text:
    BECHTEL v. SAGINAW BUILDING & LOAN ASSOCIATION.
    Building and Loan Associations — Loans—Competitive Bidding —Usury.
    In order that building and loan associations may be entitled to the benefits of the statute that authorizes them to receive interest in the form of premiums on loans in excess of the rate allowed other lenders, they must comply strictly with the provisions of the statute in making the loans; and where it appears that the premium paid was not in fact based upon competitive bidding, as required by the statute, and that the borrower was induced by the association to believe that, in order to procure a loan, he must bid a certain premium, which was bid for him by the secretary, the contract will be deemed usurious.

    Appeal from Saginaw; Beach, J.
    Submitted November 9, 1905.
    (Docket No. 105.)
    Decided April 30, 1906.
    Bill by Albert D. Bechtel and Sarah A. Bechtel against the Saginaw Building & Loan Association to restrain the foreclosure of a mortgage. From a decree for defendants, complainants appeal.
    Reversed, and decree entered for complainants.

      George C. Ryan and W. E. Crane, for complainants.

      Nathan S. Wood (W. J. Lamson, of counsel), for defendant.

       As to usury in loans by building associations, see note to Reeve v. Ladies’ Building Ass’n (Ark.), 18 L. R. A. 129.

   Moore, J.

In December, 1894, the complainant, Sarah A. Bechtel, through the agency of her husband, borrowed from the defendant the sum of $2,400, and at the same time, to secure the payment of this money, she gave a bond and mortgage on her real estate, in which her husband joined. It is the claim of defendant that she also became, at the same time, a member of said association, and the owner of 24 shares of the twenty-seventh series of its capital stock. She made monthly payments to said association, until she had paid $2,564.50, and it is her claim that she then supposed she had paid nearly all she ought, and, desiring to pay the balance, attempted to find out how much it was; that she was then informed there was still due $2,389.96. Complainant claims that, after a computation was made at the rate of 6 per cent, on said bond and mortgage, and proper credits made for all payments made by her, there was due and unpaid on April 26, 1904, the sum of $933.23, at which time she tendered that amount to said defendant, who refused to receive the same, and threatened to foreclose the before-mentioned mortgage for the full suba of $2,389.96. The bill is filed for the purpose of preventing the foreclosure, for an accounting, and for the redemption of the premises upon the payment of the amount due upon said mortgage. The defendant filed an answer in the nature of a cross-bill, praying for a foreclosure of said mortgage. From a decree finding the amount due to be $2,167.75, the complainant has brought the case here by appeal.

The husband of the complainant acted for her in procuring the loan and in making the subsequent payments. It is the claim of complainant and of the husband that when he sought out the secretary of the defendant association and inquired of him if it loaned money, that he was told that it did, and that it loaned it at the legal rate, 6 per cent., and supposing that he was obtaining the money for his wife at that rate, it was borrowed and the payments were made in that expectation. It is the claim of both of the complainants they never understood they were paying any premium in addition to the legal rate of interest for the use of the money, and it is the claim of Mrs. Bechtel that she never understood that she was a shareholder in the defendant company. On the part of the defendant it is claimed the method of the company in doing its business was fully explained to Mr. Bechtel, that he knew just what he was doing, that he authorized the secretary of the company to bid 7 per cent, premium for the money, which amount was bid in an open meeting, and that there has been no action upon the part of the association which is not within the law, and that the decree ought to be affirmed. In our view of the case it will not be necessary to discuss all of the many interesting questions discussed by counsel.

The record shows that before the loan was obtained the following papers were made out:

“ Application for Advance;
■“To the Board of Directors of the Saginaw Building and Loan Association of Saginaw, Mich.
Gentlemen: At a regular meeting of your board, held December 26, 1894, I obtained a preference for an advance on 24 shares of the twenty-seventh series stock of your association, at a premium of seven cents per share per week. I now offer you as security therefor the following property, situated in Saginaw County, Mich., viz.: Lot 2, block 165, north pf Cass street. Bought of H. B. Kinney on contract $5,000. There is now due on same $2,400 and six months’ interest. Bought this loan to get the deed. My husband’s full name is A. D. Bechtel. Occupation of my husband, furniture dealer. Should the loan be granted, I hereby agree to comply with the charter and by-laws of your association and all the requirements as hereinafter defined by your committee or board of directors.
“Albert D. Bechtel,
“ Applicant for Sarah A. Bechtel.
“ Report oe Committee.
“To the Board of Directors of the Saginaw Building and Loan Association of Saginaw, Mich.
Gentlemen: Your committee to whom was referred the security offered by Sarah A. Bechtel for an advance of #2,400 on 24 shares of the twenty-seventh series of stock, bid by her December 26, 1894, at a premium of seven cents per week per share, they find the description is correct, and they consider it is sufficient as security for the advance applied for, provided 24 shares of twenty-seventh series stock be transferred by him to the association, and provided that insurance be effected to the amount of insurable value, running to the owner of said premises with loss, if any, payable to the Saginaw Building and Loan Association. Valuation, $4,500.
(Signed by the committee.)
“Approval by Directors.
“We, the undersigned, directors of the Saginaw Building and Loan Association of Saginaw, hereby approve of the security offered by Sarah A. Bechtel for an advance of $2,400 on 24 shares twenty-seventh series stock, and the proper officers are hereby authorized, subject to the condition of the committee, and the report of the attorney,, to close the same on the execution of necessary papers.
“ Dated December 26, 1894.”
(Signed by seven directors.)

It is conceded by defendant that it is upon this application, report, and approval, that the loan was made. It is the claim of Mr. Bechtel that he signed the application without reading it and at the request of the secretary upon his assurance that it was necessary, but that nothing was. told him about a premium or a competitive bidding. The secretary contradicts Mr. Bechtel and says the latter knew he was bidding seven cents a share premium and authorized the secretary to make that bid for him.

At the time this transaction occurred the cases of Myer v. Building Ass’n, 117 Mich. 389, National Mut. Build ing & Loan Ass’n v. Burch, 124 Mich. 57, and Dailey v. Building & Loan Ass’n, 133 Mich. 403, had not been decided.

Section 7, art. 4, of the by-laws reads:

“The board of directors shall have power to fix the minimum rate of nremium at which the money on hand shall be sold.”

This by-law still exists, but, it is said, was treated as obsolete.

Among other statements of the secretary, in his testimony in relation to Mr. Bechtel, was the following:

“As to the premium, it was explained to him, and he was told that he had a right to bid, and he was told that he.had a right to bid whatever premium he saw fit; that the matter had to go before the board of directors; that others were bidding seven cents premium, and if he wanted to bid less it was his privilege.
Q. In other words, state whether he was given to understand that the matter of obtaining a loan from the association was based on a plan of bidding for the loan ?
“A. It was based on the plan of bidding for the loan; but in this case he saw fit to bid without going to the board. It was his privilege to go before the board if he so desired. I doubt if I explained to him that he might bid under the gross premium plan, although I might have done so, for at that time we were using the installment plan altogether. I told him it was necessary for him to make application before we could get it before the board, and he was ready to do so and made such application; and he was asked what he would bid. (Witness shown Exhibit 1.) That is the paper he signed as an application for the loan. It is in my handwriting, except his signature. After making the application I told him he had the privilege to go before the board and make his bid if he chose; if he made his bid in writing I could take it before the board, and it wasn’t necessary for him to go. He said ‘ that was all right; I don’t want to go.’ I made the application, and they referred it to the proper committee; the committee reported favorably, and the loan was granted.
“ The first step at the directors’ meeting is to call the roll; the second, reading the minutes of the previous meeting; then the minutes are approved and the financial statement showing the cash on hand subject to loan. This is read by me. This is done in an open meeting of the directors. Any one may come in at any time, and do so frequently. I found at this time there was money on hand to loan, and so informed the board. I immediately said there was so much money on hand which was for sale, and I bid for Mr. Bechtel and the others. He bid seven cents a week premium; was sold to him at that price. It was also sold to other bidders at the same price.”

On the cross-examination he testified:

