Segar v. Youngs, 45 N.Y.2d 568 (1978)
A county treasurer’s conveyance of a tax deed vests in the grantee an absolute estate in fee, extinguishing village tax liens unless the county or state holds the liens.
Summary
This case concerns whether a county tax deed extinguishes pre-existing village tax liens on the same property. Plaintiffs Segar and Oliver obtained a county treasurer’s deed after purchasing tax sale certificates for unpaid county taxes. They then sought to quiet title, arguing that the county deed extinguished the Village of Gouverneur’s liens for unpaid village taxes. The New York Court of Appeals held that under Real Property Tax Law § 1020, a county tax deed does extinguish village tax liens, as the statute only preserves liens held by the county or state. The court emphasized the explicit language of the statute and the absence of any provision for preferential treatment of village tax liens in this context. While the plaintiffs prevailed on the legal issue, the Court of Appeals could not grant them full relief because they did not appeal the portion of the lower court order that favored the village.
Facts
The relevant facts are as follows: Segar and Oliver bought tax sale certificates for unpaid village and county taxes on a property in the Village of Gouverneur. The village retained a tax sale certificate for 1973 unpaid taxes. Reuss purchased a certificate for unpaid village taxes for 1974. Youngs, the mortgagee of the property, obtained a foreclosure judgment. Segar and Oliver, as holders of county tax certificates, obtained a county treasurer’s deed under Real Property Tax Law § 1018 and then initiated an action to quiet title.
Procedural History
Special Term granted summary judgment for plaintiffs against Youngs (mortgagee) but denied relief against Reuss and the Village of Gouverneur, holding that the village’s liens survived the county tax sale and deed. The Appellate Division modified, holding that the village’s publicly held interest survived, but Reuss’s privately owned interest did not. Only Reuss appealed to the Court of Appeals.
Issue(s)
Whether a conveyance by a county treasurer of a deed to real property sold for nonpayment of taxes extinguishes village tax liens under section 1020 of the Real Property Tax Law.
Holding
Yes, because under Real Property Tax Law § 1020(1), a county treasurer’s conveyance vests in the grantee an absolute estate in fee, subject only to claims of the county or state for taxes, liens, or other encumbrances, thereby excluding village tax liens.
Court’s Reasoning
The Court of Appeals based its decision on the plain language of Real Property Tax Law § 1020(1), which states that a county treasurer’s conveyance vests in the grantee an absolute estate in fee, “subject, however, to (a) all claims of the county or state for taxes, liens or other encumbrances.” The court emphasized that the explicit language of the statute permits the survival of county or state liens but not those of a municipal taxing authority like a village. The court also noted that the legislature knew how to give preferential treatment to village tax liens when intended, citing subdivision 3 of section 1464 of the Real Property Tax Law, which allows village treasurers to convey deeds subject to claims of the “village, county or state.” The court found the parallel structure between § 1020 and § 1464 indicative of a deliberate choice to limit the exception in § 1020 to “county or state.”
The court distinguished City of Rochester v. Kapell, noting that the earlier statute in that case referred to claims of “the People of this State,” a much broader term than “county or state.” The court stated, “From the proclamation of America’s Declaration of Independence down there has hardly been a more comprehensive term by which to describe broadly the concept of our Government as a whole than ‘the People’.” It also distinguished County of Nassau v. Lincer and Incorporated Village of Garden City v. Roeder, noting that those cases interpreted the Nassau County Tax Act, not Real Property Tax Law § 1020. The court concluded that while the plaintiffs prevailed on the legal issue, the Court could not grant them full relief since they did not appeal the part of the lower court order favoring the village. The court stated, “However, since the plaintiffs did not seek leave to appeal from that part of the order affecting the village, we may not disturb it.”