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(44 Wash. 132)

ALBRING et al. v. PETRONIO. (Supreme Court of Washington. Oct. 13, 1906.) 1. TAXATION-TAX SALES-STATUTES.

Ballinger's Ann. Codes & St. §§ 810, 814, 815, providing for the sale of lands for the nonpayment of delinquent taxes and assessments, must be strictly pursued in order to sustain a title thereunder.

[Ed. Note.-For cases in point, see vol. 45, Cent. Dig. Taxation, §§ 1263, 1264.]

2. SAME DEFECTIVE PROCEEDINGS-REDEMP.

TION.

Ballinger's Ann. Codes & St. § 810, provides that when land is sold for delinquent assessments, the treasurer shall issue a certificate to the purchaser which must be recorded within three months in the office of the county auditor. Section 814 secures to the purchaser a lien on the land for the amount paid, and for all taxes and special assessments, interests, etc., which may be subsequently levied, and contemplates that the purchaser during the period of redemption guarantied by section 815 shall pay all taxes and public charges against the property. Held, that where neither the purchaser of land for delinquent special assessments, nor his assignee, ever made any payments of general taxes on the land, after obtaining a certificate and made no tender of such payments nor any effort to give the original owners notice of such sale, the proceedings were fatally defective, and the owners were entitled to redeem.

3. SAME TIME OF REDEMPTION-EXPIRATION -NOTICE.

Ballinger's Ann. Codes & St. § 815, provides that where land has been sold for nonpayment of delinquent assessments, before a deed shall be made, the holder of the certificate of sale shall have notified the owners that he holds the certificate, and that he will demand a deed, which notice shall be given by personal service or publication as provided. Held, that such section only authorized service of publication after the certificate holder has made an honest and diligent search for the owner in order to make personal service of such notice.

[Ed. Note.-For cases in point. see vol. 45, Cent. Dig. Taxation, §§ 1424, 1425.]

Appeal from Superior Court, King County; John B. Yakey, Judge.

Action by A. J. Albring and another against Emanuel Petronio to redeem certain land from a sale for delinquent special assessments. From a decree dismissing the complaint, plaintiffs appeal. Reversed and remanded.

Harrison B. Martin and Byers & Byers, for appellants. William Hickman Moore, G. Edgar Hayes, and Dallas V. Halverstad, for respondent.

CROW, J. On December 19, 1890, the plaintiffs A. J. Albring and Alice F. Albring, husband and wife, purchased in the name of said A. J. Albring, as their community property, lots 3 and 4 in block 2 of Prospect Terrace Second addition to the city of Seattle, and having promptly recorded their deed, have ever since owned the same, unless their title has been divested by the proceedings hereinafter mentioned. On October 30, 1899, in pursuance of the provisions of the eminent domain act of 1893, Ballinger's Ann. Codes & St. § 775 et seq., the council of the city of Seattle passed Ordinance No. 5624, en

87 P.-4

titled "An ordinance laying out and establishing a public street in the city of Seattle, commencing on the south margin of Yakima avenue and running thence southeasterly across block two (2) of Baxter's addition to the city of Seattle and across lot one (1) of block three (3) of said addition to an intersection with the west margin of Thirtieth Avenue South at a point sixty (60) feet south of the south margin of Norman street, and providing for the taking and damaging of the land and other property necessary therefor, and for the ascertainment and payment of the just compensation to be made for the private property to be taken or damaged for said purpose, and for an assessment upon the property benefited for the purpose of making such compensation." After the passage and approval of said ordinance, the city filed in the superior court of King county its petition, praying that just compensation be made for the lands and property to be taken and damaged. Afterwards, it filed a supplemental petition for the appointment of commissioners to make a special assessment on the lands to be specially benefited by said improvement. An assessment district was created, which included said lots 3 and 4, and an assessment of $12 was levied against each of them. Afterwards said assessment was certified to the treasurer of said city, who, on the 27th day of March, 1901, sold said lots for the purpose of collecting said assessments which had become delinquent. Said sale was made to one Carrie B. Osborne, who paid $30 for lot 3 and $27 for lot 4, and said treasurer issued to her two certificates of purchase which were recorded in the office of the auditor of King county, Wash. Afterwards said Carrie B. Osborne assigned said certificates to the defendant Emanuel Petronio. On the 23d day of October, 1903, the period of redemption having expired, and said Emanuel Petronio having published notice to the plaintiff A. J. Albring, said city treasurer executed to him two separate deeds for said lots, which he caused to be recorded on October 31, 1903. It appears from undisputed evidence that the plaintiffs A. J. Albring and wife at all times from the date of their purchase of said real estate in 1890, until the commencement of this action, resided in the city of Spokane; that their place of residence was unknown to the commissioners who made said assessment, to the officials of the city of Seattle, or to said Emanuel Petronio, or to any of them; but was known at the office of the treasurer of King county; that said plaintiffs at no time prior to the execution and recording of said deeds to Emanuel Pe tronio had any actual notice or knowledge, or means of obtaining knowledge, that said ordinance had been passed; that said improvement had been made; that said assessment had been levied; that the same had be come delinquent; that said sale had been made, or that said deeds had been executed