“Q. Now just tell the court when you took that bid in what you did with it ?
“A. You shall have it. The only thing I was going to say is, that my practice is uniform, and every one is brought up in the same way.
“Q. I want you to tell just what you did when you took that loan of Mr. Bechtel’s in before the board of directors.
“A. Then I stated to the board that Mr. Bechtel had authorized me to bid seven cents for him. I had talked the matter over with Mr. Bechtel first and got his consent to bid seven per cent, premium for him. I explained it to him in such a manner that he agreed to pay seven cents a week premium, which was to be paid the association. I then wept before the board and said Mr. Bechtel had-agreed to pay seven cents a week premium. There was sufficient money to advance each of the members, without the payment of any premium, if they had known the situation.
Q. Why didn’t they know the situation ?
“ A. They are not entitled to know how much money we have got to loan.
“ Q. And you mean by that that you kept that from them ?
“A. No, sir, I didn’t convey it to them.
Q. Just tell how they didn’t happen to know that, Mr. Witt.
“A. How should they know it ?
Q. How.should they know it ? You kept that information from them ?
“A. Yes, sir.
Q. That is, you had money enough to make these loans at the time ?
“ A. Yes, sir.
Q. And you wouldn’t make that known to the members ?
“A. I was not advised how many loans we had, or whether we had money enough for all. There was $3,-600 applied for that night. We had in the treasury $5,200. I made substantially the same explanation to each borrower at this meeting I did to Mr. Bechtel. None of them came before the board of directors. The general practice was for applicants to come, and their first question was, ‘ what interest do you charge ? ’ And told that the interest was seven per cent. I myself advise them their premium.
‘ ‘ Q. Suppose that Mr. Bechtel had said that night— said to you outside the door, that he wouldn’t give you that seven cents premium, what would you have done with that ?
“Mr. Lamson : I object to that as incompetent and immaterial.
“A. I would have taken his bid in, whatever it was.
“ Q. And yet at the same time, you have had a fixed premium every time, or the society had ?
“A. There was such a matter on the records, but it was virtually understood that that was always left out entirely. The society always managed to get a fixed premium of 25 per cent, from all members who borrowed under the gross premium plan. The stockholders voted upon changing the plan in 1893. There was merely a resolution to the effect that the by-laws be changed so that money could be loaned on the installment premium plan. The members were all invited to be present at the meeting. That was before the complainant was a member of the society. Section 7 of article 6, which refers to the premium, was not stricken out of the by-laws when they were changed. This section authorizes the board of directors to fix the minimum premium for which the money on hand shall be sold.
‘ ‘ Q. This was the newly-adopted by-law, wasn’t it, in 1895?
“A. In 1895. The book was read through. That was only an oversight that that article was not stricken out altogether.
“ Q. Now I want you to describe, Mr. Witt, just what you did that night when you went before the board with Mr. Bechtel’s loan ? •
“A. Well, as I said before, the first move of the meeting was to call the roll of the directors, the second to read the minutes, and the third to have them approved. The fourth move was the reading of the financial statement, showing the amount of money on hand to be loaned out.
“Q. Did you read the applicants for loans at that meeting?
“A. Then I stated the money was for sale, and that I was authorized to bid so and so for whoever made the application.
ÍÍQ. That is what they authorized you to bid ?
“A. Yes, sir. That was true.
“Q. And then you had the money put up at auction?
“A. That is true. The money was put up at auction in that way.
“Q. And you bid it off for the members ?
“A. Yes, sir.
“Q. And the members paid seven cents a week premium ?
“A. Yes, sir.
“Q. And you made it just as clear for them as you possibly could ?
“A. I certainly did.
“Q. Those members that went in there consented to give the premium voluntarily to the society ?
“A. They certainly did. If they had wanted a smaller premium they should have bid. ' They wanted a smaller premium, perhaps, but they wanted the money.
“Q. Why didn’t they bid a smaller premium ?
“A. I don’t know. As I say, the person wanting the money usually says: ‘Well, I suppose I have got to
pay as much as any one, and you may as well put that in.’
“Q. So Mr. Bechtel and all those members that went in there, they all authorized you to bid that seven cents ?
“A. Yes, sir.
“Q. And all the money was put up at auction ? Who auctioneered it off ?
“A. Well, there was no regular auctioneer, like you would go on the street and sell goods for me, or anything of that kind; but the statement was made that the money was open for sale.
“Q. And who made that statement ?
‘‘A. I did.
“Q. You made the statement yourself?
“A. Yes; and after that I stated that each member in his order had bid so much money.”

It is claimed the secretary acted at the request of Mr. Bechtel as the agent of Mrs. Bechtel in making the bid, ■offering a premium of seven cents a share. It should not be forgotten that the parties were not dealing upon an •equal footing. Sawyer v. Building Ass’n, 103 Mich. 228. Mr. Bechtel was negotiating for a loan that both parties knew was to be used to enable his wife to pay off a mortgage upon her home. Mr. Bechtel was not familiar with the complex methods of the association. See McCauley v. Saving Ass’n, 97 Tenn. 421 (35 L. R. A. 244). The secretary was familiar with the affairs ■of the association. He knew there was more money to loan than there were applicants for. He withheld this important fact from his principal. He was the paid secretary of the defendant. We express no opinion as to whether this was such a dual relation as to prevent his acting for the applicant, but if he was to act 'for him he should give him all such information as would* enable him to act intelligently. We have not quoted all of the testimony of the secretary and none of that given by the president of the association, but it is impossible to .read it without reaching the conclusion that the result of the statements made to applicants was to give them to ■understand that in order to get a loan they must bid a premium of seven cents a share. In this connection the language used by Justice Gill is in point:

“ ‘ The directors of the corporation shall hold stated meetings, at which such sums of money as they may determine shall be offered for loan to all the members in open meeting. The shareholder who .shall bid the highest for the preference, or priority of loan, shall be entitled to receive a loan whose amount shall nob exceed the number of shares of stock held by such shareholder multiplied by the par value thereof.’ 1 Rev. Stat. 1889, § 2812.
“ It will be noticed that this privilege of borrowing the accumulated funds of the association is confined to the shareholders, and to them in proportion to the par value of stock held by each; also that the stockholder has the right to get the loan for a small or even nominal premium, provided of course that no other member overbid him at tbe open meeting held by the directors. This exclusive privilege belongs to the shareholders by virtue of, and in proportion to, their respective stock subscription. If in letting the money out, the officers or directors shall in any way take from the shareholders this privilege of attending the open meetings and securing loans for the least amount of premium they are able to get it in competition only with other members, and shall fix an arbitrary rate or premium below which the borrowing shareholders cannot obtain the money, then clearly the statute above quoted is violated and the premium not fixed ‘ according to the provisions of this article.’ In order to bring the transaction within the protection of the statute and exempt it from the charge of usury, the premium must be fixed by free and open competition between the borrowing shareholders, and not by an arbitrary rule of the officers or directors of the association. Brown v. Archer, 62 Mo. App. 291; Endlich on Building Ass’ns (2d Ed.), § 409, and authorities cited in the text.
“As tersely expressed by the last-named author:
“‘A premium in order to be lawful, must be one bid for the right of precedence in taking a loan,,at a competitive sale of such rights; and where there was no such sale and no bid, there can be no lawful premium. In other words, where it was simply agreed between a borrower and an association that he was to have a loan at a certain premium, not the result of any competitive sale, but of mere consent between the parties, the loan was held usurious. The so-called premium was in fact a part of the price named by the lender to be paid by the borrower for the use of the money loaned. The assent of the borrower to pay the price required did not make him a bidder within the meaning of the statute. Galling the excess above the highest legal rate a premium did not change the nature of the transaction. It was usurious. * * *
“‘Itfollows,’says the same author [§411], ‘as a necessary con. sequence of the illegality of the attempt to establish and enforce any provision as to a fixed minimum premium, that contracts made under the stress of the operation of such a rule, and affected by it to the prejudice of the borrower, are usurious and cannot be enforced according to their terms.’
“When we bring now the facts of the case at bar alongside the principles of law above stated, the illegality of the so-called premiums which plaintiff agreed to, and did in part pay for the loan in question, is made clear. First of all the evidence shows that about two years prior to the loan to plaintiff, defendant adopted a rule or bylaw that ‘ no money should be loaned for a less premium than 40 cents per month on each $100.’ A few days before this loan was effected plaintiff negotiated with defendant’s secretary and manager as to the cost thereof; and it was there in effect agreed that in addition to$3.00 monthly dues on plaintiff’s stock the rate of interest proper should be six per cent, with the monthly payment of a premium of 40 cents on the $100 loaned or $2.40 monthly premium on the $600. The secretary told the plaintiff that he need not attend the directors’ meeting and that he (the secretary) would * bid off ’ the proposed loan for plaintiff at the price agreed and fixed by the by-law. The evidence clearly shows that competitive bidding was not contemplated, and that' there was a definite understanding between the borrower and the secretary that the former was to get the loan at the fixed rate of 6 per cent, per annum as interest and $2.40 monthly premium on the said $600. Plaintiff did not appear at the directors’ meeting, and the secretary then and there went through the empty form of having the $600 loan auctioned off, and he, pretending to act for the plaintiff, made the only bid for the preference, to wit, 40 cents on the $100 which, as already stated, was the minimum premium fixed by defendant’s by-law. It is the merest trifling to contend that the plaintiff secured this loan in a competitive bidding. The so-called auction of the loan was a mere pretense.” Moore v. Building & Loan Ass’n, 74 Mo. App. 468.

We think the course pursued by the defendant association was an evasion of the statute and resulted in a usurious contract under Myers v. Building Ass’n, National Mut. Bldg. & Loan Ass’n v. Burch, and Dailey v. Building & Loan Ass’n, supra. The learned trial judge thought he was not at liberty to follow the case of Moore v. Building & Loan Ass’n, supra, because of what was said in Estey v. Building & Loan Ass’n, 131 Mich. 503. In that case the contract was held to be usurious and we do not think anything was decided in that case which is in the way of holding this contract to be in violation of the law. Associations of this character are not entitled to the benefits and immunities conferred upon them by the statute, without complying with its provisions.

The decree of the court below is reversed, and one may be entered here finding the amount to be due April 26, 1904, to be $933.23. Complainant will recover costs of both courts.

McAlvay, Montgomery, Ostrander, and Hooker, ' JJ., concurred.


source: Caselaw Access Project

author: Ostrander, J. Hooker, J.

license: Public Domain

text:
    MORSE v. AUDITOR GENERAL.
    1. Taxation — Tax SalesTax Homestead Lands — Deed to State — Effect.
    The State does not, by virtue of the deed to it by the auditor general, hold as a purchaser State tax homestead lands within the meaning of the statutes limiting the time within which action may be brought against a claimant under a tax deed (§ 73, Act No. 206, Pub. Acts 1893, and § 116, Act No. 153, Pub. Acts 1885), especially in view of Act No. 84, Pub. Acts 1903, establishing the time within which the owners of the original title shall begin proceedings against the State to recover such lands.
    2. Same — Action by Owner — Payment op Taxes.
    The owner of the original title to lands which have been deeded to the State as tax homestead lands is not required by section 131 of the general tax law, as amended, to pay to the auditor general all delinquent taxes returned to the auditor general thereon before bringing suit against the claimant, where the claimant is not a homesteader.
    3. Same — Deeds—Evidence of Title.
    Deeds from the auditor general to the State, and from the commissioner of the State land office to a purchaser who is not a homesteader, of lands held by the State as State tax homestead lands, are neither prima facie nor conclusive evidence of title in the purchaser.

      4. Same — Cancellation of Sales — Effect.
    The auditor general, in exercising his authority to cancel tax sales, and applying for and obtaining new decrees and proceeding to a sale thereunder, destroys all effect of the sales so canceled, and renews the right of the owner to redeem.

