State v. Locke (vill. of Springer

• Decision Date: 13 October 1923
• Docket Number: No. 2744.,2744.
• Citation: 29 N.M. 148,219 P. 790
• Parties: STATEv.LOCKE (VILLAGE OF SPRINGER, INTERVENER).
• Court: New Mexico Supreme Court

29 N.M. 148

219 P. 790

STATE

v.LOCKE (VILLAGE OF SPRINGER, INTERVENER).

No. 2744.

Supreme Court of New Mexico.

Oct. 13, 1923.Rehearing Denied Nov. 6, 1923.

Syllabus by the Court.

Property which is acquired by the state in its sovereign capacity is thereupon absolved and freed of a further liability for the taxes previously assessed against it, and a subsequent sale thereof for such taxes is void.

By creating the trustees of the New Mexico Reform School as an involuntary corporation, and giving to it the power to sue and be sued, the state is not bound nor precluded by the judgment rendered in a suit against such corporation to which the state was not a party.

Appeal from District Court, Colfax County; Leib, Judge.

Suit by the State against Seon Locke, in which the Village of Springer intervened. From a judgment for the State, defendant Locke appeals. Affirmed.

Property acquired by the state in its sovereign capacity is thereupon absolved and freed of a further liability for taxes previously assessed against it in view of Const. art. 8, § 7, and a subsequent sale thereof for such taxes is void.

For convenience, the appellee, state of New Mexico, will be referred to throughout as the state, the appellant, Seon Locke, as the defendant, and the appellee, village of Springer, as the intervener.

This suit was instituted by the state to restrain and enjoin the defendant from taking possession of certain premises described as lot 12 in block 13, in the village of Springer; to further restrain him from collecting a certain judgment in the sum of $75 and costs of suit, rendered and incurred in the case of Seon Locke v. The Trustees of the New Mexico Reform School, and to cancel a tax deed purporting to convey said lot to the defendant. The state charged in its complaint that on July 1, 1910, the Mills Ranch Resort Company, a corporation, owned such lot; that it conveyed the same to the plaintiff by warranty deed with full covenants; that such deed was dated July 1, 1910, and duly recorded on August 30, 1910, and that ever since the execution of such deed it has owned the premises in fee simple; that the only pretended right of possession which the defendant ever had to such premises was derived from a tax deed which was issued to him under date of June 1, 1914, which purported to convey the same for nonpayment of the taxes due for the year 1909; that such sale was made long after the state acquired and became the owner of the premises, and that, upon it becoming the property of the state, the unpaid taxes thereon became ipso facto extinguished, and the subsequent sale was therefore void. It was further charged that on February 3, 1915, the defendant instituted a suit in ejectment in the district court of Colfax county against the trustees of the reform school, wherein he sought to recover from said defendant the possession of the premises involved in this suit; that the defendant there interposed a plea in abatement, in which it contended that the suit was in fact one against the state, because of the fact that such reform school was a mere subdivision and creature of the state, created by it for the purpose of confining, instructing, and reforming its juvenile delinquents; that all of its property, including that in controversy, belonged to the state, and that the state could not be sued without its consent being first obtained; that a demurrer to such plea in abatement was sustained, whereupon the defendant declined to further plead, and judgment was rendered against said trustees for the possession of the premises in question, together with the sum of $75 and all costs of suit; that an appeal was taken from such judgment to this court, and that we affirmed the action of the lower court. The state further averred in its complaint that it was not a party to that case, and was not bound by the judgment rendered therein; that the said reform school being a mere subdivision of the state, it would be compelled to pay the judgment rendered in the former suit unless the defendant was restrained from taking steps to collect the same, and that, unless he was further restrained from taking possession of the premises, it would be deprived of their use and benefit. Copies of the plea in abatement and judgment in such former suit, together with copies of the tax deed to the defendant, and the deed from the Mills Ranch Resort Company, were attached to the complaint. The state prayed that the tax deed be canceled; that the defendant be restrained from taking any action to collect the judgment and costs of the former case, and that he be further restrained from taking possession of such premises.

