WULFF HANSEN CO v. SILVERS ET AL (1941)

On December 10, 1936, plaintiff filed a petition for a writ of mandate to compel respondents to levy a tax, and to have it adjudged that certain defendants purchased the real property involved under foreclosure, subject to street assessment liens which were delinquent prior to filing said action in foreclosure, and that said liens were not extinguished by the decree of foreclosure. The facts were undisputed. Findings and judgment were entered in favor of defendants, denying the writ, it being ordered that plaintiff take nothing by said action. The appeal is based upon the judgment roll alone, it being the contention of appellant that the findings justify the relief sought by it.

The findings disclose that in 1925, respondent, town of Lakeport, undertook to do street work under the Improvement Act of 1911 (Stats. 1911, page 730, Deering's General Laws 1931, Act 8199). Thereafter, bonds were issued to cover the cost of said work, under the provisions of the Improvement Bond Act of 1915 (Stats. 1915, page 1441, Deering's General Laws 1931, Act 8209). Assessments, upon the property here involved, under the latter act became delinquent for the years 1927, 1928, 1929, 1930 and 1931. On May 14, 1931, respondent town (a municipal corporation), commenced an action to foreclose the lien of said assessments, and a decree of foreclosure was made and entered on April 26, 1932, directing the sale of said real property. A sale was had, and defendants Silvers, Godfrey, Morey and Martin, each purchased a group of lots, subject to all unpaid installments, interest and penalties under the same proceedings. A certificate of sale and deed were duly issued to defendant Silvers. Assessments levied by the defendant, town of Lakeport, upon the real property hereinafter described, (and a lien thereon and payable subsequent to the delinquency thereof occurring during the year 1931), have not been paid and remain wholly due, owing, payable and unpaid, and are now delinquent. Said bonds are unredeemed and now due and unpaid, except that on the 2nd day of September, 1936, there was paid on said bonds, and on each of them, 38 per cent of the principal thereof, and at various dates prior to said September 2, 1936, there was paid all interest and coupons on said bonds to July 2, 1936; that said bonds, and each of them, never were, and are not now, secured by any lien upon the real property described in said First Amended Complaint and hereinafter described, but said bonds, and each of them are, and is secured by a lien upon the redemption fund provided in and by said Act 8209 of Deering's General Laws 1931, and by the unpaid assessments made for the payment of said work only. On January 18, 1937, the city council of the defendant, town of Lakeport, a municipal corporation, duly adopted and passed resolutions ordering all assessments remaining due and unpaid on said real property hereinabove described, at the dates thereof, be collected by suit to foreclose the liens thereon which secured such assessments, that the tax collector be credited upon the assessment roll then in his hands with the amount charged against him on account of such assessments ordered to suit and be relieved of further duties in regard thereto on the 22nd day of July, 1930, on the 4th day of May, 1931, on the 21st day of April, 1932, on the 21st day of July, 1933, on the 5th day of June, 1934, on the 22nd day of May, 1935, on the 4th day of May, 1936, and on the 18th day of January, 1937. On January 20, 1937, respondent town commenced an action to secure judgment for the total aggregate amount of the principal and interest installments due and delinquent not theretofore ordered to suit by foreclosure by said town of Lakeport, a municipal corporation, for the said improvement work on said Main Street in the said town of Lakeport, and for interest, costs and penalties, attorneys' fees, and to adjudge and declare the same to be a lien upon each of the lots, pieces, or parcels of land here involved, and for the foreclosure of said lien, for the sale of each of said lots, pieces, or parcels of land in the manner provided by law, and that the proceeds of said sale be applied in the manner and for the purpose provided by law. Said action is still pending and undetermined. At the time of the trial of this action there was a balance of $4,987.50 in the Delinquent Street Assessment Fund and a balance of $2,418.48 in the Main Street Improvement Bond Fund of the defendant, town of Lakeport, a municipal corporation, the said Main Street Improvement Bond Fund being the fund of defendant, town of Lakeport, a municipal corporation, from which is paid the principal and interest on said Main Street Improvement Bonds and Delinquent Street Assessment Fund of said defendant, town of Lakeport, a municipal corporation, being the fund into which moneys are collected and paid into from a special tax at the rate of ten cents on each $100 of assessable property for the purpose of paying for the lands purchased, or to be purchased, at tax sales as provided by section 16 of said Act 8209 of Deering's General Laws, 1937. That the Main Street Improvement Bond Fund of said defendant, town of Lakeport, a municipal corporation, varied because of payments into and out of said fund from time to time between the date of filing the complaint in this action, to–wit, September 17, 1936, and September 30, 1936. Plaintiff is the owner and holder of bonds numbers 102, 103, 104, 105, 106, 107 and 108, each of the par value of $1,000, and that all of said bonds matured on the 2nd day of July, 1936, and that each and all of said bonds owned by said plaintiff were duly presented for payment on the 2nd day of July, 1936, in the manner and form required by law, after the maturity thereof, and that payment thereof was delayed, and that after the 2nd day of July, 1936, and prior to the date of the answer of defendant, M. A. Silvers, there was paid upon each of said bonds, in this paragraph hereinabove enumerated, 38 per cent of the principal thereof and all the coupon interest thereon to date of maturity, or to July 2, 1936, and that each of said bonds continue to bear interest from said July 2, 1936, on the unpaid balance of principal thereof at the rate specified in said bonds until the same have been duly paid. Other facts were found which may be referred to later herein.

