44 U.S. 441

CHARLES H. CARROLL, COMPLAINANT,
v.
ORRIN SAFFORD, TREASURER OF THE COUNTY OF GENESEE, IN
THE STATE OF MICHIGAN, DEFENDANT.

THIS case came up on a certificate of division from the Circuit Court of the United States for the district of Michigan, sitting as a court of equity.

The complainant resided in the state of New York, and in 1836 purchased from the United States three thousand five hundred and forty-nine and seventy-one one-hundredths acres of land in Genesee county, in Michigan. The lands were paid for in the way usually pursued by purchasers of the public domain, subject to private entry and sale. According to the laws of Congress, and the practice of the land officers, an individual wishing to purchase a tract of land makes application, in writing, to the register, specifying, in the application, the particular tract sought to be bought. The register examines and ascertains whether it is subject to entry. If it be, he gives to the applicant a memorandum, addressed to the receiver, stating the application, and that the land is subject to entry. This is taken to the receiver, and the money there paid. The receiver executes receipts in duplicate, specifying the particular tract sold, and the price paid for it. One of these is delivered to the purchaser, the other to the register; and this last is transmitted to the office at Washington as a voucher against the receiver. The register then makes out a final certificate, specifying the sale, and that the purchaser is entitled to a patent. It is competent for the purchaser to demand and take this certificate from the register; but, in practice, it is rarely done. Almost invariably the register retains it until he makes his monthly returns, when he transmits this certificate to the office at Washington, and on it (if the government confirm the sale) the patent issues.

In this case, the register, immediately after the entry of the land, transmitted to the proper office at Washington the patent certificates, as the basis of the issue of patents for the land so entered by the complainant.

The complainant, previous to the issuing of the patents for the lands, did not enter into actual possession of them, nor exercise acts of ownership over them.

Patents were issued for this land by the United States on 12th August, 1837, and not before. They were dated on that day, and were shortly after their date transmitted to the register of the land office at Ionia, in Michigan, and subsequently were delivered to the complainant.

The delay in the issuing of the patents, after the entry of the land by the complainant, was not at the request or in any way by the procurement of the complainant.

The patents declare, that 'the United States give and grant' the lands to the patentee.

In the year 1837, and before the date and issue of the patents, these lands were assessed at their full value, and at if owned by the complainant in fee-simple, for township, county, and state taxes, by the proper local officers of Michigan, (having full knowledge that the patents for the same had not issued,) which taxes were not paid by the complainant.

The assessment rolls describe the land as owned by the complainant absolutely, and without any reservation or qualification. The valuation attached to it purported to be its entire value, as an absolute and unconditional estate in fee-simple.

By the laws of Michigan, applicable to this part of the case, it is made the duty of the county treasurer to sell such lands as have been taxed, and the taxes on which have not been paid on giving a certain notice. The defendant being then, and now, a citizen of the state of Michigan, as county treasurer of Genesee county, did so sell the lands described in the bill of complaint.

Two years are allowed by law for the person claiming title to the lands to redeem, by paying to the treasurer the tax and charges, and interest at the rate of twenty per cent. per annum. If not redeemed, the land was to be conveyed to the purchaser in fee-simple.

The two years, the period allowed for redemption, had not expired at the time of filing the bill of complaint. The bill prayed that the assessment and sale might be declared illegal, and declared void, and that the treasurer of the county might be enjoined from conveying the lands to the purchasers at the tax sale, for other relief.

The bill was filed in 1842, and was taken pro confesso. A motion was then made for a decree according to its prayer, upon which the following questions arose, upon which the opinions of the judges were opposed:

1. Whether the statutes of the state of Michigan did, in fact, authorize the assessment and sale of the lands in question, and whether said statutes were intended to direct the assessment for taxation of lands of the United States before the patents for them had been executed by the officers of the United States?

2. Whether the lands in question were, before the date and execution of the patents for them, subject to taxation at all, by the state of Michigan?

3. Whether, if they were subject to taxation by the state, before the execution of the patents for them, it was competent to assess and tax and sell them, as the absolute property of the complainant, and at their full value, as if he owned them in fee?

4. Whether the remedy by bill in equity, and the relief sought, are proper?

The statutes of Michigan, referred to in the above questions, were the following:

Law of April 22d, 1833.

'Sect. 1. Be it enacted by the legislative council of the territory of Michigan, that the taxes hereafter to be levied in this territory, shall be assessed, levied, and paid in the manner hereinafter mentioned, upon a valuation of real and personal estate, including property and stock in any bank, insurance company, or other incorporation, to be made as hereinafter prescribed.

'Sect. 2. The assessors of each township may divide their townships, by mutual agreement, into such number of districts, to be called assessment districts, as they may deem convenient, not exceeding the number of assessors in any such township; and in every year, between the 15th day of April and the 1st day of May, shall individually, in their assessment districts, according to the best evidence in their power, make out a list or schedule of all the taxable property in the same, and bring the said lists or schedules together, and jointly value the property named in each, and set down in their assessment-roll the value of buildings and lands in such township, owned or possessed by any person residing in such township, or any banking or insurance company, or other incorporation situated in such township, opposite the name of such person or incorporation; and shall also ascertain and set down in their said assessment-rolls, in like manner, the value of all the personal estate of every such person; and in case any person, not satisfied with such valuation, shall make oath before such assessor, or either of them, who are hereby authorized to administer such oath, that the value of his or her real or personal estate does not exceed a certain sum, specifying the same, then, and in every such case, the assessors shall value such real and personal estate at the sums specified in such affidavit, and no more; and every person liable to be taxed for any personal estate as aforesaid, shall be taxed for the same in the township where such person shall reside at the time of making such assessment; and the assessors shall also ascertain what lands are situated in their townships, not owned by persons residing in such townships, and shall, in their assessment-rolls, separate from the assessments made the estates of non-residents, and designate such land in the following manner: if the estate be a patent or tract of land of the subdivision of which the assessors cannot obtain correct information, they shall enter the name of the patent or tract, if known by any particular name, without regarding who may be the owner thereof; and if such tract be not known or designated by any particular name, they shall state by what other land the same is bounded, and shall set down the quantity of land contained therein, and the value thereof, in the proper columns for that purpose; and the assessors shall complete their assessments on or before the 1st day of May in every year, and make out a fair copy thereof to be left with one of the board, and thereupon cause notices to be put up at three or more public places in their township, setting forth that they have completed their assessment, and that a copy thereof is left with one of them, naming him, where the same may be seen and examined by any of the inhabitants during ten days; and that at the expiration of the said ten days, they shall meet on a certain day, at a place in the said notice to be specified, to review their said assessments, on the application of any person conceiving himself aggrieved; and it shall be the duty of the said assessors, with whom the said assessment-roll shall be left as aforesaid, during the said ten days, to submit the said roll to the inspection of any person who shall apply for that purpose; and at the said time and place, the said assessors shall meet, and, on application of any person conceiving himself aggrieved, shall review the said assessment, and may alter the same, on sufficient cause being shown, to the satisfaction of the said assessors, or a majority of them; and the assessors, or a majority of them, shall make oath or affirmation, and attach the same to the said assessment-roll in the following, or other equivalent form, to wit: 'We do severally swear (or affirm) that the sums at which property is assessed in the foregoing assessment-roll, are, according to our best judgment, the fair cash value of such property.'

