Dillman v. Foster

• Decision Date: 26 October 1982
• Docket Number: No. 17457,17457
• Citation: 656 P.2d 974
• Parties: R. Earl DILLMAN and Lejeune Dillman, his wife, Plaintiffs and Appellants, v. Herbert E. FOSTER, and Frances M. Foster, his wife, George E. Mangan and Kathryn M. Mangan, his wife, and Omni Winterton and H. Carma Winterton, his wife, Defendants and Respondents.
• Court: Utah Supreme Court

Page 974

656 P.2d 974

R. Earl DILLMAN and Lejeune Dillman, his wife, Plaintiffs and Appellants, v. Herbert E. FOSTER, and Frances M. Foster, his wife, George E. Mangan and Kathryn M. Mangan, his wife, and Omni Winterton and H. Carma Winterton his wife, Defendants and Respondents.

No. 17457.

Supreme Court of Utah.

Oct. 26, 1982.

Brant H. Wall, Salt Lake City, for plaintiffs and appellants.

Gayle F. McKeachnie, Clark B. Allred, Vernal, for defendants and respondents.

DURHAM, Justice:

The plaintiffs in this case appeal from an adverse judgment in their action to quiet title to some real property described as Lots 2 and 3, Block 4, Pick-up Addition in the city of Roosevelt. Earl and Lejeune Dillman ("plaintiffs") filed suit in 1978 against Herbert and Frances Foster, George and Kathryn Mangan, and Omni and Carma Winterton. On May 2, 1980, a pretrial order was filed in which the parties stipulated that since the initiation of the suit, the Fosters and Wintertons had quitclaimed any interest in the property to the Mangans ("defendants"). The Fosters and Wintertons were dismissed as defendants and the matter was tried to the court on June 30, 1980.

In its Findings of Fact, the trial court stated that the real property in question, two undeveloped lots in a Roosevelt City subdivision, was acquired by the plaintiffs prior to January 1, 1964, and that the plaintiffs were the record titleholders on that date. As record titleholders, the plaintiffs were assessed by Duchesne County for property taxes pursuant to U.C.A., 1953, § 59-5-4, but failed to make payment. In February of 1964, the plaintiffs conveyed the subject property, Lots 2 and 3, together with other real property, to Richfield Enterprises, Inc., who conveyed title to Roosevelt City Development Company. In January of 1965, all of the property was conveyed back to the plaintiffs. In February of 1967, the plaintiffs conveyed the subject property together with the other property to National Title Insurance Company. Almost immediately, National Title conveyed all of the property to Herbert and Frances Foster, the predecessors in interest to the claims of the defendants. In the meantime, due to the plaintiffs' failure to pay the 1964 property taxes, Lots 2 and 3 were sold at a preliminary tax sale to Duchesne County in May of 1965. Following that sale, neither the plaintiffs nor any of the subsequent titleholders paid the 1964 taxes, so the property was subject to a final or auditor's tax sale in May of 1969. At that sale, the plaintiffs appeared and, by paying the delinquent 1964 taxes, obtained an auditor's tax deed.

The record shows that at least twice during the years following the 1969 tax sale, the Fosters, residents of California, attempted to pay the taxes on the subject property. However, each time, plaintiff Earl Dillman, a former Duchesne County Attorney, discovered this payment, and instructed the Duchesne County Treasurer to return the check to the sender and to accept his payment instead. As a result, the Duchesne County Treasurer's records indicate that the plaintiffs paid the taxes on the property from 1970 through 1979.

The plaintiffs claim that the subject property was mistakenly included in the 1964 conveyance to Richfield Enterprises, Inc. The record shows that essentially the same description was used in all of the transfers in which this property was included from 1963 through 1967. The trial court found that at least as early as 1971, the plaintiffs claimed a mistake had been made, but that there was no evidence of any mistake. The plaintiffs claim that a Release and Agreement, executed in July of 1976 between the Fosters, Plastronics Corporation (successors in interest to National Title Insurance Co.) and American Title Company, is evidence of the claimed mistake. The Release and Agreement provide, inter alia, for the transfer of title to certain other lots from Plastronics to the Fosters. These other lots had been transferred earlier by the plaintiffs to Plastronics at its request. The plaintiffs now assert that these lots were actually transferred in exchange for a release to the plaintiffs of the subject property, allegedly conveyed by mistake, as an accord and satisfaction. However, whatever the purpose of the Release and Agreement among its participants (which purpose was apparently relevant to Plastronics' exposure to liability as a title insurer), the trial court found that the Release and Agreement specifically preserved the Fosters' claim to the subject property by stating:

Fosters claim all legal right, title and interest in Lots 2 and 3, Block 4, of Pick-up Addition, Section 2, and have done so, mindful of various conveyances and acknowledged that their success or failure to retain title to said lots will in no way effect [sic] this settlement, and that this settlement shall in no way effect [sic] the Fosters' legal claim to said lots.

