Shumway v. Fleishman

• Decision Date: 15 December 1947
• Docket Number: 4932
• Citation: 66 Ariz. 290,187 P.2d 636
• Parties: SHUMWAY et al. v. FLEISHMAN et al
• Court: Arizona Supreme Court

187 P.2d 636

66 Ariz. 290

SHUMWAY et al. v. FLEISHMAN et al

No. 4932

Supreme Court of Arizona

December 15, 1947

Appeal from Superior Court, Maricopa County; Dudley W. Windes Judge.

Suit by L. D. Shumway and others against Elsie W. Fleishman and others to quiet title to realty, wherein defendants filed a cross-complaint asserting title to the realty in themselves and praying that tax deed under which plaintiffs claimed be voided. From a judgment denying plaintiffs any relief on their complaint and vacating and setting aside the tax deed the plaintiffs appeal.

Judgment affirmed.

Jennings & Tenney, of Phoenix, for appellants.

Laney &amp Laney and W. H. Chester, all of Phoenix, for appellees.

LaPrade Justice. Stanford, C. J., and Udall, J., concurring.

OPINION

LaPrade, Justice.

This is an appeal from a judgment of the superior court, sitting without a jury, vacating and setting aside a tax deed executed and delivered by the county treasurer of Maricopa County. The parties will be designated as they appeared in the lower court, the appellants as plaintiffs and the appellees as defendants. Plaintiffs who had acquired title by tax deed brought suit to quiet title to a quarter section of land located in the New State Irrigation and Drainage District. In 1938 the property was advertised and sold for delinquent taxes, the major portion of which was district taxes as distinguished from state, county, and school district taxes. The property was struck off to the state and a certificate of purchase was executed and retained by the treasurer for the benefit of the state. Under the law the holder of a certificate of purchase becomes entitled to a deed upon the expiration of five years provided no redemption has been made. In February, 1944, the treasurer advertised in the manner prescribed by law that demand had been made for a deed, and that the same would be delivered within the statutory time in the event no redemption was made. Under this advertisement the state would have become entitled to a deed to the property on March 27, 1944. On March 22, 1944, plaintiffs went to the treasurer's office and purchased this particular certificate of purchase, paying therefor the sum of $ 1,375.18.

At the time (1938) that the county treasurer published his delinquent tax list and notice of sale for delinquent taxes it was stated that $ 4,004.21 plus interest and penalties amounting to $ 1,070.78 was the amount of taxes due. The delinquent taxes for which the property was sold covered the years 1933 to 1937 both inclusive. The delinquent taxes without interest and penalties were: state and county $ 353.87, personal property $ 4.65; school district $ 106.07; irrigation district $ 3,539.62. Pursuant to this notice the property was sold to the state for $ 5,076.19.

In August, 1939, the irrigation district entered into an arrangement whereby its bonded indebtedness was refinanced under an agreement between the district, its land owners, the Reconstruction Finance Corporation, and Salt River Valley Water Users' Association. By virtue of this refinancing agreement and resolutions adopted by the district, all interest charges and penalties on delinquent taxes assessed for district purposes were forgiven; the principal of delinquent taxes was not forgiven but was to be paid over a period of years at the rate of one dollar per acre per year without interest.

The New State Irrigation and Drainage District was organized as an irrigation district under ch. 149, Laws 1921, and amendments thereof, carried forward into the Revised Code of 1928 as ch. 81, art. 2, sec. 3324 et seq., and now appearing under various articles of ch. 75, A.C.A.1939. Irrigation districts organized under the foregoing provisions now are political subdivisions of the state since the adoption, November 27, 1940, of sec. 7 of art. 13 of the State Constitution. The relevant statutory provisions in effect at the time the taxes here under consideration were levied had been interpreted by this court. These decisions had established that irrigation and similar improvement districts were quasi-municipal corporations having a public purpose, in some respects municipal in their nature in that they exercised the taxing power. Day v. Buckeye Water etc. District, 28 Ariz. 466, 237 P. 636; State v. Yuma Irr. District, 55 Ariz. 178, 99 P.2d 704; Maloney v. Moore, 46 Ariz. 452, 52 P.2d 467. District taxes and assessments are levied and assessed by the board of county supervisors upon estimates certified by the board of directors of the district, and thereafter become a lien and are collectible as other taxes. The county treasurer is constituted ex-officio district treasurer with the duty to collect district taxes and assessments in the same manner and at the same time that he collects general state, county, and school district taxes.

