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District Court of Appeal, Second District, Division 2, California.


Civ. 15521.

Decided: May 13, 1947

Hill, Morgan & Farrer, A. J. Hill, and Charles P. McCarthy all of Los Angeles, for plaintiff and respondent. Harold W. Kennedy, Co. Counsel, of Los Angeles, by Gordon Boller, Deputy Co. Counsel, of Los Angeles, and John E. McCall, City Atty., of Torrance, for defendant and appellant.

The question for decision is whether the sale of real property to the state for taxes and penalties after title thereto has been vested in the United States is a void sale.

On March 2, 1942 (tax date), respondent was owner of 476.63 acres in Los Angeles county. The land lies within the city of Torrance whose legislative body had prior to the tax date elected to have the property within its corporate limits assessed by the county assessor and its taxes collected by the tax collector of the county. Such land was assessed as of the tax date and the tax was fixed for the fiscal year of 1942–1943. The taxes became due on November 1, 1942, the first installment became in default on December 5, 1942, and a penalty became due by reason thereof. On October 26, 1942, the United States, hereinafter referred to as ‘the government,’ instituted condemnation proceedings in the United States District Court, deposited $252,800, the amount of the estimated compensation for the property, and on March 19, 1943, filed its declaration of taking. The first half not having been paid prior to the delinquency of the second half on April 20, 1943, a further penalty for such non-payment was added in addition to the delinquent penalty of three per cent on the second half. Revenue & Taxation Code, secs. 2617, 2618. On June 30, 1943, the land was ‘by operation of law and the declaration of the tax collector * * * sold to the State.’ Revenue and Taxation Code, sec. 3436. The collector filed with the government the county's claim of $6,806.62 for its taxes and accrued penalties. Thereupon Weston Investment Company filed a stipulation that $6,806.62 should be paid out of the fund on deposit to the tax collector in satisfaction of the county's claim. But with such stipulation the company filed a formal written protest against the payment of a portion of the county's claim, towit: $956.58, the amount of the ‘redemption penalties.’ Pursuant to the stipulation the county was paid on July 5, 1945, for both itself and the city of Torrance. Such stipulation was filed by reason of the government's insistence and to prevent the continuing accrual of penalties.

This appeal is from a default judgment awarding respondent the amount of the redemption penalties after the demurrer of appellants had been overruled.

Respondent's position then and now is that the sale to the state was void by reason of the fact that title to the property was vested in the government upon the filing of its Declaration of Taking, March 19, 1943; that by reason of the nullity of the sale to the state it acquired no title or interest in the property on June 30, 1943; that therefore no redemption could occur; and since no redemption was possible, a redemption penalty could not accrue and the collection thereof was void.

Appellants contend (1) that the status of property for taxation depends upon its condition on the tax date; (2) that the lien which attached continued until the tax is paid; (3) that taxes are the personal obligation of the owner; (4) that penalties on delinquent taxes continued to accrue against privately owned property, notwithstanding its subsequent acquisition by the government; and (5) that since respondent owned the property on the date the tax lien attached, and on the days it became payable and delinquent, the redemption penalty cannot be avoided by the fact that the sale to the state occurred subsequently to the investment of the government with title.

The first four of such contentions having been conceded by respondent to be valid, the sole issue remaining is whether the prior decree transferring the land to the government rendered inane the statutory sale to the state by the tax collector on June 30, 1943; also, whether the state justifiably collected from respondent the redemption penalties.

Contrary to appellants' contentions, the sale to the state by the tax collector on June 30 was a sale. When a list of delinquent properties and taxpayers has been published, all properties on which taxes, assessments, penalties and costs have not been fully paid shall be operation of law and the declaration of the tax collector be sold to the state. Revenue & Taxation Code, sec. 3436. The procedure of the officer consists of his entry on the delinquent roll of the words ‘Sold to the State,’ with the date of sale and the amount for which the sale was made. Ibid., sec. 3439. Immediately after such sale the collector must transmit to the controller a statement in detail of each sale to the state (Ibid., sec. 3440), and furnish the county auditor and assessor with a list of all property so sold. Ibid., secs. 3442, 3443. If the taxpayer does not redeem the property within five years his right of redemption is terminated and the property is deeded to the state. Ibid., sec. 3511. Upon receipt of a deed the state is then at liberty to sell such land in accordance with statutory provisions. Ibid., sec. 3476.

