City of San Diego v. Higgins (1896) · DecisionDepot

City of San Diego v. Higgins

Name: California Superior Court Tentative Rulings
Creator: DecisionDepot
License: https://creativecommons.org/licenses/by-nc/4.0/

California Supreme Court Dec 1, 1896 No. L. A. No. 31Published

Before: Henshaw, Temple

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Holding. An action to recover municipal taxes and enforce a tax lien is barred by the three-year statute of limitations prescribed in section 338, subdivision 1, of the Code of Civil Procedure.

Issues

Whether an action to recover municipal taxes and enforce a tax lien is barred by the statute of limitations.
Whether the provisions of the Political Code regarding tax liens create an exception to the statute of limitations for tax collection actions.

Disposition. affirmed

Quotations verified verbatim against the opinion

“It follows, therefore, that the cause of action sought to be prosecuted is barred by section 338, subdivision 1, of the Code of Civil Procedure, and that the demurrer thereto was properly sustained.”

“The lien is but an incident to the tax—the money due—and, like the case of a mortgage, when an action to recover the debt is barred, the suit to enforce the lien is also barred.”

Synopsis

Municipal Taxes—Limitation op Action.—An action to recover municipal taxes, and to enforce the lien thereof, is subject to the limitation of subdivision 1 of section 338 of the Code of Civil Procedure, respecting an action upon a liability created by statute, and is barred in three years after the right of action accrued.

Id. —Effect of Tax as Judgment. —Where a tax has the force of a judgment; an action commenced thereon more than five years after the right accrued, is barred by limitation, though the judgment is not thereby satisfied.

Opinion — Henshaw

Henshaw, J. Appeal from the judgment entered after demurrer sustained, plaintiff having declined to amend.

The action was for the recovery of four hundred and eighty-three dollars and forty-six cents, being the amount of municipal taxes levied by the plaintiff upon the property of defendant Higgins, for the year 1887, [172]with interest at the rate of two per cent a month, from January 1, 1888. A personal judgment against the defendant Higgins is asked, and it is also sought to subject the property to the lien of the taxes, principal, interest, penalties, and costs. The complaint was filed December 12, 1894.

Of the several grounds of demurrer urged against the complaint, that which presents the question whether or not the action is barred by the statute of limitations is the only one which need be considered.

On behalf of the demurrant it is claimed that plaintiff’s right of action is barred by section 838 of the Code of Civil Procedure. For the complaint it is insisted that sections 3716, 3717, and 3718 of the Political Code, together with section 312 of the Code of Civil Procedure, provide a limitation for the commencement of actions such as this, other and different from that contemplated by section 338 of the Code of Civil Procedure.

Under the latter section this action, having been commenced more than three years after the right of action accrued, is clearly barred. Under appellant’s claim there is no limitation of time fixed for the 'commencement of such'an action, and it may therefore be prosecuted after the lapse of any number of years.

This latter contention derives some support from the language of Lewis v. Rothchild, 92 Cal. 625, where it is said: “ We think a different limitation is prescribed by section 3716 of the Political Code, as to liens created by title IX of that code, from that prescribed anywhere in title II of the Code of Civil Procedure.” But this language is to be read in the light of the facts of the case. The action was to recover a deposit made upon the purchase price of a piece of land. The contract of purchase and sale provided for a return of the deposit, and a vacation of the contract if a valid lien was found to exist upon the property, and was not removed by the vendor within a designated time. The lien in controversy was one for.unpaid taxes, delinquent more than

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Dissent — Temple

Temple, J., dissenting. I do not agree with the conclusion reached by the court in this case. The action is for the recovery of a municipal tax. It is sought to recover a personal judgment and to subject the property of the defendant to a lien for the recovery of the tax. It seems to be admitted that the action is well brought, unless the right of action is barred by section 338 of the Code of Civil Procedure. The court holds that such right is barred because the action was not commenced within three years.

Section 3716 of the Political Code reads as follows: “Every tax has the effect of a judgment against the person, and every lien created by this title has the force and effect of an execution duly levied against all property of the delinquent; and the judgment is not satisfied nor the lien removed until the taxes are paid or the property sold for the payment thereof.”

