STATE OF SOUTH DAKOTA
OFFICE OF
THE ATTORNEY GENERAL
August 29, 1969
Miss Alma Larson
Secretary of State
Pierre, South Dakota 57501
OFFICIAL OPINION NO. 69-76
Ch. 197, Session Laws of 1969. Treasurer's tax search in relation to transfer of certain real property, and recordation of such instrument conveying real property
Dear Miss Larson:
This office has received so many inquiries from various state's attorneys, county treasurers and county registers of deeds relative to the above mentioned 1969 Legislative Act, that I am taking the liberty of combining all of these requests into but a single, lengthy opinion and issuing my interpretation of this legislative enactment to you for the benefit of the several state's attorneys, county treasurers, and registers of deeds of South Dakota. To date these questions have been received by me from such county officials:
1. If taxes are shown to be due on the property described in the instrument, and such purports to convey title to such realty to a grantee therein named, may the register of deeds record such instrument?
2. What would constitute a violation of Section 5 of the Act so as to make the register of deeds personally liable to a vendee for damages?
3. If taxes upon such property are found to be due, what is the proper method for the treasurer to "certify" the same under the statute?
4. If taxes are in fact found due, but such have not been reduced to a "tax certificate," does the treasurer make the notation "taxes due"?
5. If, as a result of such search made prior to November 1, of any year, the treasurer ascertains the first half of the taxes have been paid, but the second half of such taxes have not been paid, what notation must the treasurer make on such instrument-"taxes paid in full," or "$ __ taxes due on such property"?
6. Must the treasurer in making such search concerning taxes, search records as to the personal property taxes due against any and all persons having an interest in the real estate described in such instrument?
7. If the county treasurer marks such instrument "sold for taxes," may such instrument be recorded by the register of deeds?
8. Assuming property in question was sold for taxes, but the search reveals there are subsequent real estate taxes (or special assessments) due on such property, must the fact of these taxes be noted on the instrument?
9. Is there any time limitation upon how far back the treasurer must go to determine whether or not such property has been sold for taxes?
10. Assuming the instrument presented to the county treasurer is a deed, naming the county as grantor, and a third person as grantee, and that such conveyance is of the county's interest in such property held by the county under a tax deed (in which case such resale proceedings would act to abate prior taxes and special assessments on such property), what notation does the treasurer make on such instrument-"sold for taxes," "taxes paid in full," or is such an exception under Section 3 of the Act, so no notation is required?
11. Are instruments transferring title by the United States, this state, or any instrumentality, agency or political subdivision of the state, exempt from such tax status notation under Section 3 of the Act?
12. Assuming the instrument presented for such tax-status search is a "contract for deed," or a "bond for deed"-is such tax status search of the property therein described required by the Act?
13. Must the county treasurer note the tax status of a deed executed merely to transfer title held in a female, from her name as a single woman to her name as a married woman?
14. Must the county treasurer note the tax status of a deed executed solely for the purpose of correcting errors in prior executed, delivered, and accepted deeds? (Such correction may be as to errors in spelling of names, addresses and the like of the grantor or grantee. Such correction may also correct the legal description of the property conveyed in such prior conveyance.)
15. What procedure must the county treasurer pursue in ascertaining the tax status of platted land in town sites, subdivisions or additions to municipal corporations, or platted land without municipal corporations? (Is there any repugnancy between Ch. 197, Laws of 1969 and prior statutes?)
16. Do you have any suggestions which may aid the county treasurers in simplifying and standardizing the notation of the tax-status of the property described in the instrument?
17. Do deeds to either the State Highway Department or to a county for highway right-of-way purposes have to be subject to such tax search and tax status certification?
18. If it were shown that such deeds were actually made, executed and delivered to either the State Highway Department or to a county prior to the effective date of Chapter 197, Session Laws of 1969, would your answer to question 18 be the same?
QUESTION 1: A reading of the title to the Act, together with its provisions, leads to the only conclusion except under the conditions as specified in the Act, any instrument conveying real property must bear the endorsement "taxes paid in full," or "sold for taxes" to be eligible for recordation by the Register of Deeds. In those cases where a certificate showing certain taxes are due, the instrument is not recordable until such taxes as due are paid in full and the proper endorsement "taxes paid in full" is placed thereon.