Appellants denounce the sale to the state (Ibid., sec. 3439, supra) as no sale at all but merely a ‘paper sale’ and entry for the purpose of commencing the period of redemption and of her accrual of further penalties and interest. While it is true no deed is delivered and possession is not taken, the official declaration and entries are the equivalent of a buyer's declaration that he had exercised an option to make the purchase of land and has made the initial payment. Such a transaction between two citizens would be a purchase and sale. Provided that all previous proceedings relative to the assessment of land are valid, after the collector's entries and declaration have been made the taxpayer is powerless to deprive the state of its ownership without first having redeemed the property from the state. By the tax collector's sale to the state it becomes vested with an equitable title which ripens into a legal title upon the expiration of ‘at least five years.’ Ibid., sec. 3476. Although the state has not the right of occupancy after land is sold for delinquent taxes and penalties, in other respects its title may be assimilated to that of a vendee under a conditional sales agreement prior to his payment in full of the purchase price. In the event a diastrophism should engulf (1) land held by a private purchaser under a contract of purchase or (2) land condemned by the government prior to the statutory sale proceeding and the collector's declaration, neither would the purchaser be able to acquire title to any existing thing nor would the taxpayer have anything to redeem.

Prior to its payment of the taxes for 1942 and accrued penalties the lands of respondent had been swept away by the rising tide of federal activities. They had been claimed by condemnatory, judicial proceedings and occupied by the government. As a result there remained nothing to redeem. If the lands were irredeemable how could there be a redemptioner's penalty? Also, what was there against which to levy a penalty? The land had ceased to exist in the world of the tax collector. It had become vested in the government over 100 days prior to June 30, 1943. With the lands removed from the jurisdiction of the California taxing authority (Constitution, Art. XIII, sec. 1; Revenue and Taxation Code, sec. 202; L. E. White Lumber Co. v. Mendocino, 177 Cal. 710, 712, 171 P. 799) the sale to the state was without meaning, could have been intended for no useful purpose and was therefore necessarily void. United States v. Alabama, 313 U.S. 274, 282, 61 S.Ct. 1011, 85 L.Ed. 1327; United States v. Pierce County, D.C., 193 F. 529, 531; Smith v. Santa Monica, 162 Cal. 221, 222, 121 P. 920.

What fact or reason could justify the sale? Certainly the land could not be security for the unpaid taxes, for it had already been vested in the government. The lien once held as security for the payment of delinquent taxes had been transferred to the moneys deposited in the registry of the federal court as compensation for the land. Under these circumstances, for the collector to pretend that the addition of further penalties would hasten payment of the taxes and accrued penalties was only a specious subservience to custom and a blind adherence to statutory forms. If he knew the government then occupied the premises his ‘sale’ was a tyrannical act designed solely to take from a taxpayer moneys not earned by or on any account justify due the state. If he did not know it then his effort was without accomplishment, for he had no power to lay penalties upon the government, consciously or unconsciously. If the collector knew that respondent had been divested of its lands, his act in attempting to add to its tax burdens operated effectually to perpetrate a fraud upon the corporation. If he did not know at the time that his sale would cause a penalty to be charged against respondent in the sum of almost a thousand dollars, then promptly upon his discovery of that fact he should have revoked his entry or otherwise corrected the injustice by appropriate action. In the conduct of any government, local or national, officials in any division of the public service should aim to be just to all persons whose property and affairs are intimately linked with those of the state. They are entitled to fair and equitable treatment and its denial weakens the cause of free government. In the case of a governmental unit operating under a statute which prescribes the duties of its officials and defines the proceeding whereby to effect the collection of taxes, it comes with poor grace for such unit to repudiate the very statute which is the source of its authority. The virtue of the proceeding is not to be determined by the name affixed by the statute. Call it a pronouncement and its nature is not changed. Regardless of the name its purpose is to add a redemption penalty to the burden of the taxpayer. Such burden could not have been intended for one who could not redeem, because the state has by the exercise of its supreme authority eradicated the hitherto taxable estate.

The doctrine that the owner of real property on the tax date is personally liable for penalties assessed on account of the sale prescribed by section 3439, supra, even though his title has become vested in the national government at a time antedating such sale, is violative of the public welfare and forebodes ill to the state. Such penalties are merely devices for enforcing tax payments and to compensate for additionally necessary expenses. When an owner has been driven from his land by the exercise of eminent domain it is inconceivable that he should be required to pay such penalty accruing against the land after his divestiture. The contention of appellants that respondent is personally liable for the redemption penalties because it was owner of the land on March 2, 1942, cannot be justified in reason or by authority. Having been divested of ownership prior to the sale and having incurred penalties for delinquent non-payments which it has paid, its personal obligation for the redemptional penalty became a myth. The reason for the sale having disappeared it was iniquitous to invoke the language of the statute for the purpose of collecting from the former owner redemption penalties when he could not redeem. The authorities which support the assessment of such penalties apply to a derelict owner or his private grantee.

