Shell Oil Co., Inc. v. Board of County Com'rs of Grant County

• Decision Date: 09 October 1948
• Docket Number: 37263.,37262
• Citation: 165 Kan. 642,197 P.2d 925
• Parties: SHELL OIL CO., Inc. v. BOARD OF COUNTY COM'RS OF GRANT COUNTY et al. (two cases).
• Court: Kansas Supreme Court

197 P.2d 925

165 Kan. 642

SHELL OIL CO., Inc. v. BOARD OF COUNTY COM'RS OF GRANT COUNTY et al. (two cases).

Nos. 37262, 37263.

Supreme Court of Kansas

October 9, 1948

Appeal from District Court, Grant County; F. O. Rindom, Judge.

Action by Shell Oil Company, Inc., against Board of County Commissioners of Grant County, H. W. Stubbs, and W. P Wesley, and against Board of County Commissioners of Grant County, and H. W. Stubbs and W. P. Wesley and C. L. Dew, to vacate and set aside, as void, two sheriff's deeds issued in a tax foreclosure action brought by the defendant board. From order overruling demurrer to petitions, defendants appeal.

Order affirmed.

HARVEY C. J., dissenting.

Syllabus by the Court.

1. The entire matter of taxation, including the levy and collection of taxes, is statutory and does not exist apart from statute.

2. Chapter 375, Laws 1941, is an act relating to the collection of delinquent taxes, refers only to real estate on which taxes are due and unpaid and applies to no other real estate.

3. Compliance with tax statutes is essential to acquisition of jurisdiction.

4. In a tax foreclosure action instituted by a board of county commissioners pursuant to the provisions of chapter 375, Laws 1941, the district court had power to determine the amount of taxes actually delinquent on real estate but was granted no jurisdiction or power to sell real estate and to divest the owner of his title when the taxes thereon were fully paid.

5. That a tax is due and unpaid is either specifically or necessarily by implication embodied in every provision of an act for the sale of real property for taxes.

6. That a tax must actually be due and unpaid before real estate can be sold for taxes is a prerequisite essential to fair dealing between a sovereign and its citizens.

7. Where the sovereign has no charge or claim against property for taxes the sovereign has nothing to sell and although a court goes through the form of a sale it sells nothing and conveys nothing to the purchaser.

8. The amended petitions in actions to vacate and set aside a judgment and sales of mineral interests in a tax foreclosure action examined, and held, the trial court properly overruled defendants' general demurrer to such petitions.

W. P. Wesley, of Ulysses (H. W. Stubbs and H. B Maxwell, both of Ulysses, on the brief), for appellants.

Jesse M. Davis, of Tulsa, Okl. (Kirke W. Dale, of Arkansas City, Charles Vance, of Liberal, and George W. Cunningham, of Tulsa, Okl., on the brief), for appellee.

WEDELL Justice.

Two actions were instituted in the district court of Grant county to vacate and set aside as void two sheriff's deeds issued in a tax foreclosure action brought by the board of county commissioners of Grant county. One purchaser of a mineral interest was a member of the same board of county commissioners that instituted the foreclosure action. The purchaser of the other mineral interest was an attorney employed by the board to assist the county attorney in the tax foreclosure action. Service in that action was by publication.

The defendants in the instant action are the board of county commissioners, W. P. Wesley (county attorney of Grant county), and the two purchasers at the sheriff's sale. The plaintiff is Shell Oil Company, a corporation, formerly Shell Petroleum Corporation, a foreign corporation, authorized to do business in Kansas, with its principal place of business in this state and its post-office address in the Central Building, Wichita, Kansas.

The defendants jointly filed a general demurrer to plaintiff's verified amended petition. Defendants appeal from the order overruling their demurrer. The only material factual difference in the two present actions is the mineral interest involved and the purchasers thereof. The appeals in cases No. 37,262 and No. 37,263 have been consolidated.

The journal entry of judgment, the order of sale and the confirmation of the sheriff's sale in the tax foreclosure action were attached to and made a part of each petition in the instant cases. The petitions are quite lengthy. In our view of the case it is unnecessary to set forth the petitions in full.

We shall continue to refer to the parties as plaintiff and defendants except where necessary to distinguish between the Shell Oil Company and the Shell Petroleum Corporation. In that event we shall refer to the corporation as the oil company or as the petroleum corporation.

