New York Law Review

Tag: Tax Sale

  • Carney v. Philippone, 30 N.Y.3d 334 (2004): Redemption Rights After Tax Sale Under Onondaga County Tax Act

    Carney v. Philippone, 30 N.Y.3d 334 (2004)

    Under the Onondaga County Tax Act, a tax certificate holder must provide an owner with a six-month notice to redeem before seeking a deed, within the two-year redemption period, while an occupant must be served six months before the three-year redemption period expires; this aligns with due process and legislative intent.

    Summary

    This case concerns the interpretation of the Onondaga County Tax Act, specifically addressing when the right to redeem property expires after a tax sale. The Carneys failed to pay property taxes, leading to the sale of tax certificates. The central issue involves a malpractice claim against their attorney, Philippone, for allegedly failing to advise them to file for bankruptcy before the redemption period expired. The New York Court of Appeals clarifies the interplay between different sections of the Act, emphasizing the importance of providing actual notice to property owners while adhering to statutory redemption periods to balance the collection of taxes with preventing property forfeiture. The court ultimately determines that notice must be given six months before the two-year or three-year redemption periods expire for owners and occupants, respectively.

    Facts

    The Carneys owned property in Manlius, NY, and operated Sunnyside Nursing Home and Sunnyside Adult Home on the property. In 1993 and 1994, they failed to pay real estate taxes, leading to the sale of tax certificates to Onondaga County, which later resold them to Tax Certificate Associates, Inc. (TCA). The Carneys also took out a mortgage with Adirondack Capital Management, Inc. (ACM), defaulting later and leading to foreclosure proceedings. The Corvettis, principals of ACM, purchased the tax sale certificates from TCA. The Corvettis then sent the Carneys a six-month notice to redeem. Advised by Philippone, the Carneys filed for bankruptcy protection, but the bankruptcy court found the redemption period had already expired.

    Procedural History

    The Carneys’ bankruptcy trustee sued Philippone for malpractice in federal court, alleging that his late advice caused them to lose their property rights. The District Court granted summary judgment for Philippone, finding collateral estoppel based on the Bankruptcy Court’s decision and agreeing that the redemption period expired before Philippone was hired. The Second Circuit reversed, finding collateral estoppel inapplicable and certifying questions about the interpretation of the Onondaga County Tax Act to the New York Court of Appeals.

    Issue(s)

    1. Under the Onondaga County Tax Act, is an owner’s right to redeem their property strictly limited to two years after a tax sale, even without a notice to redeem, or does the right survive until six months after such notice, even if that extends beyond two years?

    2. Does the term “occupant” in Section 8 of the Onondaga County Tax Act include an individual operating a business on the property but not residing there? If so, does an individual who is both an owner and an occupant have three years to redeem the property?

    Holding

    1. No, the owner’s right to redeem is not strictly limited to two years without notice; however, the tax sale purchaser must provide the owner with a six-month notice to redeem before requesting a deed, but this notice must be served within the initial two-year redemption period, because the legislative intent was to provide notice while adhering to existing redemption timelines.

    2. Yes, the term “occupant” includes an individual operating a business on the property. However, an individual who is both an owner and an occupant does not have three years to redeem; they are still held to the two-year redemption period applicable to owners, because the rationale for the longer occupant period (lack of direct tax notices) does not apply to owners.

    Court’s Reasoning

    The Court of Appeals based its decision on two principles: interpreting the Legislature’s intent and construing tax sale statutes liberally in the owner’s favor. The court analyzed Sections 6, 8, and 9 of the Onondaga County Tax Act. It noted the legislative history of the Act, particularly the 1971 amendment requiring personal service of a notice to redeem, aimed at providing due process. The court reasoned that the Legislature intended to provide actual notice to property owners before the transfer of property to the tax certificate holder. "Thus, we conclude that a tax certificate holder must give an owner or occupant a six-month notice to redeem, as provided in section 6, and that without such notice there can be no transfer of the property to the tax certificate holder." The court harmonized the notice requirement with the two- and three-year redemption periods in Section 8 by ruling that the notice must be served six months before the expiration of these periods. As for the definition of “occupant,” the court looked to the Real Property Tax Law definition at the time the Act was amended, which included those operating a business on the property. However, it held that an owner-occupant is still bound by the two-year owner redemption period, as the purpose of the longer occupant period is to account for a lack of direct notice, which an owner would inherently have. The court also noted that the Act provides a five-year outer limit for application for conveyance, preventing perpetual clouds on title. It explicitly highlighted the need for legislative review of the Onondaga County Tax Act due to the inconsistencies and ambiguities identified throughout the case.

