Where the claim that a state statute is unconstitutional is
first made on a motion for rehearing in the highest court of the
state, and the motion is entertained and the federal question
decided against the contention of the plaintiff in error, the
question is reviewable in this Court.
Mallett v. North
Carolina, 181 U. S. 589.
Where the state seeks directly or by authorization to others to
sell land for taxes upon proceedings to enforce a lien for the
payment thereof, and the owner is unknown, it may proceed directly
against the land within the jurisdiction of the court, and a notice
which permits all interested who are "so minded" to ascertain that
it is to be subjected to sale to answer for taxes, and to appear
and be heard, whether to be found within the jurisdiction or not,
is due process of law within the Fourteenth Amendment to the
Constitution.
The statute of Nebraska, Laws, 1875, February 19, p. 107, for
the enforcement of liens for taxes by sale of the property is not
repugnant to the due process clause of the Constitution because in
certain cases it permits, under the provisions prescribed in the
statute, a proceeding
in rem against the land.
The facts essential to the determination of this case are
briefly summarized as follows: Irwin Davis was the owner of certain
lands in Knox County, Nebraska. On the twenty-fourth day of
November, 1880, an action was begun by Algernon S. Patrick against
Davis in the district court of the county, and an attachment was
issued and levied upon the lands. The case was afterwards removed
to the Circuit Court of the United States for the district of
Nebraska, on October 18, 1882, where, on January 21, 1890, an order
for the sale of the lands in question was made for the satisfaction
of the judgment, and the same were sold on May 15, 1894, by the
United States marshal to Lionel C. Burr. Burr afterwards conveyed
the lands to Crawford and Peters. On June 23, 1894, Crawford and
Peters conveyed the premises to Alvin L. Leigh, the plaintiff in
error in the present case.
Pending said attachment proceedings, on December 28, 1882,
Page 193 U. S. 80
a deed was filed for record in the clerk's office of Knox County
purporting to convey the lands to Henry A. Root on October 8, 1880.
Afterwards, on May 12, 1894, a decree was rendered in the District
Court of Douglass County, Nebraska, in a cause wherein said Patrick
was plaintiff and Davis and others were defendants, setting aside
the deed from Davis to Root as fraudulent and void as against the
said Patrick.
In 1891, actions were brought in the District Court of Knox
County, wherein the Farmers' Loan & Trust Company was plaintiff
and Henry A. Root and different subdivisions of the lands were
defendants, for the foreclosure of certain tax liens, which
actions, taken together, cover the lands in controversy in the
present suit.
In the same year, 1891, decrees were entered in those cases, and
orders made directing the sale of the lands for the satisfaction of
the amounts found due by the decrees. In pursuance of said decrees,
the lands were sold by the sheriff to Henry S. Green, defendant in
error in the present action. The deeds of conveyance were made and
delivered to him by the sheriff. Plaintiff in error claims title
because of the attachment proceedings, and defendant in error bases
his claim to title upon the proceedings had for the foreclosure of
the tax liens. This suit was brought by the plaintiff in error
Leigh, in the District Court of Knox County, to quiet title to the
lands in controversy.
In that court, a decree was rendered in favor of the plaintiff
in error Leigh, which decree was reversed by the Supreme Court of
Nebraska, and the cause remanded with directions to render a decree
in favor of the defendant Green.
This writ of error is prosecuted to review the judgment of the
Supreme Court of Nebraska. 64 Neb. 533.
Page 193 U. S. 85
MR. JUSTICE DAY, after making the foregoing statement, delivered
the opinion of the Court.
A motion is made to dismiss because the claim of impairment of a
right secured by the Fourteenth Amendment was not made in the
courts of Nebraska until the motion for rehearing was filed in the
supreme court. We are unable to discover a specific claim of this
character made prior to the motion for rehearing. In the motion,
reference is made to the failure of the Nebraska Supreme Court to
decide the claim theretofore made, that the statute of Nebraska was
unconstitutional because of the alleged violation of the right to
due process of law guaranteed by the Fourteenth Amendment to the
Constitution of the United States. Be this as it may, the Supreme
Court of Nebraska entertained the motion and decided the federal
question raised against the contention of the plaintiff in error.
