81 U.S. 553 - Turner v. Smith

ERROR to the Supreme Court of Virginia; the case being this:

Hannon being owner in fee simple and free from lien of a house and lot in Alexandria, granted out of it by an old-fashioned formal ground-rent deed, with clause of right of re-entry, &c., in 1819, a rent charge of $224 to Moore, with right of distress, re-entry, &c. In 1821 Hannon died insolvent, and the rent not being paid, Moore 'took possession' of the house again, though in what mode or whether with any of the requisites of a common law re-entry did not appear.

In 1825 being still in possession he conveyed the rent charge, describing it in form, to one Irwin, and Irwin in 1854 conveyed it with the lot on which it was charged to R. M. and J. M. Smith; Irwin and Smith, each respectively, being in possession of the house and lot, after they became owners of the rent, as Moore had, himself, been after Hannon's death; and each paying the taxes assessed against the house and lot while he held it.

In May, 1861, on the outbreak of the rebellion, Smith abandoned his residence and went within the rebel lines.

On the 5th of August of that year,1 Congress passed an act laying a 'direct tax of $20,000,000 annually upon the United States,' and apportioning the same in a manner which it set forth, among the several States. The act provided particularly for assessing and collecting of the tax, directing that it should be collected from persons at their dwellings, in the first instance; and if not paid should be obtained by distress and sale of personal property; and if persons could not be found, and there was no personal property, then 'by public sale of so much of the said property as shall be necessary to satisfy the taxes due thereon, together with an addition of 20 per cent.' The act then provided for giving a deed, but did not in any part declare what should be the effect of the sale or deed, or that it should divest liens of any kind.

The act authorized each State to assume, assess, collect, and pay its quota of the tax; and the loyal States did do this. In the rebel States nothing could be done.

On the 7th of June, 1862,2 Congress passed another act, entitled 'An Act for the Collection of Direct Taxes in Insurrectionary Districts,' &c. The act enacted:

'SECTION 1. That when, in any State, . . . by reason of insurrection or rebellion, the civil authority of the government of the United States is obstructed so that the provisions of the act approved August 5th, 1861 [the act last above mentioned], cannot be peaceably executed, the said direct taxes by the said act apportioned among the several States, &c., shall be apportioned and charged in each, upon all the lands or lots of ground situate therein respectively . . . as the said lands or lots of ground were enumerated and valued under the last assessment and valuation thereof, made under the authority of said State . . . previous to the 1st day of January, 1861; and each and every parcel of the said lands, according to the said valuation, is hereby declared to be . . . charged with the payment of so much of the whole tax laid and apportioned by said act upon the State, &c., wherein the same is respectively situate, as shall bear the same direct proportion to the whole amount of the direct tax apportioned to said State, &c., as to value of said parcels of land shall respectively bear to the whole valuation of the real estate in said State, according to the said assessment and valuation made under the authority of the same. And, in addition thereto, a penalty of 50 per cent. of said tax shall be charged thereon.

'SECTION 2. That on or before the 1st day of July next, the President by his proclamation shall declare in what States and parts of States said insurrection exists, and thereupon the said several lots or parcels of land shall become charged respectively with their respective portions of said direct tax, and the same, together with the penalty, shall be a lien thereon without any other or further proceeding whatever.

'SECTION 3. That it shall be lawful for the owner or owners of said lots or parcels of lands within sixty days after the tax commissioners herein named shall have fixed the amount, to pay the tax thus charged, &c.

'SECTION 4. That the title of, in, and to each and every piece or parcel of land upon which said tax has not been paid as above provided, shall thereupon become forfeited to the United States; and upon the sale hereinafter provided for, shall vest in the United States or in the purchasers at such sale, in fee simple, free and discharged from all prior liens, incumbrances, right, title, and claim whatsoever.

'SECTION 5. That the President of the United States, by and with the advice and consent of the Senate, may appoint a board of three tax commissioners, &c.

'SECTION 7. That the said board of commissioners shall be required, in case the taxes charged on the said lots shall not be paid, . . . to cause the same to be advertised for sale; and at the time and place of sale to cause the same to be severally sold to the highest bidder for a sum not less than the taxes, penalty, and costs, and 10 per cent. per annum interest on said tax, pursuant to said notice; [and the said commissioners shall at said sale strike off the same severally to the United States, at that sum, unless some person shall bid the same or a larger sum,] who shall upon paying the purchase-money . . . be entitled to receive from such commissioners their certificate of sale; which said certificate shall be received in all courts and places as prim a facie evidence of the regularity and validity of such sale, and of the title of said purchaser under the same: Provided, that the owner of said lots of ground, or any loyal person of the United States having any valid lien upon or interest in the same, may at any time within sixty days after said sale appear before the said board of tax commissioners . . . and . . . upon paying the amount of said tax and penalty, with interest, &c., together with the expenses of sale and subsequent proceedings, may redeem said lots of land from said sale.'

On the 6th of February, 1863,3 Congress passed a short 'act to amend' this act above so largely quoted, and entitled 'An Act for the Collection of Direct Taxes in Insurrectionary Districts,' &c. The new act says that the old act shall be amended so as to read as follows in section 7:

'That the said board of commissioners shall be required, . . . at the time and place of sale, to cause the same to be severally sold to the highest bidder for a sum not less than the taxes, penalty, and costs, and 10 per centum per annum interest on said tax, pursuant to notice, [in all cases where the owner of said lots or parcels of ground shall not, on or before the day of sale, appear in person before the board of commissioners and pay the amount of said tax, with 10 per centum interest thereon, with costs of advertising the same, or request the same to be struck off to a purchaser for a less sum than two-thirds of the assessed value of said several lots or parcels of ground, the said commissioners shall be authorized, at said sale, to bid off the same for the United States at a sum not exceeding two-thirds of the assessed value thereof, unless some person shall bid a larger sum.']

