Shubat v. Glacier County

• Decision Date: 21 December 1932
• Docket Number: 6961.
• Citation: 18 P.2d 614,93 Mont. 160
• Parties: SHUBAT v. GLACIER COUNTY et al.
• Court: Montana Supreme Court

18 P.2d 614

93 Mont. 160

SHUBAT v. GLACIER COUNTY et al.

No. 6961.

Supreme Court of Montana

December 21, 1932

Rehearing Denied Feb. 1, 1933.

Appeal from District Court, Glacier County; R. M. Hattersley, Judge.

Action by John Shubat against Glacier County, Montana, and others. From a judgment for defendants, plaintiff appeals.

Reversed and remanded, with directions.

Molumby Busha & Greenan, of Great Falls, for appellant.

L. A Foot, Atty. Gen., C. N. Davidson, Asst. Atty. Gen., and Horace W. Judson, of Cut Bank, for respondents.

FRANK P. LEIPER, District Judge, sitting in place of GALEN, J disqualified.

This action was instituted for the purpose of quieting title in the plaintiff to the northwest quarter of section 33 township 34 north, range 5 west of the M. P. M. The allegations of the complaint, in so far as material here, are that the plaintiff is the owner of the lands in question that Glacier county claims an interest therein by reason of a tax deed issued to it and that such tax deed is invalid because, it is alleged, the notice of application for such tax deed "did not advise the true amount due and owing said Glacier county in order to redeem said property." Plaintiff further alleges that an offer was made by him on November 10, 1929, to pay to the county an amount sufficient to discharge all of the taxes, interest, penalties, and charges, which offer was refused. It is further alleged that the defendants Frisbee and his wife claim some interest in these premises adverse to the plaintiff.

Defendants answered denying the plaintiff's ownership of these lands and claiming the title thereto in the defendants by virtue of a tax deed issued to Glacier county on November 5, 1929, and asserting that the proceedings upon which such deed is based are valid in all respects. The answer admits plaintiff's offer to pay taxes, interest, and penalty as alleged by the plaintiff. Trial was had before the court sitting without a jury. The court made its findings and conclusions favorable to defendants and entered judgment accordingly. This appeal is from that judgment.

The plaintiff introduced in evidence, without objection, the following: (a) A notice of application for tax deed together with the affidavit as to its publication; (b) the record of the tax proceedings upon application for a tax deed; and (c) the tax deed in question. The time for redemption expired November 1, 1929. The notice of application for tax deed recites: "Pursuant to a resolution passed by the board of county commissioners April 5, 1927, notice is hereby given that the undersigned will on the first day of November, 1929, apply to the county treasurer of Glacier county, Montana, for a tax deed to the following described property, to-wit: [Here follows a description of the property above mentioned.] That the amount it will be necessary to pay to effect redemption of said premises on the said 1st day of November, 1929, is the sum of $239.62."

It appears from the evidence that the several items going to make up the sum mentioned in the notice, to wit, $239.62, are as follows: (1) $54.19, that being the amount for which the land was sold to the defendant county, which sale occurred on the 10th day of February, 1926. To this there is added interest at 1 per cent. per month to November 1, 1929, that being the date on which the period of redemption expired. (2) The taxes for the years 1925, 1926, and 1927, for the respective sums of $50.65, $44.85, $40.25, to which is added a penalty of 5 per cent. and interest computed on this total (the original tax plus the penalty) at 1 per cent. per month to the date of the expiration of the period of redemption (November 1, 1929); and to this total is added the statutory charge made by the county treasurer for issuing the tax deed of $3.

It is admitted that this is the method which was followed in arriving at the total sum named in the notice for tax deed, and that these are the items which make up that total. Appellant's contentions may be summarized as follows: (1) That the 5 per cent. penalty is not subject to any interest charge; (2) that the amount set forth in the notice for tax deed ($239.62) as the sum owing on November 1, 1929, is greater (to the extent of the interest exacted upon the penalty) than that authorized by law, therefore, the tax deed issued in pursuance of such notice is a nullity.

The statute relating to the time when taxes shall become delinquent, the rate of interest to be charged thereon, together with the penalty to be added thereto, in force at the time material here, reads in part as follows: "All taxes not paid on or before 6 o'clock P. M. of the 31st day of May of each year will be delinquent, and will draw interest at the rate of one per cent per month until paid. A penalty of five per cent shall be added to all delinquent taxes." Section 1, c. 96, Session Laws of 1923. Prior to the enactment of this statute the penalty added was 10 per cent. Section 2175, Rev. Codes 1921. "A penalty is a sum of money which the law exacts the payment of by way of punishment for doing some act which is prohibited, or the omission to do some act which is required to be done." 30 Cyc. 1335; County of San Luis Obispo v. Hendricks, 71 Cal. 242, 11 P. 682; Sacramento v. Dillman, 102 Cal. 107, 36 P. 385; People ex rel. Kane v. Sloane, 98 A.D. 450, 90 N.Y.S. 762; United States v. Four Hundred and Twenty Dollars (D. C.) 162 F. 803.

"A statute properly designated as penal is one which inflicts a forfeiture of money or goods by way of penalty for breach of its provisions." Butler v. Butler, 62 S.C. 165, 40 S.E. 138, 142; 30 Cyc. 1336. The power to levy taxes includes the power to provide such means as will tend to secure prompt payment. Statutes of this character are in the nature of penalties and will be strictly construed. "The imposition of such penalties will be strictly and carefully limited to the exact amount *** laid down by the law. Anything beyond this is null and void. Interest on the accrued penalty is recoverable if the statute expressly authorizes it but not otherwise." 37 Cyc. 1546; United States v. Four Hundred and Twenty Dollars supra.

Where a taxing statute is susceptible of two constructions and the legislative intent is in doubt, such doubt should be resolved in favor of the taxpayer. McNally v. Field (C. C.) 119 F. 445; Cache County v. Jensen, 21 Utah, 207, 61 P. 303; Brown v. Com., 98 Va. 366, 36 S.E. 485; McLaughlin v. Bardsen, 50 Mont. 177, 145 P. 954. As a general rule revenue laws are strictly construed in favor of the taxpayer. (The contrary rule applies to exemptions.) 36 Cyc. 1189, and cases there cited.

The provisions of statutes which impose a penalty are penal in nature and must not be extended by implication. McLaughlin v. Bardsen, supra; State v. Aetna Banking & Trust Co., 34 Mont. 379, 87 P. 268; State v. Cudahy Packing Co., 33 Mont. 179, 82 P. 833, 114 Am. St. Rep. 804, 8 Ann. Cas. 717; Story v. Dixson, 64 Mont. 206, 208 P. 592.

The application of these principles leads us to the conclusion that the Legislature intended the interest provision contained in section 1 of chapter 96, supra, should apply only to the original tax and not to the penalty. The language used indicates such intention. The arrangement of the different provisions in this section confirms our views as to the legislative intent. Had it been the intention of the lawmaking body that the interest provision should apply to the penalty as well as to the original tax, it would doubtless have said so in terms. While not controlling here, nevertheless it is worthy of note that the Legislature, during the same session at which chapter 96 above was enacted, also passed chapter 67. Section 8 of chapter 67 provides, among other things, for the imposition of a penalty upon failure to do certain things, and specifically provides there that such penalty shall bear interest.

The 5 per cent. penalty is the incentive to pay promptly. It remains the same whether the tax be paid one day or one year after it becomes delinquent. The interest charge is, in a sense, a...