The village of Springer intervened in the cause, setting forth that, after the suit was instituted and on June 19, 1919, the state, through its Governor, conveyed the premises in question to the said village in accordance with the provisions of chapter 103, Laws 1919, and that it thereby became and ever since has been the owner of the same. It further pleaded, in practically the same language, the facts pleaded by the plaintiff, which we have previously stated, and prayed that it be adjudged to be the owner of said premises; that its title thereto be quieted; and that the tax deed referred to be canceled.

The defendant answered both the complaint and the intervention by alleging that the property was not conveyed to the state, but was in fact conveyed to the trustees of the reform school; that the deed, which upon its face ran to the state, specially provided that it was “For the New Mexico Reform School, party of the second part”; that said reform school is a corporation existing under the laws of this state, for the purpose of caring for its juvenile delinquents; that said property was used solely for the purpose of conducting said school until the state attempted to convey it to the village of Springer; that said deed was taken in the name of the state of New Mexico, by reason of the mistaken belief of the members of the board of trustees of the reform school that it must be so taken; that the funds with which it was purchased belonged to said school, and that it was never intended that such property should ever be used for any other purpose. The suit instituted by Seon Locke against the trustees of the reform school, hereinabove referred to, was pleaded at length with the contention that it is binding upon the state, as well as the intervener, who holds under a deed from the state, because the judgment there rendered constituted res adjudicata of the matters now in controversy. He disclaimed any intention or purpose to collect the judgment and costs in such former suit.

To this answer the plaintiff and intervener filed a lengthy pleading denominated a motion to strike, which is in effect a demurrer which went to the life of the answer, and which was sustained. The defendant declined to plead further, and a decree was rendered in favor of the intervener as prayed for. The defendant seasonably perfected this appeal.

L. S. Wilson, of Raton, for appellant.

W. R. Holly, of Springer, for appellees.

BRATTON, J. (after stating the facts as above).

The validity of the tax deed presents the first question for our consideration. It is to be remembered that the taxes for which the premises were sold were levied for the year 1909; that the premises were acquired by the state during the year 1910, and that afterwards and on June 1, 1914, the tax deed was issued, which purported to convey the lot in question to the defendant. So that the narrow question is whether or not the acquisition of property by the state frees and relieves it of an existing liability for taxes then levied, due, and unpaid. Section 7 of article 8 of the Constitution, provides that all property of the state, as well as many other kinds and classes therein enumerated, shall be exempted from taxation. It is in this language:

“The property of the United States, the state and all counties, towns, cities and school districts, and other municipal corporations, public libraries, community ditches and all laterals thereof, all church property, all property used for educational or charitable purposes, all cemeteries not used or held for private or corporate profit and all bonds of the state of New Mexico, and of the counties, municipalities and districts thereof shall be exempt from taxation.”

All exemptions granted from taxation proceed upon the theory of public policy, but the public policy involved is not always the same. For instance, the exemption granted by the above-quoted constitutional provision to church property, public libraries, educational and charitable institutions, and cemeteries not used or held for private or corporate profit, proceeds upon the theory of the public good accomplished by them and of the peculiar benefits derived by the public in general from their conduct. It is an act of grace upon the part of the state, which emanates from such considerations. The exemption granted to the property of the United States is perhaps compulsory; that to the state, all counties, towns, cities and school districts arises from public policy, which repudiates, as being utterly futile, the theory of the state taxing its own property in order to produce the funds with which to operate its own affairs. To tax it would merely require and render it necessary to levy new taxes to meet the demand of those already laid; that the public would thus be taxing itself to produce the money with which to pay to itself the taxes previously assessed, thereby benefiting no one except the officers employed to collect and disburse such revenues, whose compensation would merely serve to increase the burden of this useless and idle ceremony. The object of taxing property is to produce the revenues with which to conduct the business of the state; it is entirely inconsistent with our theory of government for the property of the state to be taxed, or sold for taxes, in...