we take of said act in so far as it affects this action, it will not be necessary to question its constitutionality in any particular. The record before us shows that all notices to the appellants during the entire course of these proceedings were given by publication, their address being unknown to any of the city officials or the respondent. The purpose of such publications was to advise the parties interested of the nature and pendency of the various proceedings, so that, if possible, they might have actual notice of the same. It is conceded that such a result was not accomplished in this case. The appellants now contend that said eminent domain

and delivered to the defendant Emanuel Pe- | possibly do so. By reason of the view which tronio. In fact, they were at all of said times entirely ignorant of the pendency and progress of any of said proceedings. It appears that said lots, although within the assessment district, were located at a point of from one-fourth to one-half a mile distant from said improvement; that had the plaintiffs gone upon their property and inspected the same, they would not have observed any improvements being made, nor would they have come into the possession of facts tending to put them upon inquiry; that said lots were at all of said times vacant and unimproved; and that they were of the reasonable total value of $1,000. During the entire two-year period of redemption granted by section 815, Ballinger's Ann. Codes & St. and at all times prior to the execution and delivery of said deeds, the said plaintiffs promptly paid all general taxes levied against said lots, remitting the same to the treasurer of King county, Wash. Their first knowledge of said assessment proceedings or of the execution and delivery of said deeds was obtained in the year 1904, when they tendered payment of the state and county taxes for the year 1903, and were informed by the county treasurer that payment had been made by the defendant Petronio, who claimed to own the property. Thereupon, the plaintiffs made an investigation, and for the first time learned the facts. They immediately tendered to the said Emanuel Petronio the full amount of said assessments with all penalties, interest, and costs, and all subsequent assessments and taxes paid by him, which tender being refused this action was instituted to set aside said certificates of purchase and tax deeds, to declare the same void, to quiet their title to said property, and to permit the plaintiffs to redeem. The plaintiffs have pleaded all of the facts above set forth, and the defendant in his answer has also pleaded as the source of his alleged title the various proceedings culminating in said assessment, sale, and deeds. There is no substantial dispute as to the facts involved in this case. The trial court, after refusing findings requested by the plaintiffs without making any findings whatever, entered a decree dismissing their complaint. From said final judgment this appeal has been taken.

The appellants have made numerous assignments of error, contending in substance (1) that the statute under which said proceedings and pretended sale have been conducted is unconstitutional; (2) that their property has been taken without due process of law; (3) that they were entitled to judgment upon the pleadings for which their motion was denied; and (4) that if said eminent domain act is held to be constitutional, it must be strictly construed as against the respondent who claims title under the proceed ings therein authorized. It is always the duty of the courts to sustain the constitutionality of legislative enactments if they can

act, if constitutional, should be strictly construed, as it strongly derogates from usually accepted ideas of property rights. We think this contention should be sustained. The respondent's only claim of title is under these proceedings. He has purchased property of the value of $1,000 for the small sum of $57 with such additional expenses and taxes as he may have since disbursed, which are merely nominal. If he is to obtain and retain the legal title, he should be permitted to do so only upon an exact compliance with every requirement of the statute strictly construed as against him. Section 810, Ballinger's Ann. Codes & St., provides that, when the sale is first made by the treasurer, he shall issue to the purchaser a certificate which must be recorded in the office of the county auditor within three months from the date thereof. Section 814, Ballinger's Ann. Codes & St., cures to the purchaser holding such certificate a lien on the lot or parcel of land sold for the amount paid by him, as well as for all taxes and special assessments and all interest, penalties, cost, and charges thereon, whether levied previously or subsequently to such sale, and whether for state, county, city, or town purposes, subsequently paid by him, and that he shall be entitled to interest at the rate of 20 per cent. per annum on the original amount paid, and such subsequent payments, from the date of the respective payments. This provision undoubtedly contemplates that the certificate shall not convey a title, but shall only secure to the purchaser during the period of redemption a lien for the sums mentioned. It also contemplates that the holder of said certificate shall, during the period of redemption which is guarantied by section 815, pay all taxes and public charges against said property whether the same be for state, county, city, or town purposes. Neither the respondent nor his assignor ever made any payments of general taxes during said period. The record does not show that they ever tendered any such payments, nor does it explain why such payments were not made by them. We think one purpose of this provision for the payment of such taxes by the holder of the certificate is to furnish an additional means of actual

