43 N.Y.2d 922 (1978)
When a taxing district acquires its own tax sale certificate following a sale held pursuant to statute, the personal liability of the taxpayer is extinguished.
Summary
The City of Syracuse sought to enforce a property owner’s personal liability for unpaid real estate taxes after the city itself purchased the tax sale certificates for the property. The New York Court of Appeals affirmed the lower court’s decision, holding that the city’s purchase of the tax sale certificate extinguished the property owner’s personal liability for the taxes. The court relied on its prior holding in Matter of Ueck, emphasizing that purchasing the tax certificate evidenced payment of the taxes as a matter of law. This decision clarifies the interplay between tax sales and personal liability under the Syracuse Tax Act.
Facts
Ahleen Engelstein’s (Defendant) deceased, David Engelstein, owned real property in the City of Syracuse. Engelstein failed to pay assessed real property taxes from 1971-1974 while retaining possession, control, and title to the property. The City of Syracuse (Plaintiff), pursuant to the Syracuse Tax Act, conducted a tax sale. The Commissioner of Finance bid on the premises on behalf of the city for the amount of unpaid taxes, fees, and expenses. Tax sale certificates were then issued to the city.
Procedural History
The City of Syracuse commenced an action to enforce Engelstein’s personal liability for the delinquent taxes. Special Term dismissed the city’s complaint, relying on Matter of Ueck. The Appellate Division affirmed this dismissal. The City of Syracuse appealed to the New York Court of Appeals.
Issue(s)
Whether the City of Syracuse’s purchase of tax sale certificates for Engelstein’s property extinguished Engelstein’s personal liability for the unpaid taxes under the Syracuse Tax Act.
Holding
Yes, because under the Syracuse Tax Act, the purchase of a tax sale certificate by the taxing district (here, the City of Syracuse) evidences payment of the taxes as a matter of law and extinguishes the personal liability of the taxpayer.
Court’s Reasoning
The Court of Appeals affirmed the Appellate Division’s order based on the principle established in Matter of Ueck and reaffirmed in City of Buffalo v Cargill, Inc. The court found the Syracuse Tax Act (L 1906, ch 75, as amended) practically indistinguishable from the statutes considered in those prior cases. The court emphasized the following provisions of the Syracuse Tax Act: When taxes remain unpaid, the treasurer will “advertise and sell such real estate… for the payment of such taxes” (§ 21); the notice of sale shall state that the real estate will be sold “to pay the taxes” (§ 22); the purchaser must pay the amount of his bid which must equal the amount of unpaid taxes and charges (§§ 22, 23); and the tax certificate issued after sale shall state that the property “was sold for unpaid city taxes” (§ 23). The court concluded that, under these provisions, “there can be no doubt that the purchase of the tax sale certificate evidences payment of the taxes as a matter of law and extinguishes the personal liability of the taxpayer, while the holder of the certificate obtains all the rights which attach thereto.”
Judge Jasen dissented, arguing that Matter of Ueck was wrongly decided. Jasen also contended that the Syracuse Tax Act was distinguishable because it provides that where a tax sale certificate is not redeemed, the commissioner of finance “shall institute proceedings in the name of the city of Syracuse to foreclose the lien of said taxes upon said real estate” (§ 22). Jasen argued that this language indicates the city obtains only a lien interest at the tax sale, not title, and that conveyance of title awaits foreclosure of the lien. Therefore, the purchase of tax sale certificates should not extinguish the taxpayer’s personal liability.