      5. Same — Premature Deed — Effect.
    A deed from the auditor general to the State, as abandoned, of lands bid off to the State at tax sales is unauthorized before expiration of the statutory period of redemption, and conveys no title.
    <6. Same — Ejectment by Owner — Defenses.
    In ejectment by the holder of the original title against a purchaser of lands from the State as State tax homestead lands, defendant cannot defeat recovery by merely showing a sale of the lands to the State under a valid decree, and the expiration of the period of redemption.
    '7. Same — Tax Sales — Purchase by State — Richts Acquired.
    The interest which the State acquires at a tax sale by bidding in the lands sold is one which cannot be, aside from the provisions respecting trespass and to prevent waste, asserted by the State, under existing laws, except by sale, since the law does not authorize the State to take possession or maintain an action for possession, but contemplates that the original owner shall retain possession.
    Hooker, Grant, and Moore, JJ., dissenting in part.
    Error to Montmorency; Emerick, J.
    Submitted April 27, 1905.
    (Docket No. 187.)
    Decided April 30, 1906.
    Ejectment by Benjamin O. Morse against Perry E. Powers, auditor general, Edwin A. Wildey, commissioner of the State land office, and Edward H. Gillman, trustee. There was judgment for defendants on a verdict directed by the court, and plaintiff brings error.
    Reversed.

      Henry K. Gustin and Dayton W. Closser, for appellant.

      John E. Bird, Attorney General (Charles W. McGill, of counsel), for appellees Auditor General and Commis.sioner of the State Land Office.

      O’Brien & Francis, for appellee Gillman.
   Ostrander, J.

The following statement of facts found in the brief for the appellant is conceded to be correct:

“ This is a suit in ejectment to recover possession of the. following lands: N. E. £ of S. E. £ of sec. 3, S. E. £ of N. E. £ of sec. 11, S. W. £ of N. W. £ of sec. 12, W. £ of S. W. £ of sec. 12, S. E. £ of S. W. £ of sec. 12, N. £ of N. E. £ of sec. 14, E. £ of N. W. £ of sec. 23, N. £ of S. E. £ of sec. 26, N. W. £ of N. E. £ of sec. 27, E. £ of S. E. £ of sec. 27, N-. E. £ of N. E. £ of sec. 34, S. W. £ of N. E. £ of sec. 35, S. E. £ of N. W. £ of sec. 35, all in T. 29 N., R. 4 E. The plaintiff, Benjamin C. Morse, is the owner in fee simple, tracing his title by mesne conveyances from the government to himself. The defendant Edward H. Gillman, trustee for the Turtle Lake Hunting & Fishing Club, a sporting club that is endeavoring' to establish a private game preserve out of the E. £ of town 29 N., range 4 E., Montmorency county, and the W. £ of town 29 N., range 5 E., Alpena county, claimed to be in actual possession of the lands. They have run a wire around the entire inclosure, six miles square. The lands in controversy are within this inclosure. The defendant Gillman claimed to own these lands by having purchased them by State tax homestead deeds from the State of Michigan, through the commissioner of the State land office, paying therefor the sum of 25 cents per acre. These purchases were made in November, 1901, and July, 1902. * * * The defendants further endeavor to prove their title by introducing in evidence the deeds from the auditor general of the State of Michigan to the State of Michigan. In the argument of this case the lands are divided into three classes, in accordance with the dates they were deeded by the auditor general of the State of Michigan to the State of Michigan, as follows:
“Class No. 1: Deeds Nos. 1 and 2, executed October 1, 1895. Deed No. 1 contains: N. E. £ of S. E. £of sec. 3, S. £ of N. E. £ of sec. 11, N. £ of N. E. £ of sec. 13, N. E. £ of N. W. £ of sec. 23, all in T. 29 N., R. 4 E., bid off to the State at the tax sales in the years 1888, 1890, 1891, 1892, 1893, 1894, for taxes of 1886, 1887, 1888, 1889, 1890, 1891, and 1892. Deed No. 2 contains: S. W. £ of N. W. £ of sec. 12, W. £ of S. W. £ of sec. 12, all in T. 29 N., R. 4 E., bid off to the State at the sales in the years 1890, 1891, 1892, 1893, and 1894, for the taxes of 1887j 1888. 1889, 1890, 1891, and 1892.
“Class No. 2: Deeds Nos. 3, 4, 5, 6, executed September 25, 1901. Deed No. 3 contains: S. E. ¿ of N. W. £ of sec. 23, N. ¿of S. E. £ of sec. 26, E. ¿ of S. E. ¿of sec. 27, all in T. 29 N., R. 4 E., bid off to the State at the sales in the years 1888, 1893, 1894, 1895, 1896, 1900, and 1901, for the taxes of 1886, 1891,1892,1893,1894, 1897, and 1898. Deed No. 4 contains: S. E. ¿ of S. W. ¿ of sec. 12, T. 29 N., R. 4 E., bid off to the State at the sales in the years 1893, 1894, 1895, 1900, and 1901, for the taxes of 1891, 1892, 1893, 1897, and 1898. Deed No. 5 contains: S. W. ¿ of N. E. ¿of sec. 14, T. 29 N., R. 4 E., bid off to the State at the sales in the years 1888, 1893,1894, 1900, 1901, for the taxes of 1886, 1891, 1892, 1897, and 1898. Deed No. 6 contains- N. W. £ of S. E. ¿ of sec. 14, T. 29 N., R. 4 E., bid off to the State at the sales in the years 1887, 1888, 1893, 1894, 1895, 1896, 1900, and 1901, for the taxes of 1885, 1886, 1891, 1892, 1893, 1894, 1897, and 1898.
“Class No. 3: Deeds Nos. 7, 8, 9,10, executed October 8, 1902. Deed No. 7 contains: S. W. ¿ of N. E. ¿ of sec. 35, T. 29 N., R. 4 E., bid off to the State at the tax sales in the years 1887, 1888, 1890, and 1901, for the taxes of 1885, 1886,'1887, 1888, 1890, 1895, 1897, and 1898. Deed No. 8 contains: S. E. ¿ of N. W. ¿ of sec. 35, T. 29 N., R. 4 E., bid off to the State at the tax sales in the years 1900 and 1901, for the taxes of 1888, 1890, 1895, 1896, 1897, and 1898. Deed No. 9 contains: N. W. £ of N. E. ¿ of sec. 27, T. 29 N., R. 4 E., bid off to the State at the tax sales in the years 1887, 1888, 1901, for the taxes ■of 1885, 1886, 1887, 1888, 1890, 1895, 1896, and 1898. Deed No. 10 contains: N. E.'¿ of N. E. ¿ of sec. 34, T. 29 N., R. 4 E., bid off to the State at the tax sales in the years 1888, 1900, and 1901, for the taxes of 1886, 1887, 1888, 1895, 1896, 1897, and 1898.
“It was conceded that these lands were delinquent for taxes for the requisite number of years to justify the auditor general in conveying the land to the State of Michigan, in pursuance of the tax homestead law. It was conceded that the tax titles for 1885 and 1887 in Montmorency county were void. * * *
“Defendant offered in evidence:
“Second. The files for the tax proceedings and sales had in the year 1901. The lands and the years’ taxes affected by this decree are as follows: Class No. 2: S. W. ¿of N. E. ¿ of sec. 14, T. 29 N., R. 4 E., for the taxes assessed in the years 1888,1890,1895, 1896,1898; N. W. ¿ of S. E. £ of sec. 14, T. 29 N., R. 4 E., for the taxes assessed in the years 1888, 1890, 1895, and 1898; S. E. £ of N. W. £ of sec. 23, T. 29 N., R. 4 E., for the taxes assessed in the years 1887, 1888,1890, 1895, 1896, 1898; N. £ of S. E. £ of sec. 26, T. 29 N., R. 4E., for the taxes assessed in the years 1887, 1888, 1890, 1895, 1896, 1898; E. £ of S._ E. £ of sec. 34, T. 29 N., R. 4 E., for the taxes assessed in the years 1887, 1888, 1890, 1895, 1896, 1898.
Third. The files for the tax proceedings and sales hacj in the year 1902, for the taxes of 1899. The lands affected by this decree are as follows: Class No. 3: N. W. £ of N. E. £ of sec. 27, T. 29 N., R. 4 E., for the taxes assessed in the years 1887, 1888, 1890, 1895, 1896, 1898; N. E. £ of N. E. £ of sec. 34, T. 29 N., R. 4 E., for the taxes assessed in the years 1887, 1888, 1895, 1896, and 1898; S. W. £ of N. E. £ of sec. 35, T. 29 N., R. 4 E., for the taxes assessed in the years 1887, 1888, 1890, 1895, 1896, and 1898; S. E. £ of N. W. £ of sec. 35, T. 29 N., R. 4 E., for the taxes assessed in the years 1888, 1890, 1895, 1896, and 1898.
Fourth. The tax proceedings and sales had in the years 1885 and 1886 were conceded void. There were no other proofs introduced to show the validity of any of the tax titles.”

A verdict for defendants as to all the lands was directed by the court. Plaintiff brings the case here on writ of error.

