HIM v. CITY COUNTY OF SAN FRANCISCO (1948)

Appeal from a judgment of the superior court of San Francisco after order sustaining demurrers of respondents City and County of San Francisco and State of California without leave to amend.

The main question here is whether the adoption in 1945 of section 175 of the Revenue and Taxation Code repealed by implication section 3637 of that Code.

Appellant, Henry Wong Him, was the owner of two lots in the City and County of San Francisco. In the year 1927–28 the city levied its taxes on the realty, and, in addition, on the personal property located thereon. The complaint alleges that this assessment was illegal and invalid because the personal property belonged to persons other than the appellant and other than the legal and assessed owner of the property. The taxes were unpaid, and on June 25, 1928, the property was marked sold to the state by the city and county for nonpayment of the taxes levied for that fiscal year. On September 6, 1933, the city tax collector made and executed a deed to the State of California for failure to pay taxes. This action was brought on October 22, 1946, under Chapter 5.7, Part 6, Division 1, of the Revenue and Taxation Code and against the city and state, to contest the validity of the tax deed. The deed was alleged to be invalid because the levy upon which the tax was originally based was illegal and void, and because no legal notice of the sale under which the property was deeded to the state was made or given by the city. The demurrers of the respondents on the ground that the action was barred by section 175 were sustained without leave to amend.

Appellant concedes that if section 175 is applicable to this action, then it was not brought in time, as under that section the latest date to bring it would have been September 15, 1946. He, however, contends that section 3637, rather than 175, applies, and under that section the action could be brought any time up until January 1, 1948.

Chapter 5.7 of the Revenue and Taxation Code, entitled ‘Taxpayer's Action to Contest the Validity of Tax Sale or Tax Deed,’ was originally added to the code in 1941. Section 3620 thereof sets forth the purpose of the chapter, and section 3637 provides the limitation of the remedy. The same Legislature which had passed section 175 had, just a few weeks before, extended the operation of section 3637. Section 175 was approved by the Governor June 25, 1945, and became effective September 15, 1945. (Stats. 1945, Chap. 1017, p. 1963.) Sections 3620 and 3637 were amended and became effective immediately as urgency measures on May 31, 1945. (Stats. 1945, Chap. 637, p. 1172.) Respondents' sole contention is that sections 3637 and 175 are inconsistent and irreconcilable, and therefore there was a repeal by implication when the latter was added to the Code. Appellant, however, contends that there is no inconsistency; that section 175 presents a new remedy, making the procedure for that remedy the procedure under Chapter 5.7 and placing its own statutes of limitation thereon, and, therefore, there is no repeal by implication.

In order to apply this doctrine, there must, of course, be an irreconcilable conflict between the two. 23 Cal. Jur. 694, Sec. 84, quoted with approval in Burger v. Hirni, 50 Cal.App.2d 709, 711, 123 P.2d 891, 893, states: ‘Presumption Against Repeal by Implication. It is elementary that the repeal of statutes by implication is not favored, especially where the prior enactment has been judicially construed and is generally understood and acted upon. Likewise, in the absence of express terms it will be presumed that the legislature did not intend by a later act to repeal a former one, if by a fair and reasonable construction effect can be given to both. To overcome this presumption, the two acts must be irreconcilable—i. e., clearly repugnant—as to the vital matters to which they relate, and so inconsistent that the two cannot have concurrent operation, or it must be apparent that the later statute is a revision of the entire subject matter and designed as a substitute for the earlier act, or the intent to effect a repeal must be otherwise expressed in unmistakable language. Accordingly, where there are two laws upon the same subject, they will, if reasonably possible, be so construed as to maintain the integrity of both, the courts being bound to uphold the prior act if the two may well subsist together, though if the two cannot be reconciled, the last act will, of course govern, and repeals the former in so far as the two are repugnant. The theory of repeal by inadvertence will not be considered if another result may be reached by the application of any rule of construction, * * *.’

Section 175 was added as Chapter 3 to Part 1 (‘General Provisions'), Division 1 (‘Property Taxation’), of the Revenue and Taxation Code, and reads: ‘Chapter 3. Limitation of Actions. Section 175. Tax deeds: Presumption where action not commenced in year: Manner of prosecution. All deeds heretofore and hereafter issued to the State of California or to any taxing agency, including taxing agencies which have their own system for the levying and collection of taxes, by reason of delinquency of property taxes or assessments levied by any taxing agency or revenue district, shall be conclusively presumed to be valid unless held to be invalid in an appropriate proceeding in a court of competent jurisdiction to determine the validity of said deed commenced within one year after the execution of said deed, or within one year after the effective date of this section, whichever be later. Such proceedings may be prosecuted within the time limits above specified in the manner and subject to the provisions of Sections 3618 to 3636 of this code.’

