Wells Cnty. v. McHenry

• Court: United States State Supreme Court of North Dakota
• Writing for the Court: CORLISS
• Citation: 7 N.D. 246,74 N.W. 241
• Decision Date: 31 January 1898
• Parties: WELLS COUNTY v. McHENRY et al.

7 N.D. 246
74 N.W. 241

WELLS COUNTY
v.
McHENRY et al.

Supreme Court of North Dakota.

Jan. 31, 1898.

Syllabus by the Court.

[74 N.W. 241]

1. The decision of this court in Jackson v. La Moure Co., 46 N. W. 449, 1 N. D. 238, and Grandin v. La Bar, 57 N. W. 241, 3 N. D. 446, followed on the question of the taxability of indemnity lands of the Northern Pacific Railroad Company before the selection thereof has been approved by the secretary of the interior. Before that time such lands are not taxable.

2. Place lands are taxable after they have been surveyed in the field, although the plat of survey has not yet been filed in the local land office; the survey made being thereafter approved as made, and the plat thereof being duly filed in such office.

3. In a proceeding to obtain a tax judgment under chapter 67 of the Laws of 1897, the failure of the county board of equalization to meet at all is not fatal to the tax, for the reason that the act gives the taxpayer a full hearing, in the very proceeding to enforce the tax, as to the fairness of the assessment and the justice of the tax, and confers upon the court the power to reduce the tax if, on such hearing, it appears that the land has been partially, unfairly, or unequally assessed.

4. So far as matters of form are concerned, that act is a curative law in all cases in which the defects in the tax proceeding have not prejudiced the taxpayer.

5. When, however, there is no assessment or levy, no tax judgment can be rendered. The act does not vest in the courts the power to assess property or levy taxes, but merely provides the machinery for enforcing and sustaining taxes.

6. The taxes for 1890, having been assessed

[74 N.W. 242]

by percentages instead of in specific amounts, as required by the act of 1890, are void, and no tax judgments thereon can be rendered in this proceeding. Bartholomew, J., dissenting.

7. It will not defeat a tax that one of the items of levy of taxes for general county purposes was stated to be “miscellaneous expenses.”

8. A tax lien on real estate being declared to be perpetual, no lapse of time will bar a remedy to enforce such lien against the land. It follows that no limitation statute can be invoked as a defense to a proceeding, under the law of 1897, to foreclose a tax lien.

9. Certain questions decided relating to penalties and interest on taxes levied prior to the act of 1890, and also on taxes levied subsequently to that act, but prior to the time when the Revised Codes took effect.

10. Following the decision of the federal supreme court in McHenry v. Alford (decided Jan. 3, 1898, and not yet officially reported) 18 Sup. Ct. 242,held, that the taxes against the land grant of the Northern Pacific Railroad Company, assessed in 1887 and 1888, are illegal, and hence that no tax judgments therefor can be rendered.

Proceeding by Wells county against Edwin H. McHenry and Frank G. Bigelow, as receivers of the Northern Pacific Railroad Company, to enforce payment of taxes. A judgment was rendered for plaintiff. Certain questions are certified here by the trial court. Judgment modified.

J. E. Robinson and J. J. Youngblood, for plaintiff. Ball, Watson & Maclay, James B. Kerr, and J. B. McNamee, for defendants.

CORLISS, C. J.