In such case, the question is reviewable here although first
presented in the motion for rehearing.
Mallett v. North
Carolina, 181 U. S. 589.
The federal question presented for our consideration is briefly
this: is the Nebraska statute under which the sale was made and
under which the defendant in error claims title, in failing to make
provision for service of notice of the pendency of the proceedings
upon a lienholder such as Patrick, a deprivation of property of the
lienholder without due process of law within the protection of the
Fourteenth Amendment?
The statutes of Nebraska under which the conveyances were made
to the Farmers' Loan & Trust Company are given in the margin.
[
Footnote 1]
Page 193 U. S. 86
The evident purpose of section 4, where the owner of the land is
unknown, is to permit a proceeding
in rem against the land
itself, with a provision for service as in case of a nonresident.
By section 6, it is provided that, in cases where the
Page 193 U. S. 87
land itself is made defendant, the deed shall be an absolute bar
against all persons unless the court proceedings are void for want
of jurisdiction. The object and intent of the action is defined to
be "to create a new and independent title, by virtue of the sale,
entirely unconnected with all prior titles."
The Supreme Court of Nebraska has held that the term "owner," as
used in the fourth section, applies to the owner of the fee, and
does not include a person holding a lien upon the premises. It is
this section (4) and section 6 which are alleged to be in conflict
with the Fourteenth Amendment. The argument for the appellant
concedes that the state may adopt summary or even stringent
measures for the collection of taxes, so long as they are
"administrative" in their character, and it is admitted that such
proceedings will not divest the citizen of his property without due
process of law, although had without notice of assessments or levy
or of his delinquency and the forfeiture of his lands. But the
argument is that, when the state goes into court and invokes
judicial power to give effect to a lien upon property, although
created to secure the payment of taxes, the same principles and
rules prevail which govern private citizens seeking judicial
remedies and require service on all interested parties within the
jurisdiction. The right to levy and collect taxes has always been
recognized as one of the supreme powers of the state, essential to
its maintenance, and for the enforcement of which the legislature
may resort to such remedies as it chooses, keeping within those
which do not impair the constitutional rights of the citizen.
Whether property is taken without due process of law depends upon
the nature of each particular case. If it be such an exercise of
power
"as the settled maxims of law permit and sanction, and under
such safeguards for the protection of individual rights as those
maxims prescribe
Page 193 U. S. 88
for the classes to which the one in question belongs,"
it is due process of law. Cooley on Const.Lim. (7th ed.)
506.
The most summary methods of seizure and sale for the
satisfaction of taxes and public dues have been held to be
authorized, and not to amount to the taking of property without due
process of law, as a seizure and sale of property upon warrant
issued on ascertainment of the amount due by an administrative
officer,
Murray v. Hoboken Land
Co., 18 How. 272, the seizure and forfeiture of
distilled spirits for the payment of the tax,
Henderson's
Distilled Spirits, 14 Wall. 44. The subject
underwent a thorough examination in the case of
Davidson v. New
Orleans, 96 U. S. 97, in
which Mr. Justice Miller, while recognizing the difficulty of
defining satisfactorily due process of law in terms which shall
apply to all cases, and the desirability of judicial determination
upon each case as it arises, used this language:
"That whenever, by the laws of a state, or by state authority, a
tax, assessment, servitude, or other burden is imposed upon
property for the public use, whether it be for the whole state or
of some limited portion of the community, and those laws provide
for a mode of confirming or contesting the charge thus imposed, in
the ordinary courts of justice, with such notice to the person, or
such proceeding in regard to the property, as is appropriate to the
nature of the case, the judgment in such proceedings cannot be said
to deprive the owner of his property without due process of law,
however obnoxious it may be to other objections."
