Nutting v. Herman Timber Co.

• Decision Date: 29 March 1963
• Parties: K. R. NUTTING, individually and doing business under the name and style of Foresthill Lumber Company, Plaintiff, Respondent and Appellant, v. HERMAN TIMBER COMPANY, a corporation, Defendant, Appellant and Respondent. Kenneth C. May et al., Defendants. Civ. 10317.
• Court: California Court of Appeals Court of Appeals

Page 754

29 Cal.Rptr. 754

214 Cal.App.2d 650

K. R. NUTTING, individually and doing business under the name and style of Foresthill Lumber Company, Plaintiff, Respondent and Appellant, v. HERMAN TIMBER COMPANY, a corporation, Defendant, Appellant and Respondent.

Kenneth C. May et al., Defendants.

Civ. 10317.

District Court of Appeal, Third District, California.

March 29, 1963.

Hearing Denied May 22, 1963.

Maurice A. Harband, San Francisco and John R. Couzens, Auburn, for plaintiff-respondent-appellant.

A. P. G. Steffes, Los Angeles and Daniel J. Higgins, Auburn, for defendant-appellant-respondent.

PIERCE, Presiding Justice.

Cross appeals are involved. Defendant, Herman Timber Company, a corporation, appeals from a decree quieting plaintiff's title to an interest in real property and in timber thereon. Plaintiff appeals from an order denying plaintiff's motion for permission to file, tardily, a cost bill. We will discuss the appeals in the order stated.

The real property, title to an interest in which was quited is a 40-acre parcel in Placer County, California. It is surrounded by a 1400-acre parcel admittedly owned by defendant. Plaintiff traced his interest in said 40-acre tract by mesne conveyances from an original common owner of both parcels. In 1896 this owner conveyed the 40-acre tract to five grantees, an undivided 1/5th interest to each. J. E. Prewett was one of these grantees; D. A. Russell another. When Prewett died his 1/5th interest was distributed to two heirs equally. In 1948 plaintiff, through an agent, acquired the 1/10th interest of one of these heirs, W. J. Prewett. Upon the death of D. A. Russell his interest went to two heirs. In 1952 plaintiff acquired all of the right, title and interest of these heirs in the merchantable timber growing on the 40-acre tract. Plaintiff, having proved these conveyances, established a prima facie title.

This title defendant corporation sought to defeat by two contentions: (1) That it held title to the entire 40-acre tract by redemption of a tax title which it says the State of California had acquired in 1927, cutting off the Prewett and Russell (and also the other) interests; (2) That it had acquired ownership therein by adverse possession. Neither claim can be sustained.

In 1921 the 1400 acres mentioned above were owned by Pennsylvania Gold Mining Company, a corporation (hereinafter 'Pennsylvania'). This corporation neither had nor claimed any interest in the 40-acre tract. The County of Placer, however, in 1921 mistakenly included a description of the 40-acre tract with the lands belonging to Pennsylvania on the county's tax roll and it assessed and levied taxes against the lands so described. And the county also in that year assessed, and levied taxes against, the five owners of the 40-acre tract, assessing each separately. Each of these five owners paid his taxes. The 1921 taxes assessed against Pennsylvania, however, were not paid and its lands (purporting to include the 40 acres) were 'sold' to the state in 1922, and deeded to the state five years later (July 2, 1927). This deed was recorded. During the years 1921 and thereafter the county continued to assess, and the several owners continued to pay, all taxes levied against the 40-acre tract (excepting that in 1931 there was a delinquency of the Prewett interest and a sale and subsequent deed to the state. Redemption from this delinquency was made by plaintiff after he acquired said interest).

There is no evidence in the record of any knowledge by these owners of the double assessment, or of the sale or subsequent deed to the state for Pennsylvania's delinquency.

In December, 1933, one Maxfield (who is also the managing officer and a director in defendant corporation) acquired the interest of Pennsylvania in the 1400 acres. In 1935 he transferred the 1400 acres to a corporation in which he was interested. At no time did Maxfield, or this corporation, ever pretend to have any interest in the 40-acre tract. Thereafter, when said corporation became bankrupt, however, the trustee in bankruptcy executed a deed to defendant and in this deed, executed November 27, 1942, said trustee included a description of the 40-acre tract which the bankrupt corporation did not own.

