Foster v. City of Duluth

• Decision Date: 14 February 1913
• Citation: 140 N.W. 129,120 Minn. 484
• Parties: FOSTER v. CITY OF DULUTH.
• Court: Minnesota Supreme Court

120 Minn. 484

140 N.W. 129

FOSTER

v.CITY OF DULUTH.

Supreme Court of Minnesota.

Feb. 14, 1913.

Appeal from District Court, St. Louis County; Homer B. Dibell, Judge.

Action by William C. Foster against the City of Duluth. Judgment for defendant. From an order denying a new trial, plaintiff appeals. Affirmed.

Syllabus by the Court

The property of the state and of its political subdivisions, arms, and agencies, such as cities within its borders, when used for exclusively public purposes, is not subject to taxation, or to proceedings for the assessment of taxes, or for their collection by judgment and sale.

Where real property, acquired by the state or a city for exclusively public purposes, is, when so acquired, subject to a lien for unpaid taxes, all proceedings taken to enforce such lien, after the property is so acquired for public purposes, are void. William G. White, of St. Paul, for appellant.

H. A. Carmichael, of Duluth, for respondent.

BUNN, J.

This is an action in ejectment to recover the possession of eight lots in Duluth. The complaint alleged that plaintiff was the owner in fee, and that defendant was wrongfully in possession. The answer denied that plaintiff was the owner, admitted defendant's possession, and alleged that defendant was the owner in fee of the property. The trial resulted in a decision in favor of defendant, and plaintiff appealed from an order denying a new trial.

The ultimate question involved is whether plaintiff or defendant is the owner of the property. The facts are as follows: Prior to July 17, 1905, Emily Galusha owned the lots. On that day she conveyed to the city of Duluth, and soon thereafter the city constructed thereon an ‘incinerator plant or crematory,’ for the disposal of garbage, and the lots have since been used by the city for this purpose. Plaintiff's claim of title is based upon tax certificates issued upon a sale held pursuant to a tax judgment rendered in 1907 for the taxes for the year 1905. Notices of expiration of the time for redemption were given in February, 1911, directed to the city of Duluth, in whose name the lots appeared from the assessment book for 1910 to be assessed. There was no redemption.

Plaintiff claims that the lien for the 1905 tax attached May 1, 1905; that it is a perpetual lien from that date; that the city, when it purchased the property in July, 1905, took it subject to this lien; and that, though the land was not subject to taxation after July 17, 1905, the judgment was valid, and also the sale and subsequent proceedings. Defendant claims that the lien for the 1905 tax did not attach until after the conveyance to the city, and that in any event, the property not being subject to taxation, after the city acquired it for public purposes, the court had no jurisdiction to render the tax judgment.

[1][3] After its purchase by the city in July, 1905, the property was devoted to public uses, and became public property. It was not thereafter subject to taxation. This is conceded by plaintiff. It is technically inaccurate to say that it was exempt from taxation, for the term ‘exemption’ rather presupposes a liability removed by some constitutional or statutory provision. The property is ‘exempt,’ not because of any such provision declaring it exempt, but because of its character as public property devoted to a public use. The property of the state and of its political subdivisions, arms, or agencies, such as cities within its borders, when used exclusively for public purposes, is not subject to taxation, in the absence of constitutional or statutory provisions making public property subject to the tax laws of the state. This is the undisputed rule; but it is no better established than is the proposition that proceedings for the assessment of taxes against public property, or for their collection by judgment and sale, are absolutely void. This is not only because the property was exempt from taxation, but because it was public property. A reason for the rule is that a sale of the property to enforce collection of taxes assessed against it would destroy its character as public property, to the public injury. The distinction is clear between property exempted from taxation by constitutional or statutory provisions, when such property would be subject to taxation in the absence of such provisions, as, for example, church property, institutions of public charity, or the property of corporations which pay a gross earnings tax, and public property used exclusively for public purposes, which would not be subject to taxation, though the Constitution had not so provided. In the one case the property exempted is private property, which for good reasons it is deemed wise or just to relieve from the burden of taxes that it would otherwise be obliged to sustain; in the other case the property is owned by the state, or by its agencies, is devoted to a public use, and is not subject to taxation for reasons that are different in character, among which may be suggested the fact that the taxation of public property owned by the state or its municipal divisions would mean that the state would be taxing itself in order to raise money to pay over to itself, and the reason, before suggested, that the collection of such taxes might result in destroying the public character of the property.

The distinction is again clearly apparent when we consider the doctrine of Chauncey v. Wass, 35 Minn. 1, 25 N. W. 457,30 N. W. 826, which was that, in proceedings to enforce the payment of taxes against real estate, the court had jurisdiction to try the case and render judgment against the land, notwithstanding that the taxes had been in fact paid, or that the land was in fact exempt from taxation. But this doctrine never had any application to proceedings to enforce the payment of taxes on public property. This is very clearly decided in Sanborn v. City of Minneapolis, 35 Minn. 314, 29 N. W. 126. It is interesting and important to note that this decision was rendered during the time when the court was torn up over Chauncey v. Wass, after the original decision, and before the decision on reargument. Mr. Justice Mitchell said: ‘Without entering at all upon the question of the conclusiveness of a tax judgment as against private persons, which is now before us in another case’ (undoubtedly Chauncey v. Wass) ‘it is clear that it can have no force or effect whatever as against the rights of the public in these premises.’...