Section 3637, as originally enacted on May 19, 1941, provided that an action brought under Chapter 5.7 must be commenced within one year after the date of execution of the tax deed, or one year after the effective date of said chapter. (Stats. 1941, Chap. 293, p. 1439.) The amendment of May 22, 1943, limited the time to one year after the date of execution of the tax deed or one year after January 2, 1945. (Stats.1943, Chap. 709, p. 2465.) As amended on May 31, 1945, and as it now reads, the section provides: ‘Any proceedings brought in accordance with the provisions of this chapter can only be commenced within one year after the date of execution of the tax deed, or within one year after January 2, 1947, whichever is later.’ (Stats.1945, Chap. 637, p. 1172.)

Whether section 175 provides a new remedy, and whether it is wholly inconsistent with section 3637, depends upon the legislative meaning and intent in enacting section 3620, determining who may bring an action under Chapter 5.7. The latter section has always been passed as an urgency measure, and, as last amended, effective May 31, 1945, reads: ‘The owner of any real property deeded to the State for taxes, or sold to the State by operation of law prior to July 1, 1939, or any other person who may redeem such property, may bring an action in the superior court of the county wherein the real property is located, to contest the validity of the tax sale or the tax deed to the State.’

Appellant contends that this section limits the remedy of Chapter 5.7 to the owner of any real property deeded or sold to the state prior to July 1, 1939, and that the addition of section 175 provides a new remedy for all tax deeds, and, specifically, for tax deeds made after 1939. He contends that before the passage of section 175 there was no provision for any such proceedings as to deed made after July 1, 1939. Respondents, on the other hand, contend that the proper interpretation of this section is that it permits the bringing of an action on property deeded to the state, no matter when the deed was made, but limits the bringing of an action for property sold, but not deeded, prior to July 1, 1939. Thus, the question here is—does section 3620 limit the relief under Chapter 5.7 to property deeded or sold prior to July 1, 1939, or does to limitation apply only to property sold but not deeded? If the date refers to both deeds and sales, then the remedy is strictly limited; whereas section 175 applies to all tax deeds without restriction as to date.

In approaching the proper interpretation of the legislative acts involved here, it must be borne in mind that ‘Since tax proceedings are in vitum, tax laws are strictly construed in favor of the taxpayer and against the state, whether property is to be seized or the tax enforced by suit.’ Whitmore v. Brown, 207 Cal. 473, 482, 279 P. 447, 451, quoting 24 Cal.Jur. pp. 27, 28. See also County of Los Angeles v. Jones, 13 Cal.2d 554, 561, 90 P.2d 802, and Anglo Cal. Nat. Bank v. Leland, 9 Cal.2d 347, 351, 70 P.2d 937, to the same effect.

The key to the legislative intent is found in the punctuation used in the 1943 amendment of section 3620 and the statements of the facts requiring the passage of Chapter 5.7, and all subsequent amendments thereto, as urgency measures. These clearly show that the remedy of this chapter, in itself, is limited to property either tax deeded or sold to the state by operation of law, prior to July 1, 1939.

As originally enacted in 1941, Chapter 5.7 was entitled ‘Taxpayer's Action to Contest the Validity of Tax Deed’ and section 3620 read as follows: ‘The owner of any real property deeded to the State for taxes, or any other person who may redeem such property, may bring an action in the superior court of the county wherein the real property is located to contest the validity of the tax deed to the State.’

In 1937 in the case of Otis v. Los Angeles Co., 9 Cal.2d 366, 70 P.2d 633, the court held the tax levy of Los Angeles County for the fiscal year 1933–34 invalid and excessive, thereby invalidating all tax deeds resulting from such levy. The statement of the facts constituting the urgency of the measure indicates that the Legislature had in mind the effect of the decision in the Otis case, for, after declaring that numerous levies by taxing agencies had been, directly or indirectly, declared invalid by court decision, it stated: ‘Many taxpayers are willing to paythese delinquent taxes and to redeem properties from tax sale if a quick and immediate remedy can be afforded for so doing. No such remedy now exists which has met with the approval of title companies and attorneys for public bodies. It is estimated that large amounts of delinquent taxes, necessary to the continued welfare of the fiscal systems of local governments, will be immediately paid upon the adoption of a quick and simple remedy by which such tax liabilities can be determined in an action brought by the taxpayer.’ (Stats.1941, Chap. 293, p. 1440.)

On May 22, 1943, Chapter 5.7 was again amended in several particulars. The title of the chapter was amended to read: ‘Taxpayer's Action to Contest the Validity of Tax Sale or Tax Deed.’ (Emphasis added.) An amendment to section 3620 authorized an action to contest the validity of a tax sale as well as a tax deed. Of particular importance to the instant question is the punctuation used in this amendment. It read in part as follows: ‘The owner of any real property deeded to the State for taxes, or sold to the State by operation of law, prior to July 1, 1935, or any other person * * *.’ (Emphasis added.)