'Sect. 9. The person in possession of any real estate, at the time any tax is to be collected, shall be liable to pay the tax imposed thereon; and in case any other person, by agreement or otherwise, ought to pay such tax, or any part or proportion thereof, the person who shall pay the same shall and may recover the amount from the person who ought to have paid the same; and all taxes upon any real estate shall be a lien thereon, and shall be preferred in payment to all other charges; and all taxes upon any personal estate shall, in case of the death or bankruptcy of the person taxed, be preferred in payment to all other demands.

'Sect. 14. Any tax heretofore laid by virtue of any law of this territory, or to be laid by virtue of this act, upon any real estate, and the interest and charges thereon, shall be a lien upon the same real estate, until the same tax, interest, and charges, shall be paid or recovered, notwithstanding the same real estate may have been divided or aliened, in the whole or in part; and whenever such tax, and the interest aforesaid accruing thereon, shall remain unpaid for two years from the 1st day of May following the year in which any such tax was or shall be laid, the treasurer of the proper county shall cause so much of the land charged with such tax and interest, to be sold at public auction, at the court-house of the county where such lands are situated, to the highest bidder, as shall be necessary to pay the said tax and interest, together with all charges thereon, first giving at least four months' notice of the time and place of sale, by advertisement, posted up in three or more public places in said county, and also, by causing a copy thereof to be published in one or more of the public newspapers printed or in circulation in said county.'

'Sect. 15. On the day mentioned in the said notice, the treasurer shall commence the sale of the said lands, and continue the same from day to day, until so much thereof shall be sold as will pay the taxes, interest, and charges due, assessed and charged thereon as aforesaid; and the treasurer shall give to the purchaser or purchasers of any such lands, a certificate, in writing, describing the lands purchased, and the sum paid therefor, and the time when the purchaser will be entitled to a deed for the said lands; and if the person claiming title to the said lands, described in the said certificate, shall not, within two years from the date thereof, pay the treasurer, for the use of the purchaser, his heirs or assigns, the sum mentioned in such certificate, together with the interest thereon, at the rate of twenty per cent. per annum, from the date of the said certificate, the treasurer shall, at the expiration of the said two years, execute to the purchaser, his heirs or assigns, a conveyance of the lands so sold, which conveyance shall vest in the person or persons, to whom it shall be given, an absolute estate in fee-simple, subject to all the claims which the territory of Michigan shall have thereon, and the said conveyance shall be conclusive evidence that the sale was regular, according to the provisions of this act; and every such conveyance to be executed by the treasurer, under his hand and seal, and the execution thereof witnessed and acknowledged in the usual form, may be given in evidence and recorded, in the same manner, and with like effect, as a deed regularly acknowledged by the grantor may be given in evidence and recorded.' Nelson, attorney-general, for the complainant.

Norvell, for the defendant.

Nelson, for complainant.

A fundamental proposition, and one on which the whole equity of the complainant's case rests, is, that, until the issue of the patent, the fee of the land remains in the United States; that, after payment of the purchase money by the applicant, and the receipt of it by the officers of the United States, the United States may still decline, on various grounds, to perfect his title by the execution of a patent; that he cannot know, after purchase, and before the patent issues, whether he is to receive an absolute conveyance or not; that nothing but the patent passes the fee, and that, before its issue, the purchaser has but a qualified and contingent estate in the lands.

These principles are involved in the following decisions: Stringer et al. v. Lessee of Young et al., 3 Pet., 320, 344; Boardman et al. v. Lessees of Reed & Ford et al., 6 Id., 328, 342; Bagnell et al. v. Broderick, 13 Id., 436, 450; Wilcox v. Jackson, Id., 498, 511, 516; Brush v. Ware, 15 Id., 93, 107, 108; Stoddart v. Chambers, 2 How., 284, 318.

I refer also the the opinions of the attorney-general, and the practice of the land-office, as found in the 2d volume of Public Land Laws, Instructions and Opinions, published in 1838, not only to show that the sale is frequently cancelled by the government for a great variety of reasons; and that 'the issuing a patent is not so purely a ministerial act as to follow a patent certificate as a matter of course,' but also that it has been the settled policy of the government to regard lands thus situated as exempt from all taxation, and that 'the legal title remains in the government until the patent issues.' See pp. 4, 14, 24, 25, 39, 76, 80, 84, 87, 160, 213, 214, and 1040; and act of Congress, 12th January, 1825, chap. 318.

The payment of the money by an applicant for a part of the public domain, is a proposition for a purchase. The register and receiver do not act judicially in admitting the application and receiving the money; their acts may be overruled, and the money returned, and a patent be refused for various reasons; and the fate of the application cannot be known by the purchaser until the patent be executed. Till then his title is imperfect, and his estate contingent. In ordinary cases between private individuals, where a legal contract for the sale of lands has been entered into, equity considers the vendee as the true owner of the lands, because the vendor is bound to convey by virtue of a contract, which can be enforced in a court of equity, and the obligation is mutual, as is also the remedy. 2 Story Eq., 98, 99, § 790. Not so in regard to applications for the purchase of the public lands. But even if this were, it would not affect the present argument.