The pertinent portions of the said bond act of 1915 are as follows:

Section 12 (in part): “Upon default in payment, the lands securing such installments and assessments shall be sold in the same manner in which real property in such city is sold, for the nonpayment of general municipal taxes, and be subject to redemption within one year from date of sale in the same manner as such real property is redeemed from such delinquent sale, and upon failure of such redemption shall in like manner pass to the purchaser. The city may be the purchaser at any delinquent sale in like manner in which it becomes or may become the purchaser of property sold for nonpayment of the general municipal property tax, and in the event of its so becoming the purchaser shall pay and transfer into said redemption fund the amount of the delinquent assessment and of the delinquent interest thereon upon which said sale is made. In cases where the municipal property tax is collected by county or city and county officials and sales for nonpayment of such taxes are made to the state, the state shall be the purchaser at any such sale hereunder, but shall hold the title acquired at such sale upon behalf of the city and shall account to the city for any moneys received upon redemption or from the sale of such property, the city for the purposes of this act being deemed the real purchaser.” This last provision applied to respondent city, the taxes of which are collected by the county tax collector. The section further provides: “In the event of there being no available funds in the treasury with which to make such payment, the tax collector shall delay the entry of the certificate of sale until such funds are available, making demand in the meantime upon the city council that a suitable amount be included in the next tax levy for the purpose of providing funds with which to make such payment; provided, however, that the period of redemption from such tax sale shall not be extended thereby nor the rights or privileges of the property owner be thereby in anywise affected.”

Section 11(c) of the Improvement Bond Act of 1915 reads: “(c) In the event of nonpayment of any assessment or reassessment or installment thereof, or of any interest thereon, together with any penalties and other charges accruing under the taxation ordinance of the city and not later than four years after the due date of the last installment of principal, as a cumulative remedy, the same when due and delinquent may by order of the council be collected by suit brought in the superior court to foreclose the lien thereof. * * * The foreclosure suit shall be governed and regulated by the provisions hereof, and also where not in conflict herewith by the codes of this state. * * * Upon the ordering of any such foreclosure suits the tax collector shall be credited upon the assessment–roll then in his hands with the amount charged against him on account of such assessments or reassessments ordered to suit and be relieved of further duty in regard thereto.”

Section 16, subdivision (a), provides: “The city council may, and in the event of demand by the tax collector therefor as provided in section twelve hereof must, at the time of fixing the annual tax rate and levying the taxes to be collected for general municipal purposes, levy a special tax upon the taxable property in the city for the purpose of paying for the lands purchased or to be purchased at such tax sales, but not to exceed for each local improvement ten cents on each one hundred dollars of assessable property.” (Italics ours.)

It is the contention of appellant that whenever an assessment under the said Act of 1915 is in default, it becomes the mandatory duty of the tax collector to sell the property. By the provisions of said act, when such a sale is had, and the city becomes the purchaser of the property secured by the bonds, it becomes its duty to pay the amount of the delinquent assessment into a bond redemption fund. Such funds are thereupon used to redeem the bonds. If there are no funds available to the city to make such payment, it is the mandatory duty of the city to levy a tax under sections 12 and 16 of said act. The foregoing principles have been announced in an action concerning this same bond issue––American Co. v. City of Lakeport, 220 Cal. 548, 32 P.2d 622. The bond act has been construed several times by our courts in connection with the duty of the municipality to levy the tax, but the question here––whether or not a tax sale can be forced by mandamus––has never been decided or commented upon.

Respondents contend that, by the provisions of the bond act, when assessments are in default, the city has two independent courses which it may, at its option, pursue. One is the sale by the tax collector in the same manner as other property of a municipality is sold for delinquent taxes, and the other is by an action in foreclosure. They point out that they have commenced such an action, and therefore they connot be compelled to adopt the other alternative and levy a tax.