As to the lands other than those conveyed by the auditor general to the State by the deeds of 1901 and 1902, the court below seems to have been of opinion that, defendant Gillman not having shown the validity of the tax proceedings upon which the tax homestead proceedings were based, plaintiff was entitled to recover, concluding, however, as the record discloses, to rule that plaintiff was not entitled to recover any of the lands. Using the classification of the lands adopted by counsel, we take up the contentions relating to class No. 1. These are the lands conveyed by the auditor general to the State October 1, 1895, and by the commissioner of the State land office to defendant Gillman November 4, 1901, and the deeds of conveyance were in evidence. It is said by counsel for appellant that these deeds are not evidence of title in defendant. Taylor v. Deveaux, 100 Mich. 582; Dawson v. Peter, 119 Mich. 278. No answer is made to this contention, as we understand the brief for defendant. It is replied, however, that these lands were held by the State of Michigan as State tax homestead lands for more than five years prior to the commencement of this suit, and that the State had taken and maintained adverse possession of the lands, so far as possession was held by any one. It is said that the provisions of section 78, Act No. 206, Pub. Acts 1893, as well as section 116, Act No. 153, Pub. Acts 1885 (see St. Mary’s Power co. v. Water-Power Co., 133 Mich. 470), should be applied. This point is made for the first time in this court. The court below charged the jury that only questions of law, depending upon documentary evidence, were involved in the case. It is true, the point is made to sustain, and not to defeat, the judgment. It may perhaps be assumed, the record not containing any evidence upon the subject, that upon the transfer by the auditor general to the State, in October, 1895, all of the things were done which the statute makes it the duty of the officers and agents of the State to do. But the State is not, by virtue of the deed made by the auditor general to the State, a purchaser of the lands deeded, within the meaning of the statutes of limitation referred to. Gibson v. Commissioner of State Land Office, 121 Mich. 49. Furthermore, Act No. 84, Pub. Acts 1903, establishes the time within which the owners of the original title shall begin proceedings against the State to recover lands held as tax homestead lands, and this action of the legislature must be held to negative the idea that the other provisions referred to are to be treated as applying to the State.

It is further contended on the part of appellee that section 131 of the tax law of 1893 (Act No. 206, Pub. Acts 1893; 1 Comp. Laws, § 3953), as amended by Act No. 240, Pub. Acts 1897, and Act No. 107, Pub. Acts 1899, provides, as a condition precedent to the contesting of his titles, payment by plaintiff to the auditor general of all delinquent taxes returned to the auditor general on the lands in question. See, also, section 127 (1 Comp. Laws, § 3949) of the. general tax law. We think the provision does not apply here. Defendant is not a homesteader. The language of section 131 expressly requires such payment “in all cases where the lands have been taken as a homestead,” and omits the requirement in the provision for sales to others than homesteaders. Nor is the case before us a suit to vacate the findings of the auditor general and commissioner of the State land office to the effect that it was proper to classify this land as State tax homestead land. Under the rulings of this court already referred to, the deeds, the basis of the title of defendant Gillman, were not either prima facie or conclusive evidence of title in defendant.

The lands placed in classes 2 and 3. Different descriptions of these lands had been sold for taxes levied in different years from 1885 to 1898, and had been bid in by the State. As to the taxes for 1885 and 1886, the tax deeds for which are made by the law of 1885 prima facie evidence of title, plaintiff produced testimony showing the titles to be invalid. No testimony was introduced on the part of plaintiff to show invalidity of deeds for taxes of 1887 and subsequent years, though we understand it to be conceded that the tax titles for 1887 are invalid.

We have already disposed of such questions as were raised relative to the effect of the deeds from the auditor general to the State and from the commissioner of the State land office to defendant Gillman. No testimony was introduced by defendant to show validity of any of his titles excepting those for the sales ‘made to the State in the years 1901 and 1902. And the proceedings resulting in the sale to the State in 1902 do not affect title to any lands in class 2. We have to consider, therefore, the value to defendant of the interest acquired by the sale of 1901.

It appears that previous to or in 1901 the auditor general canceled and set aside various previous sales of land in Montmorency county, and, in his petition filed in that county in 1901, he asked for and obtained a new decree for various old taxes which, as to most of the lands in class 2, were for years 1887, 1888, 1890, 1895, 1896, 1897, 1898. The lands in class 2 were offered for sale by the county treasurer at the sale beginning May 7,1901. They were bid off to the State, and were subject to be redeemed ■until May, 1902. In the summer of 1901, under the provisions of section 127 of the general tax law, these lands were converted into State tax homestead lands, and on September 25, 1901, were deeded by the auditor general to the State. Plaintiff claims this deed to be void, because (1) the State had acquired, on September 25, 1901, no title by virtue of the sale made in May; (2) the auditor general was without authority to issue a deed for the interest acquired by the State in May, 1901. Put in another way, the contention is that in May, 1901, the State had no title to these lands, but had a lien upon them for unpaid taxes. This lien was in process of foreclosure under the decree of the court, and the proceedings to foreclose had reached the point where sale had been made to the State/ Before the statute period for redeeming from this sale had expired, the auditor general deeded the lands to the State. Defendant’s title is based upon that deed.

As we read the record, it was the opinion of the learned trial judge that it was immaterial whether the defendant had or had not acquired the title from the State under the decree and sale made in 1901, because, having shown, affirmatively, the validity of the decree and the regularity of the sale thereunder to the State, and the failure of plaintiff to redeem from the sale, a case had been made requiring the application of the rule that in ejectment the plaintiff must recover upon the strength of his own title, ■and not upon the weakness of the title of his adversary.

Some consideration seems, however, to have been given, in that connection, to the fact, already stated, that for many years previous to 1901, the lands had been held as State tax lands. We are of opinion 'that, in exercising his authority to cancel the sales for these several years and in applying for and obtaining a new decree and proceeding to a sale thereunder, the auditor general destroyed all effect of the sales for those years and the character of the lands as State tax lands. The right of the owner to redeem attached, and the interest of the State was subject to be divested by such redemption. It must be held, therefore, that the auditor general had not, under existing laws, the authority to deed these lands to the State as abandoned lands, so as to convey to the State any interest, acquired under the sale for taxes made in 1901. See Act No. 154, Pub. Acts 1895. It follows that the deed from the State land commissioner to defendant is of no effect as conveying any interest acquired under the decree and sale of 1901. It is clear, therefore, that the ruling made can be sustained only upon the broad ground, already stated, that a defendant in ejectment may defeat a recovery by the plaintiff by showing a sale of the lands in controversy to the State under a valid decree, and the expiration of the time given to redeem from the sale. We think the ruling cannot be sustained. The rule that a defendant in ejectment may defeat the plaintiff’s title by showing an outstanding title in a third person is subject, to qualification. In Summerfield v. White, 54 W. Va. 311, it was said:

“ The general rule is that the plaintiff must recover on the strength of his own title. * * * But the general rule is subject to very important qualifications. These qualifications rest upon the principle of estoppel for the most part.
“ ‘According to the general rule, this proposition means that he can recover only upon the strength of his own title as being good against the whole world, or as being good against the defendant by estoppel.’ 10 Am. & Eng. Enc. Law (2d Ed.), p. 481.”

See, also, Newell on Ejectment, p. 343. In Bennett v. Horr, 47 Mich. 223, in speaking of the rule that proof of an outstanding title constitutes a defense, Mr. Justice Graves states the qualification of the rule as follows:

“But to have this effect it must appear in someway that it is a present, subsisting, and operative legal title, and one on which the owner could sue and recover.”

So, in McDonald v. Schneider, 27 Mo., at page 410, it was said:

“ It is a well-established principle that an outstanding title in a third person, set up as a bar to a recovery in an action of ejectment, must, be such a one as the owner of that title himself could recover on if he were asserting it in an action.”

The interest which the State acquires at a tax sale by bidding in the lands sold is one which cannot be, aside from the provisions respecting trespass and to prevent waste, asserted by the State, under existing laws, except by sale. It is not authorized to take possession or maintain an action for possession. The law contemplates that the original owner shall retain possession. If the title is purchased from the State by an individual, he may not assert it, as a title, against the owner of the land, without formalities, required by the State, beneficial to the owner. Nor can an individual purchase, effectively, from the State, without also paying taxes thereafter levied upon the lands, if any are due at the time of his purchase. If defendant had purchased the title in question from the State, proceedings to assert it against the plaintiff could be undertaken only after notice and the failure of plaintiff to pay to him the statutory penalty. It would seem to be illogical to permit defendant to have a greater benefit from State ownership of this interest than he would have if he were himself the holder and owner, or, to assert a right of possession which the State itself, under existing laws, could not assert. As we understand the record and the briefs of counsel, the title of defendant to the lands in class 3 is subject to infirmities and claimed to be invalid for the reasons already discussed.

For the reasons stated, it must be held that defendant did not prove title to any of the lands in controversy, and the judgment is reversed, with costs, and a new trial granted.

Carpenter, C. J., and McAlvay and Montgomery, JJ., concurred with Ostrander, J.

Hooker, J.

The lands involved in this action belonged at one time to the plaintiff, who held title through mesne conveyances under a Federal patent. At the time this action was brought, the defendant Gillman was in possession, under homestead deeds issued by the commissioner of the State land office; the lands having been previously deeded by the auditor general for the purpose, under the provisions of the tax law. This action is ejectment; Gillman and the officers mentioned being joined as defendants. Counsel have divided the lands into three classes. We will adhere to this division for convenience, in our discussion of the questions raised. All of the lands were repeatedly bid in for the State at delinquent tax sales •from 1887 to 1898. Those embraced in class 1 were deeded to the commissioner in 1895, and were not included in the list canceled, as hereinafter' set forth. The sales of the lands included in classes 2 and 3 were canceled, readvertised, and sold to the State at delinquent sale in 1901, and were subsequently and prematurely deeded to the State undei the provisions of section 127, as amended (Act No. 107, Pub. Acts 1899), as abandoned lands. The defendants maintain: (1) That defendant Gillman acquired title to the land under the deeds from the land commissioner. (2) That even if he did not, the plaintiff’s title being divested by the sale to the State,, he cannot recover in this action.

Class 1. There is no proof of the validity of the proceedings under which these lands were sold to the State, and this is a prerequisite to a holding that title vested in the State. Taylor v. Deveaux, 100 Mich. 581; Dawson v. Peter, 119 Mich. 274. It was essential that jurisdiction, a decree, and sale, be shown. For want of this proof; defendant’s contention cannot prevail as to the lands in class 1.

