State ex rel. Nat'l Bond & Sec. Co. v. Krahmer

• Decision Date: 18 September 1908
• Citation: 117 N.W. 780,105 Minn. 422
• Court: Minnesota Supreme Court
• Parties: STATE ex rel. NATIONAL BOND & SECURITY CO. v. KRAHMER, County Auditor.

105 Minn. 422

117 N.W. 780

STATE ex rel. NATIONAL BOND & SECURITY CO.

v.KRAHMER, County Auditor.

Supreme Court of Minnesota.

Sept. 18, 1908.

Appeal from District Court, Ramsey County; Hascall R. Brill, Judge.

Application by the state, on the relation of the National Bond & Security Company, for writ of mandamus against Edward G. Krahmer, county auditor of the county of Ramsey. Judgment for defendant, and relator appeals. Affirmed.

Syllabus by the Court

A law does not impair the obligation of a contract within the meaning of the Constitution, if neither party is relieved thereby from performing anything of that which he obligated himself to do. But, if either party is absolved from performing any of these things, such obligation is impaired, whether the absolution is effected directly and expressly or indirectly, and only as the result of some modification of the legal proceedings for enforcement.

The validity of a tax certificate and the rights of the holder thereof are to be determined by the laws in force at the time the certificate is acquired. Any statute which impairs any of the substantial rights secured to the holder by the existing laws is unconstitutional.

The rule that the rights of parties in tax proceedings are to be determined by the law in force at the time of the tax sale and the issuance of the certificate does not prevent the Legislature from making changes in the manner of enforcing the lien which do not substantially impair any of the obligations of the contract.

The holder of a certificate has a lien upon the land which ripens into a title in fee upon the expiration of the time for redemption and the failure of the landowner to redeem after the giving of the statutory notice of the expiration of the redemption period. Prior to the enactment of chapter 271, p. 407, Gen. Laws 1905, the holder of a tax certificate could not perfect his title without causing a notice of expiration of the time of redemption to be given. The notice might be given at any time after the expiration of the statutory period. This statute required the notice to be given within six years after the entry of the tax judgment. Held, that the statute does not impair any of the obligations of the contract.

Chapter 271, p. 407, Gen. Laws 1905, does not deprive the holder of a tax certificate of the right to refundment secured to him under the prior law.

The statute makes no change in respect to service of notice upon persons under disability. The law in this respect remains the same as before the enactment of chapter 271, p. 407, Gen. Laws 1905.

The period of 8 months and 13 days allowed by chapter 271, p. 407, Gen. Laws 1905, within which the holders of existing tax certificates may cause notices of expiration of redemption to be given, is a reasonable time for the purpose.

Chapter 271, p. 407, Gen. Laws 1905, is constitutional.

William G. White, for appellant.

Richard D. O'Brien and Patrick J. Ryan, for respondent.

ELLIOTT, J.

This appeal involves the constitutionality of chapter 271, p. 407, Gen. Laws 1905. The general tax for the year 1897 upon lot 11, block 2, Macalester View addition, city of St. Paul, was duly levied and assessed. The lot was thereafter sold under a judgment and bid in by the state. On November 27, 1898, a state assignment certificate was issued to the National Bond & Security Company, the relator herein. No redemption was made from the sale, and on September 25, 1907, the company presented the certificate to the auditor of Ramsey county, and requested that a notice of expiration of the time for redemption issue. As more than six years had elapsed from the date of the sale, the auditor refused to issue the notice. The trial court dismissed the alternative writ of mandamus, and ordered judgment for the respondent. The appeal is from the judgment entered on this order.

1. Chapter 271, p. 407, Gen. Laws 1905, approved April 18, 1905, went into effect on January 1, 1906. It provided that ‘no notice of the expiration of the time of redemption upon any certificate of tax judgment sale issued to an actual purchaser or upon any state assignment certificate (issued under the provisions of section 1601 of the General Statutes of 1894) shall issue or be served (under the provisions of section 1654 of the General Statutes of 1894, or any other law in force at the time of the passage of this act) after the expiration of six years from the date of the tax judgment sale described in any such certificate, nor shall any such certificate be recorded in the office of any register of deeds after the expiration of seven years from the date of such sale. All such certificate upon which such notice of expiration of redemption shall not be issued and served and such certificate recorded in the office of the proper Register of Deeds within the time limited by this act, shall be void and of no force and effect for any purpose whatever.’ The appellant concedes that the statute is constitutional as applied to tax judgment sales made after it went into effect, but contends that, as applied to a certificate issued before its enactment, it is unconstitutional because it impairs the obligation of the contract in that it (a) compels the holder to abandon his right to hold the certificate as a lien on the land until the tax is paid; (b) compels him to demand payment and thus create a default; (c) destroys his right to refundment; (d) compels him to bring an action to determine the validity of his certificate; (e) destroys his right to the possession of the land with the rents and profits thereof; (f) makes no provision for the issuance of the notice of redemption when the land is held by persons under disability; and (g) does not afford him a reasonable time within which to have his rights under the certificate adjudicated.

