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McAnally v. Drainage District

Supreme Court of Missouri
Jun 3, 1930
28 S.W.2d 650 (Mo. 1930)

Opinion

June 3, 1930.

1. DRAINAGE TAXES: Sale to Pay State and County Taxes: Lien of Subsequent Levies. Land sold by the sheriff under a judgment for state and county taxes is subject to the levy of future installments of drainage taxes to pay an existing bonded indebtedness of a drainage district organized under the Circuit Court Drainage District Act, and the purchaser at such sale does not acquire the land free from future annual assessments to pay such installments.

2. ____: ____: ____: Accrual. The lien of a drainage district tax annually accrues and becomes a fixed encumbrance at the time the board of supervisors determines, orders and levies the amount of the annual installment of the total taxes levied for the construction of the drainage works. When an annual installment of the drainage taxes and an annual maintenance tax are levied, the liens attach as of the date of filing the certificate of levy of the estimated total tax in the office of the Recorder of Deeds: but the liens do not accrue until an annual levy is made. And therefore when the land is sold to pay state and county taxes, the owner holds title free of, but subject to, the lien of future installments of the estimated total drainage tax, and the purchaser acquires the title subject to the levy of such future installments.

Appeal from Dunklin Circuit Court. — Hon. W.S.C. Walker, Judge.

AFFIRMED.

John A. McAnally for appellant, pro se.

(1) The lien of the State for general taxes is paramount. Sec. 12757, R.S. 1919; Fleckenstein v. Baxter, 114 Mo. 493; 37 Cyc. 1475, 1476; Verdery v. Dotterer, 69 Ga. 194; Indianapolis v. City Bond Co., 42 Ind. App. 470; Douglass v. Towell, 64 Kan. 533. The lien of the Drainage District is created upon the filing of the certificate in the office of the Recorder of Deeds. Sec. 4399, R.S. 1919. And is subject to the paramount lien of the State. Sec. 4399, R.S. 1919; Missouri Real Estate Loan Co. v. Burri, 202 Mo. App. 242; McCollum v. Uhl, 128 Ind. 304. (2) A sale under the paramount lien, extinguishes all other liens and interests, if the owners thereof were made parties to the action. Cases cited above; Stafford v. Fizer, 82 Mo. 393; Gitchell v. Kreidler, 84 Mo. 472; Paxton v. Fix, 190 S.W. 328.

Dearmont Russell, Amici Curiae.

(1) Under Missouri law, taxes are encumbrances within the meaning of the covenants contained in the words "grant, bargain and sell" in a conveyance of land, from the date of the assessment of the tax. Blossom v. Van Court, 34 Mo. 390; State ex rel. v. Harper, 83 Mo. 670; McLaren v. Sheble, 45 Mo. 130. (2) The lien of the State for taxes takes precedence over and is superior to all other, whether prior or subsequent. Stafford v. Fizer, 82 Mo. 393. (3) The lien of the assessment of benefits for street improvements, and of the judgment thereunder, attaches as of the date of the approval of the ordinance, and constitutes an incumbrance for which the covenantor must answer to the covenantee who discharges such lien, although the amount of such lien was not ascertained until after the making of the covenant, the covenantee in the meantime having had and enjoyed the property. Barnhart v. Hughes, 46 Mo. App. 318. (4) Section 4400, Laws 1927, page 181, affords drainage districts ample opportunity to protect their liens in the event the paramount lien of the State is foreclosed. If the lien of the drainage district does not come into existence until the annual installments are levied and certified, this amendment to the charter of the drainage district was entirely unnecessary. (5) The Legislature of this State has always recognized this principle and has made the lien for drainage taxes always subject to the paramount lien of the State. Mo. Real Estate Loan Co. v. Burri, 202 Mo. App. 244; McCollum v. Uhl, 128 Ind. 308. The drainage law under which the respondents are operating, as well as the "County Court" law, were copied largely from the drainage laws of Indiana, and the decision of the courts of that state should have great weight. (6) A sale of land for general taxes cuts off all earlier liens for unpaid special assessments. Bennett v. City and County of Denver, 197 P. 768; Wilson v. Korte, 157 P. 47; McMillan v. Tacoma, 67 P. 68; Keene v. Seattle, 71 P. 769; Ballard v. Way, 74 P. 1067; Penn Company v. Tacoma, 79 P. 306; Black on Tax Titles (2 Ed.) 420. When the State forecloses its lien for general taxes and sells the property to a private individual, it initiates and creates a new title to the property, which the private individual takes free and clear of any kind or character of prior liens. Maryland Realty Co. v. Tacoma, 209 P. 1; Collins v. City of Spokane, 212 P. 150. (7) Liens for special assessments against lots sold by the state for general taxes cannot be restored nor lots reassessed, but purchasers take them free of such assessments. Lovelace v. City of Chehalis, 233 P. 301. (8) If Section 4399 means anything at all, it creates a lien for all taxes which Section 4394 requires the board of supervisors of drainage districts to levy, without any unnecessary delay, as soon as the list of lands and other property, with the assessed benefits and the decree and judgment of court, have been filed in the office of the County Recorder as provided in Section 4392. Section 4399 is the only section which creates a lien and is evidently the lien referred to in Section 4400-a, Laws 1927, page 181. (9) Liens for special assessments must be created by a statute. Marsh v. Byrd, 22 F. 180; Fisher v. Brower, 159 Ind. 139; State v. Bellin, 79 Minn. 134; Philadelphia v. Anderson, 142 Pa. 357. (10) The laws under which special liens exist must be strictly construed. 37 C.J. 309; Salem v. Smith, 22 Wn. 397; Jeffry Company v. Anderson, 66 Iowa 718. (11) Section 4395, which provides for the levy of the amount of the annual installment of the total taxes levied under Section 4394, does not create or attempt to create any lien. The purpose and only purpose of this section is to provide a method whereby the lien created by Section 4395 may be enforced. The certificate provided for in that section, which is attached to the drainage tax book delivered simultaneously, constitutes the warrant and authority of the collector for making demand and collecting the taxes therein set forth, just as a delinquent back-tax book is the warrant or authority for a collector to institute suits for the recovery of delinquent taxes. Neither has anything to do with the lien which is already in existence by force of other statutes.