  • Melahn v. Hearn, 60 N.Y.2d 944 (1983): Tax Sale Extinguishes Mortgage Lien if Not Redeemed

    Melahn v. Hearn, 60 N.Y.2d 944 (1983)

    A tax sale, if valid and unredeemed, creates a new and paramount title that extinguishes prior liens, including mortgages, on the property.

    Summary

    Melahn sued to foreclose on a mortgage held on property formerly owned by Hearn. Hearn argued he wasn’t a proper party because the property was sold at a tax sale. Hearn had reacquired the property at the tax sale but then conveyed it to another party after Melahn filed a lis pendens. Melahn argued that the tax sale was unconstitutional because he, as the mortgagee, didn’t receive personal notice. The Court of Appeals affirmed the lower court’s decision, holding that because Melahn didn’t redeem the property within the statutory period, the tax sale extinguished the mortgage. The court noted that the constitutional issue wasn’t properly preserved for appeal. The purchaser at a tax sale obtains a new and complete title, free of prior claims.

    Facts

    Defendant Hearn executed a mortgage in favor of plaintiff Melahn’s assignor on property he owned. Hearn defaulted on property taxes, leading to a public auction of the property for unpaid taxes.
    Hearn reacquired the property at the tax sale.
    Subsequently, Hearn conveyed the property to another party after Melahn filed a lis pendens but before this foreclosure action commenced.
    Melahn, the mortgagee, was not given actual notice of the tax sale or the right to redeem the property.

    Procedural History

    Melahn brought a foreclosure action against Hearn.
    Hearn moved for summary judgment, arguing he wasn’t a proper party due to the tax sale.
    The Appellate Division affirmed the lower court’s decision granting Hearn summary judgment. Melahn appealed to the New York Court of Appeals.

    Issue(s)

    Whether a tax sale, where the mortgagee of record did not receive actual notice, extinguishes the mortgage lien if the property is not redeemed within the statutory period.
    Whether the failure to provide actual notice to the mortgagee of the tax sale violates due process.

    Holding

    No, because when the mortgagee failed to redeem the property within the three-year period provided by law, the purchaser’s title became “absolute” (Real Property Tax Law, § 1024, subd 1) and that the mortgage was extinguished and was unenforceable.
    No, because that constitutional issue was not raised below and thus, it is not preserved for review.

    Court’s Reasoning

    The Court of Appeals affirmed the Appellate Division’s decision, agreeing that the tax sale extinguished the mortgage because Melahn failed to redeem the property within the statutory period. The court emphasized that the purchaser at a tax sale acquires a new and complete title, free of prior claims.
    The court cited Real Property Tax Law § 1024, subd 1, which states that after the redemption period, the purchaser’s title becomes absolute.
    The court relied on Hefner v. Northwestern Life Ins. Co., stating that a valid tax deed provides the purchaser with a title “free of any prior claims to the property or interests in it and not merely the title of the prior owner or the party assessed for taxes”.
    The court refused to address the constitutional argument regarding lack of notice because it was not raised in the lower courts. The court stated: “Since that constitutional issue was not raised below, it is not preserved for our review”.
    The court allowed the plaintiff to replead to assert a claim to recover on the underlying bond associated with the mortgage.

