State v. Iron Cliffs County
| Decision Date | 23 September 1884 |
| Citation | 20 N.W. 493,54 Mich. 350 |
| Court | Michigan Supreme Court |
| Parties | STATE v. IRON CLIFFS CO. |
Appeal from Marquette.
W.P Healy, for defendant, appellant.
Prior to the year 1881 the practical operation of the revenue laws of the state had for some years been growing more and more unsatisfactory to the state authorities. To explain this it will be necessary to give a brief outline of the tax system. Taxes were apportioned according to a valuation of property made by local assessors. Local levies were voted by local boards, and the general taxes to be raised for state purposes were added to these, and a warrant issued to a local officer for their collection. This officer, if he was unable to collect any tax levied upon real property, made a return of the fact, and the parcels returned were advertised and sold at a public sale, subject to one year's redemption. The sale was made to the bidder who would pay the tax for the smallest portion of the land, and if no redemption was made the purchaser received a deed from the state which purported to convey a fee-simple title, and did so in fact if the proceedings were all legal. This effect of the deed, it was supposed, would make owners careful that a sale should not become absolute, and the state would get its revenues in due season. The state therefore, when lands were returned to it for unpaid taxes assumed that portion of them which belonged to the municipalities, and carried the burden until the time of the annual sale. If, for any parcel of land, no bid was then made, the land was struck off to the state, and the state took the risk of being able to sell it for the amount of the taxes afterwards.
The system, in theory, seemed a good one, but serious difficulties were encountered in its administration. One of the chief of these was that very many parcels of land remained unsold in the hands of the state, and the taxes accumulated against them until they greatly exceeded the value of the land. It was found, also, that tax titles, in a great many cases, did not stand legal tests; and in such cases the purchasers lost the land, and also the money paid for it. Sometimes the defect that defeated the title would be traced to some early stage in the proceedings, and would be seen to have been of such a nature that it might easily have been obviated had attention been called to it in time. The legislature had at first thought to increase the disposition to bid for tax lands by providing that the tax deed should of itself be proof of good title, leaving the party contesting it to show defects, if he could do so. Afterwards it had gone further, and provided, in substance, that mere irregularities in the proceedings should not defeat them. But, where defects existed, they were very apt to be fatal in their nature, and as the proceedings are or should be in writing, it was commonly easy to point them out. It therefore came to be very generally understood that tax titles were worthless; and land-owners sometimes deliberately allowed their taxes to remain unpaid, on a calculation that it was cheaper to litigate and defeat them than it was to pay them. The uncertainty attending tax titles did not, however, discourage people from dealing in them. On the contrary, it is well known that certain persons made it their business to attend and bid at tax sales, and that they made enormous profits out of them. The number was small in any particular county,--perhaps a single bidder or two only,-- but they had their own way at the sales, and took the whole, or as many parcels as they saw fit to select. It was a matter of course that there would be no competition in bidding, so long as no reliance was placed in the titles. Therefore, if by any chance a poor man's tax remained unpaid, and the land went to a sale, the whole was sure to be sold, though, perhaps, a tenth part of it would have paid the tax, if taken at a fair valuation. Much less than a tenth part ought to pay it in many cases. The speculator who bought it calculated upon the inability or unwillingness of the owner to incur the expense and risks of a contest, with all presumptions of law against him, and he expected to succeed in extorting a compromise on his own terms. And the less able was the owner to protect himself, by reason of poverty, or immaturity, or other disability, the more certain was the speculator to make him the victim of extortionate demands.
At the commencement of the legislative session of 1881 the governor called the attention of the legislature to some of the difficulties which have been mentioned, and informed that body that the state then held nominal title to tax lands to the amount of more than $3,000,000, upon which taxes were constantly accumulating and remaining unpaid. That portion of these taxes which were local levies, constituting the major part of the whole, the state was required under existing laws to pay over to the localities, and thus the effect was that the state was regularly levying and collecting taxes from its people to make good to the municipalities the taxes which they failed to collect.
The governor made some suggestions by way of partial remedy for this anomolous condition of things. Having done this, he proceeded to say that to revise the tax laws, and bring all of their provisions in harmony, and make them easy of execution, more time would be required and more labor necessary than could be given or bestowed during the ordinary session of the legislature, even though some of the members should abstain from other business for the purpose; and he therefore recommended "that provision be made for the appointment of a commission large enough to cover a diversity of talent and experience, into whose hands the work of revision shall be committed." This commission, he thought, should not be required to report before the next session, giving ample time for examination, and for the deliberation and discussion essential for perfect work.
The legislature concurred in this recommendation of the governor, and an act was passed which authorized the governor, by and with the advice and consent of the senate, to appoint a commission, consisting of five proper and discreet persons, whose duty it should be to prepare a suitable bill for the assessment, levy, and collection of taxes, and to report the same to the governor on the completion thereof. The commissioners were required forthwith, after their appointment, to meet at the capital, and to proceed with all reasonable dispatch to prepare and complete the bill, and, upon the same being reported to the governor, he was required to give it general publication throughout the state, and to report the same to the legislature if in session, and if not, then at the next general or special session. The act further provided that, after the submission of the bill to the legislature, the members of the commission should be entitled to seats upon the floor of the senate and house of representatives for the purpose of explaining the provisions of the said bill, and for that purpose it should be the duty of the said commission to remain in attendance during the session of the legislature until the bill was disposed of, and that no amendment should be made to said bill in either house until after the same should have been proposed and submitted to the commission for at least 24 hours, or until they should have an opportunity to report to the house in which the amendment had originated their views in relation thereto. Pub. Acts 1881, p. 146.
In compliance with this act the governor proceeded to appoint a commission, three of whose members were prominent and able lawyers, a fourth had had large experience in business, and also in important official positions in the state government, and the fifth was an extensive and well-known farmer. It will probably be conceded that the choice of commissioners was admissible, and ought to have resulted in the preparation of an acceptable and safe tax system. The commissioners immediately proceeded in the discharge of their duties, and prepared a bill, which was given general publication through the state by the governor, as the act providing for the commission had required, and abundant opportunity was thus given for criticism, and the pointing out of errors and defects. The governor then convened the legislature in special session to consider the bill, and the members had the advantage of being able to consider it at their leisure, without having their attention drawn away by the pressure for legislation which commonly attends the regular session. When the bill was before the legislature the members of the commission had seats in the two houses, as was contemplated by the act under which they were appointed, and all proposed changes in the bill were referred to them by the houses respectively, and by them referred back with their views. The members of the commission were also permitted to be heard in open sessions. The legislature contained at the time considerable legal ability, and it would hardly be supposed that any fatal defect in the system could escape notice or fail to be pointed out. Especially any conflict between the proposed law and the constitution it would seem must certainly be discovered, either by the lawyers of the commission or those in the legislature, if not by other members.
The result of legislative deliberations was the passage of the bill proposed, with slight alterations. As passed, it is entitled "An act to provide for the assessment of property, and the levy and collection of taxes thereon," and it appears in Laws 1882, p. 7, and How.St. p. 1265.
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