In the present case, the argument is that, as the state has not
seen fit to resort to the drastic remedy of summary sale of the
land for delinquent taxes, but has created a lien in favor of a
purchaser at tax sale after permitting two years to elapse in which
the owner or lienholder may redeem the property, it has, in
authorizing a foreclosure without actual service, taken property
without due process of law because the proceedings and sale to
satisfy the tax lien do not require all lienholders within the
jurisdiction of the court to be served with process. If the state
may proceed summarily, we see no reason why it may not resort to
such judicial proceedings as are authorized
Page 193 U. S. 89
in this case. And if the state may do so, is the property owner
injured by a transfer of such rights to the purchaser at the tax
sale, who is invested with the authority of the state? In
Davidson v. New Orleans, supra, the objection was made
that the state could not delegate its power to a private
corporation to do certain public work, and by statute fix the price
at which the work should be done. In that connection, speaking of
the
Slaughter-House
Cases, 16 Wall. 36, Mr. Justice Miller said:
"The right of the state to use a private corporation and confer
upon it the necessary powers to carry into effect sanitary
regulations was affirmed, and the decision is applicable to a
similar objection in the case now before us."
In the statute under consideration, for the purpose of
collecting the public revenue, the state has provided for the
enforcement of a lien by the purchaser at a tax sale, and
authorized him to proceed against the land subject to the tax to
enforce the right conferred by the state. The state has a right to
adopt its own method of collecting its taxes, which can only be
interfered with by federal authority when necessary for the
protection of rights guaranteed by the federal Constitution. In
authorizing the proceedings to enforce the payment of the taxes
upon lands sold to a purchaser at tax sale, the state is in
exercise of its sovereign power to raise revenues essential to
carry on the affairs of state and the due administration of the
laws. This fact should not be overlooked in determining the nature
and extent of the powers to be exercised.
"The process of taxation does not require the same kind of
notice as is required in a suit at law, or even in proceedings for
taking private property under the power of eminent domain. It
involves no violation of due process of law when it is executed
according to in subordination to the principles which underlie in
subordination to the principles which underlie them."
Bell's Gap Railroad v. Pennsylvania, 134 U.
S. 232,
134 U. S.
239.
In authorizing the proceedings under the statute to enforce the
lien of the purchaser, who has furnished the state its revenue in
reliance upon the remedy given against the land assessed, the state
is as much in the exercise of its sovereign power to collect the
public revenues as it is in a direct proceeding
Page 193 U. S. 90
to distrain property or subject it to sale in summary
proceedings.
Nor is the remedy given in derogation of individual rights, as
long recognized in proceedings
in rem, when the Fourteenth
Amendment was adopted. The statute undertakes to proceed
in
rem, by making the land, as such answer for the public dues.
Of course, merely giving a name to an action as concerning the
thing, rather than personal rights in it, cannot justify the
procedure if, in fact, the property owner is deprived of his estate
without due process of law. But it is to be remembered that the
primary object of the statute is to reach the land which has been
assessed. Of such proceedings, it is said in Cooley on Taxation (2d
ed. 527):
"Proceedings of this nature are not usually proceedings against
parties, nor, in the case of lands or interests in lands belonging
to persons unknown, can they be. They are proceedings which have
regard to the land itself, rather than to the owners of the land,
and if the owners are named in the proceedings, and personal notice
is provided for, it is rather from tenderness to their interests,
and in order to make sure that the opportunity for a hearing shall
not be lost to them, than from any necessity that the case shall
assume that form."
And see Winona Land Co. v. Minnesota, 159
U. S. 537.
Such being the character of the proceedings, and those
interested having an opportunity to be heard upon application, the
notice was in such form as was reasonably calculated to bring the
same to the attention of those interested in the lands. In the
present case, the notice was in the form given in the margin.
[
Footnote 2]
Page 193 U. S. 91
This notice was to all persons interested in the property. The
lienholder, the Nebraska court has held, may appear in court and
set up his claim. The notice was good as against the world, and all
that is necessary when the proceedings are
in rem:
"Laws exist under which property is responsible for damages done
by it, for taxes imposed upon it. . . . These same laws often
authorize the obligation by them imposed upon the property to be
enforced by proceedings in which the property is the defendant and
in which no service of process is required except upon such
property. The judgment resulting from such a proceeding is
in
rem, and satisfaction thereof is produced by an execution
authorizing the sale of the property. The sale acts upon the
property, and, in so acting, necessarily affects all claimants
thereto."