In support of the contention that a redemption penalty, levied after the government had become the owner and after the lien for delinquent taxes and penalties for such delinquencies had attached, is properly chargeable against the owner as of the tax date, numerous authorities are suggested: Long Beach City School District v. Payne, 219 Cal. 598, 601, 28 P.2d 663; The City of Santa Monica v. Los Angeles County, 15 Cal.App. 710, 713, 115 P. 945; United States v. Certain Lands, 2 Cir., 129 F.2d 577, 580; State of California v. Hisey, 9 Cir., 84 F.2d 802, 805; United States v. Five Acres, D.C., 56 F.Supp. 628, 633; United States v. Certain Lands, D.C., 49 F.Supp. 225, 226; United States v. Certain Parcels of Land in Mifflin Township, D.C., 47 F.Supp. 333, 334; United States v. 53 1/414 Acres of Land, D.C., 46 F.Supp. 875, 876: United States v. Certain Parcels of Land in the City of San Diego, D.C., 44 F.Supp. 936, 937, 938; United States v. Certain Land in City of St. Louis, D.C., 29 F.Supp. 92, 97. A careful scrutiny of such authorities discloses that there was not a redemption penalty involved in any of them. The most that can be said, in so far as they apply here, is that where the tax lien has attached prior to the decree confirming the declaration of holding, the lien continues as security for all unpaid taxes and for penalties for such delinquencies until paid in full. Obviously the ‘penalties' mentioned in each decision refer to penalties for delinquences imposed by law to accelerate payments of taxes. Not one of them sanctions the act of a municipal authority in ruthlessly adding other burdens to the taxpayer after he has been divested of his land and his money is in the court registry for the payment of all subsisting liens.

It must therefore be held that the sale of June 30, 1943, was a void sale and without efficacy to incur new penalties against one who could never redeem.

If the sale was void it cannot supply the basis of the state's enforcing payment of a redemption penalty which accrued solely by virtue of the sale. In United States v. Alabama, 313 U.S. 274, 61 S.Ct. 1011, 1014, 85 L.Ed. 1327, liens for taxes and accrued interest had attached to lands acquired by the United States. Sale for delinquent taxes occurred after title had been vested in the government. In the government's action to quiet title to the land thus encumbered the court held that the lien of the taxes persisted, although not enforcible during the government's ownership, for the reason that the lien arose at the taxing date which preceded the taking by the government. But the action involved nothing like a redemption penalty. The Supreme Court held that the ‘United States was an indispensable party to proceedings for the sale of the lands, and in the absence of its consent to the prosecution of such proceedings the county court was without jurisdiction and its decrees, the tax sales and the certificates of purchase issued to the State were void * * *. The United States is entitled to a decree setting aside the tax sales and the certificates of purchase.’

Appellants contend that redemption penalties are not essentially different from the tax collector's penalties. On the contrary a sharp difference between them appears, especially when viewed in such a situation as is presented by this appeal. While the collector's penalties accrue by reason of the delinquencies in December and in April (Revenue and Taxation Code, sec. 2617), redemption penalties result from the sale to the state on June 30. They are the sum of (1) a charge of one per cent a month ‘on the amount of sold taxes' for the first year following the sale to the state; (2) one half of one per cent a month thereafter to the time of redemption; (3) beginning July 1 of each subsequent year, one per cent a month for the first year thereafter on the ‘unpaid taxes for which the property would have been sold to the State in that year if there had not been a previous sale,’ then one half of one per cent a month to the time of redemption. Revenue and Taxation Code, sec. 4103. Besides such charges a redemptioner must follow a statutory procedure in order to clear his title and to have it reinvested in himself. Ibid., Part 7, Chapter 1, secs. 4103–4113. Such proceedings as are there prescribed require the active services of the tax collector, tax assessor, county treasurer, recorder, auditor, state controller and the superior court if the redemptioner should determine to quiet his title. While delinquent penalties which attach on December 5 and April 20 for the first and second installments respectively are coaxing devices to persuade the land owner to pay his taxes, redemption penalties are assessed for the purpose of compensating the state for the services of its agents.

