Gilkey & Anson Co. v. Doolittle

Barnes, J. The certificate holder might very properly have been made a party to the action brought to set aside the taxes on which the defendant’s tax deed is based. Siegel v. Outagamie Co. 26 Wis. 70, 72. Under some circumstances the certificate holder is a necessary party, particularly where the attack is made on the validity of the certificate rather than on the tax on which it was based, or where a substantial part of the relief sought consists in securing a cancellation of the tax certificate. Watkins v. Milwaukee, 52 Wis. 98, 102, 8 N. W. 823; Crites v. Fond du Lac Co. 67 Wis. 236, 30 N. W. 214; Pier v. Oneida Co. 124 Wis. 398, 102 N. W. 912. The former action was not brought primarily to challenge the tax certificates, but to test the validity of a tax. The result, of course, would affect the certificates, but this was only an incident of the action. The county was the real party in interest therein. Pier v. Oneida Co., supra. While the cases recognize that certificate holders have certain rights of which they cannot be deprived without their day in court, they are not particularly favored in the law. [167] A buyer at a tax sale is not a purchaser iu good faith for value. Gould v. Sullivan, 84 Wis. 659, 668, 54 N. W. 1013; Brown v. Cohn, 95 Wis. 90, 69 N. W. 71. And the purchaser of a tax certificate pendente lite is bound by a judgment setting aside the tax on which the certificate was based, although no notice of Us pendens was filed. Brown v. Cohn, supra; Hixon v. Oneida Co. 82 Wis. 515, 530, 52 N. W. 445; T. B. Scott L. Co. v. Oneida Co. 72 Wis. 158, 160, 39 N. W. 343. It is elementary that a tax certificate is void where it is shown that the tax on account of which it was issued was paid before sale. A deed issued on such a certificate is likewise void. While the tax certificate in form conveys an equitable interest in the land, that interest may be wiped out by redemption at any time before a deed issues and is recorded. There is no way in which the certificate holder can prevent the landowner from exercising this right. While we do not speak of redemption as payment of the tax, it necessarily includes the element of payment, and it is the matter of paying the tax with interest and charges to the proper officers that constitutes redemption. The receipt customarily issued furnishes the best evidence of the transaction, but is not the only evidence of it. The law recognizes the fact that illegal assessments may be made, and that where part of a tax is void and part valid the landowner should be compelled to pay the valid part only. The legislature has wisely, we think,. provided that controversies’ involving the validity of taxes might be compromised and settled by enacting sec. 1210^, Stats., which reads as follows : “If it shall appear from any tax roll or tax proceeding that any sum of money is due from any person or is charged against any lands or other property, and such taxes have been returned as delinquent to the county treasurer of the proper county, and such person or the owner of the lands or property so charged with such taxes shall claim such taxes to be illegal [168] for any cause tbe county treasurer, county clerk and district attorney of such county may, if they shall deem that there is reasonable cause to believe such taxes illegal, compromise with such person or owner and receive in lieu of the whole tax so appearing due or charged as aforesaid such part thereof as the said county treasurer, county clerk and district attorney, or a majority of them, shall determine to be equitable and for the best interest of such county.” After a tax has been returned delinquent, the county, as held in the Pier Case (124 Wis. 398, 102 N. W. 912), is the real party in interest in a suit to set aside taxes. The only effect such a suit ordinarily has on the certificate holder is that he will get a higher rate of interest on his investment if the tax is held valid and the owner is obliged to redeem than he would receive if the tax was held void and the county was obliged to cancel the certificate and refund the cost thereof. In practice this difference has not been considered of sufficient moment to warrant certificate holders in contesting suits brought to set aside the taxes on which their certificates were based and in subjecting themselves to costs in the event of an adverse decision. The above statute places the power of compromise with the committee provided for. There is no provision that the certificate holder shall have any voice in the settlement, and it was not so intended. The title to tax certificates once properly indorsed can be transferred by a mere delivery of the certificate; so that it is often difficult if not impossible to locate the holders of them. The parties to this suit had a perfect right to get together and agree on how much of the tax was valid and how much was not, and so long as they acted in good faith the certificate holder could not complain of their so doing. The statute gave him no right to be present at or participate in the settlement. That matter is left with the county officers named and the landowner. The parties having, pursuant to statute, agreed on the amount of the tax that was legally chargeable against plaintiff’s property, and plaint-. [169] iff having paid such sum, it paid its taxes against its lands for the year in question and paid all of them and paid them as directed. This procedure being authorized by law, we see no escape' from 'the conclusion that the payment to the clerk of the court in this instance constituted a redemption just as much as would payment of the full amount of the tax certificate with interest and charges to the county clerk. The taxpayer has done all that the law requires of him and in the manner required. Up to this point everything that was done might properly be done without the presence, knowledge, or consent of the certificate holder. When the amount that should lawfully be paid was lawfully fixed and was paid in the manner provided by law, it seems very clear that this was .a redemption of the land involved from the tax sale. The power of settlement conferred on the county officers mentioned does not cease when the land involved is sold for the tax in .dispute. It may be conceded that so much of the judgment in the former action as in form canceled and annulled the defendant’s tax certificate is not binding or conclusive on him. It is unnecessary for the plaintiff to rely on it. It may, however, rely on the fact of payment and redemption. If there had been no former action, plaintiff could succeed in the present one by showing, for instance, that it had paid the tax before sale, or that it had redeemed the land after sale in the usual way. It might do this without the production of either a tax or redemption receipt and in the absence of any record showing payment, provided it was able to show by other satisfactory evidence that it paid the right amount of money to the proper officer. Gould v. Sullivan, 84 Wis. 659, 54 N. W. 1013. We are presently dealing with a statute designed to meet cases where part of the tax is illegal. There the payment is made in a way different from the ordinary method. The landowner may pay the lawful part of the tax assessed against his property and be relieved from the unlawful part. [170] When payment is made in this class of cases in the manner provided by law, the conclusion seems inevitable that the land is redeemed from the tax sale and the certificate holder can get no title by virtue of his certificate. He is entitled to a return of the money which he paid the county, with interest. Sec. 1184, Stats. This is the measure of his relief. We do not wish to be understood as holding that the decision of the circuit court was not placed on tenable grounds. We prefer, however, to rest our judgment of affirmance on the ground herein stated. By the Gourt. — Judgment affirmed.