Opinion
Argued December 5, 1906
Decided January 15, 1907
P.M. French for appellant. W.W. Webb, Corporation Counsel ( B.B. Cunningham of counsel), for respondent.
This action is brought to foreclose the equity of redemption of defendant railway company in a certain lot of land sold by plaintiff, the City of Rochester, on a tax sale by the city treasurer, the municipality having bid in the property.
In the year 1897 a tax for general city purposes, amounting to $2.78, was assessed upon the property in question. This appeal involves the construction of certain provisions of the old charter of the city of Rochester read in connection with the so-called curative statute relating to taxes in said city. (Laws of 1903, Chap. 522.)
The complaint sets forth in detail compliance with the statutory requirements permitting a foreclosure of the equity of redemption remaining in the defendant after the sale in the proceedings to collect the tax of 1897. The defendant admits the regularity of the proceedings and the resulting judgment so far as the tax of 1897 is concerned.
The question presented by this appeal arises over the following allegation of the complaint: "That in addition to the tax for which the said premises were sold to the plaintiff, there are now due to the plaintiff on the said premises taxes as follows: General city tax, 1902, $39.50; 1901, $40.38; 1900, $115.78; 1899, $108.70; 1898, $2.89; 1896, $2.89; balance on Thrush street asphalt assessment, $239.64; together with interest thereon as provided by law."
It will be observed that the only allegation respecting these taxes is that "there are now due to the plaintiff on the said premises," the taxes as stated.
No witnesses were sworn at the trial; both parties introduced various papers from the official files; judgment was thereupon entered in the usual form foreclosing the equity of redemption as to tax of 1897, after which it was provided as follows: "That he (the owner) pay to the plaintiff the sum of $731.47, the amount due to the plaintiff upon the tax liens mentioned and described in the complaint herein, take a receipt therefor and file his report of sale; that the treasurer of the City of Rochester apply the money so received upon the city tax in the inverse order of the levy and assessment thereof."
We thus have presented the single question whether the city, in foreclosing the equity of redemption in premises upon which a tax has been regularly assessed and the property duly sold can set forth in the same complaint a general description of certain taxes due the city from the taxpayer whose property was so sold and recover a judgment for the deficiency for the aggregate amount of said taxes, with interest.
It is unnecessary to examine in detail the provisions of the old charter, which must be observed in order to permit, ultimately, a sale where the city acquires title and afterwards forecloses the equity of redemption. It is neither alleged nor argued in respect to the taxes represented in the deficiency judgment that any steps have been taken to collect the same.
It is urged that the curative act of 1903 ( supra), when construed with the provisions of the old charter, authorizes the judgment for the deficiency. Sections 94 to 104 of the old charter contain, substantially, the provisions which result in a sale and foreclosure of the equity of redemption. Sections 94 to 99, both inclusive, contain the provisions for the sale of the property, which need not be examined at this time. Under sections 100 and 101 the owner or claimant of the premises sold is allowed two years following the sale to redeem the same within thirty days after due notice served. Section 104 provides, in substance, that if the premises are redeemed within the time specified, a certificate of the fact shall be filed releasing the same. If, however, more than thirty days elapse and the premises have not been redeemed, the mayor of the city is required to execute a certificate of the fact of the sale having been made, and the lands struck off to the city, and that the same have not been redeemed, which certificate shall be acknowledged as deeds to be entitled to be recorded, and shall be recorded in the Monroe county clerk's office. The city thereupon acquires an absolute title to the premises in fee. At any time after said certificate is executed, the equity of redemption of all persons having any lien or interest in the premises may be foreclosed by an action to be brought by the city in the Supreme Court, County Court of Monroe county, or the Municipal Court of the city of Rochester, and the proceedings to be had are to be conducted as nearly as may be as on the foreclosure of real estate mortgages, and judgment of strict foreclosure or foreclosure and sale may be had therein as the court may direct.
It is clear that there are no provisions in this scheme of sale and redemption of the property which authorizes a judgment for the deficiency for uncollected taxes concerning which no steps have been taken under the above provisions of the charter.
It is urged, however, that the provisions of the curative act ( supra) permit such a recovery. Section three of said act provides as follows: "All taxes heretofore spread upon the assessment rolls of the various wards in the city of Rochester, may be collected by the corporation counsel, either by action, or by supplementary proceedings, or by foreclosure of tax liens, without regard to the date when the said taxes were so spread, and the Statute of Limitations cannot be interposed as a defense thereto. The remedies herein provided shall be in addition to the other methods provided in the charter of the city of Rochester for the collection of taxes in the said city of Rochester, and not dependent upon them, or any of them. No certificate of the mayor of the said city of Rochester, made by said mayor under section 104 of the charter of said city, of failure to redeem lands sold for taxes, now or hereafter recorded in the office of the county clerk of Monroe county, shall be discharged until all city taxes which are a lien upon the premises described in said certificate, shall have been paid. Notice to redeem from sale for taxes, may be served at any time after the expiration of two years from the date of said sale. Upon the foreclosure of tax liens in actions brought in the Supreme and County Courts, all taxes due the city of Rochester may be included in the action of foreclosure and be satisfied from the proceeds of sale of the premises. Where several lots or parcels of land are owned by the same person or persons, distinct tax liens upon the separate lots and parcels of land so owned may, at the option of the city of Rochester, be foreclosed in one action, and actions now pending may be consolidated, in the discretion of the court, upon such facts being shown."
