Montana Attorney General Opinion 15-161

Opinion No. 161 Tax Assessments - Cancellation of- l\lerger of Title-Taxes, Individual Li- a,bility for-County Commissioners. HELD: Where a county at tax sale has purchased equity of purchaser of land sold on contract, and has can- celled contract on account of default of purchaser, interest and lien of coun- ty acquired -by tax sale certificate is merged with greater title and no fur- ther tax deed is required. There is no personal liability for tax- es except as pro\'ided in Sections 225::1 and 2254, R. C. M. 1921. County commissioners may author- i7~ cancellation of tax assessments when neither land nor individual is liable for payment. OPIXIOXS OF THE ATTOR~EY GE~ERAJJ 117 April 14, 1933. You have submitted the following facts and question: "The county here has taken consid- erable lanll under tax deells, and has also sold this land on contract. 'l'he land sold by the couuty has been re- assessed to the purchaser. In the as- sessment of this lund both the state and the county hU\'e an interest in the proportionate share of the taxe::: a~sessed, and I can find no provision in the law l)I'O\'iding for any manner iu which this as~sslllent ean he re- moved from the books of the treasur- er, the result of ,';-hich is that the books of the treasUl'el' beeome more anll more lilUddled with these old as- sessments, which they will never he able to collect or dear unless some . authority is given to cancel them, ':The eounty. commissioners desire :, information as to whether or not there is 'any autllOrity 01' any way, by 'which these old uncolleeta\,lle assessments can be cancelled on the books of the treasurer." 'We assume that the equity of the purchaser has heen sold at tax sale and ,bid in by the county under See- -tion' 2191 R. O. fif. 1!)21, as amended hy Ohapter 31, Laws of 1929. Section 211)1 R O. M. 1921 as amend- ed by Ohapter 31, Laws of 1929, pro- vides for the sale of property to the county when the taxes thereon are un- paid. When the contract for the sale of thi~ property is cancelled on account of the default of the purchaser, the county then finds itself owning the property on which it also holds .a tax ~ale certificate. The purchaser has lost his equity by yirtue of the cancel- lation of the contract. There is no outstanding equity or title in anyone and the county is the owner of the whole interest. Nothing can be accom- plished by the county obtaining another tax deed to property which it already owns. Such a procedure would be fu- tile. lt is the general rule that It lesser e~tate is merged in the greater. 'L'hi~ principle is stated in 21 O. J. lO:'m, Section 233, as follows: ;"Whenever a greater and a less estate coincide and meet in one amI the same person, with- out any intermediate estate, the less is immediately annihilated; or in the law phrase it is said to be merged, tha t is, sunk or drowned in the great- er." It would seem therefore, so far as the land is concerned, that there would he no further neefl of having the rec- ords of the county show the old assess- ments on the land, or the tax sale cer- tificate, and that a cancellation and a remo\-al from the records of the same would be desirahle, unless there is a personal liability on the part of the purchaser. In 61 O. J. 1041, Section 135:1, it is said: "In the absence of any statuton' t)rovisinns to the contrary it is gen- erally held that no personal liability exists' for taxes assessed on realty, * • *." Ohapter 173. Part III Revised Oodes Qf 1921J as amended by Ohapter 96, Laws of 192.'), provides for the collec- tion of delinquent taxes by the sale of the real property against which the de- linquent taxes are a lien. This rem- edy is exclusive, with one exception. This exception is vrovided for in Sec- tions 2253 and 2254. being Ohapter 175. Part III R. O. M. 1921. 'l'his chapter g-ives the state auditor authority to di- red the county treasurer not to pro- ceed in the collection of any tax em- In'aced in the delinquent tax list when the same amounts to $300 or more. Our Supreme Court. has fully consid- ered this question in State v. Nichol- son, 74 1\{ont. 346, pages 352, 353. Since the county, through its trea::;- urer, has pursued the remedy of col- lecting tlie delinquent taxes through a sale of the land, that remedy, accord- ing to the above (\ecision of our Su- preme Court, is exclush'e and it can- Bot collect fl'om the individual. 'l'he tax assessments therefore have become functus officio. There remains no reason why they should not be can- celled. Nothing of value would lie lost nl' destro~'ed thereby. ]n view of the powers granted to the hoard of county commissioners, par- ticularly those set forth in subdivision :!2 and 25, Ohapter 38, Laws of 1929, I Hm of the opinion that the county commissioners have the power to au- thorize the cancellation of the old tax assessments and to autholi7& the prop- el' records to be made, unless the coun- ty treasurer has proceeded to collect 118 OPIXIOXS OF THE ATTOR~EY GEXERAL the tax as provided in Sections 2253 and 2254, supra. It is suggested that the same procedure might be followed as in the case when delinquent taxes are cancelled when tax deed is taken hy the county by reducing the taxes re- tch'ahle accounts on the county clerk's records and increasing the land ac- quired by tax deed account (or cancel- lation of contract) in the amount of these delinquent taxes, or such other uniform procedure which might be sug- gested by the State Examiner.