Stafford v. Realty Bond Service Corp.

• Decision Date: 28 October 1952
• Citation: 249 P.2d 241,39 Cal.2d 797
• Court: California Supreme Court
• Parties: STAFFORD v. REALTY BOND SERVICE CORP. REALTY BOND SERVICE CORP. v. STAFFORD. L. A. 21835, 21836.

Page 241

249 P.2d 241

39 Cal.2d 797

STAFFORD v. REALTY BOND SERVICE CORP.

REALTY BOND SERVICE CORP. v. STAFFORD.

L. A. 21835, 21836.

Supreme Court of California, in Bank.

Oct. 28, 1952.

Rehearing Denied Nov. 25, 1952.

Guy N. Stafford, in pro. per.

John F. Bender, Compton, and Gizella M. Allen, Los Angeles, for respondent.

Ray L. Chesebro, City Atty., Los Angeles, Louis A. Babior and Spencer L. Halverson, Deputy City Attys., Los Angeles, amici curiae on behalf of respondent.

SPENCE, Justice.

The primary question to be determined is the right of a holder of a certificate of sale, made in satisfaction of a delinquent street assessment, to have a deed issued thereon after January 1, 1947, the terminative date fixed by section 2911 of the Civil Code, as amended in 1945, for the presumed extinguishment of liens.

In 1933 the lot in question was sold to the state because of a failure to pay 1927 property taxes. By deed in 1944 the state conveyed its tax title to one Lorna Stafford, who in 1946 conveyed the property to appellant Stafford. Meanwhile in 1930 the city, proceeding under the Street Opening Act of 1903, now codified as Sts. & Hy.Code, Div. 6, Pt. 1, sec. 4000 et seq., levied an assessment against the property. The assessment not being paid, the property was sold on December 15, 1930, and a certificate of sale was issued therefor.

On April 20, 1949, appellant Stafford brought an action to quiet title against respondent Realty Bond, holder of the certificate of sale. On June 20, 1949, respondent, in pursuance of its certificate, procured a deed from the Board of Public Works. Sts. & Hy.Code, sec. 4346. Then on June 30, 1949, respondent brought a separate suit for partition against appellant, alleging that the parties were cotenants of the property. The court made findings in both cases in favor of respondent, disposing of the opposing tax and street assessment liens in accord with the parity principle. It expressly decreed that the parties were the owners of the property 'as tenants in common, each owning an undivided one-half interest' therein; that appellant was the holder of an equitable lien upon the property in the sum of $200 (the amount shown to have been paid for the tax deed by appellant's predecessor in interest); that respondent was the holder of an equitable lien upon the same property in the sjm of $1,332.65 (the principal amount of the assessment plus interest and penalties computed to be due on the certificate of sale at the time the deed was issued thereon); that the property should be sold by a referee and the proceeds apportioned in accordance with the terms of decree. Monheit v. Cigna, 28 Cal.2d 19, 168 P.2d 965, 167 A.L.R. 995; Elbert, Ltd. v. Nolan, 32 Cal.2d 610, 197 P.2d 537. From such judgments appellant appeals.

Appellant contends that respondent's certificate of sale constituted no more than a lien which was extinguished on January 1, 1947, under Civil Code section 2911, as amended in 1945, and that consequently respondent's deed, issued in reliance on such certificate after the terminative date, is without valid basis. Accordingly, appellant maintains that the court improperly applied the parity principle. But an analysis of the statutory law and the legal principles applicable to the disposition of the parties' opposing claims will demonstrate the impropriety of appellant's position.

In 1945 considerable property in the state was burdened with unpaid overlapping assessment and tax liens, delinquencies which in many cases exceeded the value of the property and constituted perpetual clouds against land titles. To relieve such chaotic economic condition, the legislature in 1945 undertook a complete revision of the subject, with the purpose of restoring the delinquent properties to the tax rolls and providing, without impairment of rights, a definite period of time for the duration and enforcement of delinquent property liens. Rombotis v. Fink, 89 Cal.App.2d 378, 390, 201 P.2d 588; also Scheas v. Robertson, 38 Cal.2d 119, 125, 238 P.2d 982. Accordingly, as here pertinent, section 2911 of the Civil Code was amended that year to read as follows: 'A lien is extinguished by the lapse of time within which, under the provisions of the Code of Civil Procedure * * * 2. A treasurer, street superintendent or other public official may sell any real property to satisfy a public improvement assessment or any bond issued to represent such assessment and which assessment is secured by a lien upon said real property; whichever is later.' At the same time section 330 of the Code of Civil Procedure was enacted to provide that when the official has the authority to sell the property, he 'may sell at any time prior to the expiration of four years after the due date of said bond or of the last installment thereof or of the last principal coupon attached thereto, or prior to January 1, 1947, whichever is later, but not thereafter.'