  • Congregation Yetev Lev D’Satmar, Inc. v. County of Sullivan, 59 N.Y.2d 418 (1983): Sufficiency of Notice in Tax Sale Proceedings

    Congregation Yetev Lev D’Satmar, Inc. v. County of Sullivan, 59 N.Y.2d 418 (1983)

    Due process requires that notice of a tax sale be provided to parties with readily ascertainable substantial property interests, but an assessor is not required to make extraordinary efforts to discover the identity and whereabouts of the owner.

    Summary

    Congregation Yetev Lev D’Satmar, Inc. (plaintiff) claimed ownership of a six-acre parcel of land through adverse possession. Sullivan County (defendant) had acquired the land through a tax sale due to unpaid taxes and subsequently sold it to Carnesi & Son, Inc. The plaintiff argued the tax sale was unconstitutional due to lack of proper notice. The Court of Appeals held that the assessor acted reasonably in providing notice based on the available records, and the plaintiff’s interest was not readily ascertainable, thus the tax deed was valid. The court emphasized that assessors are not required to make extraordinary efforts to identify owners beyond diligent inquiry of readily available records.

    Facts

    Plaintiff owned a 21-acre parcel adjacent to a six-acre parcel. Plaintiff purchased its land in 1971 from White Lake Sanruth Corporation, with the six-acre parcel explicitly excepted from the deed. The six-acre parcel was landlocked within the 21-acre parcel. Until 1973, both parcels were assessed as one. In 1973, the assessor listed them separately, assessing the six-acre parcel to White Lake Sanruth Corporation. The 1973 taxes on the six-acre parcel were not paid, leading to a tax sale to Sullivan County in 1974. The county then sold the six-acre parcel to Carnesi & Son, Inc. Plaintiff claimed ownership of the six-acre parcel by adverse possession.

    Procedural History

    The Trial Term found in favor of the defendants, holding that Frances Ettinger held record title, the plaintiff had not acquired ownership by adverse possession, and the plaintiff failed to prove the tax proceedings were irregular. The Appellate Division reversed, finding the plaintiff had acquired ownership by adverse possession and that the tax proceedings were constitutionally defective because of lack of personal notice to the plaintiff. The Court of Appeals reversed the Appellate Division’s order and reinstated the Supreme Court’s judgment.

    Issue(s)

    Whether the tax sale was unconstitutional because the County failed to provide adequate notice to the plaintiff, who claimed ownership of the property through adverse possession, given that the County relied on record information indicating ownership by another party.

    Holding

    No, because the assessor made diligent inquiry based on available records, and the plaintiff’s claim of ownership through adverse possession was not readily ascertainable through those records.

    Court’s Reasoning

    The court reasoned that due process requires notice reasonably calculated to apprise interested parties of pending actions, but does not mandate personal notice in all circumstances. Relying on Mullane v. Central Hanover Trust Co., the Court acknowledged the balancing act between the State’s interests and the individual’s rights. The Court distinguished Mennonite Bd. of Missions v. Adams, emphasizing that the assessor is charged with knowledge of facts revealed by property and tax records, and must make “diligent inquiry” to ascertain property owners, as per Real Property Tax Law § 500.

    The Court found the assessor acted reasonably by relying on the recorded deed, which excepted the six-acre parcel from the conveyance to the plaintiff, indicating the corporation retained ownership. This inference was consistent with the tax history. Mailing notice to the corporation at its listed address satisfied due process requirements. The court stated, “The assessor was not required to make extraordinary efforts to discover the identity and whereabouts of the owner”.

    The court rejected the argument for mandatory notice to the occupant, stating occupancy alone does not create a constitutional right to personal notice absent a substantial and readily identifiable property interest. The court held that the assessor’s procedures aligned with available information, meeting constitutional standards, and the plaintiff’s claim was not “readily ascertainable”. The court also noted the plaintiff’s knowledge of tax levies and the parcel’s subdivision for tax purposes.

    The Court concluded that the tax deed was conclusive evidence of a regular tax sale, given that more than two years had elapsed before the action was initiated, citing Real Property Tax Law § 1020, subd. 3.

