Litchfield v. County of Webster County of Webster v. Litchfield

• Decision Date: 01 October 1879
• Citation: 25 L.Ed. 925,101 U.S. 773
• Parties: LITCHFIELD v. COUNTY OF WEBSTER. COUNTY OF WEBSTER v. LITCHFIELD
• Court: U.S. Supreme Court

101 U.S. 773

101 U.S. 773

25 L.Ed. 925

LITCHFIELD v. COUNTY OF WEBSTER.

COUNTY OF WEBSTER

v. LITCHFIELD.

October Term, 1879

APPEALS from the Circuit Court of the United States for the District of Iowa.

Litchfield filed, Sept. 29, 1873, his bill of complaint against the county of Webster, Iowa, and Hutchinson, its treasurer, seeking to enjoin the collection of the taxes levied for 1859, 1860, 1861, 1862, 1863, 1864, 1865, and 1866 on lands whereof he claimed to be the owner. They amount to 32,602 92/100 acres, and are situate in that county in the alternate odd-numbered sections, within five miles of that part of the Des Moines River which is above the Raccoon Fork.

The principal of the taxes, when the case was submitted to the court below, was $10,174.76, and the penalty claimed for the non-payment of them, $64,235.41, making a total of $74,410.17.

These lands are a portion of those, which gave rise to a long protracted controversy, of which Wolsey v. Chapman (supra, p. 755) furnishes a complete history.

The facts which this suit involves are stated with sufficient fulness in the opinion of the court.

The court below, considering the penalties prescribed by the revenue laws of Iowa, as in the nature of interest rather than as statutory penalties proper, held that the complainant, by reason of the acts of the State and its officers, was entitled to relief upon his paying the full amount of taxes from 1862 to 1866 inclusive, with annual interest thereon at the rate of six per cent; and that the lands were not subject to taxation for the preceding years. A decree was entered accordingly, and each party appealed.

Mr. George G. Wright for Litchfield.

Mr. John F. Duncombe, contra.

MR. CHIEF JUSTICE WAITE delivered the opinion of the court.

The primary question to be decided in this case is as to the time when the lands which passed to the bona fide purchasers from the State of Iowa under the joint resolution of Congress approved March 2, 1861 (12 Stat. 251), became taxable by the laws of the State. The controversy is about taxes assessed for the years 1859, 1860, 1861, 1862, 1863, 1864, 1865, and 1866.

The facts affecting the title are fully stated in Wolsey v. Chapman (supra, p. 755), where we held, following the principles settled in Dubuque Pacific Railroad Co. v. Litchfield (23 How. 66), Wolcott v. Des Moines Company (5 Wall. 681), Riley v. Wells, not reported, Williams v. Baker (17 Wall. 144), and Homestead Company v. Valley Railroad (id. 153), that the United States continued to own the lands until the adoption of the joint resolution. No lands were included in the original river grant of 1846, except those below the Raccoon Fork. While on account of the action of the Executive Department of the general government those above the Fork were reserved from sale and did not pass to the State when selected as school lands under the act of 1841, or as railroad lands by the grant of 1856, and were not open to pre-emption entry, they were not actually donated by the United States to the State, or to the purchasers from her, until the joint resolution was adopted. The grant made by that resolution was just as much an original grant as if the act of 1846 had never been passed. The order of the Executive Department, reserving them from sale, neither transferred any title to, nor created any interest in, the State. It simply retained the ownership in the United States. While the subsequent gift was undoubtedly induced by what had happened before, the United States, until it was made, continued to be the proprietor of the lands, both in law and in equity. Such being the case, they were not taxable before March 2, 1861. They, down to that time, actually belonged to the United States, and no one else had any interest whatever in them.

