TOWN OF OKEENE, OKL. v. Kratz
| Decision Date | 22 April 1942 |
| Docket Number | No. 618 Civil.,618 Civil. |
| Citation | 45 F. Supp. 629 |
| Parties | TOWN OF OKEENE, OKL., ex rel. BURGARD v. KRATZ et al. |
| Court | U.S. District Court — Western District of Oklahoma |
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Clayton Carder, of Hobart, Okl., for plaintiff.
Cohoon & Heiple, of Oklahoma City, Okl., Nelson Crow, Co. Atty., E. Blumhagen, Falkenstine & Fisher, and Clyde E. Robinson, all of Watonga, Okl., and C. W. Wisdom, of Okeene, Okl., for defendants.
The above matter has been submitted to the court upon stipulations and briefs. Such stipulations show that the lots under various causes of action were sold for the street improvement assessments in this district at annual November sales in certain years. It is admitted that the original tax sale notices in the years 1934 to 1938, inclusive, mentioned paving taxes for the current year. Therefore, in accordance with the previous rulings of this court, it being admitted that certain of such annual installments of the paving assessments were properly included in subsequent tax resales to the county, the prayer of the plaintiff for judgment for such annual installments must be denied. Where same have not been properly included in a tax resale, the installments are outstanding, and are properly foreclosed in this action.
As to the various annual installments for the years 1929 to 1933, inclusive, which were alleged to have been sold at original tax sale and later at tax resale, the stipulations are not complete with exhibits showing the tax sale notices given at each such original sale, and the court is compelled to conclude from the stipulations and arguments in the briefs that the notices of the original sales were all defective. These defects were various and include the following: (1) A total failure to mention street improvement assessments or paving taxes; (2) a column giving figures which actually represented installments of special assessments but made no designation of same as such; and (3) a designation of a column in which amounts were listed as paving taxes, but which amounts were not for the annual installments for the year mentioned in the notice. For example, the original tax sale notice for the sale in November, 1930, stated that the lots and tracts were being sold for ad valorem taxes and paving taxes for the year 1929 when actually the amounts of the annual installments of paving taxes listed were those for the year 1930.
If the above conclusions of the court, as drawn from the inadequate record as presented, are not correct, the parties may apply for a trial on the merits and may submit proof to support their contentions and this judgment will be modified accordingly.
The defendants contend that the original tax sales, based upon the defective notices as aforesaid, are nevertheless effective to extinguish the paving lien as to such annual paving installments; that such installments were actually included in original sales; that the wrong year designation is an immaterial defect; that the resale tax deeds were of record more than one year without any action being brought to question their validity; that since such deeds recite the regularity of the notices, they are conclusive of compliance with all legal prerequisites; and that all irregularities are cured by the presumptive evidence statute and the curative statute with relation to such deeds.
As to resale tax deeds generally, and as to the cancellation of ad valorem taxes thereby, the defendants' contentions are well founded. The resale tax deeds are valid, and effectively extinguish the ad valorem tax liens and vest fee title in the purchasers. But such deeds do not extinguish the annual installments of street improvement assessments, because the contractual rights of third parties (the bondholders) are involved. Such rights may be extinguished only by due process of law, that is, by a strict compliance with the statutes. Each particular annual installment of the paving assessment must have been properly included in an original tax sale, and properly included in a subsequent tax resale before its lien is extinguished.
By reason of the defects in the publication notices as aforesaid, due process of law was not had in the attempt to extinguish the lien of the bondholders as to the annual installments of the special assessments involved, and same were not "properly included" in an original tax sale and, therefore, do not come within the rules laid down by the Oklahoma Supreme Court in Prince v. Ypsilanti Savings Bank, 140 Okl. 131, 282 P. 282; Criswell v. Hart, 155 Okl. 159, 8 P.2d 70; McGrath v. Oklahoma City, 156 Okl. 34, 9 P.2d 711. A more detailed discussion of those cases and of the general proposition of the cancellation or extinguishment of annual installments of special assessments by tax sale and tax resale is found in the opinion of this court rendered December 2, 1941, Town of Marshall, Okl., ex rel. Versluis v. P. M. Carey et al., D.C., 42 F.Supp. 630. The prayers of the defendants to quiet their titles against the liens of such annual installments involved in the defective notices aforesaid, therefore, must be denied.