It thus appears that the redemption penalty is not only not akin to the delinquent penalty but it is of a racially different breed. No one can redeem unless he is an owner or such owner's grantee, and unless the collector has made a valid sale. The very would implies a previous ownership of which the owner has been divested while clothed with the privilege of recovering by pursuing a prescribed statutory procedure. 2 Bouvier's Law Dictionary, Rawle's Third Revision, Penalty; Revenue and Taxation Code, sec. 4101; Webb v. Ritter, 60 W.Va. 193, 54 S.E. 484, 491; In re United Educational Co., 2 Cir., 153 F. 169, 171; Williams v. Hoffman, 39 Ind.App. 315, 76 N.E. 440. Also, it implies a previous valid sale. Therefore, no one can redeem but the former owner or his grantee, and he cannot redeem unless there is land to redeem.

If the taxed land has been completely eliminated from the earth's crust by diastrophic movement, or morally erased from the state's jurisdiction by reason of its occupancy by the government pursuant to a valid judgment, there is no redemption possible. If the collector uttered his speech announcing ‘sold to the state’ when there was nothing that could have been sold to the state for delinquent taxes and assessments, he performed an act which was effective for no purpose at all. The rights of appellants were already secure and the sums due them as taxes, interest and delinquent penalties were available out of the award in the condemnation proceedings. But such payment, whether by contract or pursuant to judgment, is no basis for requiring respondent to pay for redeeming what it could not redeem and could never own again save as grantee or successor in interest of the United States.

Judgment affirmed.

I dissent for the reason that the majority opinion announces new principles in tax law amounting to judicial legislation which find neither sanction in the statutes nor support in the decisions of the courts. The judgment affirmed by the majority is contrary to the express provisions of the law and to the previous decisions in this state and it ignores the rules laid down by the federal courts in cases in which the circumstances are identical with those in the instant case.

The opinion holds that delinquency penalties may be separated from the tax and that the latter may be paid and the lien satisfied without payment of the statutory penalties accruing by reason of nonpayment of the tax. In order to provide means for the application of this pronouncement the opinion goes further and declares that in the circumstances existing concerning the property involved in this action the tax collector should have omitted the performance, as to respondent's property, of acts required of him by mandate of the law, or having executed his official duty he should have withdrawn the property from the effect of one provision of the statute and should have cancelled a book entry required by another. The acts referred to are mandatory jurisdictional steps in the tax proceedings. The tax collector has no discretion except to execute the law as he finds it in the statute books.

I cannot find in the record, in the briefs, or in the opinion of the Presiding Justice, any legal, equitable or moral ground upon which respondent may be relieved of the payment of the lawful penalties attaching by reason of its nonpayment of a just tax levied against its property. If respondent had remained the owner of the property the payment of the penalties as well as the tax would have been necessary in order to avoid the loss of its title through a tax sale. Since the tax was a valid indebtedness owing to the County of Los Angeles and to the City of Torrance the transfer of title to the United States furnishes no reason for the evasion of payment.

(References to sections hereinafter made are those of the Revenue and Taxation Code unless otherwise indicated.)

When the first installment of taxes became delinquent on December 5, 1942, a penalty of 6 per cent was added and upon failure of payment on April 20, 1943, an additional penalty of 3 per cent attached to the first installment and a like amount to the second installment. Secs. 2617, 2618. No part of the tax having been paid on June 30, 1943, the property, although declared by the tax collector to be sold to the state (sec. 3436) and so marked on the delinquent tax roll (sec. 3439), was not actually sold in a legal or any concept of the term. The state obtained no title which it could convey to any one who desired to purchase but acquired merely a lien that could be removed at any time by the payment of the amount of the tax levied, together with penalties for delinquency, interest and costs in the amounts prescribed by law.

It is not until five years have elapsed after the ‘sale’ provided for in section 3436, if the taxes have not been paid in the meantime, that an actual sale is made to the state. Sec. 3476. It then receives a deed transferring the title and is in a position to execute a conveyance to a purchaser which is indispensable to support an action to quiet title against the record owner of the property. Swann v. Carson, 56 Cal.App.2d 502, 503, 132 P.2d 863; Jones v. Luckel, 174 Cal. 532, 534, 163 P. 906; County Bank v. Jack, 148 Cal. 437, 442, 83 P. 705, 113 Am.St.Rep. 285; McArthur v. Goodwin, 173 Cal. 499, 502, 160 P. 679; Bublitz v. Reeves, 40 Cal.App. 75, 79, 180 P. 28.