We think the contention of respondents must prevail. The bond act (section 11(c) expressly provides that: “Upon the ordering of any such foreclosure suits the tax collector shall be credited upon the assessment–roll then in his hands with the amount charged against him on account of such assessments or reassessments ordered to suit and be relieved of further duty in regard thereto.” (Italics added.) The order for foreclosure was made. As the tax collector was thereupon “relieved of further duty in regard thereto,” he is under no legal duty to sell the land for tax delinquencies.

Foreclosure under section 11 of the 1915 bond act is a cumulative remedy. In other words, an additional remedy. The town of Lakeport has the choice whether it shall proceed by tax sale or whether it shall proceed by foreclosure sale. In the case of Chicago & N. W. Ry. Co. v. City of Chicago, 148 Ill. 141, 35 N.E. 881, the court said: “A cumulative remedy is a remedy created by statute in addition to one which still remains in force; and when a statute gives a new remedy, and contains no negative, express or implied, of the old remedy, the new one provided is cumulative, and, the party may elect between the two.” See Bowles v. Neely, 28 Okl. 556, 115 P. 344.

1 Bouvier's Law Dictionary, Rawle's Third Rev., p. 737, defines “cumulative remedy” as follows: “Cumulative Remedy. A remedy created by statute in addition to one which still remains in force.”

Whether stated to be cumulative or alternative remedies, it must be that they are alternate in character. The lien can only be foreclosed once for each delinquency. Thus, if the lien has been foreclosed under section 11(c), there is nothing to sell at tax sale under section 12. Or, if the lien has been foreclosed by a valid sale under section 12, nothing remains to foreclose under section 11(c). Furthermore, under the bond act, the city council may, and in the event of a demand by the tax collector therefor, as provided in section 12 thereof, must levy the tax. Obviously then, if the tax collector is relieved of further duty regarding the assessments ordered to foreclosure, and is credited upon his books with the amount thereof, he is not only under no legal duty, but has no power or authority to make demand upon the city for a tax levy.

Plaintiff further contends, however, that notwithstanding the plain language of the bond act, which we hold bars the remedy sought, it should prevail by reason of adjudications in two actions between the same parties, covering certain questions arising out of said bond issue. The judgment rolls in said actions are not before us. The trial court, however, found in respect to said judgments as follows: “That on the 20th day of July, 1935, there was commenced in the Superior Court of the State of California, in and for the County of Lake, an action numbered 4179 of the files of said court, wherein Town of Lakeport, a municipal corporation, sometimes called City of Lakeport, and George H. Voss, as Treasurer of the Town of Lakeport, were plaintiffs, and Dorothy Haggitt, and Wulff–Hansen & Co., a corporation, et al., were defendants; that in and by said action number 4179 plaintiffs therein sought a judgment of said court of a declaration of their rights or duties with respect to said Main Street Improvement Bonds owned by the defendants in said action, a declaration of plaintiffs' rights or duties as to what Main Street Improvement Bonds should be paid first, a declaration of plaintiffs' rights or duties as to whether the whole Main Street Improvement Bond Fund should be kept intact and prorated when all bonds are mature, a declaration of plaintiffs' rights as to whether all delinquent Main Street Improvement Bonds should be prorated out of the funds available, a declaration of plaintiffs' rights as to whether the first Main Street Improvement Bonds presented that matured July 2nd, 1935, should be paid first or prorated with those of the same date of maturity, and for general relief; that said action number 4179 was prosecuted to judgment, and that the Amended Judgment in said action number 4179, has long since become final, and that no appeal was ever taken from said Amended Judgment in said action number 4179, and that said Amended Judgment in said action number 4179 has never been changed or modified, and that the same is now in full force and effect; that said Amended Judgment commanded, among other things, the plaintiffs in said action to pay to the defendants in said action, 38 per cent of the face value of their Main Street Improvement Bonds upon presentation, and all interest thereon to date of maturity thereof out of said Main Street Improvement Bond Fund, and that all delinquent and unpaid Main Street Improvement Bonds, other than those owned by the defendants in said action number 4179, be treated, so far as payments are concerned, in the same manner; that said plaintiffs did thereafter make all of such payments so commanded by said Amended Judgment as hereinabove found; that said Amended Judgment also provided that the plaintiff, Town of Lakeport, a municipal corporation, ‘comply with all of the provisions of the “Improvement Bond Act of 1915” ’ (Statutes 1915, page 1441), and as the same have been amended prior to the issuance of the aforesaid bonds, and that in and by said Amended Judgment it was further ordered that plaintiff, Town of Lakeport, make all necessary assessments and levy all necessary taxes as provided in said Act, and that said assessment and levy of taxes continue and the plaintiff, Town of Lakeport, was thereby directed to levy and collect the same until such time as all mature and unpaid Main Street Improvement Bonds of the plaintiff Town, and all interest thereon, as provided by law, have been fully paid, satisfied and discharged, or until funds are available for such purpose. * * * That on the 5th day of September, 1936, there was an action commenced in the Superior Court of the State of California, in and for the County of Lake, being number 4283 of the files of said court, wherein Wulff–Hansen & Co., a corporation, was plaintiff, and Town of Lakeport, a municipal corporation, sometimes called City of Lakeport, and George H. Voss, as treasurer of the Town of Lakeport, were defendants; that in and by said action number 4283 plaintiff sought a judgment of said court, among other things, commanding the defendant, town, to ‘comply with all the provisions of the Improvement Bond Act of 1915 (Statutes 1915, page 1441), and as the same have been amended prior to the issuance of the aforesaid bonds'; that in said action number 4283 a stipulated judgment was entered therein, and thereafter a stipulated Amended Judgment was entered therein; that said Amended Judgment has long since become final; that no appeal was ever taken from said Amended Judgment nor was said Amended Judgment ever changed or modified, and that said Amended Judgment is now in full force and effect; that said Amended Judgment, among other things, commanded the Defendant Town to ‘comply with all the provisions of the “Improvement bond act of 1915” (Statutes 1915, page 1441), and as the same have been amended prior to the issuance of the aforesaid bonds', and further provided ‘that this Amended Judgment shall not exceed the terms and provisions of the Improvement Bond Act of 1915, Statutes 1915, page 1441, and the amendments thereto, and should any of the provisions in this Amended Judgment in any way exceed, or attempt to exceed the provisions of the Improvement Bond Act of 1915, (Statutes 1915, page 1441), then said provisions in this Amended Judgment shall give way and be governed by the provisions of the Improvement Bond Act of 1915, as already interpreted by the decisions of the Supreme Court of the State of California’; that in and by said judgment the defendant, Town of Lakeport, was directed to make all necessary assessments, and levy all necessary taxes, as provided for in said Act, said assessment, and levy of taxes, to continue until such time as all mature and unpaid Main Street Improvement Bonds of the Town of Lakeport, and all interest thereon, have been fully paid, satisfied and discharged, or until funds are available for such purpose.''

