Middleton v. Moore

• Decision Date: 20 July 1903
• Citation: 43 Or. 357,73 P. 16
• Parties: MIDDLETON v. MOORE et al.
• Court: Oregon Supreme Court

73 P. 16

43 Or. 357

MIDDLETON v. MOORE et al.

Supreme Court of Oregon

July 20, 1903

Appeal from Circuit Court, Multnomah County; Alfred F. Sears, Jr. Judge.

Action to foreclose a mortgage brought by J.H. Middleton against F.M. Moore and the Victor Land Company. Decree for plaintiff and the land company appeals. Affirmed.

On July 1, 1893, defendant Moore, being the owner in fee of lot 8 block C, Cherrydale addition to the city of Portland mortgaged it to one Wiley, trustee, to secure the payment of four promissory notes of $175 each. On April 19, 1897, Wiley assigned the notes and mortgage to plaintiff. Moore conveyed the lot to the defendant the Victor Land Company, and this suit is for the foreclosure of the mortgage. The land company answered that, on June 6, 1902, being prior to the date of said conveyance, the sheriff of Multnomah county executed and delivered to it a tax deed to the lot in question, in pursuance of a sheriff's sale of the same to one Allen, for delinquent state, county, school, and Port of Portland taxes for the year 1897, and city taxes for 1898, the said Allen having duly assigned the certificate of sale to defendant; that at the time of the execution of said deed the lot had not been redeemed from the tax sale, and the defendant is in the actual possession, and prayed that the company be decreed to be the owner in fee simple thereof, devested of the alleged lien of the mortgage. A demurrer to this answer having been sustained, a decree of foreclosure was entered, and the land company appeals.

Frank Schlegel, for appellant.

WOLVERTON, J. (after stating the facts).

The issue presented for our consideration is whether, under the law in force in 1897 and 1898, a tax deed cut off the lien of a mortgage executed anterior to the assessment and levy of the tax for the nonpayment of which the mortgaged premises were sold and the deed given. The solution of this question depends entirely upon the statute then in effect, and its proper interpretation. For the purposes of assessment, lands and town lots were required to be valued at their true cash value, taking into consideration the improvements, the quality of the soil, etc., such value being taken to mean the amount such property would sell for at voluntary sale made in the ordinary course of business. Hill's Ann.Laws 1892, § 2752, as amended Sess.Laws 1893, p. 6. The assessment was made by setting down in the assessment roll the names of the taxable persons, the description of each tract or parcel of land, the full cash value of each parcel and of all taxable personal property, and the total value of the whole. Hill's Ann.Laws 1892, § 2770. A transcript of the assessment roll was placed in the hands of the sheriff accompanied by a warrant commanding him to collect the taxes charged on the list or roll, and to make the same by sale of the goods and chattels of the respective persons named therein, if necessary. Hill's Ann.Laws 1892, § 2794, as amended Sess.Laws 1893, p. 118. If any of the taxes mentioned in the list remained unpaid, either on real or personal property, the sheriff made out a statement and return thereof in the form designated, to which he annexed his affidavit, to the effect that the sums therein returned were unpaid, and that he was not upon diligent inquiry able to discover any goods or chattels belonging to the persons charged whereon he could levy, whereupon the county clerk made from said delinquent roll a true and correct list of the taxes returned as unpaid, and a correct description of the lands or town lots, and to whom such taxes were charged, and delivered the same, with a warrant attached, to the sheriff, commanding him to levy upon the goods and chattels of such delinquents, and, if none be found, then upon the real property as set forth in the tax list, or so much thereof as might be necessary to satisfy the amount of the taxes so charged. The warrant was deemed an execution against property, and had the force and effect thereof against any person, firm, or corporation against whom such taxes were levied or charged on the roll. If no personal property was found whereon to levy the warrant, or if that levied upon was not sufficient to satisfy the same, it was then levied upon any real property of the person, firm, or corporation against whom the tax was charged, or sufficient thereof to satisfy the same. Hill's Ann.Laws 1892, §§ 2809-2811, 2814-2816. A sale of real property conveyed to the purchaser "all the estate or interest therein of the owner, whether known or unknown, together with all the rights and appurtenances thereto belonging." The owner, or his successor in interest, or any person having a lien by judgment, decree, or mortgage on the property, or any part thereof separately sold, was entitled to redeem the same, and, if no redemption was made within two years, a deed was to be executed thereto, which operated "to convey a legal and equitable title to the purchaser [property], sold in fee-simple to the grantee named in such deed." Any person having a lien by mortgage, or otherwise, upon any land upon which the taxes were unpaid, was authorized to pay the same, and the receipt of the proper officer, showing the payment, constituted an additional lien upon the premises, which was collectible as a part of the original lien. Id. §§ 2821-2823, 2838.

This cursory statement of the effect of the statute then in force indicates quite clearly the policy of the law for the assessment and levy of taxes and the enforcement of the payment thereof. The assessment was against the person, and not specifically against the property listed. The property was of course the basis of the assessment, and land was made to bear its true cash value. The owner, however, was charged with the tax, and the property was not made primarily or exclusively liable for the payment of its own burden. In other words, the scheme adopted was not a proceeding in rem but rather in personam, and the manner of collecting was to make the tax out of the personal property of the taxpayer, if any such could be found, and, when that source was exhausted, to levy the warrant, if the taxes were delinquent, upon sufficient of the realty of the individual to satisfy the same. The "personal property is in the primary fund to which resort must be had for the compulsory payment of taxes" ( Hughes v. Linn County, 37 Or. 111, 117 ), and it was only when that was exhausted by the exercise of diligent inquiry that resort could be had to the land. When, finally, the sheriff, in pursuance of a lawful warrant, sold the land, he conveyed to the purchaser, subject to redemption, "all the estate or interest therein of the owner." The pivotal inquiry here, therefore, is, What estate is thus conveyed? "If," says Mr. Blackwell, in his work on Tax Titles (volume 2 [5th Ed.] § 954), "the land alone is assessed as the summation of all interests, liens, incumbrances, etc., the general rule is that the deed carries a fee simple absolute, a new and independent title, the land itself being conveyed; and all prior liens, incumbrances, and interest in, to, or upon the land, are extinguished." But, "on the other hand," he continues, "where the law requires the land to be listed in the name of the owner of the fee, or of any other interest in the estate, provides for a personal demand of the tax, and, in case of default, authorizes the seizure of the body or goods of the delinquent in satisfaction of the tax, and in terms,...