10 Int. Rev. Rec. 54 | U.S. Circuit Court for the District of Eastern Arkansas | 1868
This is a bill in chancery brought by the complainant to quiet his title to certain real estate, as against j Peay, and for partition thereof, as against Í Bliss. The title which he asks to have quiet- I ed and confirmed, is derived from a sale for taxes levied upon the real estate mentioned in the bill, under the act of congress of 1861, and the amendatory act of 1862, passed to enforce the collection of the tax in the insur-rectionary districts. The defendant Peay files his answer and cross bill, when-the proceedings under which the plaintiff claims were had, in which he states that he was, ¡ and still is, the true owner of the lots in con- ; troversy; that for several reasons detailed in ! the answer and cross bill, the proceedings were void and conferred no title on Bliss, the purchaser at the tax sale; and that the plaintiff. who purchased from Bliss, is therefore without title. He makes Bliss, as well as the i plaintiff, a defendant to this cross bill, and i prays that the tax sale may be declared void, ! and his title quieted, and the possession of Í the property, which had been delivered to : Bliss by the tax commissioner, restored to I him. He also prays for the appointment of a I receiver pending the litigation, and for other ■ relief.
The plaintiff and Bliss filed a demurrer to I this cross bill, based on the proposition that j the bill cannot be entertained in this court, ! because Peay and Bliss are both citizens of 1 the state of Arkansas. If this were an orig- ¡ inal bill, brought by the plaintiff therein, as ; an independent measure of relief, it could not j be sustained. Bliss was the sole purchaser, j at the tax sale, of the property in dispute. | and the certificates of sale are in his name, | and Schenck, who alleges a right in himself ! to only an undivided fourth part, derived his i claim by purchase from Bliss. It is clear, i therefore, that as between Peay as plaintiff, i and Bliss as defendant, both being citizens of ! Arkansas, no original and independent suit I of this character can be maintained in the federal courts. On the other hand, it is insisted that Schenck, who is a citizen of Ohio, and the plaintiff in the original bill, asks, as against Bliss, merely a partition of the premises, and that Peay has no interest in this branch of the case; that the principal relief sought by him is a decree quieting his title as against Peay; and that in this branch of the case, Bliss’s interests consist with the plaintiff's, and that it thence appears that the interests of Schenck and Bliss are equally adverse to Peay’s. It is also said that the matter of the cross bill is strictly defensive, and necessary to be presented in order to bring before the court fully the defences of the plaintiff therein to the original bill. If this be true, the demurrer must be overruled, for it is the established doctrine of this court, that where a party defendant finds it necessary for his defence, and to prevent an injustice resulting to him from the position in which the case stands, he is at liberty to file a cross bill, if the case is pending in chancery, or an original bill, if the case is one at law, although the parties defendant to said bill, or some of them, may be citizens of the same state with himself. The only limitations to this principle are, that the bill must be necessary to the defence of the party filing the bill, and it must be filed against parties already before the court, and subject to its jurisdiction, either as plaintiffs or defendants in the original suit. Dunn v. Clarke, 8 Pet. [33 U. S.] 1; Clarke v. Mathewson, 12 Pet. [37 U. S.] 164; Cross v. De Valle, 1 Wall. [68 U. S.] 1. And in determining whether a bill is original and independent, or is ancillary and auxiliary to a matter already before the court, we are not confined to the line which, in chancery pleadings, divides original bills from cross bills and supplemental bills, but may look to the essence of the matter, and to principles -which, as regards parties, the federal courts have adopted in reference to their jurisdiction. Minnesota Co. v. St. Paul Co. 2 Wall, [69 U. S.] 632; Freeman v. Howe, 24 How. [65 U. S.] 450.
The main question raised by the original bill is the validity of the title conferred by the tax sale, and the relief sought is to have that title quieted and confirmed. The cross bill refers only to matters connected with the validity of the same tax title, and prays as its sole relief, to have it set aside and declared void. In reference to the partition, the cross bill is silent, and the relief asked concerning a receiver is purely incidental to the progress of the suit, and could be had without the aid of the cross bill on mere petition. It seems to us. therefore, that the cross bill is essentially a mode of defence appropriate to the case; that it is necessary to a complete determination of the controversy brought before the court by the original bill; that it is ancillary to the main cause; aud that, as it brings no new parties before the.