Assuming, then, that at the time of the assessment of the lands described in the bill, the fee of them was in the United States, the complainant's counsel insist——

1. The statutes of Michigan did not embrace the lands in question, and were not intended to authorize their assessment.

The statute directed the assessment of lands 'owned or possessed by any person residing in the township.'

This part of the statute is inapplicable, for the complainant is and was a non-resident; and the case shows that he was not in the actual possession of the land.

The statute then directs the lands not 'owned' by residents to be separately assessed by the description of the tract without regard to the name of the 'owner.'

The assessment is to be according to 'the fair cash value' of the lands; that is, of the fee-simple or absolute estate in the lands.

The assessment of real estate is to be according to its entire value, as in the case of personalty. The word 'owner' is attached to both kinds of property as descriptive of the estate or interest to be taxed.

The taxes are made a lien upon the lands.

If not paid, and if the land be not redeemed after sale for non-payment, the treasurer of the county in which the lands lie is directed to execute to the purchaser 'a conveyance of the lands so sold; which conveyance shall vest in the person or persons to whom it shall be given an absolute estate in fee-simple subject to all the claims which the territory (state) of Michigan shall have therein; and the said conveyance shall be conclusive evidence that the sale was regular according to the provisions of this act.'

All the provisions of this statute are intended to operate upon the unencumbered fee of the lands assessed. This furnishes the measure of value—this regulates the conveyance of the purchaser.

Lands owned by the United States are not subject to taxation. The fee of these lands was in the United States at the time of the assessment. It is not to be supposed that there was any intention of taxing the property of the United States. This assessment is upon the fee. The conveyance operates as a transfer of the fee. How, then, can it be argued that the statutes intended to embrace these lands?

It does not aid the argument in this branch of it to say, that the complainant had a valuable and taxable interest in these lands.

This may for the present be conceded. Our answer to it is, that the statute does not profess to tax such interest. It taxes the owner of the land and sells the fee if the tax be not paid.

2. The lands in question were not, before the date and execution of the patents for them, subject to taxation at all by the state of Michigan.

The proposition refers to the date and execution of the patents. It is not denied that, so soon as executed, they become operative; and that the transmission of them to the register is in law a delivery to the purchaser through him as the agent of both parties.

The 4th article of the ordinance of 1787 for the government of the territory north-west of the river Ohio provides, that 'the legislatures of these districts or new states shall never interfere with the primary disposal of the soil by the United States in Congress assembled, nor with any regulations Congress may find necessary for securing the title in such soil to the bona fide purchasers. No tax shall be imposed on lands the property of the United States; and in no case shall nonresident proprietors be taxed higher than residents.'

It has been shown that, after the receipt of the receiver and the transmission of the patent certificate, the patent may still be refused.

In point of fact this frequently occurs. Patents were, in several instances, refused to the complainant, and his certificates of purchase cancelled. In the case of Ostrom v. The Auditor-General of Michigan, which arose in the Circuit Court for the district of Michigan, in 1842, it appeared that, out of about one hundred certificates, fourteen were never allowed, and patents for them had been refused. The lands embraced in those certificates have been sold and conveyed in fee-simple by Michigan, by virtue of assessments on them as the property of Ostrom, to whom the United States refused to convey. The United States either retain these lands, or have conveyed them to third parties. These facts illustrate the principle; they may again occur. Is not this an interference with the primary disposal of the soil by the United States? If so in any degree, the amount of it does not affect the argument; and if such may be the consequence of admitting the operation of the principle, it is a conclusive argument against its allowance at all.

Again: It is provided that 'no tax shall be imposed on lands the property of the United States.'

Mark the phraseology. It is not that no tax shall be imposed on the interest or estate of the United States in any lands, but that lands, while they remain the property of the United States, shall not be taxed at all by the states. This is the plain import of the terms. The question is then narrowed to this: When do the lands embraced in the public domain cease to be the property of the United States? This question, we think, has been fully answered by the authorities already cited.

The reasoning of the court in the case of Wilcox v. Jackson, is strong and clear upon this question:—

'We think it unnecessary to go into a detailed examination of the various acts of Congress,' say the court, 'for the purpose of showing what we consider to be true in regard to the public lands, that with the exception of a few cases, nothing but a patent passes a perfect and consummate title.' 13 Pet., 516.

And again:— 'A much stronger ground, however, has been taken in argument. It has been said that the state of Illinois has a right to declare by law, that a title derived from the United States, which, by their laws, is only inchoate and imperfect, shall be deemed as perfect a title as if a patent had issued from the United States; and the construction of her own courts seems to give that effect to her statute. That state has an undoubted right to legislate as she may please in regard to the remedies to be prosecuted in her courts, and to regulate the disposition of the property of her citizens by descent, devise, or alienation. But the property in question was a part of the public domain of the United States. Congress is invested by the Constitution with the power of disposing of and making needful rules and regulations respecting it. Congress has declared, as we have said, by its legislation, that in such a case as this a patent is necessary to complete the title. But in this case no patent has issued; and, therefore, by the laws of the United States, the legal title has not passed, but remains in the United States. Now, if it were competent for a state legislature to say that, notwithstanding this, the title shall be deemed to have passed, the effect of this would be, not that Congress had the power of disposing of the public lands, and prescribing the rules and regulations concerning that disposition, but that Illinois possessed it. That would be to make the laws of Illinois paramount to those of Congress in relation to a subject confided by the Constitution to Congress only. And the practical result in this very case would be, by force of state legislation, to take from the United States their own land, against their own will, and against their own laws. We hold the true principle to be this: that whenever the question in any court, state or federal, is, whether a title to land which had once been the property of the United States has passed, that question must be resolved by the laws of the United States; but that, whenever, according to those laws, the title shall have passed, then that property, like all other property in the state, is subject to state legislation, so far as that legislation is consistent with the admission that the title passed and vested according to the laws of the United States.' 13 Pet., 516, 517.

