By order dated January 11, 1979 this Court granted a motion to dismiss made by the defendant, Walter Beinecke, Jr. ("Beinecke"), on the ground that the complaint by the plaintiff, Town of Nantucket (the "Town"), was time barred. The Supreme Judicial Court reversed and held that this Court had erred a) by taking judicial notice of the supposed impact of a probate court decision in which conduct of the then Nantucket town counsel was criticized [Note 1] and b) by then holding, based on imputed awareness of such decision, that the Nantucket Board of Selectmen must have had knowledge of the conduct complained of no later than September 19, 1975. The Supreme Judicial Court agreed, however, with this Court that there was a statute of limitations applicable to General Laws, Chapter 268A, and that it was two years for the period here in question. The complaint first was filed in this case on June 23, 1978 so it is time barred if the Town knew or reasonably should have known of the conduct complained of prior to June 23, 1976. See Franklin v. Albert, Mass. (1980). [Note 2] Teller v. Schepens, Mass. (1980). [Note 3]
After the decision of the Supreme Judicial Court in December of 1979 the Town moved to amend its complaint, and its motion was allowed. The complaint, as amended, alleges that one Winchester Veazie had conveyed out most of the locus as described in Land Court Tax Lien Case No. 43095 and Registration Case No. 35851 by 1874, that he never re-acquired title thereto, that for many years prior to 1963 the land was not assessed, that one of the tax assessors, John J. Gardner II, first caused the locus to be assessed in 1963 to John Doe and thereafter to Winchester Veazie, that Gardner knew or should have known that Veazie was not the record owner of much of the locus and presumably was long deceased, that accordingly the taxes would not be paid and that ultimately the land would be taken and the tax title assigned, on Gardner's request, to Gardner acting for his undisclosed principal, Roy E. Sanguinetti, and that this in fact did occur. The complaint further alleges that the petition in the tax lien case and the examiner's report therein are both false in stating that Veazie was the only owner of the equity and that this constituted a fraud in the Land Court. The other allegations in the case are substantially the same as in the original complaint. The new element in the amended complaint is the alleged conveyance out by Veazie of a substantial portion of locus.
After the allowance of the amendment the defendant moved to dismiss the amended complaint on grounds other than that it was time barred and later moved for summary judgment. Both motions were denied. In ruling on the latter I stated
If the defendant can establish that the Town officials whose knowledge, consistent with G. L. c. 260, §2A, would bind the Town and start the statute running had such knowledge for more than two years prior to the commencement of this action, then it is time barred. It therefore seems to me to be essential first to determine this aspect of the case before proceeding to a consideration of the other issues in this case and in Registration Case No. 35851 in which the defendant seeks to register his title to the disputed land in proceedings pursuant to G. L. c. 185.
I further stated
Having studied the affidavits and deposition I have concluded that not all factual issues as to the Town's knowledge have been resolved but rather remain in the case, not only as to the extent of the knowledge of counsel but as to the independent knowledge of the Selectmen. It seems clear to me from the opinion of Justice Liacos that Nantucket's complaint can be time barred by something short of full disclosure to a town meeting, but it is not clear that knowledge of town counsel, even if he is not personally engaged in the wrongdoing, always suffices. I have inferred from the Supreme Judicial Court opinion that under circumstances such as we have here informed knowledge of the Board of Selectmen must be shown. This can best be shown, if indeed this is the case, by a hearing at which testimony limited to this sole issue is taken. Accordingly I order that discovery be concluded by October 15, 1980 and this case be assigned for trial on this issue only in Nantucket.
A trial was held on this issue only in Nantucket on December 3 and 4, 1980 and in Boston on December 29, 1980. At the trial a stenographer was appointed to record the testimony with all exhibits introduced into evidence being incorporated herein for the purpose of any appeal. Oral arguments were heard by the Court on January 8, 1981.
On consideration of all the evidence I again find and rule that the Town's complaint is time barred. I assume for the purpose of this decision that the allegations of the complaint as to the state of the record title are correct, and I further assume that the Town did not have actual (as opposed to constructive) notice of the Registry records as to the Veazie title until well after the decision of the Supreme Judicial Court in this very case. However, I find and rule that the state of the record, falsified as it may have been in the tax lien case, is not substantially different from the so-called Nantucket "John Doe" cases which came under scrutiny in the 1960's and the succeeding decade. I think the following facts which on all the evidence I hereby find will clarify the result which I have reached:
1. Henry Long, the then Commissioner of Corporations and Taxation, pressured communities during the depression years to put as much of their unassessed real estate as possible on the tax lists. Whether this may have been partially responsible for the situation which developed in Nantucket is speculative. It is undisputed, however, that the title to Nantucket real estate has been beset with problems which over the years has led to the registration of the title to many properties under the provisions of G. L. c. 185. With the passage of time many of these problems were acerbated, and the assessors faced increasingly difficult problems in determining ownership for tax purposes. This problem is discussed by the Supreme Judicial Court in Hardy v. Jaeckle, 371 Mass. 573 (1976). The difficulty of determining ownership led to a widespread practice in Nantucket whereby individuals who became aware of parcels of land on the island which had not been assessed requested the assessors to assess the property to "John Doe" which apparently then was done routinely. After "John" neglected to pay these taxes, the property was taken, and the tax title then was assigned to a third person.