This disposes of the taxes for the years 1859 and 1860, but another question arises as to those of 1861. Under the revenue laws of Iowa, in force at that time, government lands entered or located, or lands purchased from the State, could not be taxed for the year in which the entry, location, or purchase was made. Laws of Iowa, Rev. 1860, p. 110, sect. 711, par. 7. In The McGregor & M. Railroad Co. v. Brown (39 Iowa, 655), this was held to mean that government lands were not taxable until the next year after a patent could be demanded for them. To the same general effect are Iowa Falls & Sioux City Railroad v. Cherokee County, 37 Iowa, 483; Goodrich v. Beaman, id. 563; Iowa Falls & Sioux City Railroad v. Woodbury County, 38 id. 498. The revenue year of the State for 1861 commenced before March. It is clear, therefore, that the lands were not taxable for that year. They were neither entered, located, purchased from the State, nor patented, within the meaning of the revenue laws, until then.

We think, however, that for the year 1862 and thereafter they were taxable. By the joint resolution, Congress relinquished all the title the United States then retained to the lands which had before that time been certified by the Department of the Interior as part of the river grant, and which were held by bona fide purchasers under the State. No further conveyance was necessary to complete the transfer, and the description was sufficient to identify the property. The title thus relinquished inured at once to the benefit of the purchasers for whose use the relinquishment was made. All the lands involved in this suit had been certified, and Litchfield, or those under whom he claims, were bona fide purchasers from the State. It matters not, so far as this branch of the case is concerned, that at that time there were doubts as to whether the United States retained any title which could pass under the resolution. That question has now been settled in favor of Litchfield, and it has also been decided that after the resolution went into effect the United States had no longer any interest in the property, legal or equitable. It became private property, and as such subject to taxation under the revenue laws of the State.

It only remains to consider whether, under the circumstances of this case, it is within the power of a court of equity to enjoin the collection of the interest or penalty which the revenue laws of the State require the trea urer of the county to collect in case taxes legally assessed are not paid within the time fixed by law. The statutes regulating this matter are as follows:——

'SECT. 759. On the first day of February, the unpaid taxes, of whatever description, for the preceding year shall become delinquent, and shall draw interest, as hereinafter provided; . . .

'SECT. 760. The treasurer shall continue to receive taxes after they have become delinquent, until collected by distress and sale; but if they are not paid before the 1st of March, he shall collect as a penalty for non-payment, from each tax-payer so delinquent, one per cent of the amount of his tax additional, and if not paid before the first day of April, he shall collect another one per cent additional, and so for each full month which shall expire before the tax shall have been paid. The treasurer shall, in all cases, make out and deliver to the tax-payer a receipt for taxes paid, stating the time of payment, the description of the land, the amount of each kind of tax, the interest on each, and costs, if any, giving a separate receipt for each year; and shall make the proper entries of such payments in the books of his office, and such receipt shall be in full for his taxes that year; . . .'

By sect. 761 the clerk of the county board of supervisors is required to keep full and complete accounts with the county treasurer, and, amomg other things, to charge him with 'interest on delinquent taxes,' and 'on the first day of each month ascertain the amount of delinquent and unpaid taxes of all classes on said day, and charge said treasurer in said account with one per cent on the amount thereof to be collected by him, as provided in sect. 52 [sect. 760] of this act.' Laws of Iowa, Rev. 1860, pp. 118, 119. On the first day of October in each year the treasurer is required to offer at public sale all the lands on which the taxes for the previous year had not been paid. Of this sale notice was to be given by advertisement. Sect. 763, p. 119.

It appears from the agreed statement of the parties that the lands about which this controversy arises amount in the aggregate to 32,602 92/100 acres. Of this, 3,301 acres are part of the school lands selected by the State under the act of 1841, the particulars of which appear in Wolsey v. Chapman (supra), and about 17,000 acres fall within the limits of the railroad grant of 1856, also referred to in that case. In respect to the school lands, it appears that the State has at all times claimed title adverse to that of Litchfield and his grantors. In the adjustment of the controversies with the United States, as was seen in that case, the agent acting on behalf of the State was specifically required not to relinquish any claim of the State to its selections under the act of 1841; and even at the present term of this court the State has appeared here as a litigant, asserting its own title and that of its grantees as superior and paramount to that of Litchfield.

As to the railroad grant of 1856, the agreed statement shows that on the demand of the State the 17,000 acres now in controversy were certified for the...