The insertion of the comma after the word ‘law’ and before the word ‘prior’ would seem clearly to refer the section to property either deeded or sold to the state, prior to July 1, 1935. If the punctuation as used in this amendment left any doubt as to the intent of the Legislature, it has been completely dispelled by the statement of facts in the urgency clause, which clearly connects the remedy with property both deeded and sold to the state during the depression. It reads: ‘During the widespread depression, out of which we have now emerged, thousands of parcels of property, because of the inability of taxpayers to pay their taxes, were tax sold or tax-deeded. The appellate courts of this State have heretofore determined that many of said deeds or taxes were and are invalid. To permit an action by the taxpayer to contest the validity of tax sales and tax deeds would not only determine the validity of said tax sales and said tax deeds for the benefit of the State, but would also immediately restore properties to the tax rolls and thereby add badly needed revenue for the operation and maintenance of government.’ (Stats.1943, Chap. 709, p. 2465. Emphasis added.)

It is true that in the subsequent amendment of section 3620, on May 31, 1945, changing the specified date to July 1, 1939, the comma is omitted between the words ‘law’ and ‘prior.’ However, in view of the fact that the statement of the necessity for its passage as an urgency measure even more explicitly relates the remedy to both tax deeds and sales prior to 1939, and during the depression years, the omission is obviously the result of inadvertence. The material portion of the urgency clause therein reads as follows: ‘Thousands of parcels of property, because of the inability of taxpayers to pay their taxes were sold or tax deeded in the years prior to 1939, before we emerged out of the countrywide depression.’ (Emphasis added.) The remainder is substantially the same as that stated in the 1943 amendment. (See Stats.1945, Chap. 637, p. 1173.)

As noted in the urgency clause, one of the primary purposes was to restore property to the tax rolls and provide revenue for local governments. Undoubtedly the greater number of tax delinquencies occurred, and, consequently, the greater number of tax deeds issued and sales were made, during the depression, and it was to the restoration of these that the chapter was directed. Apparently it was during this time that the courts had declared so many of these tax deeds and sales invalid. Hence, it is logical that the Legislature would grant a longer extension of time within which to contest these deeds and sales under section 3637, to aid those who lost property due to illegal and excessive tax levies during a time of general hardship (when they could least afford any additional burdens) than in ordinary or even prosperous times thereafter when section 175 was enacted. It would seem that the very purpose of maintaining Chapter 5.7 was to provide this remedy over the extended period of time to January 1, 1948, in order to compensate in part for the inequities coincident with these excessive and illegal hardships and the simultaneous hard times.

It is true that some inconsistency might exist inasmuch as section 175 states that ‘All deeds heretofore and hereafter issued to the State of California * * * shall be conclusively presumed to be valid unless * * *’ etc. However, this section is found in Part 1, of Division 1, on ‘General Provisions,’ and it is well settled that a specific statute on a subject controls over a general provision where there is a conflict. ‘This is especially true when it is possible at least partially to iron out the inconsistencies and make the whole harmonious.’ People v. Moroney, 24 Cal.2d 638, 644, 150 P.2d 888, 891. This general rule of statutory construction applies also to the various statutes of limitation. Glassell Dev. Co. v. Citizens' Nat. Bk., 191 Cal. 375, 216 P. 1012, 28 A.L.R. 1427; Cohen v. City of Alameda, 168 Cal. 265, 142 P. 885.

Section 175 applies to all tax deeds; whereas section 3637 seems to have been intended to apply only to proceedings to determine the validity of tax deeds issued prior to 1939.

Boyd v. Huntington, 215 Cal. 473, 482, 11 P.2d 383, quoted with approval in Division Of Labor Law Enforcement v. Moroney, 28 Cal.2d 344, 346, 170 P.2d 3, 4, stated: ‘* * * a general statute will not repeal by implication a former one which is special or which is limited in its application unless there is something in the general law that makes it manifest that the Legislature contemplated and intended a repeal.’

The Legislature, in passing section 175, obviously had Chapter 5.7 in mind, as they referred to all but two sections thereof (3637 and 3638 on dismissal for failure to prosecute). It is difficult to see how they could have inadvertently failed to repeal those sections had they so intended. Hence, there is nothing ‘in the general law that makes it manifest that the Legislature contemplated and intended a repeal.’

It is clear that section 3637 is a statute dealing with a special and specific class of tax deeds, namely, those issued prior to July 1, 1939, and is not repealed by the enactment of section 175, which is a general statute dealing with tax deeds generally.

The judgment appealed from is reversed.

BRAY, Justice.

PETERS, P. J., and WARD, J., concur.