Clark County, Wisconsin - Chapter 11: The Unpaid Tax Problem, 1918

The public credit of Clark County was for many years below par, and it was not until after the building of the present courthouse that the county finances were established on a firm basis. There was little actual cash in the county in those early days. The few substantial men of worth were looking toward the future, and were tieing up their resources in investments. The permanent citizens earned what they could by working for the lumbermen, but these earnings almost immediately went outside the county for the purchase of supplies and equipment with which to develop their homes among the stumps. For the most part the population was a floating one, the lumberjacks leaving the county in the spring to spend their winter earnings elsewhere.

For all claims against the county, county orders were issued, and these orders, held at a varying discount of from twenty-five to fifty per cent were the common medium of exchange throughout the county. The county itself would not accept its own orders in payment of state, town or school taxes, but would accept them at par in payment for county taxes. Thus, a man owing $50 for county taxes could buy $50 worth of county orders for from $25 to $35, pay his taxes, and the county be no better off than before. Dealing in county orders became an established and sometimes profitable business, and as late as 1870, D. D. Cheney, and others, of Sparta, obtained a judgment against the county for $5,411 unpaid county orders which they held, and which they had probably bought for less than half their face value. Such conditions continued until about 1876, since which date all county orders have been immediately convertible into cash at par.

The greatest problem, probably, with which the county has had to contend, has been the tax certificate question, and for many years the difficulty was still further complicated by bitter political rivalries in the office of treasurer and clerk, and in the county board. The matter of the tax certificates assumed predominating importance during the Readjustment Period of the county government from March 3, 1862, to May 23, 1860. Even before that there were indications of the proportions which the problem was to assume, for in April, 1857, at the first tax sale held in the county, the list of delinquent taxes contained no less than 1,380 descriptions, and its publication in the Jackson County Banner had cost the county $250.80.

In the next few years, there were sometimes between 3,000 and 4,000 tracts of land on the delinquent list. For this condition there were several reasons. Thousands of tracts were taken up merely for the timber, and abandoned after the timber was cut off. Other tracts were taken in good faith, and abandoned by their owners when farming among the stumps failed to yield even a living. Some tracts on which the taxes became delinquent were actually occupied by their owners, but produced such small returns that the taxes could not be met. Still other tracts were those which had been purchased from the pre-emptors with a view to speculation by residents of this and other counties who, owing to the hard times following the panic of 1857, found themselves unable to pay the taxes.

A few of the tax certificates put on sale each year were purchased by those who desired certain well situated tracts, or by those who had a little money to invest and to whom the 25 per cent interest with such good security proved attractive. Most of the certificates, however, found no purchasers and were held by the treasurer or clerk.

Many causes contributed to the confusion. The county was 360 square miles larger than at present, and the entire county for several years consisted of but three townships. The Township of Weston alone embraced some 1,266 square miles, or 5,064 quarter sections, or 20,256 forties, presenting an almost impossible task for a single assessor, Some years the township assessors made no returns, and the county supervisors had to make up a list as best they could, a most difficult task in the face of the uncertain records of the time. County and local officers sometimes, through indifference and more often through ignorance of the laws of the state, neglected to comply with the procedure of tax assessment and tax collection sales laid down by the statutes. The county treasurers were handling the office as an adjunct to their personal business, and while some were men of the highest integrity and standing, others were careless, inefficient, self-seeking, and engaged in the bitterest political feuds with other officials. Towns were receiving their appropriations in tax certificates, and some county bills were being paid in the same medium. County orders were being received in payment for tax certificates at par. Vast tracts of land were held by speculative companies, or embraced in grants. Many tracts were non-assessable.

It was natural, therefore, that there should be many irregularities, No comprehensive system of accounting or of keeping county records was in vogue. Land that was not legally subject to taxation was placed on the assessment list and certified and sold for unpaid taxes, and in the general confusion the same fate sometimes met land upon which taxes had been paid and receipts issued, but which the town or county treasurers had failed to account for. The board tried to meet this difficulty by stipulating that all tax certificates issued by mistake on lands not subject to taxation, or upon which the taxes had been paid, should be redeemed by the county at face value and 25 per cent added, but when a purchaser had purchased for cash in good faith, a certificate issued by the county, it gave him little satisfaction, upon finding that the certificate had been issued by mistake, to receive in lieu of his good cash paid out, a county order worth about 60 per cent below par. Finally, the difficulties resulted in an open clash between the treasurer, Chauncey Blakeslee, and the board, the treasurer refusing to submit his accounts to the board and bringing suit against the county for certain expenses, while the board in turn ordered the treasurer to move his office to the courthouse, declared his bond forfeited and ordered suit brought against him to compel an accounting and a payment of alleged shortages. The matter was finally adjusted, and the situation was cleared somewhat by placing the custody and sale of certificates in the hands of the clerk, and the decision that nothing but actual cash should be received for certificates sold.