Classes 2 and 3. The title to these lands must depend upon the tax sales of 1901 and 1902. The proceedings were shown to be regular. We have the jurisdiction shown, a decree establishing and foreclosing a lien of the State, and a sale to the State. Under repeated _ decisions, a sale to the State at delinquent sale, where the proceedings are shown to be regular, ripens into a title in fee simple in the State, after the expiration of the period for redemption, and, under our decisions, a defendant in ejectment may ordinarily make a complete defense by showing title in a third person. Manifestly this must be a title inconsistent with the claim set up by the plaintiff. That the State becomes absolute owner in fee upon a purchase and expiration of redemption is fundamental to the scheme of sale of land for nonpayment of taxes. For many years the proceedings were ministerial; the judjcial branch of the government having no function to perform. Upon a sale and expiration of redemption, the purchaser, whether State or private person, obtained a perfect title, if the proceedings were regular. If not regular, the purchaser acquired nothing in the nature of title. This was so held in the case of robbins v. Barron, 32 Mich. 36, and it has never been questioned. The title cut off not only the prior owner’s title, but all pre-existing mortgages and other liens, homestead, and dower rights. Ejectment would be supported by such a title, and the practice in such cases was consistent with no other theory than that of complete divestiture of the title of the delinquent owner. This should be held conclusive against the plaintiff in this case, to the extent of the land in classes 2 and 3, unless the rule is changed by Act No. 229, Pub. Acts 1897, and its amendatory Act No. 204, Pub. Acts 1899.

The act of 1897 (Act No. 229, Pub. Acts 1897) added four sections to the tax law. The title stated the object as “providing for the giving of notice by tax purchasers to the occupants or persons having title to, or interest in such lands, of the fact of such sale; and providing the terms upon which such occupant or other person interested in such lands may obtain reconveyance thereof.” Section 140 prohibits the issuance of a writ of assistance to the owner, under a tax deed, until proof shall be filed, showing the service of a six months’ notice of his claim. Section 141' gives to the last grantee under the regular claim of title, mortgagees, etc., a right to a reconveyance of the premises upon payment of the tax and interest, together with certain fees and penalties within such period. Section 142 prohibits the tax purchaser from entering upon the premises until after he has given such notice. Section 143 attempts to prescribe a short statute of limitation in favor of persons holding under tax deeds.

Under the law as it previously existed, and as it yet exists, it was the policy of the State to sell its tax lands. They are offered at succeeding delinquent sales, at which tima the purchaser takes them subject to a further period of redemption, although the redemption period has expired before the sale, as we held in the case of Monaghan v. Auditor General, 136 Mich. 247. As there suggested, this provision did not necessarily áffect the title of the State. The State had a right to impose a condition upon its sale by conveying a title subject to a right of redemption by the former owner, without thereby changing the provisions of law regarding the title acquired by the State. Failing to sell at such delinquent sale, it might still sell at private sale, and until the passage of Act No. 229, Pub. Acts 1897, such purchaser acquired an absolute title, as we have often held, and until that act was passed such a sale was conclusive upon the former owner. Since its passage the purchaser has taken a title to the land, but it was subject to a .condition which the State saw fit to impose, thereby giving, as a matter of grace, to the taxpayer, an opportunity to obtain the State’s title by purchase, just as he might have done had he seen fit to apply seasonably to the auditor general. The taxpayer loses his title by the expiration of redemption, when -the State’s title ripens into an absolute title in fee simple. If no purchaser buys from the State, the land is held subject to the control of the legislature. It may, under existing laws, make homestead lands of such, after a lapse of time, or it may do as it has in the past, make a sort of closing out or bargain sale of such lands as it has long held. It ought to be at liberty to make other disposition of its accumulation of State tax lands, such as to provide for re-foresting, or any other public use. To hold that the absolute title to land, which the State takes, is not absolute after all, because limited to such methods of use or disposition as the law in existence at the time of its -purchase provided, is not only unnecessary, but would, in our opinion, be unwise, and we think it certain that the legislature never contemplated such a limitation. If this were a case where defendant Gillman were claiming title under a deed from the auditor general, he would not be entitled to sue for and recover the possession, because he •could not show a right to the possession. What we should be able or called upon to hold were he in actual possession under such a deed defending an action brought by the taxpayer, we need not decide. Possibly the statute might be construed to give a plaintiff possessory rights, of a •character entitling him to recover, or we might say that all necessary for his complete protection would be to show the invalidity of the sale, or tender the sum. necessary to entitle him to a reconveyance. But this is unimportant; the State has not sold its land either at delinquent sale, or -at private sale, through the auditor general. The attempted transfer to the land commissioner was void. Manifestly, then, it yet holds an' absolute title to these lands. The plaintiff’s title in fee simple has been divested.

We are asked to hold that Act No. 229, Pub. Acts 1897, had the effect to abrogate the rule that the State has the absolute title to its State tax lands, so that we can reach a different result. The effect of such a holding would be far-reaching. Henceforth the State could make no disposition of its lands not now provided by law, because, as contended, the former owner still holds title, which can be divested only in the way already pointed out. We think that there can be no question that the State’s title to such lands was without limitation, up to the time that Act No. 229 was passed, and that there is nothing in that act indicating an intention or a thought of changing the existing rule as to its title. What was sought was to afford relief to unfortunate landowners, a consideration that is always present both in courts and legislatures where tax sales of land are under consideration. The following cases, most, if not all of . which, have been decided since 1897, must be qualified, if not overruled, to hold that the State has not a legal title to these lands. Connecticut Mut. Life-Ins. Co. v. Wood, 115 Mich. 444; Allen v. Cowley, 128 Mich. 530; Hickey v. Rutledge, 136 Mich. 128; Monaghan v. Auditor General, 136 Mich. 247; Board of Sup’rs of Alcona Co. v. Auditor General, 136 Mich. 130; Raber v. Hyde, 138 Mich. 101; Blake v. Grondin, 141 Mich. 104. A stumbling block is found in this case by reason of the suggestion that the title of the State becomes a defense to Gillman, who claims title under a void deed from the commissioner (therefore being without any title), while, as claimant under a valid deed from the auditor general, he would not be entitled to set up such a defense by reason of the statute which denies him the right of possession, and our decisions (Corrigan v. Hinkley, 125 Mich. 125, and Huron Land Co. v. Robarge, 128 Mich. 686), which hold that the original owner is entitled to possession as against such a purchaser. A tax title purchaser who has not complied with Act No. 229, Pub. Acts 1897, is a trespasser against the person holding possession, as we held in one of those cases. If we were to hold, further, that this act recognized the right of the tax delinquent, as that of a tenant or licensee, to possession, and therefore good as against one prohibited from entry, it need not follow that the character of the State’s title to the land is affected. The auditor general has never sold this land. The State has all of the title that it ever had, or that it could acquire under a purchase at tax sale by the expiration of redemption.

Under the general rule, the plaintiff can recover only upon the strength of his own title, and, if this plaintiff had no title nor right of possession, he could not recover under that rule against Gillman, although Gillman’s possession is based on nothing more than a peaceable entry and continued occupancy. But, under the laws of this State as they exist at present, it is the policy of the State to make disposition of its State tax lands in different ways:

1. The auditor general may sell them at private sale.

2. He must offer them at public sales, if not previously sold.

3. Under certain conditions he must deed them to the land commissioner, who holds them subject to homestead entry.

If sold at a public sale, the sale is made subject to the privilege of redemption for a year. If at private sale, it is subject to a right of repurchase. If as a homestead, there is no right to either. So long as the State makes no other provisions for disposing of its lands (which perhaps it may do, when the legislature shall see fit), the original owner is entitled to the possession of lands sold for taxes, until it has been lawfully sold as a homestead, or until the expiration of the six months prescribed by Act No. 229, Pub. Acts 1897. This is made apparent by said act, and such right, whatever it may be called, is sufficient to sustain ejectment against one who, like Gillxjian, has no title, as it probably would be against a tax title holder under a purchase at delinquent or private sale from the auditor general, because the law has so provided. Under the undisputed proof the plaintiff was entitled to the possession of all of these lands, as against defendant Gillman. The declaration claims ownership in fee, but, as no question has been raised upon it, we do not discuss the subject further than to say that there may be occasion to amend it. See Fisher v. Hallock, 50 Mich. 463.

It is not intended by this decision to east any doubt upon the doctrine well settled by former decisions (see Allen v. Cowley, 128 Mich. 530; Hickey v. Rutledge, 136 Mich. 128; Blake v. Grondin, 141 Mich. 104), that the timber cut from State tax land and the cause of action resulting from said cutting belongs, not to the original owner, but to the State. The State’s ownership of said timber and of said cause of action should be upheld upon the ground that it arises from a proper construction of sections 1323 and 3936 of the Compiled Laws of 1897 (see, also, Act No. 145, Pub. Acts 1903), and not upon the ground that the State is entitled to the possession of the land from which the timber was cut.

The judgment should be reversed, and a new trial ordered.

Grant and Moore, JJ., concurred with Hooker, J.


author: Ostrander, J.

text:
    AUDITOR GENERAL v. CLIFFORD.
    1. Evidence — Judicial Notice — Supreme Court — Tax Proceedings
    This court cannot take judicial notice of facts contained in the records of tax proceedings.
    2. Taxation —Sales —Cancellation—Authority of Auditor General.
    The auditor general has no authority on application by a purchaser from the State to cancel his deed to cancel also the tax sales upon which the State’s title to the land is founded.
    3. Same — Lien for Taxes — Priority.
    The general rule is that a sale and conveyance in due form for taxes extinguishes all prior liens, whether for taxes or otherwise, and. a purchaser, at such a sale, of lands upon which there is no apparent prior unsatisfied lien for taxes, cannot be prejudiced in his title by the subsequent action of the auditor general in canceling a prior sale and reasserting the State’s lien for the taxes of prior years.
    Appeal from Midland; Dodds, J.
    Submitted April 27, 1905.
    (Docket No. 189.)
    Decided April 30, 1906.
    Petition by Perry F. Powers, auditor general, for the sale of land delinquent for taxes: On objections filed by Charles Clifford and Thomas E. McCann. From a decree for petitioner, contestants appeal.
    Reversed, and petition dismissed.