The act of Congress (15 June, 1836) admitting Michigan into the union, is even stronger in its terms than the ordinance of 1787. It is as follows:

'Sect. 4. And be it further enacted, that nothing in this act contained, or in the admission of the said state into the union as one of the United States of America, upon an equal footing with the original states in all respects whatever, shall be so construed or understood as to confer upon the people, legislature, or other authorities of the said state of Michigan, any authority or right to interfere with the sale by the United States, and under their authority, of the vacant and unsold lands within the limits of the said state; but that the subject of the public lands, and the interests which may be given of the said state therein, shall be regulated by future action between Congress, on the part of the United States; and the said state of Michigan shall, in no case, and under no pretence whatsoever, impose any tax, assessment, or imposition of any description, upon any of the lands of the United States within its limits.'

This exemption from taxation of the lands of the United States, and the prohibition of the states in which they are located to interfere with their disposal, were designed, as they were calculated, to facilitate their sale, and to hold out inducements to purchasers, and enter, as one of its elements, into the price of such lands; and as, from the very nature of the contract of purchase, a buyer cannot prudently improve, or expend money on the land, before his title is consummate. All the principles of equity, as well as of law, concur in securing to the citizen an exoneration from the burdens of state assessment, until the moment that he may be recompensed by the enjoyment of the profits of the land purchased, and that is, when his title is perfected by patent.

The legislature of the state of Michigan illustrates this view. By her act providing for the disposition of her university lands, she has provided, that the land held by a certificate of purchase from the state, shall be taxed as personal property; that such certificate shall enable the purchaser to support an action of trespass on the lands, and entitle him to the immediate possession thereof. Laws of Michigan, 1844, No. 68, sect. 19. And it has been decided by her courts, that the holder of a certificate of purchase from the United States cannot maintain ejectment on it. This I learn from the profession, for there are no reports published of their decisions. The same doctrine is the settled law of Ohio. 1 Ohio, 313, 314; 6 Id., 165; 7 Id., 151 and 252. In Illinois, the holder of certificate of purchase may maintain ejectment, &c., by virtue of positive statutory enactment. Revised Laws, p. 199.

But we think that, independent of these statutes, the claim of the state to tax these lands is indefensible.

The property of the United States is not taxable by the several states.

The subjects over which the sovereign power of a state extends, are objects of taxation; but those over which it does not extend, are exempt from taxation. McCulloch v. The State of Maryland, 4 Wheat., 316. The power of legislation, and consequently of taxation, operates on all the persons and property belonging to the body politic. Providence Bank v. Billings & Pitman, 4 Pet., 563.

These principles exempt the United States and their property from taxation by the states. See Weston et al. v. City Council of Charleston, 2 Pet., 449.

The exemption extends to the lands in controversy, unless the inchoate title acquired by the applicant for the purchase of them subjects them to taxation.

There certainly is no express legislation to this effect.

How does the case stand on general principles? In order to place it in the most unfavorable light for our argument, let the situation of the complainant be assimilated to that of a vendee after contract, but before deed, who has a perfect right to a conveyance. Before conveyance actually made, who is to pay taxes on the lands agreed to be conveyed?

Taxation is a legal question. Taxes are levied against the legal owner. They are prescribed by express statutes. Legal rights are alone looked to in the assessment and levy of taxes.

Under the old credit system, lands were confessedly exempt from taxation until after the patent issued. A purchaser of them, even before the payment of the money, was as much an equitable owner as now. He was styled the purchaser of the land so soon as he made the payment of twenty per cent. and received his certificate.

Look at the absurdity of the opposite doctrine: If a tax assessor is to inquire into the equitable rights and interests of parties, then when money has been agreed to be laid out in lands, it should be assessed and returned as lands, and vice versa, in regard to lands contracted to be sold.

This very point arose in the case of Wilson's Exec. v. Tappan, 6 Cond. (Ohio), 80, 7 Hamm. (Ohio), 172, and it was there decided, that the vendor was bound to pay them; and that, if not paid, the warranty in the deed of freedom from encumbrances would indemnify the vendee against them.

The patents issued by the United States for the public lands contain the words 'give and grant.' These words imply a warranty. See Cai. (N. Y.), 188; 7 Johns. (N. Y.), 258; 8 Cow. (N. Y.), 36; 1 Co., 384 a; 4 Kent Com. (ed. of 1844,) 474, and cases there cited. If the complainant can be compelled to pay these taxes, he has a right to be reimbursed by the United States.

The public domain, as such, cannot be taxed by the states. The lands of the complainant were not severed from it until conveyed to him by patent. After he had paid his money to the receiver on his application to purchase the lands, he could have been personally assessed for such sum, if he had been within the jurisdiction of Michigan. His property was not diminished by such a payment; for, if the patent were refused, the money would be refunded. If actual possession had been taken of the lands, inasmuch as such possession is protected by the laws of the state, its value might be the subject of a personal tax. All this may be granted, and yet nothing will have been conceded tending to establish the right of the state to impose a tax upon the land itself, which does not constitute a charge against the purchaser personally, but is to be satisfied out of the land and by a sale of it. This is the character of the present tax, and must be of any land-tax. Such tax is a proceeding in rem. It cannot be apportioned and split up, so as to sell the interest of the purchaser in the land, and transfer an interest in it, without the assent or co-operation of the United States, and yet not interfere with the absolute rights of property and control belonging to the latter.

The federal government, though limited in the subjects of its powers, is sovereign in their exercise; and in all cases where it powers are exclusive, or where the exercise of a concurrent power by a state conflicts with the beneficial and perfect exercise of it by the United States, the federal authority is supreme. The extent of the alleged interference is not a question to be considered in determining its invalidity.

The case of Dobbins v. Commissioner of Erie Co., 16 Pet., 435, applies this principle to a question of taxation. It also shows clearly, that this is a tax on the property assessed, and not a personal charge, (p. 446,) and that such a tax, when it acts upon the property or agents of the United States, is entirely illegal.

The public domain is exclusively within the control of the United States, and is an important source of its revenue. The 'perfect execution' of the power of its sale and management is certainly interfered with by the acts complained of, and the principles established in the above case (p. 447) control the present.

3. If the lands were subject to taxation to any extent by the state of Michigan, before the execution of the patents for them, it was not competent to assess, and tax, and sell them as the absolute property of the complainant, and at their full value, as if he owned them in fee.

That such is the effect of the law complained of, will not be denied. That it is illegal, we think is already shown. The fee of the United States cannot be divested by the legislation of the state. The state could only give the purchaser at the tax-sale an equitable interest, for the complainant himself had no other.

