On February 25, 1980 the City of Lawrence filed a petition with this Court pursuant to G. L. c. 60 §65 to foreclose the equity of redemption of real estate taxes assessed on the premises at 225-235 Essex Street in the City of Lawrence. The tax taking was dated November 10, 1977, gave the name of the owners from whom the land was taken as "Farrah, Albert L. & Farrah, Jeanne V." and the present owner as Louise Troisi, and was recorded on December 29, 1977 with Essex North District Deeds, Book 1328, Page 710 (Exhibit No. 3). After a report by the Land Court examiner as to the title to the premises and notice to parties in interest as required by G. L. c. 60 §66, Triad Realty Trust, claiming to be the owner of record of the premises, moved that the action be dismissed for the reason that the lien for the 1975 real estate taxes expired prior to the taking of November 10, 1977. The respondent, Triad Realty Trust, earlier had filed an answer on the merits in which it attacked the taking on other grounds.
A hearing was held at the Land Court on January 23, 1981 at which counsel for the City and Charles F. Foster, Trustee of, and attorney for, Triad Realty Trust, argued the legal questions raised by the motion to dismiss. On all the evidence I find and rule as follows:
1. On January 1, 1974 and January 1, 1975 Albert L. Farrah and Jeanne V. Farrah were the owners of record of the premises in question. On April 30, 1975 Mr. and Mrs. Farrah conveyed said premises to George Troisi and Louise Troisi by deed dated April 30, 1975 and recorded with said Deeds in Book 1259, Page 2 (Exhibit No. 1).
2. Mr. Troisi conveyed to Louise Troisi his interest in locus by deed dated December 9, 1975 and recorded on said date in Book 1273, Page 122 (Exhibit No. 2). A confirmatory deed was recorded subsequently in Book 1273, Page 690.
3. On November 10, 1977 said premises were taken by the City of Lawrence as set forth above, and the taking was recorded on December 29, 1977. The taking recites that it was for 1975 taxes.
4. By deed dated October 9, 1979 and recorded with said Deeds on October 10, 1979 in Book 1395, Page 271 Louise Troisi conveyed to Charles F. Foster, as Trustee of Triad Realty Trust, the premises in question (Exhibit No. 4).
By St. 1973 c. 52 §8 a procedure was adopted to implement the change in the fiscal year of the Commonwealth's cities and towns by clarifying the change of the method of payment of real estate taxes. Said section 8 provided for two assessments and two bills for real property taxes for the eighteen month fiscal year beginning on January 1, 1973. The first bill was to be for taxes assessed as of January 1, 1973, and the tax rate was to be based on two-thirds of the amount required to be assessed for the eighteen month fiscal year beginning January 1, 1973. The bill was payable no later than November 1, 1973 if interest were to be avoided. The second bill was to be for taxes assessed as of January 1, 1974, and the tax rate was to be based on one-third of the amount required to be assessed for said eighteen month fiscal year. This bill was to be paid by May 1, 1974 to avoid the payment of interest.
Taxes for the 1975 fiscal year commencing July 1, 1974 and ending on June 30, 1975 also were assessed as of January 1, 1974 with two payments to be made, one by November 1, 1975 and the second by May 1, 1976. With fiscal 1975 began the present system which calls for the semi-annual payment of real and personal property taxes. Previous to the change in the method of payment G. L. c. 60 §37 provided
Taxes assessed upon land, including those assessed under sections twelve, thirteen and fourteen of chapter fifty-nine, shall with all incidental charges and fees be a lien thereon from January first in the year of asessment. Except as provided in section sixty-one, such lien shall terminate at the expiration of two years from October first in said year, if in the meantime the estate has been alienated and the instrument alienating the same has been recorded, otherwise it shall continue until a recorded alienation thereof ....
Termination of the lien for real estate taxes in two years worked well when taxes were required to be paid in one installment, but with the provision for payment of one-half the annual taxes in May of the following year the two year period was deemed by the General Court to be too short. Accordingly, the statute was amended in 1976 to provide that the lien would continue for three years rather than the two which had heretofore been the case. The change in the duration of the lien by St. 1976 c. 322 was approved August 27, 1976 and made effective by Act of the Governor immediately thereafter on August 30 of that year.
The parties have agreed that the taking was made by the Collector of Taxes for the nonpayment of the second installment of real estate taxes for fiscal 1975 in the amount of $8,982.19 due no later than May 1, 1975, the first installment having been paid in November, 1974. 1975 taxes were assessed as of January 1, 1974, and by virtue of G. L. c. 60 §37, as it read prior to its 1976 amendment, terminated two years from October 1, 1974 if in the meantime the estate had been alienated. The statutory scheme at that time provided that the lien for taxes assessed as of January 1 terminated two years from the following October 1 (in this case October 1, 1976) if the premises had been conveyed during the interim period. As noted above the two years was lengthened to three in 1976, but the Supreme Judicial Court has not yet decided whether the amendment operated retrospectively.
In any event it makes no difference in the present case. This is so because whether one applies c. 60 §37 as it existed prior to the 1976 amendment or thereafter the lien terminated within either two or three years from the October 1 first occurring after the assessment date (October 1, 1974) as there had been an alienation of the property. Albert L. Farrah et al conveyed the premises on April 30, 1975 to George Troisi et al so by virtue of the very language of section 37 the lien terminated no later than October 1, 1977 since no taking had been recorded prior thereto. Accordingly the lien cannot now be foreclosed.
The City asks the Court to apply the policy set forth in the last sentence of section 37 which limits the harshness with which tax title proceedings previous thereto were viewed during an earlier period when redemption automatically was foreclosed without the present requirement of judicial or administrative proceedings. This provision reads
No tax title and no item included in a tax title account shall be held to be invalid by reason of any error or irregularity which is neither substantial nor misleading, whether such error or irregularity occurs in the proceedings of the collector or the assessors or in the proceedings of any other official or officials charged with duties in connection with the establishment of such tax title or the inclusion of such item in the tax title account.
It is impossible, however, to believe that this section was intended to apply in a case like the present where the lien continues by statute only for a specified length of time where there has been an alienation of the property. By the very wording of section 37 the lien had expired before the collector took the necessary action. In addition, it is hard to see how any error or irregularity could be more substantial or misleading than the failure to record a tax taking. See Pass v. Seekonk, 4 Mass. App. Ct. 447 (1976); Bartevian v. Cullen, 369 Mass. 819 (1976). Itfollows from what I have already said that the lien for the taxes in question expired prior to the recording of the taking by the collector, and that therefore this proceeding cannot be maintained. Of course, it does not follow that there is no personal liability for the taxes in question so far as the assessed owners are concerned. The City also may disclaim its present lien and now record a tax taking for the taxes assessed as of January 1, 1978 (fiscal 1979) as to which there can be no question as to the existence of the lien so long as the taking is recorded by October 1, 1981. This is in accordance with the procedure outlined in section 61 of said chapter 60 which provides in effect that it is unnecessary for a city or town to take real estate for nonpayment of subsequent taxes when it has already been taken for nonpayment of the taxes of an earlier year. In instances like the present where the lien has been determined to be invalid and disclaimed, then the City may thereafter take the property for a subsequent year where the proceedings are not tainted by the irregularity which affected the lien disclaimed by the collector. The Supreme Judicial Court makes this clear in Newton v. Noone, 319 Mass. 374 (1946).