Respondent contends (1) that there can be no redemption from a sale, and therefore no exaction of a redemption penalty arising from the sale, unless there has been a valid sale from which a redemption can be had; (2) that the sale of the property here involved was invalid because made after title had been taken by the United States. This argument presupposes that there was a sale and that title was conveyed to the state on June 30, 1943.

The so-called sale of the property on June 30, 1943 (sec. 3436), was not a sale in any sense of the term, not even a ‘paper sale’ as it is charitably designated in appellants' brief.

The word ‘sale’ has a fixed legal significance but is not always expressed in the same terminology. It is the transfer of property from one person to another for a consideration of value (Arnold v. North American Chemical Co., 232 Mass. 196, 122 N.E. 283, 284); a transfer of the title and possession of property in consideration of a price paid in money (Hatfield v. State, 9 Ind.App. 296, 36 N.E. 664); a contract whereby one acquires a property in the thing sold and the other parts with it for a valuable consideration (Cole v. Laird, 121 Iowa 146, 96 N.W. 744; Popp v. Munger, 131 Okl. 282, 268 P. 1100, 1102); an exchange of goods or property for money paid or to be paid (Meyer v. Rousseau, 47 Ark. 460, 2 S.W. 112, 113; Cooper v. State, 37 Ark. 412, 418). To constitute a valid sale there must be a transfer of the beneficial interest in the property intended to be sold from the vendor to the vendee for a price paid or promised. Mobley v. Marlin, 166 Ga. 820, 144 S.E. 747, 753.

What took place on June 30, 1943, the date of the purported sale, had none of the attributes of a sale. Respondent did not transfer the property to another, no other person acquired title to the property or any interest therein, and no price nor consideration was paid or promised. The operation of law and the declaration of the tax collector (sec. 3436) and the entry on the delinquent tax roll of the words ‘Sold to the State’ (sec. 3439) neither singly nor collectively constituted a sale. The state acquired neither title nor equity. These were merely additional acts provided by law to induce the taxpayer to pay his taxes and avoid the addition of further penalties to those imposed for nonpayment of the first and second installments.

In Revenue Laws of California, 1945, published by the State Board of Equalization, section 3436, is given the title “Stamp' sale; time and place' and section 3439 is entitled ‘Entry of ‘stamp’ sale.' In Ducey v. Dambacher, 27 Cal.App.2d 658, 661, 81 P.2d 597, 598, the court said that the official act performed pursuant to those sections does not operate as a sale ‘but is merely a book transaction to facilitate the adjustment of accounts between the tax collector and the auditor.’ In Crocker v. Scott, 149 Cal. 575, 596, 87 P. 102, 111, the court said with reference to the ‘sale’ by operation of law and the declaration of the tax collector: ‘The only practical effect of a compliance with these provisions, in addition to preserving the rights of the state in the matter of such taxes as are ultimately found to be valid, is to start running the period of five years within which redemption can be effected and at the expiration of which a deed may be issued to the state. During this period, the legal title to the property continues in the taxpayer, subject to the lien in favor of the state created by the assessment and levy.’ A property owner is not dispossessed of his property by the act of the tax collector in declaring the property sold to the state and in so stamping it on the delinquent assessment roll, ‘but he has five years within which to redeem, before he is devised of legal title.’ Kipp v. Billingham, 217 Cal. 527, 528, 20 P.2d 318, 319. Since there was no divestiture of respondent's title there was no sale.

The statutory designation of the official acts that were required by law to be performed on June 30, 1943, as a ‘sale’ and the declaration ‘sold to the State’ did not invest the proceeding with the legal characteristics that constitute a sale. The legislative language is a laconic substitute for a larger descriptive phrase that would be necessary for the accurate identification of the proceeding.

There is nothing sacrosanct in the words ‘sold’ and ‘sale’ as used in sections 3436 and 3439. The ‘sale’ is nothing more than a symobolic device whereby the tax lien is continued in force and the beginning of the five-year period is fixed at the termination of which the state receives a conveyance of the property if in the meantime the taxes, penalties and costs have not been paid, thereby effecting a transfer of the title, an actual sale, from the owner to the state. By such conveyance, and by it only, is a sale consummated.