On March 25, 1861, a recapitulation of county affairs showed in the possession of the county on April 25, tax certificates to the amount of $5,617.01, exclusive of interest - $1,010.95 being for 1855; $212.22 for 1856 ; $972.53 for 1857; $1.81 for 1858, and $3,419.50 for 1860. In addition to this the towns held many certificates received from the county as appropriations for improvement. It was ordered that in the future purchasers who desired to obtain certificates for county orders should pay at least 30 per cent in cash, the cash to be used in paying the county appropriations to the various school districts.

The supervisors during the commission system of county government from March 3, 1862, to May 23, 1870, found plenty to occupy their attention in the consideration of tax certificates. For a time, the proviso that certificates be sold only for cash was repealed, but when it was found that there was no cash to pay teachers, and that many teachers would not accept orders in lieu of wages, it was ordered that a stipulated percentage from the sale of certificates would be paid in actual cash, and the cash apportioned among the school districts. Later, a flat cash bonus was demanded from the purchasers. All power over certificates was taken from the clerk and returned to the treasurer, but this was a political rather than an administrative move. As time passed various reductions from the face value of old certificates, and in some cases a total elimination of interest was arranged. The situation was finally considerably cleared when the clerk was ordered to compare every description on the delinquent lists with the abstract to prevent mistakes, all worthless certificates on which refunds were claimed were ordered submitted to the board before action was taken, and arrangements were made for the issuing of tax deeds upon lands whose certificates had been held the legal length of time.

A consideration of the details of these various acts is of interest. Jan. 10, 1863, an earlier act was amplified so that 70 per cent of the amount paid for any tax certificate could be paid in town orders up to the amount of the indebtedness of the county to the several towns. April 20, 1863, the act was still further amplified, so that the 30 per cent cash received for tax certificates was to be distributed at a ratio of 50 cents for each scholar, in District 1, Pine Valley; District 2, Weston, and District 4, Pine Valley, all others to receive $1 a scholar, except District 3, which already received its appropriation. Feb. 28, 1863, the treasurer was authorized to exchange good certificates for any invalid certificates that had been issued.

Dec. 23, 1868, in order to raise money to pay bounty to soldiers, a special provision was made for the sale of tax certificates on cut-over pine lands. Certificates on such lands were to be sold at 50 per cent of their face and interest value, but the purchasers of a tract must take up any certificates which might be outstanding against the tract for 1859, 1860, 1861 and

It was on Jan. 19, 1865, that the board ordered the treasurer to compare every tax certificate in his possession with the abstracts, and to sort out all worthless certificates, that is, certificates that had been issued on university land still held by the government or the State of Wisconsin, on land the taxes of which had been paid before the tax sale, on land that had been doubly assessed, or on land that had not been entered, To pre-~ vent the issuing of such certificates in the future the treasurer was ordered to compare with the abstracts all delinquent tax lists returned, and with draw from advertisement and sale all land not subject to taxation. The treasurer was further ordered to exchange good certificates for worthless ones, paying 7 per cent interest on the worthless ones and charging 25 per cent on the good ones. This act was amended Dec. 14, 1865, so that interest of 7 per cent should be allowed on certificates that were worthless by reason of the land not having been entered, while 25 per cent should be paid up to Jan. 19, 1865, and 7 per cent afterwards for certificates that were worthless from any other cause.

Noy. 14, 1865, in order to clear up old tax certificates, it was ordered that all tax certificates held by the county previous to and including the sale of 1861, should be sold at 25 per cent of their face without interest, and that all certificates of the sale of 1862 should be sold at their face value and one year's interest. Fifty cents of each order was to be paid in actual cash, or in county orders, and the remainder in county orders. Jan. 3, 1866, the cash provison was rescinded, and the treasurer was authorized to receive county and town orders in full payment for all certificates sold.

