that “the lands were sold to the county for the delinquent taxes of these years, and the defendant acquired title through the quitclaim deeds above described to the interest of the county in the lands and the tax certificates which the county held at the time.” In view of these authorities, the proposition that the taking of a tax deed by the county operates as an extinguishment of the tax represented by certificates then held by the county cannot be regarded as an open question. The county saw fit to exchange its tax certificates for such title to the land as it could acquire by virtue of a tax deed, but that tax deed did not operate to extinguish the special drainage assessment. By section 89.37 (5) it is provided that “no tax deed shall cut off any drainage assessment nor shall any drainage assessment deed cut off any tax.” The title acquired by the county, therefore, by virtue of its tax deed issued pursuant to general tax certificates, was burdened by the lien of the special drainage assessments, and in order to protect its title it was incumbent upon the county to discharge such liens. Whether it possessed power to do that we do not inquire, but, at any rate, it is plain that the taking of the tax deed extinguished the general taxes, that it did not extinguish the special drainage assessments, and that by virtue of the sale the county has lost both its taxes and its land.

[3] However, another question is presented, which perhaps is not so clear. Some of the tax deeds upon these lands were taken by the county in April, 1928. They were assessed for general taxes in 1927, and returned delinquent in 1928, and but for the taking of the tax deeds they were subject to sale for such delinquent taxes in May, 1928. While we have determined that the taking of the tax deed in April extinguished the lien of the general taxes represented by tax certificates already issued, what about the lien for the taxes levied in 1927, for which no certificate was issued at the time of the taking of the tax deed? Lands upon which the county holds tax certificates continue subject to taxation until a tax deed is taken. Section 75.32, Stats. The lands were therefore taxable in 1927. They were returned delinquent, and before the time of the sale of lands for delinquent taxes the county obtained title to the land by reason of the tax deeds issued in the month of April. What became of the lien of that tax? Such lien, if it existed, belonged to the county. But it was a lien upon its own land. If a tax certificate could issue thereon at all, it could issue only to the county. Section 75.32, Stats. None other could purchase the tax certificate, or acquire any lien on the land, or any other title thereto by virtue or reason of these delinquent taxes. So far as towns and school districts were concerned, an impasse had arisen with reference to the collection of these taxes. Nothing further could be done. What, then, had become of them? It seems plain that they had merged with the county's title to the land, and that they have the same status that they would have if the tax deed had issued a few days after, instead of a few days before, the sale of such land for delinquent taxes. From this it follows that the claim of the county for the amount of the taxes of 1927, delinquent in 1928, was properly disallowed by the court.

[4][5] The county further complains that the court improperly allowed 10 per cent. interest upon the outstanding drainage certificates. At the time the drainage certificates in question were issued, the statute specifically provided that they should draw interest at the rate of 10 per cent. per annum (section 89.37 (6), Stats. 1925), and by chapter 531, Laws 1927, it was provided that “drainage certificates that have been held by the county treasurer until three years old shall bear from their date only six per cent. interest per annum and shall be sold for their face [value] plus such interest.” To make this provision applicable to existing drainage certificates it must be given retroactive effect. Courts will not construe statutes, so as to give them retroactive effect unless that purpose on the part of the legislature plainly appears. Building Height Cases, 181 Wis. 519, 195 N. W. 544. Such a purpose does not appear upon the face of this legislation. In the history of this state the interest upon certificates has been twice reduced, once from 25 to 15 per cent., and once from 15 to 10 per cent. The question of whether either of those reductions applied to existing certificates does not seem to have been considered by this court. However, section 75.01 (2) authorizes county boards to change the statutory rate of interest, which said certificates shall bear to a rate not exceeding 15 per cent. per annum; but it provides that the “interest to be paid on any...