      John E. Bird, Attorney General, and Bay Hart, Prosecuting Attorney (Charles W. McGill and George L. Hauser, of counsel), for petitioner.

      Elbridge F. Bacon (J. J. Speed, of counsel), for contestants.
   Ostrander, J.

Certain lots in the city of Midland were returned delinquent for the taxes of 18181, 1886, 1887, and 1888. In course of time they were bid in to the State — for taxes of 1881 in 1885, for taxes of 1886 in 1888, for taxes of 1887 in 1890, and for taxes of 1888 in 1891. They were held by the State until January 24,1894, when they were sold to an individual ■ and were subsequently deeded to him. In December, 1900, an assignee of this purchaser made application to have the sale canceled and the money paid refunded. This application contains the statement:

“The purchase and deeds are void, and we desire to have the money refunded. Cockburn v. Auditor General [120 Mich. 643], Hughes v. Jordan [118 Mich. 27], and Hubbard v. Auditor General [120 Mich. 505], would seem to cover all these purchases.”

There were other lands than those in question described in the application. In compliance with this request, the auditor general did dancel the sale and refund the money, the following memorandum being made in his office:

“Sale canceled refunded on release January 18, 1901; taxes of subsequent year not paid; no dollar mark in decree; voucher 124, 1901.”

The auditor general not only canceled the sale to the individual ; he canceled the sale of the lands, for the various years mentioned, to the State, and in his petition, filed in the year 1902, he prayed for and obtained a decree against and an order for the sale of these lots for the taxes of each of said years except the year 1886. It is from this decree that respondent Clifford has appealed.

The interest of respondents in the premises arises in this way: The same lots were returned delinquent for the taxes of the years Í896 and 1897. They were sold to the State in 1899 for the taxes of 1896, and to respondent’s assignor,- in 1900, for the ta,xes of 1897, he also purchasing the State bid for the taxes of 1896. The auditor general duly issued a deed upon the sale for the taxes of 1896, dated October 29, 1900. All proceedings connected with the decree and sale of the lots for 1896 and 1897 are conceded to be regular and valid. Respondent Clifford, March 14, 1902, contracted to sell the land to respondent McCann. The auditor general refunded, upon the cancellation which he made, $385.55, which was the amount paid to the State and interest at 6 per cent, from February 2, 1894. The decree appealed from finds the amount due the State to be $603.22, which is made up of the said taxes, with interest at 12 per cent, from the date of the return of said taxes to the county treasurer.

At the time the respondent’s deed was issued, the State had apparently no lien or claim against the lots in question for taxes of prior years, and it acquired the l;°n, now asserted, for which decree has been entered, by later action of the auditor general. In the answer of respondents, various matters claimed to affect the merits are set up. This court is limited to the consideration of those objections which deny the right of the auditor general to cancel and refund, and the right tp enforce against the land the taxes, sales for which were so canceled and set aside. The record fairly discloses that the person to whom the lands were sold in February, 1894, did not at the time of his purchase pay taxes for subsequent years. The application for cancellation, and the memorandum referred to, indicate that the auditor general assumed that for this reason his right to cancel the deed given to the purchaser, and to refund to him the money he had paid existed. But' the record does not disclose the reason for also canceling the sales to the State. True, the same memorandum states, “no dollar mark in decree,” and it might be inferred, if the right to infer was open, that the absence of the dollar mark in the decree, in each of the years, was the reason for setting aside the sales to the State. It is said in the brief for the auditor general that the sale in 1885, under the law of 1885, for the tax of 1881, was void because that law was not retroactive in operation. This may be conceded. The sale in 1888, for the taxes of 1886, was, it is said, void because of failure of the board of supervisors to equalize the valuations for that year; the sales in 1890, for tax of 1887, and in 1891, for tax of 1888, were void because of the absence of the dollar mark from the tax record and decrees. This court cannot take judicial notice of facts contained in the records of tax proceedings, and there was introduced no evidence of the truth of these assertions. The facts are not admitted. Neither had the auditor general the right to cancel these sales. Cole v. Auditor General, 132 Mich. 262.

The principal question presented, the answer to which disposes of the whole matter in controversy, arises upon the contention of appellant that his title cannot be affected by action of the auditor general taken subsequent to his purchase. It is not easy to give to the various provisions of the tax laws constructions which shall have the effect to make a harmonious, complete, and readily applied revenue statute. The general purpose of the laws must be, of necessity, kept in mind and given effect. Plainly, however, cases may arise, the case at bar being an exam-pie, where the broad right of the State to receive its taxes must yield to the particular rights of an individual who has, in reliance upon the tax laws, purchased from the State, in strict conformity with the lá’w, the last and the only apparent title of the State. When respondent acquired his title, all taxes upon the premises in question-had been paid. The State had no title to and no lien upon them. To acquire a lien, the State had first to refund, to the earlier purchaser, the moneys paid by him, annul the records and seek to re-establish and enforce the original demand. If this demand may so be enforced, there is introduced into the system, not only opportunity for gross injustice to the individual, but also, what is of .at least equal importance, an element of uncertainty likely to defeat the general purpose of the law. As was well said by this court in Robbins v. Barron, 32 Mich. 36, 39, where an attempt was made to impose upon premises a lien quite similar in its alleged inception and its effects to- the one here considered:

“Establish such a doctrine, and very few would be willing to become purchasers at tax sales, thereby assuming the responsibility of paying large sums of money to relieve the land of such lien in order to reap the benefit of their purchase.”

The case presented is not like Auditor General v. Newman, 135 Mich. 288, for the reason that in that case the cancellation of sales for prior years had been made and the lien claimed by the State was apparent when the respondent purchased for the taxes of subsequent years. The general rule is that a sale and a conveyance in due form for taxes extinguishes all prior liens, whether for taxes or otherwise. This rule is one of necessity, growing-out of the imperative nature of the demand of the government for its revenues. Tax liens -take priority in the reverse order of other liens. It is not required, in this case, that we adopt, broadly, the rule laid down in cases like State v. Gamp, 79 Minn. 343; Brewer v. District of Columbia, 5 Mackey (D. C.), 274; District of Columbia v. Hufty, 13 App. Cas. (D. C.) 175; Dougherty v. Henarie, 47 Cal. 9; Irwin v. Trego, 22 Pa. 368; Prestons. Van Gorder, 31 Iowa, 250; Bowman v. Thompson, 36 Iowa, 505; Law s. People, 116 Ill. 244; Sayles v. Davis, 22 Wis. 225, and others. It is probable that the decisions in Auditor General v. Newman and prior cases cannot stand along with the decisions in some of the. cases above referred to. The tax laws in different jurisdictions vary greatly. We are, however, required to hold, in view of the facts in this case, that the demand of the State may not be asserted against the respondent, or, what is the same thing, the premises, for the reason that upon his purchase of the title to the lands there was no apparent prior unsatisfied lien thereon for taxes.

The decree is reversed, with costs, and a decree will be entered here perpetually discharging the premises in question from any lien for the taxes, the collection of which is sought in this proceeding to be enforced.

Grant, Blair, Montgomery, and Moore, JJ., concurred.


author: McAlvay, J.

text:
    BULLIS v. FARMERS’ STATE BANK OF DECKERVILLE.
    1. Accounting — Bill—Parties.
    Where a mortgagor, after the discharge of the mortgage, files a bill against the mortgagee for an accounting, based on an agreement binding the mortgagee to apply the proceeds of the mortgage for specified purposes, the wife of the mortgag- or, who joined in the mortgage, and his mother, who released her life estate in a part of the premises, are not necessary parties.
    2. Mortgages — Disposition oe Proceeds — Accounting by Mortgagee.
    On the execution of a mortgage, the mortgagee agreed to apply the proceeds thereof in the payment of a debt due from a third person to a bank, secured by a chattel mortgage. It was provided that, on the proceeds being so applied, the mortgaged chattels should be returned to the third person. The mortgagee did not apply the proceeds as agreed, and the bank sold the mortgaged chattels to apply on its indebtedness. Held, that the mortgagee must account to the mortgagor for the full amount of the proceeds of the mortgage, with interest.
    Appeal from Sanilac; Beach, J.
    Submitted December 8, 1905.
    (Docket No. 166.)
    Decided April 30, 1906.
    Bill by Edward Bullis against the Farmers’ State Bank of Deckerville and Edward M. Mark for an accounting. From a decree for' complainant, defendants appeal.
    Affirmed.

      C. F. Gates and J. 8. Crandell, for complainant.

      Stevens, Graham & Stevens and W. II. Burgess (William T. Mitchell, of counsel), for defendants.
   McAlvay, J.

From a decree of the circuit court in Sanilac county, in chancery, against defendants on a bill filed for an accounting, an appeal has been taken to this court.

Complainant and wife, on October 14, 1903, gave defendant bank a mortgage on their farm for $1,000, under the following circumstances: Judson Bullis, complainant’s brother, had become financially involved. He had borrowed money from defendant bank, and other banks, to a considerable amount, and given chattel mortgages therefor upon his team, threshing apparatus, farming implements, and farm stock, and, it is claimed, fraudulently upon property he did not own or which was not in existence. A partner of Judson Bullis named Jenereau was a party to some of these transactions. The entire indebtedness of Judson Bullis was from $3,000 to $4,000. On the night this mortgage was given, about midnight, Judson Bullis and defendant Mark, who is cashier of defendant bank, went out into the country to complainant’s farm, for the purpose of making some arrangement about Judson’s affairs. Arriving at a certain store, by arrangement Judson went first to complainant’s house, arriving there about ten minutes before Mark, called his brother up, told him he was in difficulty and in danger of going to prison and wanted his help. He stated that Mark would be there soon. No arrangement was made before Mark arrived, except complainant said he would help him. When Mark came there were present during the interview five persons — complainant and wife, his brother Judson, and defendant Mark and Dr. Mark. An agreement was finally entered into that complainant and wife should give a mortgage on their farm of $1,000. Defendant Mark, who had the blanks in his pocket, drew up the mortgage and note running to defendant bank, both of which were duly executed, and the mortgage acknowledged, and all delivered to Mark, taken away by him, and afterwards recorded.

