Stutsman County, Dak v. Wallace

• Decision Date: 04 January 1892
• Citation: 35 L.Ed. 1018,142 U.S. 293,12 S.Ct. 227
• Parties: STUTSMAN COUNTY, DAK., v. WALLACE et al
• Court: U.S. Supreme Court

142 U.S. 293

12 S.Ct. 227

35 L.Ed. 1018

STUTSMAN COUNTY, DAK., v. WALLACE et al.

January 4, 1892.

Action in a territorial court of Dakota by Charles S. Wallace and James M. Martin, as assignee of Daniel H. Wallace, against Stutsman county, to recover moneys paid as the purchase price of lands sold for taxes. Judgment was rendered for plaintiffs, which was affirmed by the territorial supreme court. Defendant appeals. Reversed.

STATEMENT BY MR. CHIEF JUSTICE FULLER.

Appellees brought an action in the district court for the sixth judicial district of the territory of Dakota, September 28, 1886, to recover from Stutsman county certain moneys which they had paid that county for lands which the treasurer of the county had assumed to sell to them in satisfaction of taxes wrongfully assessed thereon, and which sale was therefore invalid. They also sought to recover the amount of taxes paid by them on the land after the sale, and prayed judgment for the amounts paid, and interest at 30 per cent. per annum thereon from the dates of the payments, respectively.

The allegations of the complaint were denied by the defendant, and the action was tried upon a statement of facts agreed to by the parties, which statement was adopted by the district court as its findings of fact. These findings were, in substance, that the lands in question were part of the original grant by the United States to the Northern Pacific Railroad Company; that no patents had been issued for them; that the company earned the lands after the passage of the act of congress of date July 15, 1870, in regard to the payment of the costs of surveying; that they were surveyed at the expense of the United States government, and no part of the cost and expenses of the survey had at the time of the tax-sale been repaid by the railroad company to the United States; that in the year 1880 the proper officers of the county assessed all the parcels of land mentioned in a schedule attached to the complaint, marked 'A,' and levied certain taxes thereon, to-wit, the territorial, county, general school, and district school taxes, amounting in the aggregate to $5,500, all of which remained unpaid October 1, 1882; that prior to that date the then county treasurer of that county offered the lands for sale for the non-payment of said taxes, and for the collection of the same, and sold them to Charles S. Wallace for sums amounting in the aggregate to $5,221.75, and the treasurer then and there executed and delivered to Wallace the certificate of sale of the lands in the form provided by law to be issued upon the sale of land for non-payment of taxes, and Wallace paid the treasurer said amount; that in 1881 the officers of the county, duly authorized to assess property therein, assessed and levied taxes upon said parcels of land for the territorial, county, and school taxes, and that Wallace, 'in order to protect his tax-lien thereon and equitable title thereto, paid to the defendant's treasurer, as subsequent taxes upon said land, being the taxes so levied for the year 1881,' the amount of $4,699.25, none of which taxes so levied for the year 1881 had theretofore been paid; that in 1882 the officers of the county assessed and levied territorial, county, general school, and district school taxes upon the parcels of land described in the schedule attached to the complaint and marked 'B,' all of which remained unpaid October 1, 1883, and the then treasurer of the county offered the lands for sale for the non-payment of the taxes, and for the collection of the same, and sold them to Wallace for the sum in the aggregate of $6,033, and the treasurer delivered certificates of sale to Wallace, and he paid the said amount.

That in October, 1884, the Northern Pacific Railroad Company brought an action against the treasurer and Wallace, wherein a decree was entered adjudging the tax proceedings in question to be null and void, and enjoining the treasurer from making, and Wallace from receiving, any tax-deed to the property named in Schedule A; and in September, 1885, a like action was brought, which resulted in a similar decree as to the property named in Schedule B.

It was also found that James M. Martin had an interest in the tax-receipts under an assignment from Wallace, and that prior to the commencement of this action plaintiffs tendered to the board of county commissioners of Stutsman county the tax-certificates in question, 'and offered to surrender said certificates to said county upon the payment of the amount so paid by said plaintiff, Charles S. Wallace, for the purchase of said lands at said sales, and for the payment of the subsequent taxes thereon as aforesaid, together with the interest thereon at the rate of 30 per cent. per annum from the dates of such payment,' but defendant refused to pay that sum, or any part thereof, and the whole is still unpaid; and that no part of the land has ever been redeemed from the sales, nor from either of them, nor from the subsequent taxes paid as aforesaid.