The application for the appointment of a receiver is urged upon the ground that Bliss is insolvent, except as to the property held under these tax sales; that the property in controversy is covered with valuable buildings, is located in the city of Little Rock, and is paying large rents, of which Bliss is the recipient; that the title of defendants is not only void in law, but that the tax proceedings were accompanied by such positive acts of fraud on the part of Bliss and one of the tax commissioners, that, for these reasons alone, the sale should be held to be void. These allegations of the cross bill are well supported by depositions taken in the suit. In reply to this, it is urged that the defendants in the cross bill are in possession of the property, under the legal title; that the questions of fraud remain to be investigated, and are denied generally by affidavit; that the defendants have not yet answered, nor been required to answer, the cross bill, because the demurrer has thus far remained undecided; that it is contrary to the rules of courts of equity to appoint a receiver when the defendant is in possession, under the legal title; and that the parties should be permitted to remain in statu quo until the case is decided upon the merits. It is undoubtedly true that, where the relief sought is founded upon a disputed equity, a court of chancery will with great reluctance and hesitation take the possession trcm a defendant holding the clear legal title. But under proper circumstances this may be done, and there is no absolute rule against it. Hugonin v. Basely, 13 Ves. 105. And if the motion before us presented a case where the legal title was in the defendants, and could be declared void only by reason of fraud in the sale, we should hesitate very much before appointing a receiver. The defendant in the cross bill is himself plaintiff in the original bill, and- in that bill has set out in detail the facts on which his title depends, and has on that statement asked the judgment of this court as to its validity. If in this statement he has shown that the proceedings, under which alone he claims title, have conferred no title, he stands in a different attitude from a defendant whose legal title and possession are assailed, and who has admitted nothing which tends to prove the truth of the matters alleged against them.
We are of opinion that the plaintiff in the original bill has disclosed a fatal defect in his own title. The act of June 7, 1862 (12 Stat. 422), after directing that the president shall declare, on or before the 1st day of July thereafter, in what states or parts of states the insurrection exists, authorizes him to appoint three persons for each of said states, who shall constitute a board Of tax commissioners for said state. It is made the duty of these commissioners. as the federal armies shall advance into the insurrectionary limits, to assess upon the real estate within the districts, as they are successive!}' occupied, the portion of the direct tax imposed on the state by the act of 1861 which that real estate should properly bear. The entire proceeding for the collection of this tax, including the sale and delivery of possession to the purchaser of the lands on which it was assessed, was confided by the law to this board. The original bill alleges the proclamation of the president including Arkansas as an insurrectionary state; the occupation by the federal forces of the county of Pulaski, in which the lots in controversy are located; and the appointment, by and with the advice and consent of the senate, of Hulings Cowpertb-waite, Enoch H. Vance, and Daniel P. Tyler, as a board of direct tax commissioners for the state of Arkansas; and then adds, “that said Tyler, one of the members of said board of tax commissioners, appointed as aforesaid, did not qualify and enter upon the discharge of the duties of his office until some time after the sale of the real estate hereinafter mentioned and described for taxes.” It then goes on to allege the assessment of the direct tax on the lots in question by the other two commissioner's, their sale of the lots to Bliss, and that after his purchase they put him in possession. We understand it to be well settled that where authority of this kind is conferred on three or more persons, in order to make its exercise valid, all must be present and participate, or have an opportunity to participate, in the proceedings, although some may dissent from the action determined on. The action of two out of three commissioners, to all of whom was confided a power to be exercised, cannot be upheld when the third took no part in the transaction, and was ignorant of what was done, gave no implied consent to the' action of the others, and was neither consulted by them, nor had any opportunity to exert his legitimate influence in the determination of the course to be pursued. Such is the uncontradicted course of the authorities, so far as we are advised, where the power conferring the authority has not prescribed a different rule. 2 Kent, Comm. 208. note a. 633, and authorities cited there, note b; Com. v. Canal Com’rs. 9 Watts, 466; Green v. Miller, 6 Johns. 39; Kirk v. Bell, 12 Eng. Law & Eq. 385; Crocker v. Crane, 21 Wend. 211: Doughty v. Hope, 1 N. Y. 79; Id., 3 Denio, 252. 253. The case before us goes even beyond this; for according to the statement of the bill, there never was a board of commissioners in existence until after the proceedings in regard to his title were completed. The law required three commissioners. A less number was not a board, and could do nothing. The third commissioner for Arkansas, although nominated and confirmed, did not qualify or enter upon the duties of his office until after the sale of the lots to the defendants. There was therefore no board of commissioners in existence authorized to assess the tax. to receive the money, or to sell the property. If congress
