Olds, County Treasurer v. Little Horse Creek Cattle Company

• Decision Date: 15 May 1914
• Docket Number: 782
• Citation: 22 Wyo. 336,140 P. 1004
• Parties: OLDS, COUNTY TREASURER, v. LITTLE HORSE CREEK CATTLE COMPANY
• Court: Wyoming Supreme Court

140 P. 1004

22 Wyo. 336

OLDS, COUNTY TREASURER, v. LITTLE HORSE CREEK CATTLE COMPANY

No. 782

Supreme Court of Wyoming

May 15, 1914

ERROR to the District Court, Laramie County; HON. WILLIAM C MENTZER, Judge.

The Little Horse Creek Cattle Company, a corporation, brought the action against Ray K. Olds, as County Treasurer of Laramie County, to enjoin the sale of certain State land for taxes the land being in the possession of plaintiff under a certificate of purchase. Upon the submission of the case on the pleadings and an agreed statement of facts judgment was rendered for the plaintiff, and the defendant brought error.

Judgment affirmed.

Samuel M. Thompson and Wilfrid O'Leary, for the plaintiff in error.

Although the State retains the legal title to the land as security for the deferred payments, the property belongs to the purchaser for the purpose of taxation. After the initial payment is made and the purchaser enters into possession, the State has no more control over the land and cannot defeat the purchaser's title or possession. (Courtney v Missoula Co., 21 Mont. 591, 55 P. 359; Edgington v. Cook, 32 Neb. 551, 49 N.W. 369). The State holds the legal title only as trustee. The real beneficial owner is the purchaser, who, under his contract of purchase, may pay the balance of the purchase price at any time within the prescribed period and compel the issuance of patent. To hold that he cannot be taxed on the land until he makes final payment would have the effect of deferring final payment to the last possible moment. (Farrer v. Purdy, 69 Mo. 601). The purchaser has no better title at the end of the period of payment and when patent issues than he has at present; nor will he have any more use of the land, though he may have a better evidence of title after patent. Having all the benefits of the land he is the one upon whom the tax burden should fall. (Miller v. Corey, 15 Ia. 166). The presumption that public property is exempt from taxation ceases when the property passes from the control of the public. (1 Cooley on Taxation, (3rd Ed.) 268-269). While the land in question is sought to be taxed as land, it is taxed as the property of the purchaser and not as the property of the State.

Thomas Hunter, for defendant in error.

All State property is exempt from taxation, and this includes all lands belonging to the State. The constitutional exemption is not limited to property belonging exclusively to the State and free from any interest or equity of a purchaser, nor is it limited to property while used for governmental purposes. So long as the State retains an interest in the land it is exempt. The revenue law falls far short of showing or indicating any authority or Legislative intent to tax the land in question. This land could not be sold to pay the taxes for the legal title remains in the State. The purchaser has little more than a right of possession. The contract authorizes the State to enter and regain possession without resort to legal proceedings of any character. Hence the purchaser has neither the legal nor the full equitable title. If the tax complained of is legal, then it constitutes a first lien on the land, which must attach without regard to individual ownership, and a sale to satisfy the lien would convey a new and unimpeachable title. The constitutional exemption of State property from taxation prevents a tax having that effect. (State v. Stevenson, (Ida.) 55 P. 886; Corcoran v. Boston, (Mass.) 70 N.E. 197; Witt v. Armstrong, 6 S.W. 225; Hardy v. Hartmen, 4 So. 545; Henderson v. State, 53 Ind. 60; Willey v. Koons, 49 Ind. 272). It is well settled by a long line of decisions that the State cannot tax public lands of the United States until the settler or purchaser becomes vested with the full equitable title. (Sargent v. Herrick, 221 U.S. 404). The decisions upholding a tax on State lands held under contract of purchase are based upon either constitutional or statutory provisions differing materially from those in this State.

POTTER, JUSTICE. SCOTT, C. J., and BEARD, J., concur.

OPINION

POTTER, JUSTICE.