(It should also be understood that throughout this opinion the term "taxes" includes any special assessment levied on the property by a municipal corporation.)
QUESTION NO. 1 is answered NO.
QUESTION 2: Section 5 provides its own answer to this question. The recordation of any instrument required by such Act to be subject to such tax search, which is not exempt therefrom, must bear the notation "taxes paid in full," or "sold for taxes" over the county treasurer's official signature. Any recordation in violation thereof is unlawful.
As a practical matter, as the several registers of deeds are not learned in the law, the register of deeds himself should not make a determination of whether a particular instrument is subject to or exempt from the enactment. The local state's attorney should advise the register of deeds on this factor whenever any instrument, seemingly conveying real property, is presented for recordation, and it does not bear the endorsement "taxes paid in full," or "sold for taxes."
I should also add, it is my opinion that any liability under Section 5 of the Act is of a personal, not an official nature, and inures only to the benefit of the grantee named in such instrument. Such does not inure to the benefit of the heirs, devisees or assigns of such grantee.
QUESTIONS 3, 4 and 5: These questions deal with the duties and responsibilities of the county treasurer when as a result of his tax status search he determines taxes are due on such described real estate.
Question 3 deals with an ascertainment that taxes are due on the property. When such are found, the county treasurer must make a separate written instrument to the effect that:
"I, ……………..TREASURER OF.………………COUNTY, SOUTH DAKOTA, CERTIFY THAT $................IN TAXES ARE DUE ON THE ………………(description of land) DATED THIS DAY OF………….., 19…….. ,..................................... COUNTY TREASURER"
Question 4 has been included as such has been presented to me. I am at a loss to determine what is meant by a "tax certificate." If this is a tax sale certificate, it seems axiomatic that taxes must be due and unpaid prior to a tax sale. If it is some other form of certificate, I am at a loss as to what such would be. Taxes in South Dakota become due by operation of law, and there is no necessity that any county official notify a tax debtor that such taxes have been imposed as a condition that such taxes attach to land. Question 5 raises the question of when taxes become "due" in South Dakota. There is a great deal of difference between taxes which are "due," and taxes which are "delinquent." In this state (SDCL 1967, 10-21-4 and 10-21-23) taxes become due on the first of January of each year following assessment, levy and extension, but the first half of such taxes do not be· come delinquent until May of said year, and the second half of such taxes become delinquent on the first day of November of the same year.
The search is for taxes that are "due," not "delinquent." Under the factual situation given, the second half payment of taxes are due (although not delinquent.) Such second half taxes must be certified by the county treasurer.
QUESTION 6: This question must be answered NO. The tax status search required by the enactment does not require a search as to the status of the personal property taxes assessed against either the grantor in such instrument or any other person who may appear to have ownership of an interest in the land.
While personal property taxes are liens upon real property, such lien is not enforceable against realty until the county treasurer files a return showing he is unable to collect such personal property tax from the personality of the tax debtor. (SDCL 1967 10-19-4) The lien of personal property taxes, insofar as real estate is concerned, is subject to the same rules of priorities as any other lien. Miller v. Anderson, 1 SD 539, 41 NW 957, 11 LRA 317 and Iowa Land Co. v. Douglas County, 8 SD 491, 67 NW 52. The lien of the personal property tax is not levied directly against real estate. It is my opinion that the enactment requires a search concerning taxes, and special assessments, which directly attach to such real estate. For those interested, the same conclusion was reached in Arendts v. Best, 38 ND 389, 165 NW 500.
QUESTION 7: My answer to this question is YES. I believe my previous discussion furnishes the reason for this answer.
QUESTION 8: The purposes of the statutes requiring the sale of real property when taxes become delinquent is a part of the process to place title of realty in the hands of a person who will pay taxes. Such property may be redeemed by the prior owner, prior to taking a tax deed, or after notice is given of an intention to take tax deed. However, on such a redemption, or an assignment of the counties' interest in such land, the redemptionor or assignee must pay all "subsequent taxes" on the premises. If the county must take a tax deed to the premises, and dispose of such property by resale proceedings, the bids on such property must equal or exceed the appraised price of such property, before such resale may be made.