4. The case is properly cognisable in equity, and the relief sought is appropriate.

As to the principle on which equity exercises its jurisdiction, there are equitable rights and legal rights incident to property.

Courts of law will not take notice of mere equitable rights; they can be enforced only in equity, and hence arises the exclusive jurisdiction of courts of equity.

But in cases where legal rights are defined and settled by the rules of law, then equity follows the law.

The right to tax, and the mode of taxation, are defined by statute, and the construction of statutes is the same at law and in equity.

In support of these principles, I refer to 1 Story Eq., 14, 15, 16, 17, 72.

Our rights, then, are settled by the law, and will be construed in the same manner in courts of law and of equity. Indeed, is it not manifest that the legality or illegality of the tax must be decided in the same way by courts of law and equity? Can that be a valid assessment in equity which is invalid at law, where there can be but one legal mode of assessment in any case? Why, then, if we rely upon our legal rights, do we ask the interference of equity?

We come for the remedy. The most important source of jurisdiction of an equity court is that which is concurrent with courts of law. Rights in each court are the same, but a party is at liberty to ask the aid of a court of equity to protect him in his legal rights on account of the better remedy which results from the modes of administering relief in equity; and equity will interfere in all cases where the remedy at law is not plain, adequate, and complete. See 1 Story, 93, 94; 2 Id., 155, 163; 3 Pet., 215.

When this is done, the rights of parties in the subject-matter of the litigation are construed as at law. The remedy is according to equity, and it will be granted in all cases, with the simple condition, that a party who asks it shall be equity himself.

What is meant by this? Not the wild notions as to natural equity which were suggested on the argument below; but simply, that where legal and conscientious matters are mingled in the same transaction with those of a fraudulent and illegal character, a party shall discharge the former part of the contract before he will be relieved as to the latter. 1 Story Com., 77.

This maxim has here no application, until it be snown that a part of these taxes are legal and proper.

The sole point that is left for discussion is, as to the reasons which render the remedy at law inadequate, and require the interference of this court. These reasons are the following:

1st. To prevent a cloud being cast over the complainant's title. See following authorities: Corporation of Washington v. Pratt, 8 Wheat., 682; Burnet v. City of Cincinnati, 3 Ohio, 86; Gouverneur v. City of New York, 2 Paige (N. Y.), 435; Pettit v. Shepherd, 5 Id., 493, 501; Hamilton v. Cummings, 1 Johns. (N. Y.) Ch., 517; Ward v. Ward, 2 Hayw. (N. C.), 226; Leigh v. Everhart, Exec., 4 Munf. (Va.), 380; Grover v. Hugel, 3 Russ. Ch., 432; Harrington's Rep., 3; Ostrom v. Bank of the United States, 5 Pet. Cond., 759.

2d. To prevent a multiplicity of suits and unnecessary litigation. 1 Story, 82, 83, 84; 6 Paige (N. Y.), 88. Better for both complainant and the state that the matter should now be decided.

3d. To restrain public officers from doing an illegal act. If the act be consummated, there may be no redress; equity, therefore, interferes to prevent the consequent failure of justice by enjoining the act. Osborne v. Bank of the United States, 6 Paige (N. Y.), 88; 2 Kent, 339, note, 3d ed.

The claims of the state to tax lands in the situation of those described in the complainant's bill are exceedingly inequitable. The lands are not actually nor theoretically separated from the public domain. The purchaser has taken no possession of them, nor exercised any acts of ownership over them. A tax on the unimproved and vacant lands of nonresidents is generally inequitable, and, at best, oppressive and onerous. See 2 Kent Com., 332. Just so soon as an individual proposes to buy the lands of the United States, the agents of the state rush in and fasten on it, and demand, on pain of forfeiture of the whole of it, that he pay taxes on it for an interest which he does not own, and which he cannot know he will receive, until, perchance, the land has been sold and lost.

Norvell, for defendant.

The questions of difference involved in this case are of deep importance to the state of Michigan, affecting as they do, her right to tax lands as soon as they are purchased, and paid for, from the United States, and obliging her, if they should be decided adversely to the defendant, to refund to individuals a large amount of money received into her treasury from the taxation of lands so situated.

1. The first question is, 'whether the statutes of the state of Michigan did, in fact, authorize the assessment and sale of the lands of the complainant, and whether said statutes were intended to direct the assessment for taxation of lands of the United States before the patents for them had been executed by the officers of the United States?'

The statutes of Michigan did and do authorize the assessment, taxation, and sale of lands for non-payment of the taxes, situated as those of the complainant were. The lands of the complainant had, prior to their assessment, been purchased from the United States, and he had received the regular certificates of purchase and payment from the receiver of public moneys. These lands were not, it is believed, sold for the taxes, before the patents were dated and executed. But whether they were, or not, is not material to the right decision of this cause.

The act passed by the legislative council of the territory of Michigan, and approved on the 22d of April, 1833, authorizes, in its first section, the assessment, levy, and collection of taxes, upon the valuation of real and personal property, to be made as prescribed in the subsequent sections of the same act.

The 2d section directs the proper officers to ascertain, assess, and make out a separate and distinct list of the lands situated in their respective townships, 'not owned by persons residing in such township,' and prescribes the manner in which the lands of non-residents shall be described and entered in the assessment-rolls.

This is precisely the same language used with regard to the lands owned by non-residents, and assessed for taxation, in the laws of Michigan, passed by her legislature, after she became a state.

The 14th section of the act of April 22, 1833, provides that whenever the taxes on lands of non-residents, as well as residents, shall remain unpaid for two years, the treasurer of the proper county shall cause so much of the land charged with such taxes and interest, as shall be necessary to pay the same, to be advertised and sold for that purpose, giving at least four months' notice, in certain public newspapers, of the time and place of sale.

100

The long notice directed to be thus given, before the sale could take place, affords conclusive evidence that the lands of non-residents living out of the state were included in the terms and provisions of the act directing the assessment, taxation, and sale of real and personal estate, if the taxes were not duly paid thereon.

101

The succeeding section of the law prescribes the time within which, and the conditions on which, the lands in question, thus assessed, taxed, and sold for the taxes, might be redeemed by the owners.