2. The abuses which this practice allegedly engendered led to widespread discussion of it in Nantucket both at meetings of the Selectmen and at town meetings, particularly in the time frame of 1967 through 1973.
3. During the late 1960's and early 1970's there was a crescendo of protest, not so much as to the method of assessment, but as to the disposition of the tax titles. The gist of the complaints was that a favored few acquired title to the lands whose values continually were escalating whereas other inhabitants did not have similar opportunities.
4. One of the three assessors in Nantucket, at least from 1964 to 1972 when he resigned, [Note 4] was John J. Gardner, II. [Note 5] Town counsel during this period until his resignation in December, 1969 was Roy E. Sanguinetti. Both Mr. Gardner and Mr. Sanguinetti are now deceased. The town treasurer, until sometime in 1969 when her husband was transferred from the island by the weather bureau and she resigned, was Margaret M. Roche.
5. In due course the question of validity of the Nantucket tax titles came to the attention of Elwood Hettrick, the then Chief Judge of the Land Court, and he appointed Haughton Sanguinetti to investigate the situation. Mr. Sanguinetti was the brother of the Nantucket town counsel, but as a result of his recommendations to the Court a moratorium was imposed in 1967 on the entry of decrees foreclosing the equity of redemption where taxes had been assessed to John Doe.
6. The complaints prevalent in Nantucket led the Selectmen to confer with Mrs. Roche in April, 1969 about her practice of assigning tax titles. She told them that she assigned the tax title to the first person who requested it. Her procedure, she said, was "first come, first served." She also has been quoted as saying that if any person went to the trouble to locate property not on the tax rolls, to bring it to the attention of the assessors and then to request an assignment after the tax taking, she felt that their perseverance should be rewarded.
7. The annual 1969 Nantucket town meeting adopted a proscription against further assignment of tax titles without a public auction. This article in the warrant was attacked by John Gardner in the public press as being without the power of the town meeting since the General Laws gave the treasurer the discretion to dispose of tax titles by assignment and without public auction. Mrs. Roche also took this position. The General Laws, of course, have since been amended. G. L. c. 60 §52 as amended by St. 1973, c. 249. Whether the vote of the town meeting was legally binding or not, the practice of assignment without notice or foreclosure terminated.
8. One of the persons who protested the method of disposition of tax titles was Captain Parker Gray, Chairman of the Nantucket Conservation Commission, who bombarded the Selectmen with so-called data sheets in which he attacked John Doe assessments and the transfer of tax title property. He also specifically mentioned locus, its assessment to Gardner and sale to Sanguinetti and later Beinecke. He also attended many of the meetings of the Selectmen to protest the tax situation generally and the disposition of town lands in particular. Letters to the local newspaper from Captain Gray and others also appear among the exhibits. The statements set forth in Captain Gray's data sheets were not always accurate, but if not a whole ear, they had at least many kernels of truth within them. Locus is referred to in the evidence as land at Reedy Pond, and the record is replete with references to it and suggestions of impropriety in connection therewith. There were other members of the community who also objected to the method of assignment of tax titles on the theory that insiders were able to obtain the assignments where general members of the public could not.
9. The complaints by Parker Gray and others led Robert Haley, Chairman of the Board of Selectmen, in at least one heated exchange reported in the Nantucket Inquirer and Mirror of February 24, 1972 to tell Captain Gray to take his complaints to the District Attorney or the Attorney General.
10. The Land Court then, as now, customarily does not review a back title in a registration proceeding based on a foreclosed tax title other than to check possible easements and restrictions not cut off by its final decree in the tax lien case and to review the description. Rather the practice has been to assume good title in the petitioner in the tax lien case after the entry of the final decree and to have the Land Court examiner bring the title forward from that date. Counsel for the defendant in our present case aptly has denominated this procedure as "piggybacking." This is the method which Gardner and Sanguinetti intended to follow in the present case.