After considering the enactment in question and the purposes of the tax law, and the protection afforded the county under the tax statute, it is my opinion that once the treasurer finds the property "has been sold for taxes," such a finding is sufficient. If such instrument names a redemptionor as grantee, or an assignee of the county, other statutes require the payment of subsequent taxes. If the instrument is one issued by the county after a resale, such would come within the exemptions set forth in Section 3 of Chapter 197, Laws of 1969.
My answer to Question 8 is NO.
QUESTION 9: This question raises a practical question in regard to the length of time that must be considered in the tax-status search. It is a settled principle of law that all public officials are presumed to do their duty. Under our statutes and interpretations of this office, a tax sale of real estate upon which delinquent taxes are due must be held each year. The tax-status search required by the enactment is to determine the present tax status of such real property. No tax deed may be issued until at least four years have elapsed between the time of the tax sale and the reduction of such certificate of tax sale to a tax deed.
Certainly, the fact certain property some twenty or thirty years before was subject to a sale for nonpayment of taxes is of historic moment only. Such cannot show the present tax status of such property. The exact length of time the treasurer must examine his records must be left to the sound discretion of the treasurer. If such in fact has been subject to a recent tax sale and which has not been reduced to a tax deed, such should appear on his records. Logic compels me to advise that such tax-status search must be confined to but a few years prior to the date when such tax search is required.
QUESTION 10: This question raises the practical question of what notation must be placed upon a deed issued by a county when such conveyance is a part of that procedure commonly called a "tax resale" proceedings. I will not burden this opinion with a minute discussion of the statutes or laws concerning tax resales. Reference is made to Coughlin v. City of Pierre (1939) 66 SD 523, 286 NW 877, and subsequent cases citing such decision, which sets forth the settled law of tax resales.
In view of our statutes (Sections 6794 and 6797 of the 1919 Revised Code which became SDC 57.1108 and 57.1109, and were compiled in the 1967 compilation of the South Dakota law as Sections 10-23-24 and 10-23-10), this office has consistently ruled that in the absence of bidders at a tax sale, the county treasurer has a duty to bid in the property offered either for nonpayment of general taxes or special assessments. A certificate of such purchase is issued to the county. If there is no redemption, nor an assignment of such certificate, after the passage of four years from the date of such tax sale, the county may take a tax deed to the property.
"Tax resales" describe the procedure whereby the county transfers its interest under a tax deed to a new owner. Such resales, and tax sales are but procedure to get property into the hands of a person who will pay taxes, and thus support the various government subdivisions which are dependent upon taxes for financial support. There is no question that if a county follows the procedure correctly, the ultimate purchaser will take the property free and clear of any prior tax or special assessment on such property. Such a conveyance may come within the purview of Section 3 of the Act creating exemptions. However, it is my opinion that a notation "sold for taxes" upon the instrument is proper and within the spirit of the enactment.
QUESTION 11: Sections 3 and Sections 4 of the Enactment provide the exemptions from such tax-status search and notation for recordation of instruments. A reading of such sections makes it unmistakable that the fact an instrument has as its grantor either the United States, the State of South Dakota, or a subdivision of the state is not exempt from the requirements of such enactment merely because of its grantor.
Question 11 must be answered NO.
QUESTION 12: This question raises a practical question of what our Legislature intended to cover by the use of the term "deed or other instrument conveying real property."
While an attorney at law understands that there exists an equitable as well as a legal title in the same premises, and that the legal title may be held by one person, and the equitable title by another, I doubt if the average layman either appreciates, or cares, that such condition exists in regard to the ownership of real property. The Legislature of our state, while it has some of the legal profession in its members, is predominantly a non-lawyer entity. I am satisfied that the Legislature collectively meant the conveyancing of the legal title to the real property in its use of such term in Section 1 of the enactment.
It is settled that a bond for deed, or a contract for deed, cannot convey legal title, but at best conveys equitable title to such premises. As the court in
Clinton v. Miller, 124 Mont. 463, 226 P 2d 487, 497 said:
"A 'bond for deed' is not a conveyance of legal title but is merely an executory contract to convey and puts no title into the obligee so long as the contract remains executory, and not until conditions of bond are fulfilled by obligee does obligee have right to demand a deed of conveyance vesting title in property."
