State ex rel. Com'Rs of the Land Office v. Passmore

• Decision Date: 25 March 1941
• Docket Number: Case Number: 29828
• Citation: 189 Okla. 232,1941 OK 100,115 P.2d 120
• Parties: STATE ex rel. COM'RS of the LAND OFFICE v. PASSMORE et al.
• Court: Oklahoma Supreme Court

1941 OK 100

115 P.2d 120

189 Okla. 232

STATE ex rel. COM'RS of the LAND OFFICE v. PASSMORE et al.

Case Number: 29828

Supreme Court of Oklahoma

Decided: March 25, 1941

Syllabus

¶0 1. TAXATION--Liens for taxes purely statutory absent constitutional provision to contrary.

In the absence of constitutional provisions to the contrary, liens for taxes, their duration, extent and priority are purely statutory.

2. SAME--Ad valorem tax lien made inferior to mortgage lien in favor of Commissioners of Land Office securing loan of public funds.

Section 12758, O. S. 1931; 68 O. S. A. § 394, makes the ad valorem tax lien provided for in section 12723, O. S. 1931, 68 O. S. A. § 353, inferior to the mortgage lien in favor of the Commissioners of the Land Office securing a loan of public funds.

3. SAME--Former decision overruled.

The decision in Board of County Commissioners of Woods County v. State, 125 Okla. 287, 257 P. 778, 53 A. L. R. 1128, is overruled insofar as the same is in conflict with this opinion.

4. SAME--Title acquired at tax resale by county held exclusively for benefit of county and political subdivisions and not vested in state or held in trust for state.

The title acquired at a tax resale by the county in the name of the chairman of the board of county commissioners is held exclusively for the benefit of the county and the political subdivisions thereof, and the title is not vested in the state or held in trust for the state.

5. SAME--Right of action by Commissioners of Land Office to foreclose mortgage on land acquired by county at tax resale--Appointment of receiver mandatory.

The Commissioners of the Land Office may maintain an action to foreclose a mortgage on land acquired by the county at tax resale. and in such an action it is the mandatory duty of the court to appoint a receiver to take charge of such land where the property is not actually occupied as a homestead by the fee owner.

Appeal from District Court, Roger Mills County; T. R. Wise, Judge.

Action to foreclose mortgage by the State on relation of the Commissioners of the Land Office against Frank J. Passmore and others. Objections by defendant Board of County Commissioners of Roger Mills County to appointment of receiver were sustained, and plaintiff appeals. Reversed.

Tom Huser, Campbell Hibbon, and Orlando Sweet, all of Oklahoma City, for plaintiff in error.

Carl A. Beaven, County Atty., of Cheyenne, for defendants in error.

HURST, J.

¶1 In 1927 the owners of 400 acres of land in Roger Mills county gave a mortgage thereon to the Commissioners of the Land Office to secure a loan of $2,500. In April 1939, the land was acquired by the county at the tax resale. In January 1940, this action was commenced by the State of Oklahoma on relation of the Commissioners of the Land Office to foreclose said mortgage, the amount of principal and interest alleged to be then past due being $4,622.92. The plaintiff alleged that the land was sold for taxes accruing subsequent to the effective date of its mortgage. Plaintiff also alleged that the value of the land was less than the mortgage debt, and asked for the appointment of a receiver. Plaintiff named as defendants the board of county commissioners of Roger Mills County and the former owners of the land. The former owners made no defense. The board of county commissioners filed objections to the application for the appointment of a receiver, attached to its objections a copy of its tax deed, and alleged its duty to manage the property and the lack of authority for the appointment of a receiver where, as here, the mortgaged land has been acquired by the county at tax resale. The objections were sustained, the application for the appointment of a receiver denied, and the plaintiff appeals.

¶2 The plaintiff contends (1) that the county holds title in its corporate capacity and not for the state, under sections 7361 and 7362, O. S. 1931, 19 O. S. A. §§ 1 and 2, and the 1939 Resale Law (art. 31, ch. 66, S. L. 1939), and is subject to be sued under section 7361 in this cause; and (2) that in such an action the court has jurisdiction of the ancillary receivership proceeding.

¶3 The defendant contends: (1) That its right under the tax deed is coequal with, if not paramount to, the mortgage lien of the plaintiff, and that its title cannot be cut off or litigated in a mortgage foreclosure action; and (2) that the resale tax deed issued to the chairman of the board of county commissioners in legal effect places the title in the State of Oklahoma, and that there is no statute authorizing the state to foreclose such mortgage lien and thereby cut off the interest of the state acquired by the tax deed.

¶4 1. Tax liens, their duration, extent, and priority, are creatures of the Constitution or statutes. State v. National Bank of Commerce, 139 Okla. 134, 281 P. 579; Magee et al. v. Whitacre (Nev.) 106 P.2d 751; Board of County Com'rs v. Bench Canal Drainage Dist. (Wyo.) 108 P.2d 590; 61 C. J. 912. Since we have no constitutional provision creating such liens, the question is committed to the Legislature. The second Legislature in 1909 provided that "taxes upon real property are hereby made a perpetual lien," and that taxes on personal property are made a lien on real property for a limited time. See S. L. 1909, p. 603; R. L. 1910, § 7391; see. 12723, O. S. 1931; 68 O. S. A. § 353. The same Legislature, in the same act, provided that the ad valorem tax lien "shall be subject at all times to the lien of the state or to the Commissioners of the Land Office," or of "any other commission, board, or office having power to loan public funds." S. L. 1909, p. 612; R. L. 1910, § 7414; sec. 12758, O. S. 1931, 68 O. S. A. § 394.

¶5 This priority was given under authority of section 6, art. 11, of the State Constitution to carry out the duty the state assumed by article 11 in accepting the funds and lands that had been set apart and were conveyed by the federal government to the state, and were required to be devoted to educational and other public purposes. Such lands and funds are referred to in article 11 as a "sacred trust" to "forever remain inviolate." Priority was given to liens securing the loan of such trust funds to guarantee "the safety of the funds and permanency of the investment" as required by section 6, art. 11. In order to further safeguard said funds the Legislature enacted section 10, art. 1, ch. 28, S. L. 1937, providing for the cancellation of delinquent taxes, tax certificates, and tax deeds on lands acquired by the Commissioners of the Land Office on which it had loaned such funds.

¶6 This court has discussed the conflicting rights of the state under mortgages securing the loan of said funds, of the county under ad valorem tax liens, and of the individual purchasers at tax sales, under said constitutional and statutory provisions, in the following cases: Board of County Com'rs of Woods County v. State, 125 Okla. 287, 257 P. 778, 53 A. L. R. 1128; State v. National Bank of Commerce, supra; State v. Galyon, 154 Okla. 204, 7 P.2d 484; State v. Board of Com'rs of Nowata County, 166 Okla. 78, 25 P.2d...