McDonald, County Treas. v. Duckworth

DAVISON, J. The plaintiff, R. J. Duckworth, sued the defendants, the county treasurer and board of county commissioners of Jackson county and the city of Altus, to quiet title to three lots in said city and for judgment decreeing that all the ad valorem taxes and special assessments levied against the lots for 1939 and all previous years were cancelled by the 1940 tax resale. Judgment was for plaintiff, and defendants have appealed, appearing herein as plaintiffs in error. The case was tried on the pleadings and a written stipulation of facts. The record does not disclose whether there were any special assessments standing against the property. The stipulation discloses that R. M. Thorp, F. B. Thorp, and S. A. Cook were the owners of the lots at the time .of the 1940 resale and prior thereto. J. A. Carter was the purchaser of the lots at the resale in question. His bid was for a sum less than the actual amount of taxes due thereon. That after Carter acquired title to said lots he conveyed the lots to the former owners, who, in turn, conveyed said property to William E. Neher and Eloise Neher, who in turn conveyed to plaintiff. The parties all agree that the resale proceedings were valid, and that Carter acquired a valid fee-simple title to the property and that in doing so he acted independently of, and without any agreement with the former owners to reconvey, and that the purchase was made in good faith for himself. The plaintiffs in error assert that by reason of the reconveyance to the former owners, and regardless of the good faith of Carter in the purchase thereof, the tax lien was reinstated, and the amount of the original bid should be treated only as á credit on taxes and the lien revived against the property for the balance of the taxes. The sole question to be decided in this case is whether the reconveyance of the property to the former owners, by the bona fide tax deed purchaser, who acted independently of, and without any agreement with, the former owners to reconvey to them, and who was in no manner under obligation to pay the taxes, operated to revive the tax lien against said property. The question is one of first impression with us. Our attention has' not been called to any authorities from any other jurisdiction which deal with the precise question. From an independent research we have been unable to find where the exact question has ever been called to the attention of any court for decision. By analogy, however, plaintiffs in error direct our attention to the fact that this court has long been committed to the rule that where one who is under a moral or legal obligation to pay taxes on land purchases, either directly or indirectly through the agency of another, the land at a tax sale, the purchase is deemed a mode of paying the taxes and of redeeming from the tax sale, and he does not thereby acquire any or strengthen his title. Brooks v. Garner, 20 Okla. 236, 94 P. 694; Grison Oil Corp. v. Lewis, 175 Okla. 597, 54 P. 2d 386. Plaintiff in error further points out that in the case of Burnett v. Cole, 193 Okla. 25, 140 P. 2d 1012, we held that a “person on whom the original duty to pay the taxes rested may not profit by his own neglect even by purchasing from a stranger who has purchased at the tax sale.” In the latter case we were discussing the rights of a cotenant and we pointed out' that “in such cases the equities existing against the original obligor may be cut off while the land is owned by such stranger or other third parties, but when the land is coveyed to the original obligor, the former status is at once restored, or at least the original obligor is estopped to deny it.” *578 These cases were followed in Curry v. Frerichs, 194 Okla. 230, 149 P. 2d 95. It will be noted that all of the above cases deal with the rights of interested third persons to whom the original ob-ligor owed a legal or moral duty, and not with the rights of the governmental body imposing the tax. We have also found an abundance of authority from other jurisdictions dealing with the rights of the original owner who was obligated to pay the tax to purchase from a tax purchaser with the view of eliminating the rights of third parties, such as cotenants, mortgagees, lienholders, and other third parties to whom the original obligor owed a duty to pay or protect. We find that the great weight of authority is to the effect that the cases support the general proposition that the original ob-ligor cannot buy from the bona fide tax purchaser and asserts such title successfully against a third party to whom the original obligor owed an absolute duty to protect. The basis usually for such a rule is that it is the duty of the original obligor to keep the taxes paid and that he cannot be allowed to derive an advantage from his own wrong in ‘permitting them to go unpaid. 134 A.L.R. 289, at page 292. We have held, and are committed to the rule, that the issuance of a resale tax deed shall effect the cancellation and setting aside of all delinquent taxes, assessments, penalties, and costs previously assessed or existing against real estate sold at resale tax sale, and of all outstanding individual and county tax sale certificates; and shall vest in the grantee an absolute and perfect title in fee simple in the real estate involved. Shnier v. Vahlberg, Co. Treas., 188 Okla. 471, 110 P. 2d 593. We have also held that ad valorem taxes are not debts but are positive acts of the government, are the creatures of statute, and must be enforced in the manner provided by statute. We have also held that the statutes of this state provide a full and comprehensive system by which delinquent taxes on real estate may be collected by sale of such real estate as provided by statute. City of Sapulpa v. Land, 101 Okla. 22, 223 P. 640. Also, see 61 C. J. 1053, par. 1381. Since we are committed to the rule that real estate taxes are not a personal debt of the owner, we are of the opinion that there is a valid recognizable distinction between the case such as here presented and the cases where the obligor owed a personal promise to perform some legal and moral duty to a class such as third party mortgagees, cotenants and lienholders. In the case before us the state is the instrumentality causing the sale. The state is the sole agency authorized to conduct the sale, and the purpose of the sale is to obtain the best possible offer for the collection of its tax lien. The state is interested in conducting a legal sale for the purpose of collecting its tax lien. The state is the statutory machinery used in conducting the sale. When the state has sold the property to a bona fide purchaser in good faith, without collusion, nor as the agent of the person obligated to pay the tax, a deed executed in pursuance thereof transfers a full and complete fee-simple title to the purchaser. Such purchaser may thereafter convey full and complete merchantable title to anyone, including the former owner, except that such title would inure to the benefit of such third parties such as mortgagees, coten-ants, and lienholders, and such other persons to whom the original obligor owed a personal obligation to pay or protect. The state is in a different position. Here the state sold the property to an admittedly bona fide purchaser, and, therefore, being the instigator and promulgator of the sale, is not in a position to complain of the disposition the purchaser might make of the property. The rights of third parties are not here involved. The state has had its day in court. This rule, of course, would not be applicable if collusion was used in the purchase of the tax title by the tax purchaser. *579 From the over-all picture presented in the present case, we feel that we should adopt the rule that the recon-veyance of the property to the former owners, by the bona fide tax deed purchaser who was in no manner under obligation to pay the taxes, does not operate to revive the tax lien against said property in favor of the governmental body imposing the tax and engineering and conducting the sale. Judgment affirmed. GIBSON, C.J., and OSBORN, BAY-LESS, WELCH, and CORN, JJ., concur. HURST, V.C.J., dissents.