The symbolic ‘sale’ bears not the slightest resemblance to an option given by the owner of property to a prospective purchaser, nor to a conditional sales contract. There is no contract between the owner and the state. A purchaser or optionee is required to perform the acts and to make the payments provided in the contract or option. The state does neither. There are no terms with which it is required to comply. The state does nothing but await the expiration of the five-year period. Meanwhile the owner may, by payment of the taxes and penalties, terminate the right of the ‘purchaser,’ the state, to demand a conveyance.

The property continued in the ownership of respondent when the first installment of the tax became delinquent on December 5, 1942. Title passed to the United States on March 19, 1943, when the declaration of taking was filed. 40 U.S.C.A. § 258a. Payment not having been made of either the first or the second installment the proceedings required by sections 3436 and 3439 were taken on June 30, 1943, and the additional penalties, interest and costs were added as provided by law to the amount of the tax lien.

There is nothing in the record to indicate that the tax collector had any knowledge on June 30, 1943, of the pendency of the condemnation suit or of the fact that respondent had been divested of its title as a result of the action. Even if he had possessed such knowledge he was required by the mandatory provisions of sections 3436 and 3439 to perform the acts therein prescribed. Having made the declaration and the book entry required by those sections he was without authority to revoke them. Any such purported act would have been without legal effect and the tax lien would have remained.

Implicit in the nature of the tax scheme from the date when taxes become a lien until the actual sale to the state five years after the symbolic sale, paper sale or stamp sale, by whatever appellation it may be designated, is the preservation of the tax lien. There is no dissolution of the lien until the taxes and accrued penalties have been paid.

The property was privately owned on the tax lien date, the first Monday in March, 1942, and therefore was liable to taxation. Const. Art. XIII, secs. 8, 8a; Revenue and Taxation Code, secs. 405, 2192. The tax lien attached on that date. Sec. 2192. It had the effect of a judgment against the person (sec. 2186) and of an execution levied against the property (sec. 2193). The denouncement of these provisions by the majority opinion does not eliminate them from the statute nor render them innocuous or unenforceable. The tax remained a lien until paid or legally cancelled. Sec. 2194.

Consonant with the provisions of the statute and with the decisions herein cited respondent concedes in its brief (1) that the liability of property to taxation depends on the status of the property on the tax lien date, the first Monday in March; (2) that the taxes constitute the personal obligation of the property owner; (3) that the later acquisition of the property by the United States did not wipe out the tax that had theretofore attached to the property, together with the penalty prescribed for failure to pay the tax. But, contends respondent, (1) a sale for delinquent taxes made subsequently to the time when the United States acquired title is not valid and (2) any redemption penalty prescribed by law as a condition precedent to the right to redeem the property from such sale is also invalid.

The first contention has been disposed of in that there was no ‘sale’ of the property after title passed to the government but that the so-called sale was merely a proceeding to perpetuate the lien for unpaid taxes and penalties. However, if it be assumed that there was a sale, as argued by respondent, the redemption penalty and the interest and costs added on June 30, 1943, as required by law, were nothing more than penalties accumulating in addition to those added for nonpayment of the two installments of taxes. The only difference between delinquency penalties and redemption penalties is that the former become fixed in the definite amounts specified in the statute upon the respective delinquency dates and the latter increase with the lapse of time and are computed to the date of redemption.

Respondent's argument on its second contention is based on the exemption from taxation of property of the United States (Cal.Const. Art. XIII, sec. 1; Revenue and Taxation Code, secs. 201, 202) and on the judgment in United States v. Alabama, 313 U.S. 274, 61 S.Ct. 1011, 85 L.Ed. 1327, declaring that actual tax sales had and certificates of purchase issued to the state after the United States acquired title to the property should be set aside. This argument ignores the law as clearly stated in the Alabama case that the tax lien that had accrued prior to the conveyance of title to the United States remained unaffected by that conveyance. The tax lien date was October 1, 1936. The three conveyances were made to the government on October 1, 1936, December 10, 1936, and March 10, 1937, respectively. The taxes became due on October 1, 1937, and delinquent on January 1, 1938. The sales took place on June 12, 1939. Such penalties as were provided by law obviously accrued after title had vested in the United States.