notice to the owners of the property that the assessment has been levied, that the preliminary sale has been made, and that the certificate has been issued, so that they may obtain such actual knowledge in ample time to redeem. In this instance the appellants were deprived of this opportunity, the respondent and his assignor having failed to make such payments. Section 815, after providing for a period of redemption of two years, also provides that said redemption may be made by the owner upon payment of the amount for which the lots were sold, with interest at the rate of 20 per cent. per annum, together with all taxes, special assessments and interest, penalties, and charges thereon paid by the purchaser with like interest thereon. Said section further provides, that unless written notice of taxes and assessments subsequently paid, and the amount thereof, shall be lodged with the treasurer, redemption may be made without including the same. This provision not only contemplates that the holder of the certificate of purchase shall pay these general taxes and other charges, but also that he shall, for the protection of his lien, file written notice of such payment with the city treasurer. Said section 815 further provides that, before a deed shall be made, the holder of the certificate of sale shall have notified the owners of said lots or parcels of land that he holds said certificate, and that he will demand a deed therefor; that said notice shall be given by personal service, or by publication in a weekly newspaper published in said city once each week for three successive weeks. construction of this statute is that it contemplates a personal service if it can possibly be made. This being true, the holder of the certificate should make an honest and diligent search for the owner. If the owner cannot thus be found, then service by publication may be made. In this instance the respondent is not shown to have had any actual knowledge of the post-office address or residence of the appellants, nor is he shown to have made any such search; but the record shows that said appellants had. during the entire period of redemption, been paying the general taxes upon this property, and that the county treasurer had their post-office address. The respondent himself failed to make such payment of taxes. If he was acting in good faith, he could only have done so by reason of the fact that the payments were first made with such promptness by the appellants as to prevent payment by him. But if this was the case, the address of the appellants would certainly have been obtainable at the office of the county treasurer, and could have been readily learned by the respondent. If he failed to call at said office and tender payment of the state and county taxes as was his duty, he thereby either intentionally or unintentionally deprived himself of an opportunity for learning the ad

dress of the appellants, which would have enabled him to serve them with personal notice. This was an act of omission upon his part for which the appellants are in no way responsible, but which resulted in preserving their profound and excusable ignorance of any of the proceedings. Said section, 815 further provides that the treasurer's deed shall be executed only after payment of all subsequent taxes and special assessments on said lots. This provision evidently contemplates that, as a condition precedent to the obtaining of said deeds, a showing must be made to the city treasurer that all taxes and special assessments which have become due either prior or subsequent to the original sale have been paid. This being true, the respondent necessarily was obliged to ascertain whether said taxes and assessments had been paid. Had he done this, he would have learned before the execution of the deed that their payment had been made by the appellants, and necessarily would have also learned appellants' address.

Our view is that this statute must be strictly construed as against the respondent; that he must be held to a complete and exact compliance with all of its provisions as a condition precedent to obtaining his deeds. Had he succeeded in giving personal notice to the appellants, a less stringent rule might be invoked in his behalf. He failed to pay said taxes, to attempt their payment, or to explain their nonpayment by him. He permitted their payment to be made by the appellants during the period of redemption. He failed to avail himself of an opportunity which he had during the period of redemption for obtaining knowledge of the appellants' post-office address and place of residence, and has thereby placed himself in a position which he may think will excuse his having given them notice by publication instead of personal service. This is an action in equity and, under these circumstances, we think appellants are in equity and good conscience entitled to redeem said property. Were we to hold that the appellants are without remedy. we would be placing a construction upon said statute which would enable unscrupulous persons to avail themselves of its provisions as a means of fraud and oppression against innocent owners of property. This we should not do. Our duty is to so construe it that it may be available as a reasonable and proper measure for the collection of delinquent assessments as contemplated by the Legislature. While there is nothing in the record affirmatively showing any intentional fraud on the part of the respondent, yet if a purchaser at a sale of this character can be permitted to hold his certificate for two years during the entire period of redemption, without the payment of taxes, without any showing why such payment was not made, without the suggestion of an effort