The record also shows that in 1971 the defendants purchased a lot adjacent to the subject property. The defendants wished to pasture some animals on Lots 2 and 3 and asked the plaintiff Earl Dillman if he would sell his interest in the property. Defendant George Mangan had discovered conflicting claims to Lots 2 and 3 and specifically mentioned the Foster claim to the plaintiff Earl Dillman. The plaintiff Earl Dillman refused to sell but said he had no objection to the defendants' use of the property. The defendant George Mangan also contacted the Fosters in California and obtained their permission to use the lot for pasture. Subsequently, the defendants began to use the property by pasturing animals, constructing a fence, irrigating and clearing the land.

The plaintiffs allege three errors in their appeal. In their first point, they assert that the trial court erred by failing to sustain the validity of their auditor's tax deed. The trial court found that the plaintiffs had an obligation to pay the 1964 taxes, that they had failed to pay these taxes, that the tax sale had occurred because of that failure, and that the plaintiffs could not "use their failure to discharge their legal obligation as a basis to acquire title as against the interest of ... other record titleholders." The trial court cited U.C.A., 1953, § 59-5-4, which in part provides:

The County Assessor must, before the fifteenth day of April of each year, ascertain the names of all taxable inhabitants and all property in the county subject to taxation ... and must assess such property to the person by whom it was owned or claimed, or in whose possession or control it was at 12:00 m. of the first day of January next preceding, and at its value on that date ....

The plaintiffs argue that the statute merely sets out the manner in which taxes are to be assessed but does not impose a duty on the owner to pay the taxes. This argument is contrary to public policy and good sense. The collection of taxes for the common welfare would be hindered if it were the duty of the county treasurer to collect taxes from someone other than the individual to whom the property was assessed pursuant to § 59-5-4. Chapter 10 of Title 59, entitled "Collection of Taxes," places no obligation on the county treasurer to investigate or trace possible title transfers subsequent to January first. That official's duties, in relevant part, are specified in § 59-10-10:

On receipt of the assessment roll the county treasurer shall index ... the names of all property owners shown by the assessment roll .... He shall proceed to collect taxes and shall furnish to each taxpayer ... a notice of the amount of tax assessed against him ....

It is true that anyone could pay the tax, but if the January 1 record holder transfers his interest in the property and does not want to be held liable for the tax, it is his obligation to make appropriate arrangements for payment by his transferee:

Public policy requires that all taxes be paid promptly where due, and it is the duty of every citizen to pay the taxes properly assessed against his property.... [H]e cannot escape liability for the consequences of delinquency upon the ground of his good faith in belief of his own nonliability for the tax.

72 Am.Jur.2d State and Local Taxation § 834 (1974).

In San Juan County v. Jen, Inc., 16 Utah 2d 394, 401 P.2d 952 (1965), this Court held that the tax upon real property is a charge upon the property and is not in the nature of an in personam obligation of the owner, i.e., the recourse is to the property and not to the owner. It is important to note that this holding was made in the context of the county's attempt to pursue a landowner personally when the assessed tax remained unsatisfied after the land had been sold for taxes. That case considered § 59-10-1, holding that the landowner's obligation was limited by the value of the land taxed, and that "the effect of a judgment against the person" was satisfied when "the taxes are paid or the property sold." Since the property was sold for taxes, this Court held that the judgment was satisfied according to the statute. Although there is language in the San Juan decision which implies that the statute creates no personal obligation of any kind, that language is not necessary to the holding and is clearly contrary to the plain meaning of § 59-10-1. To the extent that such dicta conflicts with the statute and the holding in this case, it is expressly disavowed.

In § 59-10-1, the legislature has made clear its intention that the person taxed be held responsible for payment of the tax:

Every tax has the effect of a judgment against the person, and every lien created by this title has the force and effect of an execution duly levied against all personal property of the delinquent. The judgment is not satisfied nor the lien removed until the taxes are paid or the property sold for the payment thereof.

This statutory language makes the following commentary applicable to the circumstances of this case:

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