  • Teddy’s Drive In, Inc. v. Cohen, 47 N.Y.2d 79 (1979): Sheriff’s Liability for Misfeasance in Tax Sale

    Teddy’s Drive In, Inc. v. Cohen, 47 N.Y.2d 79 (1979)

    A sheriff executing a facially valid warrant loses immunity from personal liability if, through misfeasance such as ignoring a credible claim of ownership, he steps outside the scope of his authority.

    Summary

    Teddy’s Drive In, Inc. sued Alexander Cohen, a tax compliance agent, for conversion after Cohen conducted a tax sale of property in which Teddy’s Drive In claimed a superior security interest. Prior to the sale, Teddy’s president announced the chattel mortgage on the property. Cohen proceeded with the sale without investigating the claim. The New York Court of Appeals held that Cohen was personally liable for conversion because he acted with misfeasance by ignoring the claim of ownership, thus stepping outside the scope of his protected authority as a sheriff executing a facially valid warrant. The court reasoned that Cohen should have investigated the ownership claim before proceeding with the auction.

    Facts

    The New York State Tax Commission issued warrants to seize property owned by Eloise Restaurant Associates for unpaid taxes. Alexander Cohen, a tax compliance agent, executed the warrants on property believed to be owned by Eloise Restaurant. Teddy’s Drive In, Inc. held a perfected security interest in the property, giving them title, from June 9, 1972. Before the auction, Teddy’s president announced that all items were subject to a $70,000 chattel mortgage held by Teddy’s Drive In. Cohen proceeded with the sale without investigating the validity of Teddy’s claim.

    Procedural History

    Teddy’s Drive In sued Cohen for conversion. The lower courts ruled in favor of Teddy’s Drive In, finding Cohen liable. Cohen appealed to the New York Court of Appeals.

    Issue(s)

    Whether a tax compliance agent, acting in the capacity of a sheriff, is personally liable for conversion when he conducts a tax sale after receiving notice of a third party’s claim of ownership in the property and failing to investigate that claim.

    Holding

    Yes, because Cohen, acting in the capacity of a Sheriff, had property auctioned with notice that the true owner of the property was someone other than the delinquent taxpayer and failed to investigate the claim; this constituted misfeasance, rendering him personally liable in conversion.

    Court’s Reasoning

    The court reasoned that public officials have a limited immunity to protect them from the threat of legal action deterring them from performing important civic functions. A sheriff authorized to seize property under a facially valid writ is generally protected. However, this immunity is not absolute and does not shield a sheriff who, through misfeasance, steps outside the scope of his authority. Here, Cohen received notice of Teddy’s Drive In’s claim of ownership before the auction. Instead of investigating the claim, Cohen ignored it and proceeded with the sale. The court determined that this constituted misfeasance. The court stated: “Having received this notice, he should have delayed the sale to inquire into the validity of plaintiff’s claim of ownership. Instead, completely ignoring the claim, he chose to proceed with the sale. These actions amount to misfeasance, and since plaintiff’s claim has proven valid, defendant is personally liable to it in conversion.” The court emphasized that Cohen’s failure to investigate the ownership claim, despite the clear notice, was a departure from his authorized role, thus nullifying his immunity. The Court cited People ex rel. Kellogg v Schuyler, 4 NY 173 to support its finding of conversion.

  • Wood v. La Rose, 39 N.Y.2d 266 (1976): Tax Sales and Redemption Rights

    Wood v. La Rose, 39 N.Y.2d 266 (1976)

    A county treasurer is not obligated to subdivide delinquent tax properties for sale, but may allow bidding on less than the full interest; however, a tax deed may be invalidated if the property owner was incorrectly informed about redemption procedures by the county treasurer.

    Summary

    This case concerns the validity of a tax deed. The Court of Appeals addressed whether the county treasurer had a duty to subdivide the property for sale and whether the plaintiff was given incorrect information regarding the proper procedure for redemption. The Court held that the treasurer did not abuse his discretion by permitting bidding on the entire parcel. However, the Court also found evidence suggesting the plaintiff was misinformed by the treasurer about redemption procedures, specifically being told to contact the purchaser instead of the treasurer to redeem the property. The Court reversed the Appellate Division order and remitted the case to the Supreme Court for a new trial to determine if the defendants should be estopped from asserting the validity of the tax deed.