Jan. 25, 1868, it was decided to sell the tax certificates of 1862 for 50 per cent of their face value, and those of 1863 for the face and one year's interest. The Fox & Wisconsin River Improvement Co. question was adjusted by the decision to cancel all certificates issued upon the lands of that company for the taxes of 1864 and 1865, and to call in any such certificates that might be outstanding. The clerk was authorized to take into his possession all of the tax certificates issued upon the land of this company for the years 1866 and 1867, and sell them - presumably to the company - at a certain discount not mentioned and with interest added up to Jan. 15, 1868.

March 26, 1869, the clerk was authorized to give county orders for worthless certificates, the clerk to collect a fee of 30 cents for the redemption of lands advertised for sale in 1868.

Dec. 20 of that year the treasurer was ordered not to sell any certificates held by the county and subject to tax deeds, but to deliver them to the county clerk in order that the tax deeds might be issued. It was also ordered that all worthless certificates should be laid before the board for examination.

With the dawn of the modern period, in 1870, the question of delinquent tax sales was thoroughly reviewed, a new system of keeping track of the certificates was inaugurated, provisions were made for the issuing of quit claim deeds to holders of tax deeds, it was provided that all sales of tax deeds and tax certificates should be made in actual cash, as should all payment of delinquent taxes, with the exception that such portion of delinquent taxes as might be due for county taxes, might be paid for in county orders. A sweeping accusation was made that ever since the county was organized, town and county treasurers had received money and issued receipts for taxes that had subsequently been returned as delinquent. Several offers were made the county by various firms, offering to buy at certain reductions of interest all delinquent tax certificates held by the county, but these offers were refused. The irregularities in the handling of tax certificates and county order reached their climax with the suits against certain county officials in 1876. In obtaining judgments against these individuals, the books and accounts of the clerk and treasurer were gone over thoroughly, and as much order as possible was injected in the chaos of tangled county affairs. Jan. 1, 1877, N. H. Withee took office as county treasurer, and the records of that office have since been kept with exactness. "The tax question, however, long continued to be a serious problem,

May 23, 1870, at the first meeting of the Modern Period, the treasurer was authorized to exchange good tax certificates for worthless ones, but was required to present all documents and data of each exchange at the next board meeting following the transaction.

June 29, 1870, another adjustment was made. No tax certificates were to be sold except for cash. At delinquent tax sales the part of the tax due to the towns was to be paid in actual cash, the part due the county could be paid in county orders. Provision was also made for quit-claiming lands to purchasers of tax deeds held by the county, notification that such lands were again subject to taxation to be made at once to the town clerks and assessors.

On Nov. 15, 1870, the county treasurer was ordered to secure a book in which he should record all tax certificates, giving the number, the description, the amount at which the certificate was sold, the amount of interest, to whom sold and the date. Jan. 16, 1871, the treasurer was ordered not to sell any tax certificates, to receive no county orders unless signed by the chairman of the board. In case of a receipt being presented, showing that taxes had previously been paid on land sold by mistake, the amount was to be charged back to the township interested, and former treasurers were ordered to settle for such receipts. Towns were also to be charged back with all certificates issued on land illegally assessed.

June 12, 1871, the county considered the matter of certain persons outside the county, who had come into possession of county orders, and were suing the county for payment. Jan. 6, 1872, it was discovered that many errors had been made in the tax certificate book, and the treasurer was ordered to make such corrections as he could from the records in the clerk's office.

T. B, Tyler to purchase all the county tax certificates at face value, paying a quarter down and the remainder in three equal payments three months apart. Several resolutions were offered on the subject, but all were rejected. It was determined, however, that the courts should quit-claim tax deeds to any person who would pay the county the amount due at the time the deed was issued, the fee for issuing it and interest at 10 per cent from the date of the deed, together with the amount due on any tax certificate. It was ordered that hereafter before the assessment rolls were delivered to the collector a description should be inserted therein of each piece of real estate to be taxed. The entire matter of the tax certificates was entered into and a report rendered, in which an attempt was made to present a complete inventory of all tax certificates held by the county, both valid and worthless, together with as near correct a statement as could be obtained regarding the complete transactions of each former treasurer in regard to the payment of taxes, the issuing and sale of certificates, and the sale of certificates.