In the Alabama case the court held that the United States having acquired one of the parcels on the tax date and the others after that date, the lien on the land persisted although the property could not be sold for nonpayment of the tax without the consent of the government. 313 U.S. at page 281, 61 S.Ct. 1011, 85 L.Ed. at page 1332. The court expressly refused to make an exception of the parcel conveyed on the tax lien date. The property was in actuality sold pursuant to law for nonpayment of the tax and certificates of purchase were issued to the state. The action was an original proceeding in the Supreme Court. The government sought a decree quieting its title against the state, asserting its right to a merchantable title and to a decree cancelling the liens, tax sales and certificates of purchase. The court held that the government was entitled to a decree setting aside the tax sales and the certificates of purchase because the sales were made and the certificates issued after the United States had become the owner of the property and the proceeding against the property amounted to a suit against the government which could not be maintained without its consent, but that the land remained subject to the tax lien notwithstanding ownership by the United States and a decree quieting title was denied.

Since the symbolic ‘sale’ to the state on June 30, 1943, pursuant to section 3436 was not an actual sale and did not purport to convey title to the state, but was merely an added step in the perfection and perpetuation of the lien for unpaid taxes and resulted in nothing more potent than added penalties for nonpayment, the title of the United States was not placed in peril. On the basis of the Alabama case an action by the government to quiet title would have failed, and an action to set aside the proceeding denominated a sale that was not a sale would likewise have failed.

The lien for the amount of the original tax is not legally separable from the lien for penalties, interest and costs. The latter is an accretion to the original lien and the result is an enlargement of the amount necessary to be paid in order to remove the lien. Nor are the penalties (1) for nonpayment of the second installment or (2) those that accrued on June 30, 1943, both of which were added after the United States acquired title, separable from the penalty for nonpayment of the first installment.

The difference between a delinquency penalty and a redemption penalty is in name only. Both are penalties required by law to be added to the tax and both must be paid in order to effect a clearance of the title. No case has been cited to the effect that a redemption penalty is dissimiliar in effect from a delinquency penalty, and no reason suggests itself that one should be enforceable and the other not.

The tax lien relates back and attaches to the land as of the tax date and exists for the full amount of the tax, penalties, costs and interest imposed by law. Respondent concedes that the liability of its property to taxation depends on its status on the tax lien date, which means that since the property in question was owned by respondent on the tax date it was taxable and the law then in force followed through until the tax lien was satisfied by the payment of the tax and all penalties accruing by reason of nonpayment.

When the United States acquires land by condemnation after the tax date the lien for taxes attaches for the full amount of the tax and penalties. In United States v. Certain Lands (Eau Claire), D.C., 49 F.Supp. 225, 226, the court allowed the tax lien out of the deposit made by the government ‘for the full amount of the tax, penalties and interest.’ In United States v. Certain Parcels of Land (Mifflin Twp.), D.C., 47 F.Supp. 333, 334, interest was awarded ‘from the time of the condemnation until the time of payment.’ The court remarked that the property owner could have stopped the accruing interest by requesting the payment of the taxes, including the interest thereon, when the land was taken. In United States v. Five Acres (Suffolk County), D.C., 56 F.Supp. 628, 633, the city was held to be entitled to interest on the taxes ‘up to the time of payment.’ Affirmed sub.nom. Richard T. Green Co. v. City of Chelsea, 1 Cir., 149 F.2d 927. In United States v. 53 1/414 Acres of Land (Brooklyn), D.C., 46 F.Supp. 875, the property owner contended that the city was not entitled to interest and penalties on the taxes after the date of vesting of title in the United States because the city could have applied for the payment due at any time after the date of vesting. This contention was overruled. The court said, 46 F.Supp. at page 876, that the owner could have made application for the payment to the city immediately after the date of vesting of title and thereby could have avoided payment of interest and penalties. The lien for taxes attaching on the first Monday in March remains notwithstanding the acquisition thereafter by a municipality, and the latter takes title ‘subject to the lien for county purposes to the same extent as would a private purchaser.’ City of Santa Monica v. Los Angeles County, 15 Cal.App. 710, 713, 115 P. 945, 946. Since the city would be in the shoes of a private purchaser it would be compelled to pay interest, penalties and costs in addition to the tax in order to remove the lien. The penalty is part of and follows the tax. Long Beach City School Dist. v. Payne, 219 Cal. 598, 601, 28 P.2d 663.