The defendants have also pleaded the statutes of limitations. This question has been decided contrary to their contentions in City of Clinton, Okl., ex rel. Schuetter v. First Nat. Bank in Clinton, Okl., D.C., 39 F.Supp. 909, which expressly referred to the instant case by number.
The defendants also contend that they are entitled to recover their attorney's fees as the prevailing parties in a suit to enforce a lien. This question has been decided contrary to defendants' contentions in Town of Marshall, Okl., ex rel. Versluis v. P. M. Carey et al., supra.
A question is raised which has not been previously before this court. It appears that the lots in certain causes of action were assessed separately as required by law, but, by reason of improvements which cover all of said lots, they were assessed together for ad valorem taxes, and the street improvement installments were lumped together for the purpose of sale, and were sold as one tract for one consideration.
The plaintiff contends that such lumping together changed the method of assessment. The assessment against each lot was made at the time of the creation of the paving district, and has not been changed. The law requires that the lots be sold separately. But the Oklahoma Supreme Court has held that contiguous lots may become a "single tract" for tax purposes and may be sold as such. Board of Com'rs of Tulsa County v. Sutton, 185 Okl. 665, 95 P.2d 648, and Flint v. Board of Com'rs of Tulsa County, 188 Okl. 628, 112 P.2d 157. The mere fact that the installments of the paving assessments were lumped together did not deprive the bondholders nor the property owner of any vested constitutional rights. The latter would have to pay the same amount in order to redeem either separately or together. He was merely precluded from redeeming separate lots and letting the tax sale proceed as to other lots; but when, as in this instance, the improvements covered all of the lots so grouped, it would have been impractical to have redeemed any one lot, or any number of lots less than the entire group. Therefore, his rights were not prejudiced by the lumping together of the said annual installments.
Upon the authority of the above mentioned decisions, there was nothing illegal about lumping together for the purpose of advertising and sale, the lots here involved covered by common improvements and sold as one tract.
The court has not attempted to measure and weigh each particular annual installment in each cause of action, as that would require a great amount of detail, but looks to the parties to make such detailed analysis and prepare a form of judgment consistent with this opinion. Judgment will be in favor of the defendants decreeing that each installment has been extinguished which properly was included in an original tax sale and subsequently in a tax resale, and in favor of the plaintiff foreclosing the lien of all such annual installments which were not so properly included in such sales.
On January 13, 1942, this court rendered an opinion in this cause wherein it was held that by reason of defects in the original tax sale notices for certain years, there had not been due process of law in selling, or attempting to sell, the lots involved for the annual installments of the street improvement assessments for certain years, and that such installments remained outstanding and plaintiff was entitled to foreclosure thereof. The opinion stated: "The court has not attempted to measure and weigh each particular annual installment in each cause of action, as that would require a great amount of detail, but looks to the parties to make such detailed analysis and prepare a form of judgment consistent with this opinion."
It was conceded that the stipulations, upon which the above opinion was rendered, were incomplete and inadequate. The defendants moved for further consideration of the question. Such motion was granted and a formal hearing was had. The defendants presented their evidence, including copies of the newspapers taken from the files of the county treasurer, containing the original November tax sale notices and the 1936 resale notice. A further stipulation was filed and supplemental briefs were submitted.
In the stipulation with certain defendants it is agreed that the annual November sales for the years 1934 to 1938, inclusive, were advertized regularly and certain lots were sold for installments of the paving assessments for such years, and that the proceedings pertaining to the tax resales for 1936 and subsequent years, and the resale tax deeds issued pursuant thereto, are valid. However, it sets out that as to certain lots the 1936, 1937 and 1938 installments have not been paid; that as to certain other lots, the 1937 and 1938 installments have not been paid; that...
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