Complainant contends that this mortgage was given under the express agreement that its proceeds were to be applied to pay the chattel mortgages of the Truman Moss State Bank, upon which Judson’s personal property had been seized; that such property was at once to be returned to Jiidson; that the amount of indebtedness to said bank was about $750; that the balance was to be paid back to complainant, or to be credited upon the mortgage. This, complainant says, was done to help his brother get back his stock, team, and tools, so that he could support his family, and complainant was to have this property as-security for what he paid, and it was also to prevent any criminal prosecution against Judson. The proceeds of this mortgage were not applied, as complainant contends, according to agreement.

Defendants insist that no agreement as above set forth was entered into, but that the proceeds of said mortgage and other moneys received by defendant bank were to be applied, first, to pay defendant bank in full for all indebtedness of Judson Bullis to it, and the balance to be paid out to other mortgagees, being creditors of said Bullis, as complainant well understood.

The nest night, late, defendant Mark and Dr. Mark, his brother, went to Elizabeth Travis, the mother-in-law of Judson Bullis, and secured from her and her husband a mortgage and note for $500 in favor of defendant bank. Defendant Mark, having ascertained that Emmeline Bullis, the mother of complainant, had a life lease or estate in part of his farm upon which he had given this mortgage for $1,000, claiming the mortgage could not be realized upon unless she released her interest, induced complainant to go with him to Saginaw and secure such release. They went October 17th, meeting one of defendant’s attorneys at Port Huron, arriving at Saginaw in tho night, and after some delay found where she resided. They arrived at her home between 11 and 12 o’clock and secured from her a writing, probably a mortgage, for the purpose, as she testified, of paying the Truman Moss State Bank indebtedness and releasing Judson’s stock, and preventing him from being prosecuted criminally, and any amount remaining to be paid to her. She was over 70 years old, had been aroused from her sleep, and says she was somewhat confused. This instrument was not in evidence, and, as far as the record shows, was never negotiated by the defendant bank.

On October 28th defendant bank, through cashier Mark, negotiated the mortgages given to it by complainant and Mrs. Travis to one Eli Burtch, a money loaner, and also a creditor of Judson Bullis, for the sum of $1,500, the Travis mortgage for $500, in notes and mortgages made or indorsed by Judson Bullis, and the mortgage given by complainant, for $1,000 cash. This Burtch had a mortgage of $400 on complainant’s farm and took up another small mortgage against it. He made an arrangement with complainant that he would fund all this indebtedness, amounting to $1,650, take a deed from complainant and wife, and give back a contract providing for payment in 10 years. On October 29th defendant bank discharged the mortgage given to it by complainant. From the testimony of defendant Mark and the books of defendant bank it appears that all of the indebtedness then owing to it by Judson Bullis was paid October 16, 1902.

It is insisted by defendants that complainant’s wife and mother should have been joined as parties to this suit. This is not indicated under the pleadings unless claimed by the general demurrer clauses in the answers. There is no merit in the claim. The mortgage is discharged, and no attack is made upon it by the bill of complaint. No rights or interests of the wife or mother are in litigation here. The sole question in dispute is whether defendants received the money from this mortgage for certain specific purposes, and to be applied upon a specific indebtedness of Judson Bullis.

The question in the case is purely a question of fact. To discuss the evidence in this voluminous record relative to the numerous mortgages, and the indebtedness of Judson Bullis both individually and in connection with Jenereau, his partner, would be unprofitable. Admittedly complainant had no part in these transactions, and no knowledge except as given by his brother and defendants or their agents. We find, from a careful examination of the whole record, the facts to be that the agreement was made with Mark, the. cashier of defendant bank, as claimed by complainant, that the mortgage was given to defendants for the purpose of paying the indebtedness of the Truman Moss State Bank, and to secure the return of the personal property of Judson Bullís, and, without doubt, also to avoid his prosecution; that defendants did not apply any part of the $1,000 received as agreed; that Truman Moss State Bank was not paid, but kept the property it had seized and sold it to apply on its indebtedness; that defendants must account to complainant for full amount thereof, with interest to date.

The decree of the circuit court is affirmed, with costs.

Grant, Blair, Hooker, and Moore, JJ., concurred.


author: Hooker, J.

text:
    BROWN v. NAPPER.
    Review — Bill—Leave to Pile — Delay.
    Leave to file a bill of review in proceedings by a tax sale purchaser for a writ of assistance will be denied when applied for more than five years after the decree was granted, during which time the applicant has known of the defense which he desires to interpose to the tax sale proceedings, and has paid neither the taxes on the land nor his adversaries’ disbursements in defending against his ill-advised litigation.
    Petition by George F. Brown and A. B. Cullen against Robert Napper and John E. Fitzpatrick for a writ of assistance : On motion of Robert Napper for leave to file a bill of review.
    Submitted May 2, 1905; reargued April 3, 1906.
    (Calendar No. 18,087.)
    Motion denied April 30, 1906;
    rehearing denied July 24, 1906.

      O'Brien & Francis, for the motion.

      McFarlan & Wilson, contra.
   Hooker, J.

This is an application for leave to file a bill of review, in a cause once before this court. See Brown v. Napper, 125 Mich. 117. The question there determined was that a decree for delinquent taxes for ] 893 was valid. It was decided at the October term, A." D. 1900, both parties being represented by counsel in both courts. The petition shows that the petitioner was served with the statutory notice in August, 1899, but relying upon the statements of his mortgagor, whose duty it was to pay the taxes, that said taxes had been paid, he contested the purchaser’s claim, and was defeated. Brown & Cullen, the purchasers, made the purchase under section 84 of Act 206 of the Public Acts of 1893, 1 Comp. Laws, § 3907, and at that time failed to pay the delinquent taxes for 1896. Petitioner knew this in 1899 and bought the tax title for that year, but claims that he did not learn until 1904, that this was a fatal defect in the title of Brown & Cullen, and that he would have prevailed in his litigation had the question been raised at the hearing of the application for the writ, of assistance in 1900. Subsequently he asked the auditor general to cancel the deed of Brown & Cullen and to issue a deed to him (presumably upon a proper tender), and, being denied this, he thereupon brought an action of ejectment against Brown & Cullen, in which he was defeated, and he appealed to the Supreme Court where he was again defeated, the judgment being affirmed. Napper v. Fitzpatrick, 139 Mich. 139. He has now filed an application in this court for leave to file a bill of review in the proceedings for a writ of assistance, relying upon the case of Hughes v. Jordan, 118 Mich. 27, to show that, under the facts stated, the writ of assistance was erroneously awarded. That case was decided two years before the writ of assistance in this case was applied for. Petitioner then knew that the tax of 1896 was not paid by Brown & Cullen, for he had bought that title himself in May, 1899, and afterward took a deed from the auditor general for the west 40 acres, the east 40 acres not having been returned as delinquent. He claims to have been assiduous in his efforts to obtain his rights, and ascribes his failure thus far to his ignorance of the law and the failure of his counsel to properly present his case; i. e., the failure of Turnbull to raise the question alluded to at the hearing in 1900. This he would have the court ascribe to a mental disease with which he claims that Turnbull was afflicted, which he attempts to show and to some extent does show by affidavits attached to his petition.

Upon the part of the original petitioners, Brown & Cullen, attention is called to the fact that Napper’s own affidavit discloses that he showed to Turnbull his tax certificate for the tax of 1896, and that'he replied “ This ends the case, say nothing about it,” and he did so. Also that it appears in the case that other counsel have had charge of Napper’s papers and affairs for 10 years, yet did not inform, him of his proper defense, any more than Turnbull did, and not until four years after this decree was affirmed was any step taken, and then ineffective proceedings were commenced and carried to the court of last resort. We are not advised that petitioner has ever offered or proposed to make the complainants whole, by tendering even their disbursements, while he has put them to much trouble and expense in defending ill-advised litigation, and is apparently still endeavoring to maintain his title, leaving them to bear the loss of their investment and expenses. For five or six years he has known that they have paid taxes upon his land, taxes that as between them it was his duty rather than theirs to pay. There has been an exceptional delay in this case. See Sanford v. Haines, 71 Mich. 116; Sherwood v. Savings Bank, 104 Mich. 65. The complainants are not at fault, either for petitioner’s delay or the mismanagement of his case, “though, they have been put to much unnecessary trouble ,and expense.

The motion should be denied, with costs.

Carpenter, C. J., and McAlvay, Grant, Blair, Montgomery, and Ostrander, JJ., concurred.


text:
    MEAGHER v. DUMAS.
    'Taxation — Tax Homestead Lands — Abandoned Lands.
    Where lands which have been bid in for the State at tax sales are shown by the examiner’s report and certificate to be actually occupied by the owner of the original title, they are not subject to disposition as “abandoned" lands under sections 127-134 of the general tax law as amended (§§ 3949-3956, 1 Comp. Laws).
    Error to Bay; Shepard, J.
    Submitted January 9, 1906.
    (Docket No. 30.)
    Decided April 30, 1906.
    Ejectment by William J. Meagher against Henry Dumas and Sophia Dumas. There was judgment for plaintiff for a part only of the land claimed, and he brings •error.
    Affirmed.

      Pierce & Kinnane, for appellant.

      Haller & Haller and M. L. Courtright, for appellees.
   McAlvay, J.