Some of the salient facts alleged in the verified amended petition in case No. 37,262, in substance, were: The petroleum corporation was a defendant in the tax foreclosure action; the journal entry of judgment in that action disclosed the owner and party claiming the mineral interest involved was the petroleum corporation; the oil company, formerly the petroleum corporation, a foreign corporation, was authorized to do business in this state; at all times during its existence in this state petitioner had a service agent appointed in this state, as required by law, upon whom personal service could be had and service could likewise have been had on the secretary of state; the tax foreclosure action was filed on March 19, 1942; the oil company, formerly the petroleum corporation, on that date and for many years prior thereto had been the owner of the undivided mineral interest involved; there were no delinquent taxes on that mineral interest on March 19, 1942; the petitioner had at all times paid the taxes in full; the records of the county treasurer of Grant county disclosed there were no delinquent taxes on 'said land' on March 19, 1942; notwithstanding defendants' knowledge that no tax lien existed against 'said land' the defendants, W. P. Wesley, county attorney, and H. W. Stubbs, as agents and attorneys for the defendant board of county commissioners, instituted the action seeking to foreclose alleged tax liens; the mineral interest and many other properties, were sold on July 26 and 28 and the sales were confirmed August 5, 1942; the alleged unpaid tax on the mineral interest was $3.57; the costs were $4; the market value of the mineral interest on March 19, 1942 was $6,000; the mineral interest was purchased at sheriff's sale for the grossly inadequate and unconscionable sum of $20 by H. W. Stubbs; the county attorney and H. W. Stubbs, as agents and attorneys for the board of county commissioners, instituted the tax foreclosure action for Grant county; in that action the county attorney and H. W. Stubbs acted as governmental agents and representatives of the taxpayers and the general public; although petitioner had a resident agent in this state, as required by law, upon whom personal service might have been had and although personal service likewise might have been had on the secretary of state service was nevertheless obtained by publication only; the publication service was approved by the district court by reason of an affidavit filed by the county attorney in which it was knowingly and falsely stated that personal service could not be had on the petitioner in the instant case in this state; that defendants conspired to fraudulently deprive petitioner of its title to the mineral interest involved; the petitioner had no actual notice of the foreclosure action and the fraud of defendants until April 1, 1944; until that date this petitioner had relied on its record title, returned the same for taxes each and every year and had payed all taxes assessed against it; had this petitioner had notice of the foreclosure action it could, and would, have shown the court it was the lawful owner of said land free and clear of any alleged tax liens.

It is conceded the allegations in case No. 37,263 were substantially the same except the petition in that case, in substance, further stated: The alleged unpaid tax on that mineral interest was $3.27; the mineral interest was purchased at sheriff's sale by C. L. Dew, a member of the board of county commissioners for the inadequate and unconscionable sum of $10; the market value of 'said land' on March 19, 1942, was $6,000.

It is conceded the mineral interest in each of these cases is an interest in real estate and that where the petitions refer to it as 'said lands' the property so designated is the mineral interest involved.

The tax foreclosure action was governed by chapter 375, Laws 1941, and all references will be made to it or to sections thereof contained in G.S.1941 Supp. to the General Statutes of 1935.

Plaintiff, in substance, framed the petitions to vacate and set aside the tax foreclosure judgment and sales on the following theories, to wit: (1) The tax foreclosure act, chapter 375, Laws 1941, under which the mineral interests were sold, does not relate to the sale of real estate on which the taxes are fully paid but only to the sale of real estate on which the taxes are 'due and unpaid'; the judgment and sheriff's deeds issued in the foreclosure action are void for the reason the court acquired no jurisdiction of the subject matter; (2) the purchasers at the sheriff's sale, one a member of the board of county commissioners and the other an attorney appointed by that board to assist the county attorney in the foreclosure action, were representatives of the public and in such fiduciary capacity were disqualified purchasers and obtained no title as against this plaintiff; (3) jurisdiction over this plaintiff, if any, was acquired by means of fraud on the district court and this plaintiff and by reason of such fraud the judgment was void; and (4) service by publication was unauthorized as a matter of law and the judgment was void.

We have not attempted to set forth all allegations of the petitions designed to state a cause of action on each theory. Is the first theory sound? In Magnolia...