In addition to occupying the attention of successive county boards for so many years, the tax question in the county also came up for consideration by the courts. In 1870, a series of suits was brought against the county, alleging many irregularities in the assessments of that year. Typical of these cases was that of John J. Marsh and another, as administrators of the estate of Samuel Marsh, deceased, together with other complainants, against the board of supervisors and the vlerk of Clark County to have certain taxes assessed in 1870, on plaintiff's lands in said county, and the sales of the lands for such taxes, and the certificates of said sales, declared void, and to restrain the issue of tax deeds based upon said sales.

A recapitulation of the case as appealed to the Supreme Court is as follows: "A part of the lands in question were situated in Township 25 North, Ranges 1 and 2 West, which were included in the town of Weston, and a part in Township 25 North, Range 1 East, which was in the town of Lynn, in said county. It is alleged in the complaint, among other things, that the assessor of the town of Weston did not value the lands in the two townships first above named, 'from actual view, nor at the full value which could ordinarily be obtained therefor at private sale, and which the assessor believed the owner, if he desired to sell, would accept in full payment therefor,' and that only a small portion (if any) of the lands in the said two townships were assessed from actual view. There is a similar averment as to the assessment made that year of lands in the town of Lynn. It is further averred that the lands in the three townships above described 'are uniformly heavily timbered, but there is a great variety of surface and soil, some portions of said townships being broken and bluffy, and having very little or no value, other portions being wet and marshy, and others level and fertile, valuable for cultivation and general agricultural purposes; some of said lands having valuable tracts of pine timber on them, and the timber of other lands being of little or no value f that, at the time when said assessments were made, a number of tracts of land in each of those townships had been to a considerable extent cleared, cultivated and improved with fences and buildings thereon, and were much more valuable than the unimproved lands in said townships; that plaintiffs were at that time nonresidents of said county, and all said lands were in a wild and unimproved state; that the respective assessors of said towns, in the year named, valued the lands therein, for the purpose of assessment, arbitrarily and at nearly uniform rates, without reference to their relative value, and, in very many cases, without actually viewing them; that the lands in said townships in the town of Weston were valued at from two to three dollars per acre, but mostly at two dollars per acre, three or four sections being valued at four dollars, one forty at six, and one at eight dollars and fifty cents, per acre; that all the lands in said townships are divided by the government survey into forty-acre tracts, but were assessed and valued in tracts of one hundred and sixty acres each; that the improved lands were generally assessed at the same rate as the unimproved lands, and in some instances at lower rates, although generally of much greater value; that the lands in Township 25, Range 1 East, in the town of Lynn, were valued at two dollars and fifty cents per acre without exception; that the respective assessors of said towns intentionally and fraudulently made a distinction in such assessment against the plaintiffs and other nonresidents owning lands in said townships, for the purpose of making them pay more than their just portion of the taxes; and that the valuation so made was the basis of which the taxes of that year were levied upon plaintiff's lands. It is further alleged that no notice of the time and place of meeting of the board of review of either of the said towns was posted, and no meeting of such board was held, in said year, and the pretended assessment rolls aforesaid were not reviewed; that neither of the assessors of said towns took and subscribed the oath annexed to said pretended assessment rolls, as required by law, or took and subscribed any oath of like effect or substance; and that no oath taken and subscribed by either of said assessors was annexed to either of said rolls; and it is further alleged that neither of the treasurers of said towns, respectively, made any proper return to the county treasurer, or made any affidavit to be annexed to tle statement of the taxes remaining unpaid. The other averments of the complaint need not be stated. The answer was a general denial.

"The District Court found, among other things, that the assessors of the towns of Weston and Lynn, respectively, did not intentionally or fraudulently make a distinction, in the assessment above mentioned, against the plaintiffs or other nonresidents for the purpose of making them pay more than their just and equal portion of the taxes to be paid in those towns in 1870; but that each of said assessors, in that year, made a just, equitable and fair assessment of the lands situate in his town. There was no other specific finding as to any facts alleged in the averments of the complaint above stated; but a general finding of 'all the issues of fact joined in the pleadings in this action, in favor of the defendants.'

"It will sufficiently appear from the opinion herein, what facts were shown by the evidence bearing upon the averments of the complaint above recited.