Freeman on Judgments, sec. 606.
When the proceedings are
in personam, the object is to
bind the rights of persons, and in such cases the person must be
served with process; in proceedings to reach the thing, service
upon it and such proclamation by publication as gives opportunity
to those interested to be heard upon application is sufficient to
enable the court to render judgment.
Cross v. Armstrong,
44 Ohio St. 613, 624. Where land is sought to be sold, and is
described in the notice, a technical service upon it would add
nothing to the procedure where the owner is unknown. The
publication of notice which describes the land
Page 193 U. S. 92
is certainly the equal in publicity of any seizure which can be
made of it.
In
Tyler v. Judges of the Court of Registration, 175
Mass. 71, the Supreme Judicial Court of Massachusetts upheld as
constitutional an act providing for registering and confirming
titles to lands, in which the original registration deprived all
persons, except the registered owner, of any interest in the land,
and the act gave judicial powers to the recorder after the original
registration although not a judicial officer, and there was no
provision for notice before registration of transfer or dealings
subsequent to the original registration. The majority opinion was
delivered by MR. JUSTICE HOLMES, then Chief Justice of
Massachusetts. In the course of the opinion, speaking of the
Massachusetts Bill of Rights and the Fourteenth Amendment, he
said:
"Looked at either from the point of view of history or of the
necessary requirements of justice, a proceeding
in rem,
dealing with a tangible
res, may be instituted and carried
to judgment without personal service upon claimants within the
state or notice by name to those outside of it, and not encounter
any provision of either constitution. Jurisdiction is secured by
the power of the court over the
res."
In
Huling v. Kaw Valley Railway & Improvement Co.,
130 U. S. 559, it
was held that notice by publication in proceedings to condemn land
for railway purposes was sufficient notice to nonresident owners,
and was due process of law as to such owners. So as to
adjudications of titles of real estate within the limits of the
state as against nonresident owners, brought in by publication
only.
Arndt v. Griggs, 134 U. S. 316,
134 U. S. 327;
Hamilton v. Lewis, 161 U. S. 256,
161 U. S.
274.
The principles applicable which may be deduced from the
authorities we think lead to this result: where the state seeks
directly or by authorization to others to sell land for taxes upon
proceedings to enforce a lien for the payment thereof, it may
proceed directly against the land within the jurisdiction of the
court, and a notice which permits all interested, who are "so
minded," to ascertain that it is to be subjected to sale to answer
for taxes, and to appear and be
Page 193 U. S. 93
heard, whether to be found within the jurisdiction or not, is
due process of law within the Fourteenth Amendment to the
Constitution.
In the case under consideration, the notice was sufficiently
clear as to the lands to be sold; the lienholders investigating the
title could readily have seen in the public records that the taxes
were unpaid and a lien outstanding which, after two years, might be
foreclosed and the lands sold and, by the laws of the state, an
indefeasible title given to the purchaser. Such lienholder had the
right for two years to redeem, or, had he appeared in the
foreclosure case, to set up his rights in the land. These
proceedings arise in aid of the right and power of the state to
collect the public revenue, and did not, in our opinion, abridge
the right of the lienholder to the protection guaranteed by the
Constitution against the taking of property without due process of
law.
The judgment of the Supreme Court of Nebraska is
Affirmed.
[
Footnote 1]
"SEC. 1. That any person, persons, or corporation having by
virtue of any provisions of the tax or revenue laws of this state a
lien upon any real property for taxes assessed thereon, may enforce
such lien by an action in the nature of a foreclosure of a mortgage
for the sale of so much real estate as may be necessary for that
purpose and costs of suit."
"SEC. 2. That any person, persons, or corporation holding or
possessing any certificate of purchase of any real estate at public
or private tax sale or any tax deed shall be deemed entitled to
foreclose such lien under the provisions of this act within any
time not exceeding five years from the date of tax sale (not deed)
upon which such lien is based;
And provided, That the
taking out of a tax deed shall in nowise interfere with the rights
granted in this chapter."
