Eagle Point Irr. Dist. v. Cowden

• Decision Date: 14 July 1931
• Citation: 137 Or. 121,1 P.2d 605
• Parties: EAGLE POINT IRR. DIST. v. COWDEN et al.
• Court: Oregon Supreme Court

1 P.2d 605

137 Or. 121

EAGLE POINT IRR. DIST. v. COWDEN et al.

Supreme Court of Oregon

July 14, 1931

Department 2.

Appeal from Circuit Court, Jackson County; H. D. Norton, Judge.

Suit by the Eagle Point Irrigation District, a corporation, against G. E. Cowden and others, including the State Land Board of the State of Oregon, in which the last-named defendant filed a cross-complaint. From the decree, plaintiff appeals.

Modified and, as modified, affirmed.

J. F. Fliegel, of Medford (O. C. Boggs, of Medford on the brief), for appellant.

Frank P. Farrell, of Medford, for State Land Board.

BELT J.

This suit was instituted to foreclose certain delinquent tax certificates on land within the Eagle Point Irrigation District. The state land board by cross-complaint prayed for foreclosure of its mortgage covering the same land, given to secure payment of money belonging to the common school fund. This mortgage was executed and recorded prior to the organization of the irrigation district. The sole question at issue under the facts stipulated was as to the priority of the mortgage lien over the district tax lien. Defendants other than the state land board made no appearance, and a decree by default was entered against them. The trial court decreed that the mortgage lien of the state land board was prior and superior to the lien of the plaintiff. Judgment was also entered against the irrigation district for the amount due on the school fund mortgage. Hence this appeal.

It is clear that, in the absence of any constitutional prohibition the Legislature has the power to declare that taxes on real property, even though levied subsequent to the execution of a mortgage, shall have priority. But statutes will not be thus construed unless the legislative intent to make tax liens superior over prior mortgage liens is clearly expressed. With reference to property of the state, exemption from taxation is the general rule. Before such property may be subjected to taxation in any form, the Legislature must so declare, either by express enactment or by clear implication. 37 Cyc. 872.

The district, in asserting the alleged superiority of its tax lien over the mortgage, relies strongly on section 48-806, Oregon Code 1930, which provides: "*** Any land, the title to which may now or hereafter be vested in the state, including lands segregated under the Carey act or state lands sold under contract, in any irrigation district, shall be subject to taxation by the district, and the full amount of assessments due against said lands shall be paid to the district before the same is sold, resold or contract for sale executed. ***"

Appellant district also directs attention to that part of section 48]504, Oregon Code 1930, which reads: "*** All the lands in the district shall be and remain liable to be assessed for such payments as herein provided, and under and subject to the provisions of this act *** and no district assessment lien shall be removed until the assessments are paid with interest and penalties or the property sold for the payment thereof."

In the same section, it is also provided that: "*** The district shall never bid or pay a greater sum than the total of all taxes against the land with interest and penalties. ***"

In none of the statutory provisions is there any express legislative declaration that such assessment liens are superior to and shall have priority over common school fund mortgages, nor do we think, after a consideration of the various statutory enactmenets, that there is any clear implication of an intention thus to impair the security of funds which, by the Constitution, have been dedicated to the maintenance of our public school system. Indeed, if we were to construe the statute in accordance with the contention of appellant irrigation district and hold that school fund mortgages should be considered as property belonging to the state and subject to taxation,...