11. John Gardner, as noted above, was only one of the three assessors, but he appears to have been the authoritive figure on the Board. For purposes of this decision I have assumed that it was him who had locus assessed to Winchester Veazie as set forth above. Taxes were not paid, and the property was taken by the Town by deed dated February 24, 1964 and recorded with Nantucket Deeds in Book 125, Page 448. A petition to foreclose the tax lien was filed on behalf of Mr. Gardner by Roy Sanguinetti on May 11, 1966, and the title was referred to Robert F. Mooney, Esquire, to determine the persons who might be interested in the petition. Mr. Mooney is counsel for Mr. Beinecke in the present registration case still pending before the Court. In response to a letter from Bernard W. Berkowitch, Chief Title Examiner, requesting a report in detail as to "what diligent search you made for the heirs of Winchester Vezie (sic) and George Easton," Mr. Sanguinetti replied as follows:
With reference to your letter of March 28 pertaining to Tax Lien Case No. 43095, John J. Gardner II, Petitioner, Winchester Vezie (sic), named in the petition, purchased this land back in 1874 at which time he was listed as being a resident of Boston. As far as I know and can find out here, nobody ever heard of him and he has no Nantucket connections.
I checked with the Assessors and I am advised by them that in going back in their records to around 1900, this property hasn't been on the tax rolls since before 1900 until 1964 when they re-assessed it to Vezie as the last owner of record. There's been considerable erosion in theproperty since Vezie's day and I would say that it was just about impossible to find this fellow's heirs after a lapse of almost 100 years, particularly when he was no one connected with the Island.
I trust the above will enable you to have decree entered in this case.
12. Mr. Sanguinetti's hope was fulfilled, and a final decree was entered on April 4, 1967 in said tax lien case.
13. As appears from the abstract in Registration Case No. 35851 which was introduced as an exhibit Gardner then conveyed the property to Roy E. Sanguinetti, Trustee under Agreement of Trust dated March 1, 1962 by deed dated May 10, 1967 and recorded in Book 130, Page 456. Later in the same month of May by deed dated May 31, 1967 and recorded in Book 130, Page 568, Sanguinetti conveyed the property to Beinecke for a stated consideration of $16,500.
14. Upon the appointment of William I. Randall as Chief Judge of the Land Court the problem of the John Doe assessments in Nantucket again was raised by the Land Court. District Attorney Philip A. Rollins instituted an investigation in the fall of 1972. The grand jury returned no indictments, but it did report as follows:
REPORT OF THE GRAND JURY SEPTEMBER TERM, 1972
During this term the Honorable Philip A. Rollins, District Attorney for the Southern District of Massachusetts, pursuant to complaints received by him presented to this Grand Jury evidence that a large number of parcels of land have been assessed to a fictitious person, "John Doe."
That such an assessment is probably illegal.
That the tax laws are very complex and difficult to understand for laypeople and some officials.
That an ignorant mistake of the law was in large measure the cause for the assessment of tax liens acquired by the Town of "John Doe" property.
That the exercise of the Town Treasurer's power to assign tax titles to individuals may be subject to abuse throughout Massachusetts and we encourage the efforts of the District Attorney to amend the General Laws to remove this power of all Town Treasurers to assign tax titles without publication and public auction.
That the assessment practice of "John Doe" should be immediately stopped.
That the District Attorney proceed immediately in the following cases pending in the Land Court to have the assignments determined to be null and void and obtain back for the Inhabitants of Nantucket such parcels of land ...
(The list of then pending Land Court Tax Lien cases is omitted.)
15. The District Attorney subsequently wrote to the Nantucket Selectmen and expressed his opinion that in instances where the Land Court had entered a final decree in a tax lien proceeding no recourse was available to the town (which was the situation in the Beinecke transaction), but he suggested that appearances be filed on behalf of the town in all the pending John Doe cases which in his opinion were illegal. He earlier had filed appearances in many, if not all, of these cases, and he recommended that this be done on behalf of the Town. The Town in fact did follow through by filing appearances, and Charles A. Goglia, Jr., Town Counsel who succeeded Mr. Sanguinetti in 1970, appeared in these proceedings. In the spring of 1973 Mr. Goglia also wrote the Selectmen at length on the history of assessment practices and the controversy surrounding them. The Town did not, however, attack the "John Doe" procedure nor did it pursue possible lines of defense in the pending cases.
16. At approximately this time the case of Hardy v. Jaeckle was heard by the Land Court, but the multitudinous evidence which was furnished to the Court in the present case was not before it in the Hardy matter. No person opposing the allowance of the petition other than one witness who withdrew during the proceedings took an active part in the trial. After the decision by this Court in the Hardy case, District Attorney Rollins delivered to the Nantucket Selectmen a brief case replete with papers relative to the grand jury investigation into Nantucket practices. The Selectmen delivered this brief case to town counsel, but it appears that until the recent hearing in the present case no inventory was made of its contents.