Ward Reeves and Oliver Oliver for respondents.

(1) The district's lien for taxes is created by the statute. It provides for the levy of what is called "the total tax;" also the levy, certification and collection of the "annual installments" thereof. It also provides for the levy and collection of a maintenance tax. The last General Assembly expressly provided that notwithstanding land was sold for state and county taxes it shall remain subject to subsequent drainage and levee taxes. Sec. 4394, R.S. 1919, providing for levy of estimated total tax; Sec. 4399, R.S. 1919, providing for filing of certificate of total tax in Recorder's office; Sec. 4395, R.S. 1919, providing for levy of annual installment of total tax; Sec. 4418, R.S. 1919, providing for payment of bonds and interest and limitations as to use of money so collected; Sec. 4419, R.S. 1919, providing for levy of maintenance tax; Sec. 4400, R.S. 1919, providing that sale by the district one year shall not destroy the lien of the district for subsequent years; Sec. 2, Laws 1929, p. 180, expressly saving the lien of the district in event of sale by State. (2) The levy of the total tax which is filed in the Recorder's office is not self-enforcing and does not of itself create a lien. It constitutes constructive notice to the landowner of the estimated amount of benefits that, in the opinion of the board, will be required to pay the costs of construction of the works of the district. The Board must "each year thereafter" determine, order and levy such portion of the installment tax as, in their opinion, is required to meet the obligations of the district, in order to constitute it an enforceable lien or bring that portion of the total tax into being. The levy of the total tax is not of itself sufficient to constitute an enforceable lien. It is the levy of each annual installment that constitutes an enforceable lien. Each year's annual levy constitutes a separate enforceable lien. The district's annual levy to collect the subsequent annual installments arising after 1926, being necessarily made after the sale of the land in question in 1926 for state and county taxes, is unaffected by the sale so held. The levy of the annual installment for the year 1935, for example, has not yet been made and is, therefore, not affected. The lien of the district, for all years subsequent to the 1926 annual installment, is in no way impaired. It could not be, for it has not yet come into being. Elsberry Drainage District v. Winkelmeyer, 278 Mo. 268, 212 S.W. 893; Little River Drainage District v. Sheppard, 7 S.W.2d 1013; Sec. 4400, R.S. 1919. (3) This case falls within the provisions of Section 2 of the Act of June 11, 1929 (Laws 1929, p. 178), providing that all lands sold for state and county taxes shall thereafter remain subject to the lien of drainage and levee districts for subsequent drainage and levee taxes. If any doubt previously existed as to the conclusion to be reached in this case, this section removed it. The power of taxation is inherent in the Legislature. It is supreme, being subject only to the limitations imposed by the Constitution. No such limitations are urged against the section. Sec. 1, Art. X, Mo. Constitution; In re Sanford, 236 Mo. 685; Houck v. Little River Drain. Dist., 248 Mo. 373. (4) The defendants' position is supported by the courts of last resort of other states when they were interpreting statutes of similar purpose and intent. Baldwin v. Frisbie, 270 Pac. (Wash.) 1025; City of Tacoma v. Fletcher Realty Co., 272 Pac. (Wash.) 43; Hunt v. City of St. Maries, 260 Pac. (Idaho) 155; Turley v. St. Francis County Road Dist., 287 S.W. (Ark.) 196.