"Briefs were filed, by Sloan, Stevens & Morris for the appellants, and by J. R. Sturdevant and R. J. McBride, with S. U. Pinney of counsel, for the respondents; and there was oral argument by Mr. Stevens and Mr. Pinney."

Upon being appealed, the decision of the District Court in favor of the county, was reversed and a verdict ordered in favor of Marsh. The summary of the Supreme Court opinion (Marsh and Others ys. The Board of Supervisors of Clark County and Another, 42 Wisconsin, 502) as rendered by Chief Justice Edward G. Ryan, is as follows:

"7_That provision of our state constitution which declares that the rule of taxation shall be uniform, requires a uniform assessment of value; and no tax upon property can be supported which does not proceed upon valid assessment, legally made, upon a uniform rule. 2 - Violations or evasions of duty imposed by law to secure a just and uniform rule of assessment, whether occurring by mistake in law or by fraud in fact, which go to impair the general equality and uniformity of the assessment, and thereby to defeat the uniform rule of taxation, vitiate the whole assessment as the foundation of a valid tax. Kelley vs. Corson, 11 Wis., 1, and Miltimore vs. Supervisors, 15 id., 9, as to his point, overruled. 3 - Under ch. 130, Laws of 1868, the act of the assessors in making, and annexing to and filing with the assessment roll, an affidavit that he has performed his statutory duty in the several particulars there enumerated, including the valuation of each parcel property from actual view of it, is essential to the validity of the assessment; and when such affidavit has not been made, the facts which should appear by it can not be shown aliunde; nor can the rule of the statute be relaxed by showing that compliance with it was impossible. 4 - Equity will restrain the issue of a deed upon a sale of land as for a delinquent tax, where there was no valid assessment, without requiring other proof of injury to the plaintiff from the pretended | ba

The case of Stevens vs. The Supervisors of Clark County (43 Wisconsin, 36) was similar in character to the Marsh case, except as to proof of plaintiff's title to the lands upon which the taxes were assessed, and the contending parties were represented by the same attorneys. The land owned by Stevens had been a part of the Fox & Wisconsin River Improvement Co. tract, but the certificate which that company had filed with the county registrar of deeds recapitulating the lands which that company had selected in the county did not bear the statement that it had been compared with the original papers in the state archives by the secretary of state personally. Upon appeal, Chief Justice Ryan affirmed the decision of the District Court upon the ground that the plaintiff had failed to prove title; and upon a rehearing, though with reluctance, Justice Ryan again affirmed the decision of the District Court. "It is better," he said, "that parties should sometimes suffer undue results of their litigation,

"I - See. 7, ch. 112 of 1856, provides that 'copies of the lists of lands required by section five of this act to be filed in the offices of the secretary of state and the registers of deeds of the several counties, shall, when certified to be correct by said officers respectively, under their official seals, be received in any court of this state as evidence' of certain facts. Held, that in certificate accompanying such copy, the certifying officer must state that it 'has been compared by him with the original,' as required by the general provision of sec. 71, ch. 137, R. S8.; and a mere certificate that such copy 'has been compared' with the original, and is correct, is insufficient. 2 - On affirming a judgment, the appellate court has no discretion to grant a new trial."

The opinion in the Marsh vs. Supervisors case continued to be the standard authority in all similar cases in this state for some fifteen years. In 1885 it was practically set aside by the opinion of Associate Justice David Taylor, who criticised its language and found (Fifield vs. Marinette County, imp. Beebe vs. Marinette County, 62 Wisconsin, 532), as follows:

"I - A court of equity will not set aside or enjoin the collection of a tax for mere irregularities in the tax proceedings, unless the taxes justly chargeable to the property are first paid or tendered in all cases where such taxes are ascertainable. 2 - A complaint which does not allege in direct terms the injustice and inequality of the tax, and further allege a state of facts which, if proved on the trial, would establish the truth of the general allegation of its injustice, does not state a course of action for equitable relief, unless there be a further allegation of an offer to pay the taxes justly chargeable to the property of the plaintiff on account of which he seeks relief. 3 - The objection to the sufficiency of the complaint in such a case may be taken after judgment, on appeal, although there was no appearance on behalf of the defendant in the trial court. 4 - The mere failure of the assessor to verify the assessment roll as required by law, does not necessarily render the taxes apportioned upon such assessment unequal or unjust."