"SEC. 3. All petitions for foreclosure or satisfaction of any
such tax lien shall be filed in the district court in chancery
where the lands are situated."
"SEC. 4. Service of process in causes instituted under this
chapter shall be the same as provided by law in similar causes in
the district courts, and where the owner of the land is not known,
the action may be brought against the land itself, but in such
case, the service must be as in the case of a nonresident; if the
action is commenced against a person who disclaims the land, the
land itself may be substituted by order of court for the defendant,
and the action continued for publication."
"SEC. 5. All sales of lands under this chapter, by decree of
court, shall be made by a sheriff or other person authorized by the
court in the county where the premises or some part of them are
situated."
"SEC. 6. Deeds shall thereupon be executed by such sheriff,
which shall vest in the purchaser the same title that was vested in
the defendant to the suit at time of the assessment of the tax or
taxes against the same, and such deed shall be an entire bar
against the defendant to such suit, and against all parties or
heirs claiming under such defendants, and in case the land itself
is made defendant in the suit, the deed shall be an absolute bar
against all persons unless the court proceedings are void for want
of jurisdiction, the object and intent of this action being to
create a new and independent title by virtue of the sale entirely
unconnected with all prior titles."
"SEC. 7. The proceeds of every sale made under a decree by
virtue of this chapter shall be applied to the discharge of the
debt adjudged by the court to be due and of the costs awarded, and
if there be any surplus, it shall be brought into court for the use
of the defendant or of the person entitled thereto, subject to the
order of the court."
"SEC. 8. If such surplus or any part thereof shall remain in
court for the period of three months without being applied for, the
court may direct the same to be put out at interest, under the
direction of the court, for the benefit of the defendant, his
representatives, or assigns, to be paid to them by the order of the
court, the party to whom said surplus shall be loaned to be
designated by the court, and the sureties, upon which said money is
loaned, to be approved by the judge."
"SEC. 9. All lands sold by the sheriff by virtue of this act
shall be appraised, advertised, and sold as upon execution, and the
title conferred by his deed shall be entitled to all the
presumptions of any judicial sale."
"SEC. 10. This act shall be construed as cumulative, and not
exclusive, in respect to the remedy for enforcing liens and
collecting delinquent taxes, by sale of property or otherwise, in
the cases herein provided for, and shall in nowise interfere with,
alter, or amend the existing revenue laws of the state."
[
Footnote 2]
"
Legal Notice"
"
I
n the District Court of Knox County, Nebraska"
"The Farmers' Loan & Trust Company, Plaintiff,"
"
vs."
"Henry A. Root and The Northwest Quarter of Section"
"Twenty-two (22), Township Thirty-one (31), Range"
"Three(3) West, of the 6th Principal Meridian, Defendants"
"The State pf Nebraska, Knox County, to the above-named
defendants and all persons interested in said real estate:"
"You are hereby notified that the petition of plaintiff is now
on file in the District Court of Knox County, Nebraska, wherein
plaintiff claims that it purchased said real estate for taxes due
thereon in the sum of twenty-four dollars and fifty-one cents at
the tax sale held in said county on the 12th day of June, 1888;
that, under said sale it has paid subsequent taxes on said land as
follows, to-wit: on the 10th day of August, 1888, twenty-one
dollars and seventy-nine cents and on the 9th day of July, 1889,
nineteen dollars and sixty-three cents, for which sum, with
interest as provided by statute, plaintiff claims the first lien
against said premises, and asks the foreclosure thereof, and that
the said property be sold to satisfy the amount due plaintiff,
together with the further sum of ten percent of said amount as
attorney's fees and costs of suit. And you are further notified to
appear and answer said petition on or before Monday, the 9th day of
November, 1891, or the petition will be taken as true, and judgment
rendered accordingly."
"Dated this 30th day of September, 1891."
"Farmers' Loan & Trust Company"
"By M.J. Sweeley,
Its Attorney"