Plaintiff began ejectment against defendants in the circuit court for Bay county to obtain possession of lot 5, block 4, Johnson & Lewis’ first addition to Bay City. Plaintiff claims title by virtue of a deed from the State land commissioner, dated December 19, 1904, being, as stated in the deed, “lands reserved and withheld from homestead entry under the homestead right, pursuant to the provisions of sectionT31 of Act 206 of the Public Acts of 1893, as amended by Act 141 of the Public Acts of 1901, and said lands having been restored to market in manner provided by section 131 of Act 206 of the Public Acts of 1893, as so amended.” Defendant Henry Dumas is the owner of the original title, and with Sophia, his wife, has owned and occupied the same as his homestead since 1872, first under a land contract, and later under deeds. The land has been assessed in two descriptions as the east 50 feet and the west 60 feet of said lot 5, block 4. The entire lot has been occupied continuously as one parcel, and has been inclosed as such for about 11 years. The house is situated partly on both of the descriptions. This lot, under the descriptions above given, had been sold to the State for more than five years prior to any action taken by the auditor general under the provisions of section 127, Act No. 206, Pub. Acts 1893. There was a total of unpaid taxes against the east 50 feet of $73.95, and against the west 60 feet of $65.77.

On March 4, 1904, an examiner certified his inspection of the property under the statute, showing the east 50 feet occupied by H. Dumas under warranty deed dated about 1875, giving the estimated value of the land $65 and the house $200, and the west 60 feet unoccupied, the value of the land estimated at $40. On May 7, 1904, the county clerk of Bay county certified an examination of the records and files of his office, and that he found no action pending to set aside any taxes against the land, or to remove the cloud occasioned by any of said taxes or by any sale thereof. • On May 12th the auditor general certified that the land, as delinquent for taxes for more than five years, was sold or bid off to the State for one or more of said years, was not redeemed, and the time for redemption had expired. On the same date the auditor general and the commissioner of the State land office certified that the foregoing steps had been taken as to lands included in the statement annexed (which included the land in controversy), and determined that said lands came within the provisions of section 127, Act No. 206, Pub. Acts 1893, as amended by Act No. 107 of the Public Acts of 1899, and found and determined “ eighty sections of land included in this determination, being the descriptions entered on the preceding pages,” which was the statement to which their certificate was attached. The auditor general deeded this land in controversy to the State September 24, 1904.

On October 8,1904, the same officers, under section 131 of general tax law, as amended by Act No. 141, Pub. Acts 1901, withdrew said land from homestead entry. Notice of restoration to market, and sale, as provided by said section, was published by the land commissioner to take place December 8,1904, and under this notice a sale was made and deed executed to plaintiff, under which he claims. Prom the report above mentioned of the examiner, Whitbeck, to the auditor general, it appeared that the east 50 feet of said lot was occupied by defendant, and the west 60 feet was not occupied. The court directed a verdict for defendants for the east 50 feet, for the reason that it could not be sold as abandoned land, and a verdict for plaintiff for the west 60 feet, certified as unoccupied, holding as to that portion the owner could not dispute the record.

Plaintiff asks this court to reverse the judgment in this case for the following reasons: (1) The court erred in not directing a verdict for plaintiff. (2) The court erred in charging the jury:

“ So far as the occupied land is concerned, I charge you and direct the clerk to enter your verdict that the plaintiff shall recover so far as the west 60 feet of it is concerned, and that as to the land returned to the auditor general as occupied land that he cannot recover, and a judgment shall be for the owner of the land, and that will be your verdict.”

Both parties assigned errors, and the bill of exceptions was settled at the request of both. Plaintiff sued out his writ of error. Defendant has, as yet, taken no further steps in the case.

The consideration of this case involves. an examination and construction of sections 137 and 131 of the general tax law as amended, relative to lands known as “ State Tax Homestead Lands.” This legislation (sections 137-134, inclusive, of the general tax laws) was first enacted in 1893. Act No. 306, Pub. Acts 1893. This act applied to “barren, swamp, or worthless lands that have been abandoned by the owner,” which had been delinquent for taxes and bid off to the State for a period of more than three years. By Act No. 154, Pub. Acts .1895, it was provided that “failure to pay the taxes or to redeem or purchase any lands” so sold, “shall be, in all cases where such lands are not actually occupied, prima facie evidence that such lands are abandoned by the owner.” ' Section 3949, 1 Comp. Laws. Section 131 of the original act provided for the disposition of such lands to homesteaders only. Unimportant amendments were made to this section in 1899. Act No. 107, Pub. Acts 1899, amended sections 137, 138, 130, 131, and 133 of the general tax law as embodied in 1 Comp. Laws. The amendments to section 137 will be first considered.

The first paragraph provided that lands delinquent for taxes for any five years, sold ■ and bid off to the State for one or more of said years and then so held, and no application made to pay, purchase, or redeem from said taxes, and no application made to set aside such taxes or remove cloud occasioned thereby, shall be deemed abandoned lands, unless such lands are actually occupied by the person having the record title thereto. The second paragraph is a material addition. It provides:

“Any lands delinquent for taxes for a period of five or more years, and said lands having been sold and bid in by the State and held by the State for the taxes of any of said years, and no application having been made to pay, redeem or purchase the same, and no suit pending to set aside said taxes or remove the cloud from the title occasioned thereby, shall be subject to the provisions of this section.”

The third paragraph provides :

“ Whenever it shall appear by the records in the auditor general’s office that any lands are delinquent for taxes for five years or more and that said lands have been bid off to the State one or more times by reason of such delinquent taxes, and that the time of redemption of such sale or sales has expired and that no application has been made to pay, to redeem or purchase the same, and it shall appear that no action is pending in the circuit court of the county where said lands are situated to set aside the taxes or remove the cloud on the title occasioned thereby, the title to the State shall be deemed absolute in and to said lands; and it shall be the duty of the auditor general and the commissioner of the State land office to cause an examination of such lands to be made as soon as practicable, to ascertain their value and if abandoned.”

The section further provides that, upon filing a certificate of said examination and a certificate of the county clerk with reference to proceedings to set aside the taxes or remove the cloud, the auditor general and commissioner shall determine what lands so examined come within the provisions of this section, and make a record thereof. This finding and determination must show, among other things: ‘ ‘ Fourth. Whether said lands are occupied or abandoned ” — and shall be deemed conclusive of the facts therein stated, unless suit is instituted to vacate the same within six months. The section further provides that the auditor general, within 90 days after such determination, shall deed such lands to the State, to be held by the land commissioner subject to the further provisions of the statute ; that no suit shall be instituted to vacate, set aside, or annul said determination, unless instituted within six months thereafter. There are other provisions embodied in this section, not material to the case, relative to where, and the terms upon which, the suit may be instituted. Sections 128 and 130 refer to matters not material to this case. Section 131, which, as section 3953, 1 Comp. Laws, was very short, and provided that such lands should be held subject to homestead entry only, was amended by Act No. 107, Pub. Acts 1899, as to the details of such homestead entries. It was amended further by Act No. 141, Pub. Acts 1901, to provide for other dispositions than for homestead entry, as follows:

“All such lands shall be held by the commissioner of the State land office subject to entry as homestead lands' unless withheld and reserved in the manner following: The commissioner of the State land office and the auditor general, acting jointly, may reserve and withhold from entry under the homestead right such portion of the lands deeded by the auditor general to the State under section 127 * * * as, in their opinion, may not be advantageous to open for homestead, and they may withhold and reserve such land from entry for so long a time as in their opinion will best subserve the interests of the State; The said land commissioner and auditor general shall affix a minimum price upon all lands so reserved and withheld, or which may hereafter be reserved and withheld.”

Further provision is made that all such lands shall be offered for sale by the land commissioner at prices to be fixed by him, but in no case for less than the minimum price above provided for, and such sale shall be made under the same rules and regulations as provided by Act No. 21, Laws of 1873. The balance of the section relates only to homestead lands.

It is first necessary to determine whether only abandoned and unoccupied lands were intended by the legislature to be set apart for homestead entry. It is conceded by plaintiff that this was so according to the terms of the statute as originally enacted; but it is claimed that by the amendment of 1899, by adding the second paragraph of section 127, all lands coming within the terms of the amendment above quoted, whether unoccupied or not, could be so set apart. If this is true, this paragraph, injected by this amendment, renders the first paragraph, declaring such lands under practically identical conditions nugatory and meaningless in declaring that they shall be deemed abandoned lands, “unless such lands are actually occupied by the person having the record title thereto.” It will be noted that the original provision of this statute that such lands should be barren, swamp, or worthless is eliminated, and the legislature has only retained the provision relative to actual occupancy by the owner of the original title. It is the duty of this court to give force and effect, if possible, to a clearly expressed legislative intent. The examiner, by the provisions of this section as amended, is required to report whether the lands are abandoned. The finding and determination must be made as to all the lands within the provisions of this section which are eventually to be deeded by the auditor general to the State and to be held by the land commissioner. This section 127 has not been amended since 1899, and these lands were deeded to the State to be held by the land commissioner, subject to homestead entry only under section 131 as it then provided. We think it was not the intention of the legislature to place lands already actually occupied upon the homestead lists, and hold that the section as amended did not include such lands.

These lands, as shown by the record, were held, treated, and described by the land commissioner as abandoned lands. The auditor general and the land commissioner found and determined that part of, this land in dispute was occupied by defendants holding by warranty deed, and had been so occupied by them since about 1875; the examiner’s report and certificate, referred to and made a part of such finding and determination, showing such fact. The record relied upon by plaintiff shows upon its face that the land was occupied land, and did not come within the provisions of the statute authorizing it to be placed upon the homestead list. This finding of fact does not support the determination of the officerst We hold the circuit judge was not in error in so ruling as to this east 50 feet of the lot, and instructing a verdict for defendants. After the land was deeded to the State, and held by the land commissioner subject to homestead entry, it was withheld and reserved from such homestead entry-right by virtue of section 131, as amended by Act No. 141, Pub. Acts 1901. The land commissioner afterwards took proceedings to restore this land, with other lands, to market, and a sale was made to plaintiff, under which he claims title.

Defendants not having sued out their writ of error, their objections and exceptions cannot be considered.'

The judgment of the circuit court is affirmed.

Grant, Blair, Montgomery, and Ostrander, JJ., concurred.