    Facts

    The plaintiff, Wood, owned property subject to delinquent taxes. The County Treasurer conducted a tax sale where La Rose purchased the property. Wood attempted to pay his delinquent taxes prior to the issuance of the tax deed. Wood claimed the County Treasurer incorrectly informed him that he needed to contact La Rose, the purchaser, to redeem the property.

    Procedural History

    The Supreme Court declared the tax deed valid. The Appellate Division affirmed. The plaintiff appealed to the Court of Appeals.

    Issue(s)

    1. Whether the county treasurer is required to subdivide delinquent tax properties and sell only so much as is necessary to cover the delinquent taxes?

    2. Whether the defendants should be estopped from asserting the validity of the tax deed because the county treasurer gave the plaintiff incorrect information about how to redeem the property?

    Holding

    1. No, because the Real Property Tax Law § 1006(1) authorizes, but does not mandate, bidding for less than a full interest in the entire parcel.

    2. Undetermined; the case is remitted to the Supreme Court for a new trial on this issue because there is evidence that the County Treasurer gave the plaintiff incorrect information about redemption procedures.

    Court’s Reasoning

    Regarding the first issue, the Court interpreted Real Property Tax Law § 1006(1), which states that the treasurer shall continue the sale until so much of each parcel shall be sold as will be sufficient to pay the amount due, as permissive rather than mandatory. The court stated that this provision “does not put the county treasurer to the costly burden of subdividing delinquent tax properties, but merely authorizes, without mandating, bidding for less than a full interest in the entire parcel.” The Court cited prior case law, including Matter of Countrywide Realty Co. v. Bruen, to support this interpretation.

    Regarding the second issue, the Court found evidence that the plaintiff attempted to pay his taxes but was allegedly misled by the treasurer. The court noted that “payment for the purpose of the redemption of property sold for delinquent taxes should be made to the county treasurer. (Real Property Tax Law, § 1010, subd 1.)” Because there was a factual question of whether the Treasurer’s office provided incorrect information, the Court could not determine if the defendants should be estopped from asserting the validity of the tax deed. The Court remitted the case to the Supreme Court for a new trial on the estoppel issue.

  • Canino v. Engelstein, 43 N.Y.2d 922 (1978): Tax Sale to City Extinguishes Personal Liability

    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.

  • Rose v. Eichhorst, 42 N.Y.2d 92 (1977): Municipal Officer’s Purchase at Tax Sale Creates Conflict of Interest

    Rose v. Eichhorst, 42 N.Y.2d 92 (1977)

    A conflict of interest arises when a town board member purchases property within their town at a county tax sale, as this implicates the town’s role in the tax collection process.

    Summary

    Rose, a member of the Town of Victor’s town board, acquired property within the town at a county tax sale after the original owners, the Eichhorsts, failed to pay their property taxes. Rose then sought to evict the Eichhorsts. The court addressed whether this purchase created a prohibited conflict of interest under New York’s General Municipal Law. The Court of Appeals held that it did, emphasizing the intertwined nature of town and county functions in the tax collection process. The court reasoned that the town board’s role in the budget process and oversight of the tax collector created a sufficient connection to trigger conflict-of-interest concerns, rendering the sale voidable.

    Facts

    Gustav and Carmen Eichhorst owned property in the Town of Victor, Ontario County. In 1972, the property was sold by Ontario County for unpaid taxes from 1970 and 1971. The tax sale certificates were initially purchased by the petitioner’s son and then assigned to Charles G. Rose, the petitioner, who was a member of the Town of Victor’s town board. Three years later, in 1975, the county treasurer executed a tax deed for the property to Rose. Rose initiated summary proceedings to dispossess the Eichhorsts.