This statement is consistent with SDCL 1967 43-26-1, which authorizes agreements to sell real property. There is a marked distinction between an agreement to sell or convey real property and the actual instrument conveying title to such real property.
My answer to Question 12 is NO. There is no necessity for a tax-status search when the instrument presented is a contract for deed or bond for deed to real property.
QUESTION 13: Jane Doe executes a deed conveying title to described real property to Jane Doe Smith, formerly Jane Doe. Is this instrument subject to such tax-status search?
Such an instrument, of course, strictly speaking, does not come within the exceptions set forth in Section 3 of the Act. However, the general rule of law is that a person cannot convey title to real property to himself alone, as such a deed conveys nothing, and his title must be derived from an earlier instrument conveying title to the premises to such person. (See Lutz v. Dutmer, 286 Mich. 467, 282 NW 431.)
It is my opinion that the deed in the form as described, which is executed for the sole purpose of correcting any alleged errors in the chain of title, of itself conveys no interest of any kind in such real property, and therefore, does not come within the purview of Section 1 of the Act.
Question No. 13 must be answered NO.
QUESTION 14: This raises the question of the applicability of the law in question to corrective deeds. As has been pointed out, such correction may take a form of correctly spelling the name of the grantee, or grantor of the instrument, it may give a correct address of the grantee or grantor in the instrument.
As to deeds of this classification, which in no way pertain to the legal description of the property conveyed, it is my opinion that such instruments, merely corrective in nature, which have as their purpose the correction of an elleged error in the chain of title, I believe such, similar to the factual situation involved in Question 13, do not in any manner convey title to real property-title must come from a previously made, executed, delivered, and accepted instrument conveying title.
As to those corrective deeds, which in no manner deal with the legal description of the premises conveyed, it is my opinion the provisions of Section 1 of the Act do not apply, and therefore, the tax-status search is not required by the statute.
QUESTION 15: This raises the tax-search status of original plats of a town or plats of addition to a municipal corporation. It has no reference to plats previously filed and recorded which have been lost or destroyed.
Insofar as the plat of any tract of land is subdivided, rearranged, or platted into lots, the county treasurer has a duty to issue, without charge, his certificate that all taxes which are liens upon the tract so subdivided have been fully paid. This requirement is derived from Section 2, Chapter 342 of the Session Laws of 1913, and is now Section 10-21-20' of SDCL 1967. Plats of a townsite, and of additions or subdivisions of municipal corporations, since territorial days have not been entitled to record unless the same has endorsed or attached thereto a certificate of the county treasurer that all taxes which are liens upon any land included in such plat, as shown by the records of his office, have been fully paid. (SDCL 1967 11-3-9)
It is a cardinal rule of statutory interpretation that all enactments of the Legislature must be construed together. Likewise, there can be no finding of an implied repeal of an existing statute, unless there is no alternative, is as fundamentally settled as any rule of statutory construction.
It is my opinion that these older statutes, and the 1968 enactments may be construed together and each given effect.
In the platting or subdivision of property, whether such is an original townsite, an addition or subdivision to a city, or platting of land outside of any municipality, our statutes (Sec. 11-3-6 and 11-3-8, SDCL 1967) require approval by either the county commissioners or the governing body of the affected municipality, prior to the acceptance of such tract of land as such townsite, addition or subdivision. In drawing the analogy to the ordinary conveyance of real estate, in the case of plats and town sites, the beneficiary of this statute must be either the county commissioners or the governing body of the city.
The county treasurer, prior to the presentment of such plat, townsite, addition or subdivision to approval of the proper governing body, must make such tax-status search, and append the proper notation of such tax-status to such instrument prior to the governing body considering whether to approve or disapprove such plat. This is required by Chapter 197, Laws of 1969. Thereafter, and before recording, in conformity with SDCL 1969 11-3-9, the treasurer must, either as a certificate attached to such approved plat, or an endorsement thereon, certify that all taxes upon the property within such plat which are liens upon such land have been paid.