The curative act was construed by this court in City of Rochester v. Fourteenth Ward Co-op. B.L. Association ( 183 N.Y. 23). The object of that action was to foreclose a tax lien upon lands in the city of Rochester pursuant to the provisions of the charter and certain special acts relating to that city. In that case there had been a failure to serve a notice to redeem upon the owner. It was argued on behalf of the city of Rochester, appellant, that the service of such a notice was unnecessary in view of the provisions of the curative act. Judge VANN, writing for the court said (p. 29): "It is contended in behalf of the city, although the action was not brought on that theory, that the object of this curative act was not only to correct all irregularities and omissions in the assessment of taxes and in the proceedings to collect the same, but to provide new remedies for the collection of taxes wholly independent of the methods provided by the charter. It is claimed that neither a sale by the city treasurer need be made, nor any notice to redeem given, in order to foreclose a tax lien. It may be that the statute admits of this construction, but before we conclude that the Legislature intended to provide such a harsh and oppressive remedy we should study the act with diligence to see whether another construction, less severe upon the owner and equally effective, is not reasonable and practicable."
The opinion then argues at length this question of construction, and continues (p. 31) as follows: "The learned counsel for the appellant, in order to justify the construction he contends for, relies especially upon the following sentence, which appears in the curative act almost in direct connection with the provision relating to the service of a notice to redeem: `The remedies herein provided shall be in addition to the other methods provided in the charter of the city of Rochester for the collection of taxes in the said city of Rochester, and not dependent upon them, or any of them.' This seems plain when read by itself, but it is not plain when read in connection with the old charter. The remedy of foreclosure was not an additional remedy, because it had already been provided. The foreclosure authorized by the old charter, however, depended upon what had actually been done by the mayor, treasurer and other officers of the city when their acts were effectual to the validity of the tax."
After further discussion the opinion states (p. 32) as follows: "We are also of the opinion that the `foreclosure of tax liens' authorized by the curative act means the liens created by the record of the list of lands sold in the county clerk's office, and not the liens created by the levying of the tax by the common council. When the lien becomes a matter of record in the office which contains a history of all titles in the county it is dignified in the statute by the name of a tax lien, which may be foreclosed in a court of record the same as a mortgage lien when a mortgage is recorded in that office. It is, however, argued that according to the curative act an action at law may be commenced to recover the amount of the taxes as soon as it becomes due, without any sale by the treasurer, and that this remedy is nearly as severe as an action of foreclosure. If this is so, and we are not now required to pass upon the question, it does not follow that the legislature intended to give two drastic remedies, each involving an imposition upon the taxpayer of costs out of all proportion to the amount of the taxes, instead of one. We have reached the conclusions announced not without hesitation, for whatever construction is adopted serious difficulties are encountered. The real meaning of the legislature is not clear, but all doubts as to the construction of a taxing statute are to be resolved in favor of the taxpayer, and we resolve those doubts in this case by affirming the judgment appealed from with costs."
This decision is controlling; indeed, the facts now presented are much less favorable to the city than in the case cited, for it is not alleged in the complaint that any steps had been taken to collect the taxes represented in the deficiency judgment.
We are not required to pass upon other, and possibly difficult questions, presented by the involved provisions of the curative act and now urged upon our attention.
It, therefore, follows that so much of the judgment entered in this action as forecloses the equity of redemption under the sale in proceedings relating to the taxes of 1897, with interest and notice, amounting at the time of the decree to $6.33, and costs, is regular; but the provision in the judgment that the owner pay to the plaintiff the sum of $731.47, the amount due to the plaintiff under the tax liens mentioned and described in the findings, should be reduced to the sum of $6.33, the amount due on the tax sought to be foreclosed, and a deficiency judgment should be awarded only for said sum, together with interest, costs and allowances, and the judgment as so modified is affirmed, without costs to either party in this court.
I dissent and briefly state my reasons therefor. In the case of City of Rochester v. Fourteenth Ward Co-op. B.L. Assn. ( 183 N.Y. 23) the plaintiff wholly failed to sustain any cause of action. In the case now before us it is conceded that the action was properly brought.
The defendant admits the regularity of the proceedings and the resulting judgment so far as the tax of 1897 is concerned. The curative act, chapter 522 of the Laws of 1903 in section 3, provides: "Upon the foreclosure of tax liens in actions brought in the Supreme and County courts, all taxes due the City of Rochester may be included in the action of foreclosure and be satisfied from the proceeds of the sale of the premises."
Under this provision of the statute the taxes subsequent to 1897 were properly set forth in the complaint, that the amount thereof might be determined in the action and paid from the proceeds of sale. If the property had sold for a sufficient amount to pay the taxes due the city of Rochester they could by the express terms of the statute have been satisfied from such proceeds of sale.
The curative act also provides for the collection of all taxes by action and the charter, section 104, chapter 14, Laws of 1880, provides, "That in an action to foreclose a tax lien the same proceedings shall be had as nearly as may be on the foreclosure of mortgages."
Equity, having acquired jurisdiction of the parties and of the subject-matter of the action, should retain it for all purposes, and render judgment in the action for deficiency as in an action to foreclose a mortgage.
The judgment should be affirmed, with costs.
CULLEN, Ch. J., O'BRIEN, HAIGHT, VANN and WILLARD BARTLETT, JJ., concur, with EDWARD T. BARTLETT, J. CHASE, J., reads dissenting opinion.
Judgment accordingly.