    Procedural History

    The County Court awarded possession of the premises to Rose. The Appellate Division affirmed, finding no prohibited conflict of interest because Rose dealt with the County of Ontario, not the Town of Victor, in acquiring the property. The New York Court of Appeals granted review.

    Issue(s)

    Whether a conflict of interest arises under General Municipal Law § 801 when a town board member purchases property located in their town at a county tax sale.

    Holding

    Yes, because the contract of sale, though in form concerning only the county, by implication also involves the town due to the town’s role in initiating tax collection and its oversight of the town tax collecting officer.

    Court’s Reasoning

    The court emphasized that counties and towns are governmental divisions of the state and are intertwined in the taxing mechanism. The town initially collects taxes, presents its annual budget to the county board of supervisors, and the county levies taxes based on the town’s assessment roll. The town collecting officer is responsible for collecting taxes and may levy on personal property for unpaid taxes. Although the county assumes responsibility for collecting delinquent taxes, the town board has a relationship with the collecting officer, including fixing their salary, designating deposit banks, and filling vacancies. The court noted that “the town board…is not a legal stranger to the collecting officer.”

    The court reasoned that while the county conducts the tax sale, it is the culmination of a process initiated by the town. The court stated, “To consider solely the procedure by which delinquent taxes are collected is to focus in on only one aspect of a larger and more complex picture.” Therefore, the two municipalities have an overlap of interest. The court concluded that Rose’s actions as a town board member in preparing the town budget and his acquisition of the property created a conflict of interest. The court determined that “the sale is voidable” under General Municipal Law § 804.

  • Sainer v. County Treasurer of Warren County, 33 N.Y.2d 271 (1973): Sufficiency of Tax Deed Descriptions Using Area

    Sainer v. County Treasurer of Warren County, 33 N.Y.2d 271 (1973)

    A tax deed describing property with three boundaries and the area is sufficient if the fourth boundary can be mathematically and geographically determined without unreasonable or arbitrary results.

    Summary

    This case concerns the validity of tax deeds where the property description included only three boundaries and the area. Warren County sold a portion of Sainer’s land for unpaid taxes to the defendant, describing it as six-eighths of an acre bounded on the east by Lake George and on the north and south by specified lines. Sainer challenged the deeds, arguing the description was insufficient. The trial court agreed, but the Appellate Division reversed, finding the description adequate since the fourth boundary could be determined. The Court of Appeals affirmed, holding the description sufficient and rejecting the need for a “unitary parcel” rule, emphasizing the importance of efficient tax collection.

    Facts

    Sainer owned seven-eighths of an acre on Lake George. Warren County sold six-eighths of an acre of this parcel to the defendant at a tax sale for unpaid property taxes. The tax deeds described the parcel as bounded on the east by Lake George, and on the north and south by specified lines, but did not specify a western boundary. The defendant paid the taxes and made improvements on the property. Sainer sued to invalidate the tax deeds, claiming the property description was insufficient.

    Procedural History

    The trial court ruled in favor of Sainer, holding the tax deeds void due to the uncertain description. The Appellate Division reversed, upholding the validity of the deeds. Sainer appealed to the New York Court of Appeals.

    Issue(s)

    Whether a tax deed describing a parcel of land with three boundaries and its area is void for uncertainty if the fourth boundary can be mathematically calculated.

    Holding

    Yes, because the lack of a specified fourth boundary does not invalidate the deed if it can be determined through mathematical calculation and surveying without leading to an unreasonable or arbitrary result.

    Court’s Reasoning

    The Court of Appeals reasoned that the description was sufficient because the fourth boundary could be determined mathematically and through surveying. The court stated that the fixation of the fourth boundary line is “purely a mathematical and surveying problem, readily solvable.” The court dismissed concerns that the County Treasurer might act unreasonably in designating the boundary. The court emphasized that the primary concern of the statute is the collection of delinquent taxes and the marketability of the taxed parcels should not be unduly impaired. The court found no need for a “unitary” subparcel rule of construction, which might impede speedy tax sales. The Court referenced Godfrey, Enforcement of Delinquent Property Taxes in New York, 24 Albany L. Rev. 271, 282, n. 31, to support their argument that the bidding should relate not only to the amount of the delinquent taxes but to the portion of the taxed parcel which the bidder seeks to buy. The court stated: “Absent such a showing, the county treasurer had no duty to sell less than all of the taxed property. Nevertheless, when he found that he was able to satisfy the tax lien by selling less than the whole property, he was not only authorized but required by the statute, in reason, to accept such a bid.”