to learn the place of residence of the true owner, and can then obtain a deed depriving the ignorant and innocent owner of his title, then the statute would become a most vicious instrument for the perpetration of fraud. Considering the entire statute, we are constrained to believe that the Legislature in drafting it made these various provisions to which we have referred in order that every opportunity might be afforded an owner to obtain actual notice of the assessment and sale before the period of redemption had expired. The long period of redemption which it guaranties, the provision for the payment of the taxes by the holder of the certificate, the requirement that notice be given, the requirement that written notice of all taxes paid by the purchaser must he filed with the city treasurer, and the further requirement that all taxes must be paid before a deed can be obtained, show a legislative intent to require such steps to be taken as would ordinarily result in bringing actual notice home to the owners of the property. There has been a complete failure upon the part of the respondent to comply with these provisions. Our holding is that, when a certificate of purchase is obtained, it is the duty of its holder to pay all general taxes and all public charges against said property. If any reason exists why he cannot do so, some affirmative showing should be made to explain his omission. The appellants have at all times since learning of said assessment been ready and willing, and are now ready and willing to pay said assessment, together with costs, taxes, and charges, with 20 per cent. interest. In fact, they have tendered payment and have kept their tenders good. We think they are in equity entitled to redeem.

It is ordered that the judgment of the superior court be reversed, and that this cause be remanded with instructions to the trial court to permit the appellants to redeem and in doing so to ascertain the amounts due the respondent for the disbursements made by him with 20 per cent. interest thereon, as provided by section 814, Ballinger's Ann. Codes & St. It is further ordered that, if prior to the commencement of this action the full amount then due had heen tendered by the appellants, they recover their costs in the superior court; that otherwise the respondent recover said costs. It is further ordered that, in estimating the amount due, the appellants, if a full tender was made by them prior to the commencement of this action, shall be charged 20 per cent. interest on the respondent's disbursements to the date of said tender only, and that no further interest be allowed; otherwise that interest be allowed at said rate until the date of payment. The appellants will recover costs in this court.

MOUNT, ROOT. DUNBAR, RUDKIN, and HADLEY, JJ., concur.

(44 Wash. 23)

DRAINAGE DIST. NO. 15 OF SKAGIT COUNTY et al. v. ARMSTRONG et al. (Supreme Court of Washington. Sept. 25, 1900.)

1. DRAINS-ASSESSMENT OF DAMAGES AND BENEFITS WAIVER OF DAMAGES-EVIDENCE -SUFFICIENCY.

In proceedings to assess the damages and benefits to lands in a drainage district, it appeared that individuals claiming damages had, before the organization of the district, waived a right to damages by an instrument reciting that the organization of the district was of importance to them and others who declined to assist in the organization, unless the individuals waived damages. The individuals showed that a third person interested in the organization of the district induced them to sign the waiver on the representation that if they were not benefited, they would not be taxed. Held, that evidence of damages to them was properly excluded, for it was not shown that there was an agreement that the individuals should not be taxed, if they were benefited, and the representation made by the third person was not the sole consideration for the waiver of damages, and the third person had no authority to release any one from payment of benefits. 2. SAME-WAIVER OF DAMAGES-CONSIDERATION ADEQUACY.

Pending the organization of a drainage district, individuals owning land in the proposed district executed a waiver of damages, which recited that it was of importance to them that the district be organized and that others owning property within the proposed district declined to assist in the organization of the district unless damages were waived. Held, that the waiver was supported by two sufficient considerations; one as an advantage to the individuals, and the other to obtain the assistance of the other owners, who refused to assist unless the waiver was made.

Appeal from Superior Court, Skagit County; Geo. A. Joiner, Judge.

Action by drainage district No. 15 of Skagit county, by J. O. Rudene and others, against William Armstrong and others. There was a judgment for plaintiffs, and defendants appeal. Affirmed.

Million & IIouser, for appellants. McLean & Wakefield, for respondents.

MOUNT, C. J. This action was brought by the respondents to assess the damages and benefits to lands located within a drainage district, organized pursuant to laws relating to drainage districts. Section 3715

seq.. 1 Ballinger's Ann. Codes & St. The appellants have appealed from a judgment levying an assessment of $10 per acre for benefits accruing to their lands. At the trial of the case the appellants sought to offset damages alleged to have accrued to them by reason of a dam which cut off navigation from their warehouses. It appears that when the petition for the formation of the district was being circulated, appellants signed a contract as follows: "Waiver of Damages. Whereas, it is proposed to organize a large portion of the territory which drains into Sullivan slough in the county of Skagit. Washington, into a drainage district, under and by virtue of the laws