102

I refer to the act of April 22, 1833, at page 88 of the Session Laws of 1833, to be found here in the Department of State.

103

The laws of Michigan make no distinction between the lands for which patents have not been issued and those for which they have been issued, in providing for their assessment, taxation, and sale for the non-payment of taxes. As soon as the lands are purchased of the United States, the money paid for them, and the duplicate receipts and certificates of purchase signed, and issued by the receivers of the public moneys at the land-offices within the state, they become, according to the invariable interpretation of the tax laws of that state, and the usage in their execution, objects of assessment, taxation, and sale.

104

An act was passed by the legislative council of Michigan, and approved December 30, 1834, 'making the certificates of the purchase of public lands' evidence of their possession by the persons holding such certificates of purchase of such lands, as against any person or persons not having a better title than actual possession. This act illustrates the general light in which the duplicate receipts or certificates of the purchase of public lands, signed by the receivers, were viewed by the legislative authorities of Michigan. The statute remains unrepealed. And I am not aware that any of the courts of Michigan have decided, 'that the holder of a certificate of purchase from the United States cannot maintain ejectment upon it.' On the contrary, the very law making these certificates evidence of possession was intended to authorize the holder to maintain action of ejectment in any of her courts, and it expressly provides that they shall be evidence in such courts that possession is in the person holding the certificate. And, as secretary of the legislative council when the act was passed, I remember it was maintained in debate, that lands which had been purchased, and for which certificates of purchase from the United States had been issued at the land-offices, were as lawfully and rightly the subjects of taxation as if the patents had been issued from the proper department at Washington. See the Session Laws of Michigan, passed at the second session of legislative council in 1834, pp. 88, 89.

105

The act of the legislature of the state of Michigan, approved April 19, 1839, makes it the duty of the several county treasurers to collect all non-resident taxes assessed prior to 1838, remaining unpaid, as if the laws under which said taxes were assessed still continued in force. See Session Laws of 1839, pp. 168 and 177.

106

An act to regulate tax-sales for 1843 authorizes the sale of all lands for delinquent taxes assessed in the years 1836, 1837, and 1838. The several county treasurers are to make the sales under the direction of the auditor-general. See Session Laws of Michigan of 1843, pp. 55 and 70.

107

It is clear, then, that 'the lands in question,' belonging to the complainant, were authorized by the statutes of Michigan to be assessed for taxation, and to be sold for the non-payment of taxes.

108

It is equally clear, from the plain language of the statutes, and from the practical interpretation put upon them by all the public authorities of Michigan, that 'they were intended to direct the assessment for taxation of lands' purchased from 'the United States, before the patents for them had been executed by the officers of the United States,' but after the money had been paid for them, and certificates of purchase and payment had been received from the proper land-officer.

109

2. To the question, 'whether the lands in question were, before the date and execution of the patents for them, subject to taxation at all by the state of Michigan,' I answer in the affirmative.

110

In the case John H. Ostrom et al. v. Charles G. Hammond, auditor-general of the state, tried in the Circuit Court of the United States for the district of Michigan, at the June term of 1842, before Judge Wilkins, it was decided that the entry of public lands, the payment of the purchase money, and the certificate of the receiver, constituted such an equitable interest and title in the land as to authorize its taxation by the state, and its sale for the non-payment of the taxes.

111

At the succeeding October term of the same court, Judge McLean presiding, the decision of the court, at the preceding term, in the case of Ostrom v. The Auditor-General, was confirmed, both judges concurring in opinion.

112

Newspaper reports of the case have alone, as yet, been published. But the decision must remain fresh in the memory of Mr. Justice McLean of this court.

113

In the case of Douglas v. Dangerfield, in the Supreme Court of Ohio, the court stated that the right to tax lands within the borders of that state, before they become the property of individuals, was a right which had been exercised from the earliest period of the state government, with respect to all lands except those belonging to the United States, while so held, or for a limited period after the same were sold. This limited period has reference to the five years' exemption, which the compact of admission between the United States and Ohio secures to purchasers of public lands in that state, after they have made their purchases. No such exemption is stipulated in the compact which admitted Michigan into the union. She has the right to tax as soon as the public lands are purchased.

114

Judge Hitchcock adds, in this same case, that 'if the right to tax exists, and that it does there has not been any serious question for many years at least, it would seem to follow, that the right to collect must also exist, although in making collection it might become necessary to transfer to a new proprietor the thing taxed.' When, however, this question 'does arise, it must be purely a legal question, to be settled by a court of law.' 10 Wilcox (Ohio), 156. See also, pp. 154, 155.

115

In Ohio, it is well known that lands entered and surveyed in the military land district, have for years been taxed, and sold for taxes, before they were patented. This is stated in the report of the case of Hennick et al. v. Wallace, 8 Ohio, 540, where the court say, that in another case, which was cited, 'it was expressly held, that where lands have been entered and surveyed in the military land district, and sold for taxes before patented, that when patented, the patentee must hold the land subject to any claim which a purchaser at tax-sale may have in consequence of such sale.' In the case of Hennick, just referred to, the land was sold for taxes before patented, and the court said that the sale was legal, so far as anything appeared to it in the case. 8 Ohio, 541.

116

In the case of the lessee of Stuart and others v. Parish, Supreme Court of Ohio, at the December term, 1833, 6 Hamm. (Ohio), part 1, 476, 477, Stuart purchased the tract No. 5, in the Sandusky Reserve, in 1817, and made the first payment. He afterwards took the benefit of the eight years' credit, under the laws which then prevailed. Stuart did not complete the payment for the land until 1830. Four years before that, the land was taxed. The court would not entertain the question, whether the land was liable to taxation before patent issued, but admitting the legality of the sale for taxes, said, that the legal title of the patentee was not affected by such sale. In other words, the tax-title could not convey an interest to the purchaser superior to that of the owner at the time of the sale for taxes.

117

In Alabama, before public lands finally pass into the hands of the purchaser by patent, the collector may rent at auction so much as will pay the tax, but cannot sell until the title is complete.

118

The Supreme Court of the United States, in the case of Bagnell et al. v. Broderick, 13 Pet., 436, decided, that 'no doubt is entertained of the power of the states to pass laws to authorize purchasers to prosecute actions of ejectment, or certificates of purchase, against trespassers on the lands purchased.' If conflicting patents issue, the state courts may give effect to the better right.