It is decided that not only has the statute run against the right to maintain a personal action, but against the right to foreclose the lien as well. At the same time the code provision is construed to mean that the lien continues until the taxes are paid or the property has been sold for the payment thereof. It is held that the statutory lien continues and will never become barred, but that there is now no mode in which the tax can be collected or the lien foreclosed. The lien is said to constitute a right without a remedy. It is not that the law has not provided a mode for the foreclosure of the lien, but that by reason of the bar of the statute the tax cannot be collected at all, through a sale of the property upon which it constitutes a lien or otherwise.

What is meant, under such circumstances, by saying that the lien continues after the right to collect the tax from the property in any mode has ceased, I am unable to comprehend. A lien is necessarily an incident to an obligation, and the purpose is to secure performance. ' [178]When it ceases to be security for such performance it has ceased to exist. If it could continue it would not be a right without a remedy, but a remedy without a right—redress when there was nothing to redress. Of course, as it is always an incident, it must fall with the principal, although the converse does not follow.

As an example of a right without a remedy, reference has been made to cases in which the right to a personal action is barred while there is still a right to foreclose a lien given to secure it. An unfortunate reference, for the point in all such cases is that the obligation may be enforced by foreclosing the lien. It is also said that the bar of the statute does not extinguish the debt but only bars the remedy. This too is error. As a legal obligation a debt is extinguished by the bar of the statute. It continues to exist only as a moral obligation which is sufficient consideration for a new contract. In the cases above alluded to, in which it was held that a suit would lie to foreclose a mortgage, although the note was barred, the note and mortgage were regarded as distinct obligations or agreements to pay the same debt. The doctrine was sometimes based upon the fact that the mortgage was under seal and the note was not, and different periods of limitation were prescribed, and sometimes on the claim that the limitation did not apply to courts of equity. Sometimes, too, it may be, because title passed by the mortgage to the mortgagee, and courts would not enforce a right to redeem until the debt was paid, on the principle that he who seeks equity must do equity. On the same principle this court has refused to compel the satisfaction of a mortgage by a mortgagee after the mortgage had become barred—not that there is a subsisting lien, but because the court will not grant affirmative relief in violation of the maxim above alluded to.

At common law a lien was simply a right to retain possession until an obligation was performed. In equity a lien might be a right to sell certain property for the payment of a debt, or an amount falling due [179]upon the nonperformance of an obligation. The lien could exist without possession, and be enforced by foreclosure and sale. A lien may arise in various ways. It is always a charge upon property, and when there ceases to be a charge there can be no lien. (See Code Civ. Proe., sec. 1180.) It is security for the performance of an obligation, and, when the obligation ceases to be, it is a contradiction in terms to say that the lien exists. Therefore, if it be conceded, as it is in the leading opinion, that the effect of the section of the code above recited is that the lien is never barred, it must follow that the obligation to pay the tax is not barred.

What is the lien of a tax? It is the right to collect the amount of the tax from the property. This right does not merely result from the lien—it is the lien. To say that the lien continues, but cannot be enforced in any mode, is to say that the right to collect the tax from the property continues and is not barred, yet the right to collect the tax from the property is wholly barred. It is a contradiction in terms.

What I have said is upon the theory that section 3716 is correctly construed as providing that the lien shall never be barred by the statute. That section makes the lien a judgment lien, and, I think, plainly the judgment and lien go together. If the section is to be understood as providing that the lien continues without regard to limitation until the tax is paid, it must also be understood as providing that the judgment continues. It as emphatically declares that the judgment is not satisfied as it does that the lien is not removed. Perhaps it was merely intended to say that no change in the property or its ownership should affect the lien, and no officer or board could satisfy the judgment or remove the lien. It might mean all this and have ho reference to any limitation.

If it be material to hold that the action is based upon the judgment, I think it should be held this action is [180]an action upon the judgment. When facts are averred . which show the existence of a tax it also shows a judgment, for that is the judgment.

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Synopsis

Opinion — Henshaw

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Dissent — Temple

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