  • Congregation Simchas Chaim, Inc. v. Town of Wallkill, 36 N.Y.2d 240 (1975): Sufficiency of Notice in Tax Sale Proceedings

    36 N.Y.2d 240 (1975)

    Indirect notice, such as publication in designated newspapers, is sufficient to satisfy due process requirements in tax sale proceedings, provided the statutes are universally applied and the taxpayer is presumed to know the laws affecting their property.

    Summary

    Congregation Simchas Chaim, Inc. challenged the validity of a tax deed issued to the respondent’s assignor for their property in the Town of Wallkill after failing to pay real property taxes. The Congregation argued that the published notice of the tax sale and redemption was insufficient to provide them with actual notice, violating their due process rights. The Court of Appeals upheld the tax sale, finding that the statutory publication requirements (Real Property Tax Law §§ 1002, 1014) provided sufficient notice, as the land stands accountable to the state and owners are charged with knowledge of the laws affecting it. The Court, however, suggested the legislature re-examine the statutes to better apprise property owners of pending tax sales and redemption deadlines.

    Facts

    The Congregation owned unimproved land in the Town of Wallkill, Orange County, and resided in the City of Middletown. They failed to pay their 1961 real property taxes. The county, following sections 1002 and 1014 of the Real Property Tax Law, advertised the property for sale in two newspapers in Warwick, N.Y., for six weeks. These newspapers were designated by the board of supervisors. The Congregation had previously redeemed the property after a similar tax sale in 1959. While the Congregation claimed they did not receive the notice of redemption after the sale, evidence suggested the county treasurer mailed it. The county complied with all statutory requirements.

    Procedural History

    The Congregation sued to invalidate the tax deed. The lower courts upheld the validity of the tax sale and the deed issued pursuant to it. The New York Court of Appeals granted review to determine if the applicable sections of the Real Property Tax Law were constitutionally valid.

    Issue(s)

    Whether the notice provisions of sections 1002 and 1014 of the Real Property Tax Law, providing for notice of tax sales and redemption through publication in newspapers, are constitutionally sufficient to provide due process to property owners.

    Holding

    No, because indirect notice through publication is sufficient to satisfy due process requirements in tax sale proceedings, as property owners are presumed to be aware of the laws affecting their property and the consequences of failing to pay taxes.

    Court’s Reasoning

    The Court reasoned that personal or direct notice of an impending tax sale or notice of redemption is not constitutionally required. Indirect notice is sufficient because “[t]he land stands accountable to the demands of the State, and the owners are charged with the laws affecting it and the manner by which those demands may be enforced.” The Court cited Ballard v. Hunter, 204 U. S. 241, 254-255, emphasizing the landowner’s presumed knowledge of relevant laws. The Court also relied on Matter of City of New York (801-815 E. New York Ave.), 290 N. Y. 236, 241, stating that once a taxpayer has notice and an opportunity to be heard regarding the imposition of taxes, the due process clauses are not offended by summary statutory remedies for collection. The Court highlighted the dual purpose of the notice requirement: to notify delinquent taxpayers and to inform prospective purchasers. The Court distinguished Mullane v. Central Hanover Trust Co., Schroeder v. City of New York, and Smith v. City of New York, noting those cases involved situations where individuals had no reason to expect their property interests were being affected, unlike the case at bar where owners should be aware of the duty to pay property taxes and the consequences of non-payment.

    While upholding the constitutionality of the statutes, the Court acknowledged that the method of selecting newspapers for publication may be outdated, given changes in land ownership patterns and population mobility. The Court suggested the legislature re-examine the statutes to better apprise property owners of pending tax sales and redemption deadlines but deferred to the legislature on this issue, stating that such a task would be beyond judicial power. The Court declined to remodel the law on such a scale.