Nothing is better settled in the law of this country than that proceedings in pais for the purpose of divesting one person of title to real estate, and conferring it on another, must be shown to have been in exact pursuance of the statute authorizing them, and that no presumption will be indulged in favor of their correctness. -This principle has been more frequently applied to tax titles than to any other class of cases. We cannot presume, therefore, that congress intended that less than three commissioners could conduct these proceedings, and still less that they intended that, in regard to the important matters confided to the board, any action should be taken when there was no legally organized board in existence.
It is said, however, that this defect is cured by section 3 of the act of March 3, 1865 (13 Stat. 502), which declares, “that a majority of a board of tax commissioners shall have full authority to transact all business and to perform all duties required by law to be performed by such board, and no proceeding of any board of tax commissioners shall be void or invalid in consequence of the absence of any one of said commissioners.” As this act was passed after the proceedings relied on by complainant as conferring title on him, we must give it a retroactive effect, in order to reach the case.
The law concerning retrospective statutes has been so much discussed in this country and in England, that it would be an affectation of learning to cite authorities upon the subject. It is undoubtedly within the power of congress to pass retrospective statutes which do not come within the definition of ex post facto laws. As this prohibition of the constitution relates exclusively to criminal laws, it does not affect the power of congress to pass such a law in regard to the matter before us. But when we are called upon to construe statutes claimed to be retroactive, the rule is firmly settled that we can only give them that effect when there is something on their face putting it beyond doubt that the legislature so intended; or, to express it in other words, the legislature must have expressly declared the statute to be applicable to past transactions, or the intent must appear by an unavoidable implication. No such inference can be drawn from the statute before us. The first declaration is in the future tense, that a majority of- the board shall have authority to transact business. and the second branch of the provision, that no such proceedings shall be void or invalid in consequence of the absence of any one of the commissioners, has very natural reference to the exercise of the power granted for the future to a majority of the board. It is not by such language as this that titles defective on account of past transactions are cured. The language of a statute which so violates the rule of policy against retrospective laws, as in effect to take the title from one man and give it to another, must be much more clear and explicit in stating that intent than the one under consideration. No fair and natural construction of its terms will justify attaching to it such an effect. But if the section we have cited could be held to have a retroactive effect, the case before us does not come within its purview;, for it requires a board of tax commissioners to be in existence, and then provides that a majority of that board can act. We have already shown that, according to the allegations of the bill, no such board was in existence; that none had ever been organized when the two commissioners assessed the tax and sold the defendant’s property. The act of 1S65 does not pretend to hold that the sale shall be valid where there is no board in existence, where one of the commissioners never qualified, and where, consequently, no authority was ever vested in three which might be exercised by two.
We are therefore of opinion that the original bill shows on its face that the complainant has no title to the property which he claims, of which he is in possession, and from which he has for several years received the rents and profits. And as this showing accompanies the assertion of the legal title on which he relies to defeat the appointment of a receiver, that title can have no such effect. As tlu* circumstances disclosed in the depositions are all such as should incline us to use the discretionary power of the court in favor of the appointment of a receiver, the order will be made for such appointment; and also for an injunction restraining the defendants in the cross bill, Schenek and Bliss, from interfering with the receiver, or exercising control over the property, until the further order of the court.