119

In Pennsylvania, where the consideration for the land has been paid, a survey, though unaccompanied by a patent, gives a legal right of entry. 3 Dall., 457.

120

The authorities, then, clearly show that lands are subject to taxation by the state, on certificates of purchase, before the patent issues. It would be very extraordinary if an individual could purchase lands of the United States, settle, improve, and cultivate them, on certificates of purchase, and yet, because, from the neglect and delay of the proper department, the patents are not issued for several years, they are exempt from taxation, while his neighbor was compelled to pay taxes, when he was deriving no greater advantage from the possession and cultivation of his land.

121

Lands purchased and paid for at the land-offices, are not thereafter the property of the United States. The United States cannot withhold the patents, except in a few specified cases, as where the sale was illegal; where a prior sale or reservation, or a prior grant, may have been made; where the land had not previously been offered at public sale, or where it had been directed by government to be withheld from sale. These are rare exceptions, and do not affect or impair the general principle, that, as soon as the public land is purchased and paid for, it becomes the property of the purchaser, and may be sold and transferred by him, as is constantly the case, before it is patented. If the authorities and decisions were not in favor of the right of the state to tax such land or certificates of purchase, reason and common sense would demonstrate its equity and justice.

122

3. It follows from these views, which show that lands are subject to taxation before they are patented, that it is competent for the state to assess, tax, and sell them, as the property of the owner, as if they had been patented.

123

If, from accident, or the exceptions adverted to under the preceding head, the certificates of purchase should not be matured into patents, the purchaser at a tax-sale could not acquire a better title than the holder of the certificate. That is his risk. But in the case of the present complainant, it is not pretended that his titles were not perfected. On the contrary, the record brought up here alleges and admits that the patents for his lands were issued on the 12th of August, 1837. And this was before the lands were sold for the taxes.

124

4. It is doubted whether the remedy sought in this case, by a bill in equity, is proper. In the case of Ostrom v. The Auditor-General, involving the same principles as the case of the complainant involves, Judge Wilkins said that the complainants had an adequate and complete remedy in the state courts for any injury they might sustain by the sale of their lands of taxes, if the taxation and sale were illegal. And the 16th section of the act of 1789, establishing the courts of the United States, provides that suits in equity shall not be sustained in the courts of the United States, in any case where a plain, adequate, and complete remedy may be had at law.

125

Mr. Justice McLEAN delivered the opinion of the court.

126

The complainant filed his bill in the Circuit Court of the United States, in Michigan, stating that he is the owner in fee-simple of certain lands lying in Genesee county, amounting to three thousand five hundred and forty-nine and seventy-one hundredths acres, and of the value of $7,500. That, in 1836, he entered these lands, paid for them, and received from the land-office a final certificate. Patents were issued for them on the 12th of August, 1837. That the delay in issuing the patents was not at the instance of complainant. Before the emanation of the patents, the lands were assessed for taxation, and sold by the defendant for the taxes thus assessed. Two years are allowed the owner to redeem the land by the act of Michigan, on the payment of the tax, charges, and interest, at the rate of twenty per cent. per annum. When this bill was filed, the time of redemption had not expired. The bill prays, that the assessment and sale may be declared illegal and void, and that the defendant may be enjoined from conveying the land, and other relief, &c.

127

The case was considered as on a demurrer to the bill, and on the argument, the opinion of the judges were opposed on the following points:——

128

1. 'Whether the statutes of the state of Michigan did, in fact, authorize the assessment and sale of the lands in question, and whether said statutes were intended to direct the assessment for taxation of lands of the United States, before the patents for them had been executed by the officers of the United States.'

129

2. 'Whether the lands in question were, before the date and execution of the patents for them, subject to taxation at all by the state of Michigan.'

130

3. 'Whether if they were subject to taxation by the state, before the execution of the patents for them, it was competent to assess, and tax, and sell them, as the absolute property of the complainant, and at their full value, as if he owned them in fee.'

131

4. 'Whether the remedy by bill in equity, and the relief sought, are proper.'

132

The 1st section of the act of the 22d April, 1833, of the territory of Michigan, provides, 'that the taxes hereafter to be levied in this territory shall be assessed, levied, and paid in the manner hereinafter mentioned, upon a valuation of real and personal estate,' &c.

133

By the 2d section the assessors of the different districts, 'according to the best evidence in their power,' are required to make out 'a list or schedule of all the taxable property in the same,' and bring the said lists or schedules together, and jointly value the property named in each, and set down in their assessment-roll the value of buildings in such township, owned or possessed by any person residing in such township,' &c. 'And the assessors shall ascertain what lands are situated in their townships, not owned by persons residing in such townships, and shall, in their assessment-rolls, separate from the assessments made the estates of non-residents, and designate such land in the following manner: if the estate be a patent or tract of land of the subdivision of which the assessors cannot obtain correct information, they shall enter the name of the patent or tract, if known by any particular name, without regarding who may be the owner thereof; and if such tract be not known or designated by any particular name, they shall state by what other land the same is bounded, and shall set down the quantity of land contained therein in the proper columns for that purpose.'

134

By the 14th section, the tax, interest, and charges thereon, constitute a lien on the land, though aliened, and unless paid within two years from the 1st of May succeeding the assessment of such tax, the treasurer of the proper county, after giving notice, is required to sell the same. And if the person claiming title to said lands shall not pay to the treasurer, for the use of the purchaser, his heirs or assigns, the sum paid by him for the lands, with interest at the rate of twenty per cent. per annum, the treasurer shall execute to the purchaser, his heirs or assigns, 'a conveyance of the lands so sold, which conveyance shall vest in the person or persons to whom it shall be given an absolute estate in fee-simple,' &c.; 'and such deed may be given in evidence, and recorded in the same manner and with like effect as a deed regularly acknowledged by the grantor may be given in evidence and recorded.'

135

It is first contended, 'that the statutes of Michigan did not embrace the land in question, and were not intended to authorize their assessment.'

136

In answer to this, it may be said, that a different construction has been put upon the above statutes by the authorities of the territory, and also of the state since its admission into the union. The practical construction of local laws is, perhaps, the best evidence of the intention of the law-makers. The courts of the United States adopt as a rule of decision the established construction of local laws. And it cannot be material, whether such construction has been established by long usage or a judicial decision.