To relieve the treasurer of the burden of keeping the records and to facilitate collections, the records of the county treasurer relating to the taxes of this district were transferred to the offices of the Salt River Valley Water Users' Association, which undertook to collect the taxes, issue receipts, etc. It was during this hiatus in the affairs of the district that the irregularities hereafter noted, and which appear in the findings of fact made by the trial court, transpired.

"Findings of Fact

"At the time when the County Treasurer's records were transferred to the office of the Water Users' Association in December, 1940, there was a balance of $ 4,304.54 due upon the principal of these delinquent District taxes, which amount still remained a lien upon the land in question; and as of the date of the trial there remained against the land on account of these delinquent taxes the amount of $ 3,754.54, which still has to be paid off at the rate of one dollar per year.

"On February 25th and March 3rd, in the year 1944, the County Treasurer published his notice that the state of Arizona had applied for a Treasurer's Deed to the lands therein described. This notice stated that the lands had been sold to the state on February 1, 1939, for taxes, interest, penalties, and charges in the amounts set opposite the respective descriptions, and then it set out opposite the description of the land in question the sum of $ 606.32 (includes treasurer's fees of $ 1.50) instead of the figure $ 5,076.19 which was in truth the amount for which the premises had been sold to the state on February 1, 1939. * * *"

* * *

"This 1944 notice that the State had applied for a tax deed was not seen by (defendants) J.L. Dawson or Elsie W. Fleischman, or her attorney, but on or about March 1, 1944, Dawson's neighbor, one Bill Luke, told him that he had noticed where apparently the 'brush part' of said land was being advertised for a tax deed for some $ 600, it being a further fact that approximately fifty acres of the quarter section in question was still in brush and not being served with water."

Some time between March 1 and March 15, 1944, defendant Dawson, being desirous of redeeming the property from the tax sale, made inquiry from some of the deputies in the treasurer's office as to the amount required to redeem. From the findings of fact, supported by the evidence, it appears that he was informed that it would require the amount shown on the face of the certificate of purchase, together with further accumulations, making a total of $ 7,998. At this time Dawson secured from the county treasurer a delinquent tax statement containing this lastnamed figure, which he delivered to the attorney of defendant Fleishman, who was selling the property to Dawson on a contract of sale. This attorney went to the office of the county treasurer and secured the same information that had been given Dawson. Dawson and the attorney both testified, and the court so found, that had they known that the property could be redeemed for $ 604.82 plus subsequent accruals they would have redeemed the property, but that they were frustrated in so doing on account of incorrect information given to them. The court further found that Dawson and the attorney under all the circumstances had the right to rely upon the aforesaid representations made and the delinquent tax statement furnished by personnel of the county treasurer's office, and acted reasonably, and were not guilty of negligence in so relying upon the same.

The refinancing arrangement, the forgiveness of interest and penalties, and the deferment of collection of principal owed on account of district taxes were presumably brought to the attention of the county treasurer. With reference to the conduct of the county treasurer, the court made the following findings: "That at a time between the time early in March, 1944, when J. L. Dawson made his aforesaid inquiries at the county treasurer's office, and the time of the assignment by that office to the plaintiffs of the certificate of purchase, the figures $ 5,076.19 appearing in said certificate of purchase as the price for which the land had been sold on February 1, 1939, were stricken out and in lieu thereof there were inserted the figures $ 606.32, as the price for which the land had been sold to the State of Arizona. That the advertisement of March, 1944, giving notice that a tax deed had been applied for, named the figures $ 606.32 as the amount for which the property had been theretofore sold, notwithstanding the fact that in truth the amount for which it had theretofore been sold was $ 6,076.19. That said figure of $ 606.32 was not even the portion of the original sale figure which remained against the land, because the taxes assessed for irrigation district purposes constituted approximately 88% of the amount for which the premises had been sold to the State, and the greater...