The part in [ ] of the new section is a change, it will be seen, upon the part of the old one (supra, pp. 555-6) in similar [ ].

In a subsequent part of it, this substituted section 7, makes, like the old one, a right of redemption of the land sold (within sixty days), 'to any loyal person of the United States having any valid lien upon or interest in the same;' with a provision for persons under disabilities, &c.

With these statutes on the statute-book, and the property in Alexandria, mentioned at the beginning of this statement, being assessed on the land-book of Virginia, on the 1st of March, 1864, at $3500, the tax commissioners of the United States (not themselves bidding at all) sold it, in professed pursuance of the acts of Congress, for $1750 (less than two-thirds, $2333, of its assessed value) to one Turner, describing it as a house on Royal Street, between King and Prince Streets at Alexandria, in the State of Virginia, 'said to have belonged to R. M. and J. M. Smith,' and charged to them on the land-book of the State aforesaid for the year 1860.

The rebellion being suppressed the Smiths—never having offered as 'holders of a valid lien' or otherwise to redeem brought suit in proper form against Turner to recover certain arrears of the ground-rent. Turner claimed title to the lot free of rent under the sale for taxes, made by authority of the several acts of Congress, already mentioned, for imposing and collecting a direct tax. The decision of the court where the suit was brought was against the title thus set up, that is to say, it was in favor of the Smiths, and their rent, and this decision being affirmed in the highest court of the State,4 the case was here for review.

Mr. F. L. Smith, for Turner, plaintiff in error:

The length of time in which Moore and those who succeeded him were in possession, that is to say, the lapse of time from 1821 (when Hannon died and Moore resumed possession of his house) to 1864, when this sale was made, is sufficient to raise a presumption of either a re-entry in 1821 with all the requisite forms of the common law, or of a re-lease then or afterwards by Hannon's heirs. After such a term as forty-two years, almost any presumption necessary to sustain a party in possession will e made. By such a re-entry or release, a merger took place,5 and there ceased to be two separate estates in the one property. The house and lot, free of ground-rent, thus became Smith's; and being regularly sold to Turner, he was owner of it discharged of all incumbrance.

This would all be so on principles of common law, but the fourth section of the act of June 7th, 1862, gives a disincumbered estate to the purchaser, even if the owner of the fee held it incumbered to its entire value. The estate may indeed be defeated by the holder by any valid lien, being a loyal person, if he redeem in the mode specified in the acts. But no such redemption is pretended. In any aspect, therefore, the judgment should be reversed.

Mr. C. W. Wattles, contra:

1. The case showed only that the owner of the rent charge took possession of the premises. A re-entry with common-law formalities cannot from this be inferred, nor a release from the heirs of the owner of the ground. The only inference is an act of trespass by the owner of the rent and a violation by him of the rights of his tenant. And this inference is made a certainty by Moore's conveyance of the rent eo nomine in 1825 to Irwin, as a thing then existing.

No time will run against a rent charge, so as to divest title or extinguish it. The limitation applies only to the recovery of rent in arrears by distress or action. The estate itself remains for all time unless merged or extinguished. The principle is elementary. The case then is that——

1st. Of a title to the land in Hannon's heirs, in fee simple (subject to the rent), at the time of the tax sale; a corporeal hereditament; and,

2d. Of a fee simple title to the rent charge in the Smiths; an incorporeal hereditament.

Hence there were two separate and distinct estates; one of them, the land, was sold for the tax; the other, the rent, remained intact.

It would, indeed, be a forced construction to say that an incorporeal hereditament is a lien, incumbrance upon, or a right, title, or claim to land, in the sense contemplated by the act, for the rent may have been held by a citizen most devoted to the cause of the United States, and residing in a State not in insurrection; who could have no notice of a contemplated sale of his property, either directly or by the terms of the act, as it does not provide for a tax upon such species of property.

2. The land was sold for less than two-thirds of its value. This made the sale void. The act of 1863 requires the tax commissioners to bid off the land to the United States 'at a sum not exceeding two-thirds of the assessed value.' They did no such thing. The assessed value was $3500. Two-thirds of that sum is $2333.33. They sold it for $1750. Literally construed, indeed, the language 'authorized to bid off' may be but permissive, and not mandatory. But it is a general rule of construction that where power is conferred by statute on public officers in language which, literally construed, is but permissive, the language will be construed as peremptory whenever the power is conferred for the benefit of the public or of individuals. And by no court has this doctrine been declared more emphatically than by this. Witness the case of Supervisors v. United States,6 in which words so little mandatory in form as the words 'may, if deemed advisable,' were construed as imposing a positive and absolute duty; the court citing cases from old reports like Skinner and Salkeld; 'leading cases on the subject,' which it declares 'have been followed in numerous English and American adjudications,' to this day. In the present case the authority was conferred for the benefit of the government of the United States, representing the whole public; and the government had a right to claim its exercise by the commissioners as a duty imperative on them. Congress could not, by the act of 1863, have intended to leave the commissioners to say what lands should be bid off and what not; any more than it could have so intended by the act of 1862, in which, certainly, it did not so intend. It meant, in all cases, to take the land for the United States if it could be obtained on the terms specified in the act, and to deny authority to the commissioners to sell it to any other purchaser.

Mr. Justice MILLER delivered the opinion of the court.