of the state of Washington; and whereas, it is intended to dam said slough at some convenient point, not higher up than the bridge, or not lower down than the section line between section 31 in township 34 and section 6 in township 33 in range 3 in said county; and whereas, the construction of such dam will cut off steamboat navigation of said slough above the proposed dam; and whereas, certain individuals have warehouses for the storage of grain located upon said slough, or the arms thereof, and said parties may have cause of action against said proposed drainage district when the same shall have been organized; and whereas, it is of importance to said individuals that said drainage district be organized, and certain individuals residing within the territory of said proposed drainage district decline to sign the petition of said proposed drainage district or assist in causing the same to be organized, unless a waiver of damages by reason of the construction of said dam to be made by the said individuals so interested: Now, therefore, we, the undersigned hereby waive any and all right or claims to damages by reason of the construction of said dam and cutting off of the navigation of said slough, or any of the arms or branches thereof, and will bring no action. for such damages, providing all of the following named individuals sign this waiver."

Appellants offered to prove that when they signed the above waiver, one Rudene who was interested in establishing the drainage district, and who was afterwards elected one of the commissioners of the district, represented to appellants that, in case they signed said waiver, no assessments for benefits would be made against their lands, and that upon such representation appellants signed the waiver, and that this was the sole consideration therefor. The court received evidence to the effect that appellants told Rudene that they would not receive any benefits, and that Rudene agreed with them. The gist of the evidence upon this point is stated by Mr. Armstrong, one of the appellants, as follows: "He [Mr. Rudene] said that we were the only ones that stood in the way and would flood the Beaver marsh, and that country all out, so we gave in and did not want to stand in the way of a large vicinity in the Beaver marsh, and that is the reason we gave our granaries, and now they want to tax us. He said that if we were not benefited we would not be taxed, and of course we talked it over that we would not be benefited any there, and he agreed with us, and that led us to believe we never would be taxed." The court, upon motion of respondents, struck out all the evidence relating to damages on account of the warehouses. Appellants contend upon this appeal that the court erred in striking this testimony, and in holding that the contract above set out is a binding waiver of

damages. We think the court properly struck out the evidence for several reasons: First, the evidence does not show that Mr. Rudene agreed that appellants should not be taxed if they were benefited; second, this was not the consideration expressed in the written waiver, and was clearly not the sole consideration; and, third, Mr. Rudene at no time. had any authority to release any one from the payment of benefits. At least, there is no showing of such authority in the record before us.

Appellants also contend that the contract of waiver is not binding upon the appellants, because the waiver is not based upon a valid consideration. The contract of waiver states the consideration as follows: "It is of importance to said individuals [meaning these appellants and others] that said drainage district be organized and certain individuals residing within the territory of the said proposed drainage district declined to sign the petition of said proposed drainage district or assist in causing the same to be organized unless a waiver of damages by reason of the construction of said dam be made by the several individuals so interested." Two considerations were here named; one as an advantage to the appellants, and the other, to obtain the signatures of necessary parties who refused to sign the petition unless such waiver was made. Either of these considerations was sufficient to make the waiver binding upon the appellants. 9 Cyc. 330; 6 Am. & Eng. Enc. of Law (2d Ed.) p. 721; 1 Parsons on Contracts (8th Ed.) p. 468 et seq. Staver & Walker v. Missimer. 6 Wash. 173, 32 Pac. 995, 36 Am. St. Rep. 142.

We think there is no merit in either of the questions presented, and the judgment is therefore affirmed.

DUNBAR. ROOT, HADLEY, FULLERTON, and CROW, JJ., concur.

(44 Wash. 79)

MCAVOY v. JENNINGS. (Supreme Court of Washington. Sept. 25, 1906.)

1. FRAUDULENT CONVEYANCES-INSOLVENCY. In a suit to set aside a trust deed as a fraud on the grantor's creditors, it must be alleged and proved that the grantor was insolvent at the time it was made, or that an execution has been issued and returned nulla bona, which implies insolvency.

[Ed. Note. For cases in point, see vol. 24, Cent. Dig. Fraudulent Conveyances, §§ 128, 140, 790.]

2. ASSIGNMENT FOR BENEFIT OF CREDITORS— CONDITIONS-RELEASE OF CLAIMS.

An insolvent debtor being entitled to prefer his creditors, a deed of a debtor's property to a trustee, for the purpose of having the same sold and applying the proceeds ratably among a list of creditors was not void, because it contained a condition that, before any of the creditors should be entitled to receive his pro rata under the terms of the deed, he should

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