By such two searches the county treasurer will have satisfied the statutes applicable to such plats.
QUESTION 16: I have been asked if I have any suggestion relative to simplifying the procedure of the county treasurer in affixing to the instrument in the fruits of his work. I believe there is.
Previously I have made a suggestion relative to the certification of taxes due. This appears under my answer to Questions 3, 4 and 5.
In order to simplify the duties relative to noting upon the instrument the fact that "taxes are paid in full" or the property was "sold for taxes," I would suggest the county treasurer obtain an ink stamp in substantially this form:
I CERTIFY THAT AS OF THE ……………….. DAY OF………., 19……… , THAT …………………………….(printed name if desired)……………….. Treasurer of………………..County, South Dakota.
The county treasurer should impress this ink stamp on the original instrument, fill in the date when such tax-status search was made, and on the appropriate line designate "taxes paid in full," or "sold for taxes," whichever expresses the true facts as ascertained by such tax search.
This ink stamp might also be used to indicate the amount of taxes due if imprinted on a separate sheet of paper. As such search is for both real estate taxes and special assessments, it is my suggestion that the amount of "taxes" so due on such real property could be indicated by use of this form of statement on the proper line:
$................................ IN TAXES ARE NOW DUE ON THIS PROPERTY. THIS INCLUDES $.................................... OF SPECIAL ASSESSMENTS AGAINST SUCH PROPERTY.
In my opinion this suggested procedure satisfies the requirement of the statutes and may simplify the duties of the county treasurer.
QUESTIONS 17 and 18: These questions raise the question of the applicability of the enactment to various deeds accepted by either the State of South Dakota or the County Highway Department for the purpose of rights-of-way on our public highways.
An examination of Section 3 of the Act which sets forth the majority of exceptions to such Act, such right-of-way deeds are not excepted from this Act. Some may argue that the provision that:
"Any instrument granting an easement in favor of a public utility in the nature of a right of way over, along, across or under a tract of land may be recorded without such certificate as to the land covered by such easement."
In my opinion, a highway department, be it of the state or an inferior subdivision thereof, does not constitute a public utility. This does not apply. Question 18 presents a theoretical problem which, in my estimation, is such that to make a distinction would for all practical purposes put too much of a judicial burden on a register of deeds in this state. We must remember the register of deeds is charged with the fact that any violation of such enactment is unlawful and may result in personal liability.
Question 18 presents a theoretical problem which, in my estimation, would require each register of deeds to act in a judicial capacity, if a distinction were made as to the applicability of such enactment as to deeds previously made, executed and delivered prior to the effective date of the enactment, but presented after such act became effective and deeds made, executed (but either not delivered or not accepted) prior to such tax status search) and offered for recording after the effective date of such act.
We must remember that the register of deeds is charged with the fact that if he permits any violation of the enactment, such is an unlawful act which may result in personal liability on his part.
In my opinion, as the act applies to such right-of-way deeds, there is no practical method to differentiate between right-of-way deeds, as described in Question 17 and Question 18. The Act applies. When such right-of-way deeds are presented for recordation after the effective date of such Act, the register of deeds, in order to protect from liability, and not to do an unlawful act, should insist upon compliance with the enactment and the presentation of the statement affixed thereto, "taxes paid in full," or "sold for taxes," before recording such instrument.
I would assume that in most instances such land that is the subject of such right-of-way deed is "carved out" of an existing described tract of land under the ordinary governmental survey system. I would also assume that the taxes were assessed, levied, and spread as to such tract of land larger than the subject matter of such right-of-way deed. The county treasurer can only search as to the tax status of such larger tract. It is not his duty then to apportion such taxes between the actual tract of land taxes and the tract of land being conveyed for right-of-way purposes. The only thing he can report on is the tax status of such larger tract of land. If such taxes on such larger tract of land are due and unpaid, be should insist on the payment of such taxes as shown due in full before affixing the statement "taxes paid in full" on such instrument. Conversely, if such property were "sold for taxes," such sale would be of the larger tract of land. Such notation "sold for taxes," then, of course, could be affixed to the deed to a smaller tract of land as described in such deed.
Respectfully submitted,
Gordon Mydland
Attorney General