The record in this proceeding is certified to us by the district court without an appeal, under the provisions of section 10, c. 67, Laws 1897. The proper steps having been taken under this statute to obtain tax judgments against lands owned by the Northern Pacific Railroad Company, the defendants, who are receivers of such company, filed their answers, setting up various defenses, which will be more specifically referred to as the points certified to us for decision are severally discussed. Some of the lands are indemnity lands. They were selected by the company, in manner and form as prescribed by the secretary of the interior, prior to the levy of the taxes in question. But it appears that the selection was not approved by the secretary of the interior until May 25, 1896. While the facts of this case are different from the facts in Jackson v. La Moure Co., 1 N. D. 238, 46 N. W. 449, and Grandin v. La Bar, 3 N. D. 446, 57 N. W. 241, in that the selection has, in the case at bar, finally been approved, yet the principle of those cases must govern this. The groundwork of those decisions was that an approval of the secretary of the interior was necessary to vest in the company title of any kind, either legal or equitable. If such approval is the act whch transfers the title, it is evident that it is immaterial whether the approval be absolutely refused or withheld or subsequently given. In all cases, whatever action the secretary of the interior takes, the whole title to the property, legal and equitable, remains in the government until he has passed upon the various questions which must be settled before it can be known whether such selection should be assented to by the government or modified or wholly disapproved. When we construed the words, “under the direction of the secretary of the interior,” in the act containing the grant of the Northern Pacific Railroad Company, as equivalent to the language used in the Price County Case, 133 U. S. 496, 10 Sup. Ct. 341, we took ground which made it necessary for us to hold, under the ruling of the federal supreme court in that case, that the Northern Pacific Railroad Company is, as to indemnity lands selected by it, a stranger to the title, and has no taxable interest therein until such selection is approved. The fact that the secretary of the interior has approved the selection, made in 1886, of the land in this case taxed as indemnity land, does not give the company, as of the date of such selection, any greater right therein than it would have had if the approval had been withheld. Unlike place lands, the title to indemnity lands does not vest in the company as of the date of the act of congress containing the grant, but only from the time of the selection thereof; and until the selection is approved there is no selection in fact, but only preliminary steps, which may or may not result in a selection, according to the subsequent action which the proper representative of the government may take in the matter of such selection. This is the explicit declaration of the federal supreme court in the Price County Case, and, so long as the opinion in that case stands unmodified, we consider it our duty to hold that until approval no title whatever to indemnity lands vests in the Northern Pacific Railroad Company. In the Price County Case the court said that, “until the selections were approved, there were no selections in fact, only preliminary proceedings taken for that purpose, and the indemnity lands remained unaffected in their title.” It follows that we must answer in the negative the following question certified to us by the district court: “Should not judgment be given against indemnity lands for all taxes charged against the same, with interest and penalty as provided by law?”

It is urged that some of the lands within the place limits were not surveyed until after the taxes for the year 1892 had been levied, and that, therefore, such taxes are illegal, so far as they affect such lands. The basis of this claim is the fact that while the survey in the field antidated the assessing and levying of the taxes, yet the plat of the survey was not filed in the land office until after such levy had been made. Counsel for the receivers cite in this connection the following cases: U. S. v. Curtner, 38 Fed. 1;Frasher v. O'Connor, 115 U. S. 102, 5 Sup. Ct. 1141;McCreery v. Haskell, 119 U. S. 327, 7 Sup. Ct. 176;Barnard v. Ashley, 18 How. 43; and also the ruling of Secretary Schurtz in the case of In re Foster, 5 Copp, Landowner, 5. They insist

[74 N.W. 243]

that these decisions establish the rule that a survey is not complete until after the plat is filed in the proper office. As we regard the matter, these cases have no bearing on the point now under discussion. It is undisputed that the survey as made in the field was the survey which was in fact approved, and that the plat which was subsequently filed was in fact the plat of such survey. The lands being within the place limits, the grant, as soon as it attached on the filing of the plat (assuming that it did not attach before), related back to the date of the act containing the grant to the Northern Pacific Railroad Company. The grant as to place lands is a grant in præsenti, and when it attaches it becomes a grant of the land from the very day the act took effect. See Jackson v. La Moure Co., 1 N. D. 238, 46 N. W. 449, and cases cited. It therefore appears in this case that the company was the owner of the land when it was assessed and when the tax was levied. Such land having been at that time surveyed in the field, the assessor could value it, for its boundaries were then established just as they now exist and ever since have existed.

But it is insisted that this land was not taxable because the survey fees had not been paid. In this connection counsel for the receivers cite the Rockne Case, 115 U. S. 600, 6 Sup. Ct. 201. The act of congress which modified the rule laid down in that case was qualified by the proviso that it should not apply to unsurveyed lands. If these lands were at the time they were assessed unsurveyed, within the meaning of that statute, it is clear that they could not be taxed. Railroad Co. v. McGinnis, 4 N. D. 494, 61 N. W. 1032. The cases cited throw no light upon the question as to the meaning of the word “unsurveyed” as used in the act of 1886. That statute had for its object the abrogation of an unjust rule that the railroad company could, under the guise of protecting the lien of the government (and to protect such lien no such ruling was necessary), interpose as a defense to state taxation its own failure to discharge its obligation to the federal government. The extraordinary spectacle was presented...