This is a proceeding in error for the review of a judgment in an action brought by the Little Horse Creek Cattle Company, a corporation, against the County Treasurer of Laramie County enjoining the defendant therein, as said treasurer, from selling the south half of the south half of section 16 in township 18 north, of range 62 west of the Sixth Principal Meridian, for taxes levied upon the same for the year 1912, and also restraining the performance by the defendant of any and all acts which might tend to enforce the payment of such tax by the plaintiff.

The land in question is State school land, that is to say, it comes within the description of lands granted to the State for the support of common schools, and the plaintiff is the owner of a certificate of purchase executed by the proper State officers reciting a sale of the land to the plaintiff on December 23, 1911, under and subject to the laws providing for the sale of State lands, for the sum of $ 1,920, and among other terms and conditions of the sale that the purchaser had paid $ 192, leaving a balance due of $ 1728, payable in 18 annual installments with interest thereon at a stated rate payable annually; and that the purchaser may pay any installment at any time if interest is paid thereon to the time of the next annual payment. It is conceded that no part of said balance had been paid when the land was assessed for taxation except the installment or installments that had become due. The cause was submitted upon the pleadings and an agreed statement of facts, the latter reciting with reference to the tax proceedings that the land was assessed for taxation as land, and in the same manner as all other lands in the same vicinity; that the assessment was in no respect an assessment of the interest or equity of the purchaser; and that the tax is a tax on the land as land, and not a tax on the interest or equity of the plaintiff in the land. The only question discussed by counsel and deemed by them to be presented for consideration upon the facts is whether the land as such was subject to taxation in 1912, or, stated generally, whether before the amount of the purchase price of State land has been paid in full, and the purchaser has thereby become entitled to a patent conveying the title to him, the land is taxable as land as the property of the owner of the certificate of purchase.

By the terms and conditions of the grant and the provisions of the constitution accepting it the State may dispose of its school lands only at public sale, and for not less than ten dollars per acre. (Act of Admission, Secs. 5, 11; Const. Art. XVIIII, Sec. 1). These restrictions as to price and manner of sale are recognized by the statute authorizing and regulating the sale of school and other State lands by providing that said lands shall be sold only at public auction to the highest responsible bidder at not less than three fourths of the appraised value, and not less than ten dollars per acre, except that a preference right to purchase a certain quantity of land at its appraised valuation is given to an actual and bona fide settler thereon at the time of the adoption of the Constitution; the statute following the Constitution in that respect. But the statute provides as to terms of payment, that not less than ten per cent of the purchase price shall be paid in cash on the day of the sale, and the balance in not to exceed eighteen equal annual payments with interest thereon at the rate of four per cent per annum and six per cent per annum on all amounts not paid when due; that interest on all deferred payments shall be paid annually; and that the purchaser may pay in full at the time of sale, or may pay any annual installment at any time if interest is paid on the same to the time of the next annual payment. (Comp. Stat. 1910, Sec. 634, as amended by Ch. 25, Laws of 1911). The other material provisions of the statute relating to such sales are substantially as follows: When any State land shall have been purchased according to law, the board shall make and deliver to the purchaser a certificate of purchase containing the name of the purchaser, a description of the land, the sum paid, the sum remaining unpaid, the amount of annual payments including the accrued interest, and the date on which each deferred payment falls due; such certificate to be signed by the Governor and countersigned by the Commissioner of Public Lands. (Comp. Stat. 1910, Sec. 637). Whenever the purchaser, or his assign, has complied with all the conditions of the law providing for the sale, and has paid all the purchase money, together with the lawful interest thereon, he shall receive a patent for the land purchased; such patent shall run in the name of the State, and shall be signed by the Governor, countersigned by the Commissioner of Public Lands, and attested by the seal of the proper land board, and shall convey a good and sufficient title to the person therein named in fee simple. (Id. Sec. 638). Whenever any purchaser shall fail to make any of the payments stipulated in the certificate of purchase, and the same remains unpaid for one year after the time when it should have been paid, "the board may sell such land again. In case of such sale, all previous payments made on account of such land shall be forfeited to the State; such land shall revert to the State, and the title thereto shall be in the State as if no sale thereof had ever been made." (Id. Sec. 639). The board may require of each purchaser of State lands a bond, upon such conditions as the board may determine. (Id. Sec. 642).

It does not appear that any bond was required of the plaintiff as the purchaser of the land...