On August 11, 1944, defendant entered into a logging contract with Auburn Lumber Company (hereinafter 'Auburn'). Under this contract, Auburn redeemed the property from all delinquent taxes assessed against Pennsylvania (withholding from contract payments due defendant the amount of outlay for such tax redemption). It is this redemption which defendant argues as the basis of its first attack on plaintiff's title. It argues (1) that the state acquired a perfect title to the 40-acre tract by its tax deed in 1927 after Pennsylvania's 1921 tax 'delinquency'; (2) that even if such title was not perfect when acquired it became so one year after recordation of the deed by operation of Revenue and Taxation Code sections 3521 and 175; ¹ (3) that redemption by Auburn was effectively a transfer of that tax title by the state to defendant, conveying said 'perfect' title to it. At no step is this reasoning correct.

Its inceptive vice is in its assumption that a redemption equates with a conveyance by the state of its tax-deeded lands to the end that the redeeming owner obtains a greater title than that enjoyed before the delinquency. He does not. A conveyance by the state of tax-deeded lands transfers to the grantee all right, title and interest which the state had in the lands free and clear (with certain exceptions) of encumbrances (Rev. & Tax.Code, sec. 3712), cutting off a right of redemption, and the purchaser may sometimes receive a better title than the person against whom the taxes were assessed. (Helvey v. Sax, 38 Cal.2d 21, 24, 237 P.2d 269.) A redemption, however, merely terminates the state's tax title. (Rev. & Tax.Code, sec. 4112.) The cases cited by defendant as upholding its contention (People v. Maxfield, 30 Cal.2d 485, 183 P.2d 897, and People v. Lucas, 55 Cal.2d 564, 11 Cal.Rptr. 745, 360 P.2d 321) do not stand for the proposition urged by defendant at all. What they do hold is that redemption, although it terminates the state's title, does not nullify it from the beginning and that during the period of the existence of the title, the state is entitled to enjoy all the rents, issues and profits from the land and to recover damages for any trespass--this notwithstanding a subsequent redemption.

Secondly, the argument assumes the validity of a deed to the state, based not upon an actual tax delinquency but upon a double assessment made in error. The assumption is patently unsound. The deed to the state does not validate the void proceeding. Again defendant relies upon the Lucas and Maxfield cases as support for the contention and again our reading of these cases reveals no basis for such reliance. On the contrary, the title of the state is dependent upon the validity of the tax proceedings. If the proceedings by which the state acquires title are invalid, the assessed landowner retains his title. (Helvey v. Sax, supra, 38 Cal.2d 21, 25, 237 P.2d 269.)

Nor do Revenue and Taxation Code sections 3521 and 175, which we have quoted above, breathe life into the theretofore void tax proceedings. These sections have been termed 'special' statutes of limitations (in Sears v. County of Calaveras, 45 Cal.2d 518, 289 P.2d 425) applicable, as against even owners in possession, where the alleged defects of the deed are NOT jurisdictional in the sense that curative acts would not apply, i. e., where the defect in the tax proceedings has been for non-observance of some procedural notice or other step which the Legislature, without defiance of state or federal constitutions, might have dispensed with altogether. But curative acts do not excuse nor cure nonperformance of constitutionally indispensable steps, and tax deeds which are the product of sales of doubly-assessed lands cannot be reached by either curative acts or general or special statutes of limitation. To attempt to apply either would constitute confiscation. (See Sheeter v. Lifur, 113 Cal.App.2d 729, 249 P.2d 336.) The precise issue now before the court was presented to the New York Court of Appeals in Cameron Estates v. Deering, 308 N.Y. 24, 123 N.E.2d 621, in a case where there was a double assessment. The court said (on page 623):

'There is a vast difference between a tax deed voidable for irregularity in the proceedings and a tax deed void because the proceedings were a nullity due to prior payment of the tax. A Statute of Limitations ordinarily does not start to run until the right sought to be barred has accrued (citation) * * *.

'* * * A Statute of Limitations is one of repose designed to put an end to stale claims and was never intended to compel resort to legal remedies by one who is in complete enjoyment of all he claims, Cooley on Constitutional Limitations, p. 366, nor may it be used to transfer property from the true owner to a stranger simply because the void tax deed was not challenged within six years from the date of recording. * * *' (See also Weaver Sons v. Burgess, 7 N.Y.2d 172, 196 N.Y.S.2d 641, 164 N.E.2d 677, 679.)

Defendant's claim to a title based upon its redemption of the state's tax deed must therefore be rejected.

Defendant's contention that the evidence established its title to the 40-acre tract by adverse possession as a matter of law cannot be sustained either. It argues that the deed which it obtained from the trustee in bankruptcy on November 27, 1942, gave it 'color of title' since it included in its description the 40-acre tract in which the bankrupt corporation admittedly had no interest. And it urges that its acts during the following five years were sufficient to establish its title by adverse possession. The only acts which it points to were occupancy of the 1400 acres, the making of the logging contract with 'Auburn' Company,...