137

But independently of the force of usage, we think the construction is sustainable. When the land was purchased and paid for, it was no longer the property of the United States, but of the purchaser. He held for it a final certificate, which could no more be cancelled by the United States than a patent. It is true, if the land had been previously sold by the United States, or reserved from sale, the certificate or patent might be recalled by the United States, as having been issued through mistake. In this respect there is no difference between the certificate-holder and the patentee.

138

It is said, the fee is not in the purchaser, but in the United States, until the patent shall be issued. This is so, technically, at law, but not in equity. The land in the hands of the purchaser is real estate, descends to his heirs, and does not go to his executors or administrators. In every legal and equitable aspect it is considered as belonging to the realty. Now, why cannot such property be taxed by its proper denomination as real estate? In the words of the statute, 'as lands owned by non-residents.' And if the name of the owner could not be ascertained, the tract was required to be described by its boundaries or any particular name. We can entertain no doubt that the construction given to this act by the authorities of Michigan, in regard to the taxation of land sold by the United States, whether patented or not, carried out the intention of the law-making power.

139

But it is insisted, 'that the lands in question were not, before the date and execution of the patents for them, subject to taxation at all by the state of Michigan.'

140

It is supposed that taxation of such lands is 'an interference with the primary disposition of the soil by Congress,' in violation of the ordinance of 1787; and that it is 'a tax on the lands of the United States,' which is inhibited by the ordinance. Now, lands which have been sold by the United States can in no sense be called the property of the United States. They are no more the property of the United States than lands patented. So far as the rights of the purchaser are considered, they are protected under the patent-certificate as fully as under the patent. Suppose the officers of the government had sold a tract of land, received the purchase money, and issued a patent-certificate, can it be contended that they could sell it again, and convey a good title? They could no more do this than they could sell land a second time which had been previously patented. When sold, the government, until the patent shall issue, holds the mere legal title for the land in trust for the purchaser; and any second purchaser would take the land charged with the trust.

141

But it is supposed that because on some certificates patents may not be issued, taxation of unpatented land is an interference 'with the primary disposition of the land.' And it is said that in the case of Ostrom v. The Auditor-General of Michigan, before the Circuit Court in 1842, out of one hundred certificates patents were refused on fourteen of them; that those lands had been sold for taxes and conveyed under the statutes of Michigan; and that the United States either retain those lands or have conveyed them to third parties.

142

Michigan does not warrant the title to lands sold for taxes. The deed, by the express words of the statute, when duly executed and recorded, 'may be given in evidence in the same manner, and with like effect, as a deed regularly acknowledged by the grantor,' &c. The government has no right to refuse a patent to a bona fide purchaser of land offered for sale. But where there has been fraud, or mistake, the patent may be withheld, and every purchaser at a tax-sale incurs the risk as to the validity of the title he purchases. He incurs the same risk after the emanation of the patent. But how this interferes with 'the primary disposition of the public lands,' by the United States, is not perceived. The sale for taxes is made on the presumption that the purchase from the government has been bona fide, and if not so made, the purchaser at the tax-sale acquires no title, and consequently no embarrassment can arise in the future disposition of the same land by the government.

143

It is known to be universally the practice in the west, where lands are purchased for a residence and cultivation, that the purchaser enters immediately into the possession of them. And it may also be observed, that in all the new states, lands purchased of the United States have uniformly been held liable to be taxed before they are patented. And, indeed, in Ohio, under the credit system, lands were taxed after the expiration of five years from the time of their purchase, although they had not been paid for in full. There was no compact made with Michigan, as with Ohio, not to tax lands sold by the United States until after the expiration of five years from the time of sale. The court think that the lands in question were liable to taxation under the authorities of Michigan.

144

It is contended 'that such lands should not be taxed at their full value, nor should they be sold as if the claimant owned them in fee.'

145

The statute does provide that the conveyance, under a tax-sale, 'shall vest in the purchaser an absolute estate in fee-simple,' &c. Two years and more are required to elapse after the tax shall become due, before the land is liable to be sold; and the deed is not to be executed before the lapse of two years after the sale, during which time the owner has a right to redeem. This is a tardy proceeding, and gives ample time to non-residents for the payment of their taxes, &c. The land should be estimated at its full value, as the owner, having paid for it, is subjected to no additional charge for the obtainment of the patent. And although the statute may purport to give a higher interest in the land than the owner could convey, yet it does not follow that such title is inoperative. It must at least convey the interest which the owner has in the lands. Or it may be that a higher interest is conveyed. But whether such a conveyance shall take effect as in fee, under the statute, when executed, or when the patent shall be issued, or at any time, it cannot be necessary now to inquire. The only inquiry is, whether the land should not be estimated at its full value, and sold by the state for the tax regularly assessed upon it. The effect of the title is not now before us for consideration. The conveyance of real estate, whether by deed or by operation of law, is subject to the law of the state; and it is difficult to say that any restraint can be imposed upon the local power on this subject. It cannot, however, convey a better title to the land sold for taxes than the owner of such land, to whom it stands charged, possessed at the time the taxes constituted a lien, or when the land was sold. Whether the legislature may not change the character of a title, so as to make that a legal title which before was only an equity, is a very different question.

146

In the case of the Lessee of Wallace v. Semour and Renich, 7 Ohio, 156, the court held 'that a purchaser at a sale for taxes can acquire a right which can be enforced in equity, although he has been defeated at law.' But that case grew out of the peculiar phraseology of the statute. It was also decided that 'where lands have been entered and surveyed in the military district, and sold for taxes before patented, that when patented, the patentee should hold the land subject to any claim which a purchaser at tax-sale may have in consequence of such sale.' And in Lessee of Stuart v. O. Parish, 6 Ohio, 477, that a purchaser of land at a tax-sale, before a patent was issued, could not set up, in an action of ejectment, the tax-deed against the patentee. In Douglass v. Dangerfield, 10 Ohio, 156, the court say, in reference to taxing lands before the patent has been issued, 'if the right to tax exists, and that it does there has not been any serious question for many years at least, it would seem to follow that the right to collect must also exist.'