Housing Authority of City of Butte v. Bjork

• Decision Date: 13 January 1940
• Docket Number: 8056.
• Parties: HOUSING AUTHORITY OF CITY OF BUTTE v. BJORK et al.
• Court: Montana Supreme Court

98 P.2d 324

109 Mont. 552

HOUSING AUTHORITY OF CITY OF BUTTE v. BJORK et al.

No. 8056.

Supreme Court of Montana

January 13, 1940

Appeal from District Court, Silver Bow County; T. E. Downey, Judge.

Suit by the Housing Authority of the City of Butte, Mont., against Ture Bjork, the County of Silver Bow, Mont., and others to enjoin the county from selling a certain lot in the city of Butte for delinquent taxes. From a judgment for plaintiff the County of Silver Bow, Mont., appeals.

Affirmed.

W. E Coyle and J. F. Emigh, both of Butte, for appellant.

John B McClernan, of Butte, for appellees.

ANGSTMAN Justice.

This is an appeal by defendant county from a judgment for plaintiff. The action was to enjoin the county from selling a certain lot in the city of Butte for delinquent taxes. The facts involved in the controversy are these:

Plaintiff, in September, 1939, commenced an action in the district court of Silver Bow county to obtain certain described property by right of eminent domain. The complaint described the area as a slum district, detrimental to public safety, health and morals; plaintiff, according to its complaint, proposed to eradicate the slum area by substituting in the place of dilapidated and unsafe dwelling accommodations, safe and sanitary buildings for persons of low income. The lands involved were alleged to be necessary for public use.

Plaintiff joined as defendants all persons, corporations and political subdivisions known to claim any interest, right, title or estate in, or lien or encumbrance upon the property or any part thereof, and also "all other persons, unknown, claiming or who might claim any right, title, estate, or interest in, or lien or encumbrance upon, the real property described in the complaint, or any thereof, adverse to plaintiff's ownership, or any cloud upon plaintiff's title thereto, whether such claim or possible claim be present or contingent, including any claim or possible claim of dower, inchoate or accrued." The county of Silver Bow and Charles Erb were named as defendants. Charles Erb was personally served with summons and notice to appear, but made no appearance at the time fixed for the hearing.

After hearing, the court found that it was necessary for plaintiff to acquire title and possession of the property in question for the purpose alleged, and appointed appraisers to appraise the property and to determine the amount to be paid to each owner or other person interested in the property. After the appraisers fixed the amount to be paid to each owner, plaintiff deposited the money in court. Thereupon, on motion of the county, the court ordered that there should be deducted from each individual award the amount of delinquent taxes against the particular piece of property owned by such individual and ordered that the money so deducted be paid to the county treasurer.

The lot in question here was found to belong to defendant Charles Erb, and it was found that he was entitled to $100 as the fair market value of the lot. The delinquent tax against the lot is shown to be $210.64. The county received the $100 fixed as the value of the lot and threatens to sell the lot at tax sale for the unpaid balance. This action was brought to enjoin the county from so doing. The district court entered judgment for plaintiff, enjoining the sale of the property and the appeal followed.

The general rule governing the precise question before us is stated in 61 C.J. 945, as follows: "Where land is taken under eminent domain by a municipality or a like entity, a lien for taxes is extinguished." To the same effect is 26 R.C.L. 299, note 2. Many cases support this rule: Gasaway v. City of Seattle, 52 Wash. 444, 100 P. 991, 21 L.R.A.,N.S., 68; Smith v. City of Santa Monica, 162 Cal. 221, 121 P. 920; State v. Locke, 29 N.M. 148, 219 P. 790, 30 A.L.R. 407; Foster v. City of Duluth, 120 Minn. 484, 140 N.W. 129, 48 L.R.A.,N.S., 707; State v. Stovall, Tex.Civ.App., 76 S.W.2d 206; Gachet v. City of New Orleans, 52 La.Ann. 813, 27 So. 348; City of Laurel v. Weems, 100 Miss. 335, 56 So. 451, Ann.Cas.1914A, 159; and compare Collector of Taxes of City of Boston v. Revere Bldg., Inc., 276 Mass. 576, 177 N.E. 577, 79 A.L.R. 112, and note.

The purport of most of the above cited cases is that the lien for taxes follows the funds fixed as compensation for the property. Section 39, Article V of the Constitution, is in no way violated so long as the county obtains the fair market value of the property.

What we have said presupposes that proper procedure has been taken to obtain the property by condemnation. So far as Erb's interest in the property is concerned, the record shows that proper procedure was taken. But the record affirmatively shows that summons was not served upon unknown owners prior to the hearing. This appears from the fact that the complaint was not filed until September 25, 1939, whereas the hearing was held on October 10th. The statute permits the joining of unknown parties by a statement to that effect. Sec. 9940 Rev.Codes. Summons may be served in like manner as in a civil action. Sec. 9941. The action being one in rem (18 Am.Jur. 738), service of summons on nonresidents may be made by...