  • Cary v. Koerner, 200 N.Y. 253 (1910): Adverse Possession Against Original Owner Insufficient to Bar Occupant’s Right to Notice of Tax Sale

    Cary v. Koerner, 200 N.Y. 253 (1910)

    A party in adverse possession against the original owner of land is nonetheless an ‘occupant’ entitled to statutory notice of a tax sale, and failure to provide such notice renders the tax deed invalid and incapable of triggering statutes of limitations.

    Summary

    This ejectment action concerns title to an island claimed by the plaintiff through tax deeds and by the defendant through adverse possession. The court held that the plaintiff’s tax deeds were invalid because the statutory notice to redeem was not served on the defendant’s predecessor, who was an occupant of the land through adverse possession at the time of the tax sales. The court reasoned that the requirement of notice to occupants is mandatory and that recording the tax deeds without evidence of such notice was a nullity, and thus, not subject to the statute of limitations. This case clarifies that adverse possession against the original owner does not negate the occupant’s right to statutory notice of tax sales, emphasizing the importance of strict compliance with notice requirements to ensure valid tax titles.

    Facts

    The plaintiff sought to eject the defendant from Osprey Island, basing their claim on three tax deeds from 1875, 1881, and 1884. The defendant claimed title through adverse possession, initiated by Alva Dunning in 1869, who occupied the island under claim of title. Dunning transferred the property to Charles Durant in 1881, and Durant conveyed it to the defendant, Joseph Ladew, in 1891, who then took possession.

    Procedural History

    The trial court found that the defendant had established title by adverse possession against the original owner. However, it ruled in favor of the plaintiff, asserting that the tax deeds were valid despite jurisdictional defects because the defendant was considered a stranger without standing to challenge the tax title. The defendant appealed, arguing the failure to serve notice to redeem invalidated the tax deeds.

    Issue(s)

    1. Whether a party in adverse possession of land is considered an ‘occupant’ entitled to notice of a tax sale under the relevant statutes.

    2. Whether the failure to serve the required notice to redeem on the occupant invalidates a tax deed.

    3. Whether a curative act or statute of limitations can validate a tax deed that was recorded without evidence of the required notice to the occupant.

    Holding

    1. Yes, because a party in adverse possession is an occupant entitled to notice of tax sale.

    2. Yes, because the statute requires notice to the occupant before the tax deed can be validly recorded.

    3. No, because the recording of a tax deed without evidence of the required notice is a nullity and cannot be validated by curative acts or statutes of limitations.

    Court’s Reasoning

    The Court reasoned that the statutory requirement of serving notice to redeem on the occupant of land sold for taxes is mandatory. Since Alva Dunning and Charles Durant were occupants in adverse possession during the relevant periods, they were entitled to notice. The statute expressly forbade recording the tax conveyances until the expiration of the notice period and required evidence of service to be recorded with the conveyance. The court found that because no notice was served and no evidence of service was recorded, the tax deeds were effectively not recorded at all. The court stated, “Therefore, in the case of occupied land, such as this was, the record, without evidence of service of the notice, was absolutely void. Hence it seems to me that the tax deeds from the comptroller are to be regarded as though they had not been placed upon the record books at all.”

    The Court further held that the curative acts (Laws of 1885, chapter 448; Laws of 1896, chapter 908) did not remedy this defect. While these acts provided that a recorded comptroller’s conveyance becomes conclusive evidence of the regularity of the proceedings after two years, this did not apply to a record that was wholly void from the outset. Citing Meigs v. Roberts, 162 N.Y. 371, the Court emphasized that such acts are essentially statutes of limitations and do not validate fundamentally defective records. The Court distinguished People v. Turner, 145 N.Y. 451, noting that in that case, the referee’s finding negated any actual occupancy requiring notice. Therefore, the Court reversed the judgment, ordering a new trial.