Suit to quiet title. The case was submitted on motions of the parties for judgment on the pleadings. Judgment for the defendants, and plaintiff appealed.

Appellant purchased the land at a sale for state and county taxes for the year 1926. He claims under the sheriff's deed. The land is located in Dunklin County and in both the Little River and Elk Chute Drainage Districts. The Little River District was organized in 1907, and the Elk Chute District in 1922, both as circuit court drainage districts. Benefits were assessed against the land in suit and other lands. The assessments were confirmed by the circuit court. Thereafter, the Little River District levied a total tax of such portion of said benefits as deemed necessary to reclaim the land, plus ten per cent of said total amount for emergencies. The Elk Chute District did likewise. On these assessments of benefits and levy of the total tax, the districts issued bonds to provide funds. At the time of the trial the Little River District had bonds outstanding in the sum of $7,628,000 and the Elk Chute District had bonds outstanding in the sum of $468,500.

The annual levies of the Little River District were paid for the years 1913 to 1923, inclusive, but the annual levies for the years 1924, 1925 and 1926 were delinquent at the time of the trial. At that time the annual levies of said district for the years 1927 and 1928 were also delinquent and amounted to $1790.78, and at said time the total tax as estimated by the supervisors to be collected by annual levies from 1929 to 1944, both inclusive, amounted to $7,528.18. The delinquent taxes for the years 1927 and 1928, plus the estimated future taxes from 1929 to 1944, the maturity date of the bonds, amounts to $9,318.36. Appellant alleges said taxes in this amount constitute a cloud on his title.

Appellant also alleges that the annual levies of the Elk Chute District against the land in question for the years 1927 and 1928, with the total tax as estimated by the supervisors to be collected by annual levies, constitute a cloud on his title.

Since the ruling in Little River Drainage District v. Sheppard, 320 Mo. 341, 7 S.W.2d 1013, respondents concede they lost their lien for delinquent annual installments levied prior to the levy and subsequent sale of the land in question for state and county taxes for the year 1926.

The organization, assessment and levies of the districts are not challenged by appellant, and the regularity of the suit to collect the state and county taxes is not challenged by respondents. And there is no question as to priority of liens.

Appellant contends that the sheriff's deed conveyed the land to him free of the lien for future installments of the total tax.

Respondents state the question for determination as follows: "The sole question then presented is whether or not the sale of the land in question for state and county taxes destroys the lien of the districts for unlevied subsequent (future) installments of the estimated total tax."

The question involves the construction of sections of the statute authorizing the organization of drainage districts by circuit courts. Reference to sections will be understood to mean Revised Statutes 1919.

The financial foundation of the district is provided in Section 4394, which follows:

"After the list of lands, and other property, with the assessed benefits and the decree and judgment of court, have been filed in the office of the county recorder as provided in Section 4392 of this article, then the board of supervisors shall, without any unnecessary delay, levy a tax of such portion of said benefits on all lands, railroad and other property in the district to which benefits have been assessed, as may be found necessary by the board of supervisors to pay the costs of the completion of the proposed works and improvements as shown in said `plan for reclamation' and in carrying out the objects of said district, and plus ten per cent of said total amount for emergencies. The said tax shall be apportioned to and levied on each tract of land or other property in said district in proportion to the benefits assessed and not in excess thereof, and in case bonds are issued as provided herein and hereafter, then the amount of the interest (as estimated by said board of supervisors) which will accrue on such bonds shall be included and added to the said tax, but the interest to accrue on account of the issuing of said bonds shall not be construed as a part of the costs of construction in determining whether or not the expenses and costs of making said improvements are or are not equal to or in excess of the benefits assessed. The secretary of the board of supervisors, as soon as said total tax is levied, shall, at the expense of the district, prepare a list of all taxes levied, in the form of a well bound book, which book shall be indorsed and named `drainage tax record of . . . drainage district . . .' which indorsement shall also be printed or written at the top of each page in said book, and shall be signed and certified by the president and secretary of the board of supervisors, attested by the seal of the district, and the same shall thereafter become a permanent record in the office of said secretary."

