Moore v. Otis
| Decision Date | 04 October 1921 |
| Docket Number | 5661. |
| Parties | MOORE, County Treasurer, v. OTIS et al. |
| Court | U.S. Court of Appeals — Eighth Circuit |
Robert E. Jackson, of Muskogee, Okl., P. E. Gumm, of Boynton, Okl and W. A. Green, of Muskogee, Okl., for appellant.
D. M Tibbetts, of New York City, and Fred W. Green, of Guthrie Okl., for appellees.
Before CARLAND and STONE, Circuit Judges, and MUNGER, District Judge.
Action by appellees to enjoin appellant from enforcing sections 7411 and 7412 of the Revised Laws of Oklahoma, 1910, as amended by sections 5 and 6 of House Bill 29 of the Oklahoma Legislature approved April 5, 1919 (Laws 1919, c. 130). The trial court granted the relief prayed for. The appellees are holders of bonds issued by the city of Muskogee, Okl., to pay the cost of street improvements. Chapter 10, art. 1, Session Laws Okl 1907-08.
This act provided that the bonds as issued should bear interest at the rate of 6 per cent. per annum, should be payable in 10 annual installments on the 1st day of September of each year, and should be payable out of the fund to be created by levying assessments against property within improvement districts required to be created; the property being assessed according to the benefits. The assessments for the payment of bonds were required to be made by ordinance upon the completion of the work and ascertainment of the cost thereof. If the assessments so made were not paid in full within a limited time, the act provided that they should be payable, together with interest, in 10 annual installments, maturing on the 1st day of September each year. The guaranties which surrounded the holders of the bonds by virtue of the law in force at the time the bonds were issued were as follows: Chapter 10 of the Session Laws of 1907-08, provided in section 5 thereof that:
'Such special assessments and each installment thereof and the interest thereon are hereby declared to be a lien against the lots and tracts of land so assessed from the dates of the ordinances levying the same, coequal with the lien of other taxes, and prior and superior to all other liens against such lots or tracts, and such lien shall continue until such assessments and interest thereon shall be fully paid, but unmatured installments shall not be deemed to be within the terms of any general covenant or warranty.'
It was further provided in section 6 that it should be the duty of the city clerk of the municipality to collect the installments as they fell due, and as to the disposition of such funds it was provided: 'It shall be the duty of the city clerk to keep an accurate account of all such collections by him made, and to pay to the city treasurer daily the amounts of such assessments collected by him, and the amounts so collected and paid to the city treasurer shall constitute a separate special fund to be used and applied to the payment of such bonds and the interest thereon and for no other purpose.'
Section 6 also provided that, in the event of any installments becoming delinquent, the city clerk should, on or before September 15th of each year--
'certify said installment and interest then due to the county treasurer of the county in which said city is located, which installment of assessment and interest shall be by said county treasurer placed upon the delinquent tax list of said county for the current year and collected as other delinquent taxes are collected, and thereupon pay to the city treasurer for disbursement in accordance with the provisions of this act.'
The tax sale law in force at that time was substantially the same as that contained in article 9, c. 72, Revised Laws of Oklahoma, of 1910. By virtue of the provisions of article 9, c. 72, of the Revised Laws 1910, and section 6, c. 10, of the Session Laws 1907-08, it was the duty of the county treasurer in November each year to hold a tax sale, at which properties upon which there existed delinquent special assessment taxes for the current year, and delinquent ad valorem taxes for the previous year, should be offered for sale, and the property affected sold for both classes of taxes at such sale. At the annual sale, the property was required to be sold to the person who offered to pay the amount due on any parcel of land, for the smallest portion of the same. Section 7399. It was then provided by section 7406 that the county treasurer might bid off all property at such sale for the amount of taxes, penalty, interest, and costs due and unpaid thereon in the name of the county, in the event no other bidders offered the amount due, the county thereupon acquiring all the rights, both legal and equitable, that any other purchaser could acquire by reason of such purchase. There was no provision, however, that the county should pay anything for the property so taken over. By section 7407, a redemption period of two years was provided for, during which any person having an interest in the property, had the privilege of making redemption, by paying the county treasurer the amount of all taxes, penalty, interest, and cost of sale up to the date of redemption. By virtue of section 7408 any person was permitted to purchase the interest of the county and take an assignment of that interest upon paying to the county treasurer the amount of the taxes, penalty, interest, and cost of sale and transfer up to the date of the transfer. It was also provided that any person holding a tax sale certificate, either by purchase at the original sale, or by taking the assignment of the county's interest, might, after a period of two years, upon proper notice as specified by the statute, acquire a tax deed to the property.
This deed in terms conveyed to the purchaser of the property 'in as full and ample manner as said treasurer of said county is empowered to sell the same. ' The same act provided that in cases where the county had taken over the property and held it for a period of two years or more, a resale might be had at which the property so offered should be sold to the highest bidder for cash. At such resale, the property was disposed of to the highest bidder for cash, and this, no doubt, had the effect, upon a valid sale, of cutting off the interest of the owner of the property and any liens junior to the tax for which the property was sold, and such title was passed to the highest cash bidder as the purchaser, but the amount so realized was subject to distribution as has been indicated. Under this act, there were no express provisions as to what liens or rights in the property should be cancelled. This was the situation when the bonds were purchased. House Bill 29 provides:
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