2. Prior to 1877 tax deed issued in accordance with the general tax law of 1874 (Laws 1874, p. 17, c. 1) conveyed a title which became absolute at the expiration of the period for redemption. No notice of the expiration of the time was required to be given to the owner. But section 37, c. 6, p. 42, Gen. Laws 1877, provided that before the owner should be deprived of his land he must be given notice, and the effect was to make the lapse of time depend upon the service of this notice and the right to redeem remained irrespective of the lapse of time until the notice was given. As said in Merrill v. Dearing, 32 Minn. 479, 21 N. W. 721, the statute meant that the owner's right to redeem should continue until and for a specified number of days after the service of the notice, provided ‘that this redemption period shall not in all be less than three years from the date of sale.’ A party asserting title in fee by virtue of a tax certificate had the burden of proving that the notice had been duly given. Nelson v. Central Land Co., 35 Minn. 408, 29 N. W. 121;Mueller v. Jackson, 39 Minn. 431, 40 N. W. 565. Gen. Laws 1881, p. 32, c. 10, § 22, attempted to repeal this requirement of notice, but this section of the act was held unconstitutional because the subject-matter was not expressed in the title. The act of 1877 applied to assignees of the interest of the state before forfeiture (Nelson v. Central Land Co., 35 Minn. 408, 29 N. W. 121;Mueller v. Jackson, 39 Minn. 431, 40 N. W. 565), but not to an assignee or grantee acquiring such interest after forfeiture (State v. Smith, 36 Minn. 456, 32 N. W. 174). By section 1, c. 198, p. 311, Gen. Laws 1889, it was provided that the title to all land sold to purchasers ‘under and by virtue of section 101, c. 11, Gen. St. 1878 (section 1616, Gen. St. 1894), shall not expire until the notice contemplated by this act shall have been given by said purchaser.’ Since 1889 the right of redemption could not in any case be eliminated without giving the notice provided for by the statute. Powell v. King, 78 Minn. 83, 80 N. W. 850;State v. Halden, 62 Minn. 246, 64 N. W. 568. The act of 1905 did not go into effect for 8 months and 13 days after its passage. It required the holder of an existing certificate to do within a designated time what before its enactment he was required to do in order to perfect his title, but which he might do at such time as suited his convenience. Did this provision impair any of the substantial rights of the holder of such a certificate? The respondent contends that the statute affects the remedy only, and such was the view taken by the learned trial court. It is conceded that no one has a vested right in any particular remedy, and that the Legislature may change or modify the existing remedies for the enforcement and protection of contract rights so long as an adequate remedy remains. Cooley, Const. Lim. § 361; Kipp v. Johnson, 31 Minn. 360, 17 N. W. 957;Whitney v. Wegler, 54 Minn. 235, 55 N. W. 927. This doctrine was applied in Archambau v. Green, 21 Minn. 520, where it was held that the Legislature might properly shorten the time within which a mortgage must be foreclosed from 20 years, as provided by statute when the mortgage was executed, to 10 years. Of this legislation the court said: ‘It in no way impairs the contract rights of the parties, neither increasing nor diminishing the same, but simply prescribing the time within which those rights must be enforced. That it is competent for the Legislature to enact, and change a statute of limitations applicable to judicial remedies and to contracts already in force is settled beyond question, and we are unable to conceive of any reason why it is not equally competent to enact or to change a rule of limitations applicable to the right to a remedy in pais like that of foreclosure by advertisement.’

This case sustains the decision of the trial court, and requires an affirmance, unless it is inapplicable because the terms of the existing statutes have been so incorporated into the contract that a change thereof in any respect will impair the obligation of the contract. The appellant contends that...