In Elsberry Drainage District v. Winkelmeyer, 278 Mo. 268, 212 S.W. 893, we held the levy under this section was not self-enforcing and that it was only "a step necessarily precedent" to the levy and collection of the district taxes.

This levy rests on the engineers' estimate of the cost of reclaiming the land and is only an estimate of the taxes to be collected. If found to be insufficient, it may be increased within the amount assessed as benefits. [Sec. 4418.] It is made before the construction contracts are let, before bonds are issued and is only notice to the owners of land within the district and to all that said lands are subject to taxation for purposes of the district. If the undertaking should collapse before an annual levy, no taxes may be collected.

In determining the question, the above section should be considered with Section 4395, which in part follows:

"The said board of supervisors shall each year thereafter determine, order and levy the amount of the annual installment of the total taxes levied under the preceding section, which shall become due and be collected during said year at the same time that state and county taxes are due and collected, which said annual installment and levy shall be evidenced and certified by the said board not later than September 1st of each year to the collector of revenue of each county in which lands and other property of said district are situated. . . ."

The lien of the State for taxes is established by an assessment of all land for that purpose. [Sec. 12757.] However, said lien does not accrue and become a fixed encumbrance until the amount of the tax is determined by an annual assessment of the land and an annual levy of the tax. Likewise, the lien of a drainage district annually accrues and becomes a fixed encumbrance at the time the board of supervisors "determine, order and levy the amount of the annual installment of the total taxes levied under" Section 4395. The intention of the Legislature could not have been otherwise, for, as argued by respondents, "Can a lien exist until the amount of the charge has been determined? Can a charge be cancelled until it has been created? Can a sale of land in 1926 destroy a tax not to be determined and levied until in 1928? Can anything be destroyed prior to its creation? A landowner cannot pay the annual tax until after it has been determined, ordered and levied and certified to the collector. How can it be contended that it is a lien until the owner of the property charged had an opportunity to discharge the so-called lien?"

Answering this, appellant directs attention to Section 4399, which follows:

"All drainage taxes provided for in this article, together with all penalties for default in payment of the same, all costs in collecting the same, including a reasonable attorney's fee, to be fixed by the court and taxed as costs in the action brought to enforce payment, shall, from date of filing the certificate hereinafter described in the office of the recorder of deeds for the county wherein the lands and properties are situate, until paid, constitute a lien, to which only the lien of the State for general state, county, school and road taxes shall be paramount, upon all the lands and other property against which such taxes shall be levied as is provided in this article. Such lien shall be evidenced by a certificate substantially in the following form, to-wit:" [Then follows the form of the certificate.]

Under this section when an annual installment tax (Sec. 4395) and an annual maintenance tax (Sec. 4419) are levied, the liens attach as of the date of filing the certificate of levy of the estimated total tax (Sec. 4394) in the office of the recorder of deeds. But the lien does not accrue until an annual levy is made. It follows that at the time appellant purchased the land, the owner held title free of, but subject to, the lien of future installments of the estimated total tax. Therefore, the sheriff's deed conveyed the land subject to the future attachment of said liens. In view of this conclusion, it isn't necessary to consider Section 2, Laws 1929, page 180, expressly saving the lien of the district in event of sale for state, county, school and road taxes.

The authorities cited by appellant and the amici curiae have been examined and considered. They rule different facts or construe statutes of other jurisdictions and do not touch the question here presented.

The judgment should be affirmed. It is so ordered. All concur.


Summaries of

McAnally v. Drainage District

Supreme Court of Missouri
Jun 3, 1930
28 S.W.2d 650 (Mo. 1930)
Case details for

McAnally v. Drainage District

Case Details

Full title:JOHN A. McANALLY, Appellant, v. LITTLE RIVER DRAINAGE DISTRICT and ELK…

Court:Supreme Court of Missouri

Date published: Jun 3, 1930

Citations

28 S.W.2d 650 (Mo. 1930)
28 S.W.2d 650

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