There can be no apportionment of taxes but the entire amount of the tax lien must be paid out of the money deposited as compensation for the land. United States v. Certain Lands (Eau Claire), D.C., 49 F.Supp. 225, 226. Since the tax lien remains against the property until paid and since the property cannot be sold to satisfy the lien, the taxing officers must look for the recovery of the tax and penalties to the fund deposited by the United States upon the filing of the declaration of taking. Where the obligation for payment of taxes matures before the appropriation of title by the United States, the responsibility for payment of the tax with interest and penalties rests wholly on the property owner, who may stop the accumulation of interest and penalties at any time by paying the amount due. United States v. Certain Land (St. Louis) D.C., 29 F.Supp. 92, 97. The fund deposited by the United States in the Registry of the court as compensation to be paid to landowners in a condemnation case stands in the place of the land condemned and is subject to the claims of all lienholders for the payment of the amount of their liens, with interest and other accretions that had attached to the real estate at the time of the appropriation of the property by the government. The lien status is not changed by the taking of the land. United States v. Certain Land (St. Louis), supra, D.C., 29 F.Supp. at page 94; United States v. Certain Lands (Brooklyn), 2 Cir., 129 F.2d 577, 580; United States v. Certain Parcels of Land (San Diego), D.C., 44 F.Supp. 936, 937. If the penalty as well as the tax is a lien on property, the penalty is part of the tax and the payment of the penalty cannot be differentiated from the payment of the lien for the tax. State of California v. Hisey, 9 Cir., 84 F.2d 802, 805.

There are federal decisions that from casual reading appear to be contrary to the cases cited above, but an examination of them will reveal that some were decided under state statutes that permitted taxes to be apportioned up to the time of condemnation and that in others the taxing authorities were attempting to obtain payment of taxes out of the funds on deposit that had not ripened into liens when title was taken by the United States. In California there is no statutory provision for apportionment. The tax lien attaches to the property on the first Monday in March and remains, with all its accumulations and accretions in the form of penalties, interest and costs, until paid or cancelled.

The loss of the property by condemnation does not excuse respondent from payment of the tax and penalty. The majority opinion holds that the loss of the property relieves respondent from payment of the penalties. The argument is based on the proposition that when there is an agreement to sell or an uncompleted sale of property and it is destroyed before title is transferred, thus rendering the contract impossible of performance, the loss falls on the seller and he cannot collect the sale price. This thesis is negated by the fact that the property was not lost as would have been the case if it had been destroyed by tidal wave or earthquake. Respondent did not suffer such a loss. Nothing was destroyed. Respondent received cash in exchange for the land, and since the compensation paid by the government stands in the place of the land respondent suffered no detriment.

There was no occasion in any of the federal cases to distinguish between redemption penalties and delinquency penalties for the reason that it does not appear that any of the tax proceedings under discussion had progressed to the point of a sale from which redemption would be required. The cases all hold that penalties and interest up to the time of payment must be awarded with the taxes out of the fund on deposit. Such being the rule from which no court has dissented until in the instant case, I see no logical justification for attempting, as the majority opinion does, to differentiate between penalties because they are of different classes or are designated by different names, or because they arise for different reasons and at various stages of the tax proceedings. If the penalties go with the tax and if the transfer of title to the government does not intervene to stop the accumulation of one penalty, how can such transfer annul the other?

Title remained in respondent until March 19, 1943, more than a year after the taxes became a lien. During that time it had the possession, control and use of the property and received the revenues produced from it. It received the same benefits and protection from the state, the county and the city to which all property owners and taxpayers are entitled. In lieu of the real property it received cash to which the same benefits and protection were transferred. In equity it should pay the tax and the penalties that were added as compensation to the state and its political subdivisions for the delay in paying the lawful levy.

Respondent could have avoided penalties, costs and interest (1) by paying each installment of taxes when it became due or (2) by applying at any time after March 19, 1943, the date of the deposit and declaration of taking by the United States, for an order for the payment of the taxes out of the fund deposited in payment for the land. See cases cited. Having done neither it cannot complain because it is required to pay the same amount that would have been necessary to satisfy the tax lien if it had retained title.

The liability for the tax did not cease when the government took title and possession. Since the lien for penalties, interest and costs cannot be separated from the lien for the tax, respondent's concessions hereinbefore noted (1) that the liability of the property to taxation is fixed as of the tax date, (2) that the taxes were its personal obligation, and (3) that the taxes and penalties were not affected by the acquisition of the property by the United States after the tax date, sufficiently dispose of the question of respondent's liability for the penalties and costs in dispute.

The judgment should be reversed. Since the complaint does not and cannot state a cause of action the trial court should be directed to sustain the demurrer without leave to amend and to enter judgment for defendants.

MOORE, Presiding Justice.

McCOMB, J., concurs.