The court found as conclusions of law that no taxes were due upon the lands at the time of their sale, and that they were sold 'by the mistake and wrongful act of the defendant's treasurer, the then county treasurer of Stutsman county, and that the plaintiffs are entitled to recover from the defendant the amount paid for said lands at said sales, and the amount paid as subsequent taxes thereon, as hereinafter stated, together with thirty per cent. interest thereon, and on the whole amount so paid, from and after the date of such payments, as hereinafter specified, to this date;' and thereupon directed judgment in favor of plaintiffs, and against Stutsman county, for $9,921, with interest from and after October 1, 1882, at the rate of 30 per cent. per annum, and for the amount of $6,033, with interest thereon from and after October 1, 1883, at the rate of 30 per cent. per annum, amounting in the aggregate, both principal and interest, to the sum of $35,800, together with costs and disbursements, and judgment was entered accordingly.

Exceptions were duly taken, and motion for new trial made and overruled. The county thereupon carried the case, on appeal, to the supreme court of the territory, by which the judgment was affirmed, whereupon an appeal was prayed and allowed to this court.

The parts of the revenue laws of the territory of Dakota referred to be counsel are given in the margin.¹

Jon F. Dillon and Harry Hubbard, for appellant.

J. H. Baldwin and W. E. Dodge, for appellees. [Argument of Counsel from pages 302-305 intentionally omitted] Mr. Chief justice FULLER, after stating the facts in the foregoing language, delivered the opinion of the court.

Appellees recovered judgment for the amounts paid, and 30 per cent. per annum interest thereon. Interest at this rate was that which purchasers at tax-sales received upon redemption, and section 78 of chapter 28 of the Political Code of the Territory of Dakota provided that the purchaser who came within its terms should be saved harmless by being paid the principal and interest to which he would have been entitled if the land had been rightfully sold. Unless the recovery was justified under the statute, this judgment must be reversed.

Stutsman county is one of the counties North Dakota, which was admitted into the Union after this cause was docketed in this court. In Tyler v. Cass Co., (N. D.) 48 N. W. Rep. 232, (not yet published in the official reports,) where the state of facts was substantially such as is disclosed by this record, the supreme court of the state decided that no recov- ery could be had by the purchaser at a tax-sale whose title failed, either at common law or under the section in question, which in 1885 had been amended in a point not material here, and become section 1629 of the Compiled Laws of Dakota of 1887.

It is well settled that, upon the construction of the constitution and laws of a state, this court, as a general rule, follows the decisions of her highest court, unless they conflict with or impair the efficacy of some provision of the federal constitution or of a federal statute or a rule of general commercial law. Norton v. Shelby Co., 118 U. S. 425, 439, 6 Sup. Ct. Rep. 1121; Gormley v. Clark, 134 U. S. 338, 348, 10 Sup. Ct. Rep. 554.

Our mandate in this case must be issued to the state supreme court, which will, in its turn, direct the state court succeeding to the district court of the territory to proceed in conformity to our judgment. 25 St. 683.

The parties are citizens of North Dakota. The litigation proceeded upon the recognition and allowance of the exemption of the lands from taxation under the laws of the United States, and no federal questions were involved. Tyler v. Cass Co., supra. The case belongs to the class upon which the local decisions are ordinarily given controlling effect, and the adjudication of the highest tribunal of the state in the case cited should be considered in the light of this rule, though the appeal is from the supreme court of the territory, which reached the opposite conclusion.

The supreme court of the state held that lands which were part of the original grant to the Northern Pacific Railroad Company, and had been surveyed at the expense of the United States, and earned by the company, after the passage of the act of congress of July 15, 1870, but no part of the survey fees had been repaid to the United States, although they had been disposed of by the company and conveyed to third parties, who were in possession, were not in fact taxable; yet that, since land was a subject of taxation in Dakota territory, prima facie they were taxable; that the assessor, being a judicial officer, where property is exempt from taxation by class, and not by specific description, has full jurisdiction, and it is his duty to decide in each instance whether or not a particular piece of property falls within any of the exempted classes, and in this respect the...