17. In 1969 the Land Court gave notice to the Town of the petition by Beinecke to register his title to locus, wherein Sanguinetti was requested to file an answer on behalf of the Town to preserve certain rights of way claimed in the area of Reedy Pond; Sanguinetti advised the Selectmen of his inability to act for the Town since he had sold a portion of the land to Beinecke. The Selectmen then requested James K. Glidden, a local attorney well versed in real estate matters, to act on behalf of the Town in the registration proceedings. Subsequently, Mr. Goglia and much more recently the Town's counsel in the present case also filed appearances on its behalf. In the abstract filed in said case on February 5, 1969 appeared the entire title picture of which the Town now complains.
18. Even if we assume, as I have, that the Selectmen are not bound by constructive knowledge of the provisions of the Land Court abstract, it is clear from other evidence that they were aware of the purchase of the tax title assignment by Gardner and the conveyance to Sanguinetti no later than April of 1972.
The account which I have set forth above of general Nantucket tax title procedure with particular emphasis on the present locus makes it very apparent that the Selectmen knew, or should have known, well before the crucial date here (June 23, 1976) that Messrs. Gardner and Sanguinetti may have acted in a fashion inimical to the Town's interest. However, all the evidence compels the conclusion that the Selectmen in the exercise of their discretion determined that it was preferable to discontinue the practice of the assignment of tax titles, which discontinuance also had been voted by the town meeting, and subsequently was mandated by the General Court, rather than to follow a procedure which would attempt to reverse the status quo and rescind tax title assignments. This may well have been the most sensible approach for the Town to take. The then chairman of the Board of Selectmen pointed out to the District Attorney by letter dated February 1, 1973 that he previously had advised the Board that the chance of success was about 30-40 per cent; the Board also was puzzled as to procedural steps to be followed in light of the assignments the Town had made. In addition, the District Attorney was of the opinion that there was no recourse to the Town in cases where the equity of redemption had been foreclosed, and the Selectmen were aware of this as he had so advised them.
The matter was raised again when the Land Court determined in Registration Case No. 35851 that the Town should be notified of Judge Knight's language in the Probate Court decision considered at length in Sanguinetti v. Nantucket Construction Co., Mass. App. Ct. (1977). [Note 6] This case ultimately followed. The registration case is still pending before the Court and may itself be subject to future litigation. Obviously, there are questions which now exist in relationship to the title which will have to be explored ultimately by this Court. So far as the question of whether the present complaint pursuant to G. L. c. 268 is time barred is concerned, only an affirmative answer seems possible. The Town has argued that the facts which it has alleged relative to Winchester Veazie are facts only recently uncovered. I agree that the point has not been raised before although the information was there in the Registry of Deeds to be found and was itself constructive notice to all the world. It seems to me, however, that this approach is begging the question of the status of the ownership of the land, for whether it was in fact owned by Winchester Veazie or by several grantees from him the assessing procedures in Nantucket in this case were no different in kind than the John Doe assessment. It may well be impossible in view of the lapse of time to ferret out the parties now entitled under Veazie's grantees. The real cause for the Town's complaint [Note 7] is not the false information supplied by the assessor, later the petitioner in the tax lien case, and not corrected, indeed accepted, by the Examiner who reported to the Court in the tax lien proceeding. The basic cause for complaint is the history of real estate tax assessments in Nantucket during the decade of the sixties and the method of disposition of tax titles. This culminated in the grand jury investigation and the recommendations of the District Attorney. The Selectmen again and again were put on notice of facts, which if they had pursued them, easily would have led to a full disclosure of the facts on which this complaint is based. The conclusion is inescapable that the Selectmen not only were aware of the general problem but also knew, or should have known of the roles played by Gardner and Sanguinetti in the Reedy Pond transaction and chose knowingly under all the circumstances not to pursue the investigation. Instead, adopting the concept that "You cannot go home again" the Town heretofore has elected to change future procedure but not to undo the past. It is too late now to reverse this decision.
[Note 1] Nantucket v. Beinecke, Mass. (1979). Mass. Adv. sh. (1979) 2623.
[Note 2] Mass. Adv. Sh. (1980) 2187.
[Note 3] Mass. Adv. Sh. (1980) 2199.
[Note 4] Mr. Gardner's tenure as an assessor appears to have covered a period of over fifty years.
[Note 5] The evidence in this case centers on Gardner's role in the scheme; no light is shed in this or other cases on the activities of the other assessors.
[Note 6] Mass. App. Ct. Adv. Sh. (1977) 404.
[Note 7] This is not to say that the Court itself is not both grieved and aggrieved at the abuse ofjudicial foreclosure of tax titles and of the trust reposed by it in officers of the Court.