Here the sale of the property for the delinquent street assessment was held in 1930, which was well within the time contemplated by law. Under section 4343 of the Streets and Highways Code, upon issuance of the certificate of sale, 'the lien of the assessment shall vest in the purchaser, and is only divested by a redemption of the property * * *.' Section 4346 of said code then provided that 'at any time after the expiration of 12 months from the date of sale,' the street superintendent might 'execute to the purchaser, or his assignee * * * a deed of the property sold, which shall recite substantially the matters contained in the certificate, also any assignment thereof and the fact that no person has redeemed the property.' Despite this unlimited time for issuance of the deed after the lapse of twelve months from the date of sale, appellant argues that respondent was required to procure a deed before January 1, 1947, in order to preclude the extinguishment of the 'lien of the assessment'. In this contention appellant relies on that language of section 2911 of the Civil Code, as amended in 1945, providing that 'any lien heretofore existing or which may hereafter exist upon real property to secure the payment of a public improvement assessment shall be presumed to have been extinguished * * * on January 1, 1947'.

But the determinative consideration here is the fact of sale of the property in 1930 in satisfaction of the delinquent street assessment. Thereby the initial steps in preservation of the lien were taken and the amount of the assessment claim against the property was made a matter of record. Cf. Sipe v. Correa, 38 Cal.2d 131, 134-135, 238 P.2d 989. A similar problem was presented in Missler v. Sommer, 92 Cal.App.2d 417, 206 P.2d 1116, where the sale on the delinquent improvement bond was not consummated until after January 1, 1947, although foreclosure proceedings had been instituted with the proper public official a few months before that date. It was argued that the sale was not caused to be timely made, that the lien of the bond was therefore extinguished under the 1945 amendment to section 2911 of the Civil Code, and that the sale as actually concluded was void as without legal basis. The court rejected this theory of extinguishment of the bond lien where demand was made to the authorized official for the sale prior to the time limit specified therefor by section 330 of the Code of Civil Procedure. Such case was distinguished from the situation existing in Rombotis v. Fink, supra, 89 Cal.App.2d 378, 201 P.2d 588, where no foreclosure proceedings at all were commenced prior to January 1, 1947. Such inaction on the part of the bondholder brought into play the provision for extinguishment of the assessment lien as provided by the 1945 amendment to said section 2911 of the Civil Code, construed as a valid statute of limitations affecting the duration and enforcement of preexisting bond liens.

In the Missler case at page 419 of 92 Cal.App.2d, at page 1117 of 206 P.2d the court said: 'It is appellant's contention in substance that the word sell in section 330 (Code Civ.Proc.) is all-inclusive and contemplates each, all and every act required to be performed in the process. And that unless the last act is performed within the four years or before January 1, 1947, the sale is void. The Fink case does not support such a construction. Indeed such a strict and limited interpretation of section 330 would not only defeat the purpose of that section, but by analogy would complicate other provisions of Chapter II and Title II of the Code of Civil Procedure (Time for Commencement of Civil Actions). The sale of the property in the within action in the circumstances was according to law as contemplated by the above provisions.' Here not only the demand but the actual sale was completed more than sixteen years before January 1, 1947, so as to bring this case even more effectively without the time limitation of the 1945 legislation for the taking of action in the enforcement of delinquent assessment liens so as to avoid their extinguishment under statutory law.

Moreover, regard must be had for the position of the holder of a certificate of sale under the law. Upon the filing of the certificate, the lien of the assessment vests in the purchaser and is only divested by a 'redemption.' Sts. & Hy.Code, sec. 4343. The term 'redemption,' in a literal sense, means the act of buying back or repurchasing. Webster's New International Dictionary, 2d Ed. It connotes a change of interest in the thing to be redeemed, and implies that there is something to be redeemed, 'something lost to be gotten bakc'. Seward v. Dogan, 198 Miss. 419, 21 So.2d 292, 295; cf. Marker v. Scotts Bluff County, 137 Neb. 360, 289 N.W. 534, 537; Lincoln County v. Shuman, 138 Neb. 84, 292 N.W. 30, 33; Vol. 36, Words and Phrases, page 592. By analogy, the certificate of sale issued upon a delinquent street assessment may by construed to have many of the attributes of a like certificate acquired upon an...