We are of the opinion that neither of the said judgments is a bar to this action. The rule governing the situation is thus expressed in 34 C.J., page 902, sec. 1312: “A judgment rendered by a court having jurisdiction of the parties and subject matter, whether correct or not, is conclusive and indisputable evidence as to all rights, questions, or facts put in issue in the suit, and actually adjudicated therein, when the same come again into controversy between the same parties or their privies in proceedings upon the same or a different cause of action.” (Italics ours.)

Section 1911 of the Code of Civil Procedure provides as follows: “That only is deemed to have been adjudged in a former judgment which appears upon its face to have been so adjudged, or which was actually and necessarily included therein or necessary thereto.”

The question adjudicated here––the right of a bondholder to compel the municipality to sell property at a tax sale––was not adjudicated in either of said former judgments, and such judgments were therefore no defense to the action.

Appellant relies chiefly upon two cases, in respect to the question whether or not the commencement of the foreclosure proceedings precluded the granting of any relief to it. The first is the case of Hammond v. City of Burbank, 6 Cal.2d 646, 59 P.2d 495, 502, wherein it is said: “It may be that when foreclosure proceedings are instituted and proceed not only to final judgment, but also to sale, then the city may be relieved of liability (Federal Construction Co. v. Wold, 30 Cal.App. 360, 158 P. 340), a point we expressly refrain from deciding, but the foreclosure provisions were never intended, in our opinion, to constitute an alternative method of procedure so that the city by the mere commencement thereof, or by proceeding to judgment therein, should be entirely relieved of its mandatory obligation to make the 10–cent levy under section 16(a).” (Italics added.)

Respondents here do not contend that the commencement of such an action relieves the city of the obligation to levy the tax. The question of the right of a bondholder to compel the tax collector to proceed with a tax sale was not involved in the case.

In view of what we have said, we do not deem it necessary to discuss the question whether or not the purchasers at the foreclosure sale took title subject to the lien of delinquent assessments which were due prior to the commencement of that proceeding. We might add that such question was not decided by the trial court.

Finally, it is the rule that “proceedings on tax sales are in invitum, and to be valid must be stricti juris.” (Italics added.) 24 Cal.Jur., sec. 296, page 324. There would seem to be no valid reason why the legislature should provide two methods of enforcement in case of delinquencies, one of which may be more beneficial than the other to the bondholders. The foreclosure method, adopted by respondent city here, as we have seen, insures the creditor little or nothing. The language of the statute is so plain and direct that there is no room for interpretation. We refer the whole matter to the legislature. We can go no further than to declare the law according to its plain and obvious import.

The judgment is affirmed.

TUTTLE, Justice.

THOMPSON, Acting P. J., concurred.