A-33095, AUGUST 26, 1930, 10 COMP. GEN. 92

A-33095: Aug 26, 1930

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PROVIDED HIS ASSENT THERETO IS CLEARLY SHOWN. 1930: I HAVE YOUR LETTER OF AUGUST 19. MINNESOTA REQUIRE THAT A DEED CONVEYING LAND CAN NOT BE ACCEPTED FOR RECORDATION UNTIL ALL TAXES HAVE BEEN PAID AND A CERTIFICATE TO THAT EFFECT FROM THE TAX COLLECTOR IS PRESENTED TO THE RECORDER OR REGISTRAR WITH THE INSTRUMENT TO BE RECORDED. AN EXAMPLE OF THE SITUATION CONFRONTING THE DEPARTMENT IS AS FOLLOWS: UNDER DATE OF MARCH 15. IT NOW APPEARS THAT HE IS UNABLE TO RAISE THIS AMOUNT AND REQUESTS THE DEPARTMENT TO PAY SAME AND DEDUCT THAT AMOUNT FROM THE PURCHASE PRICE OF $180.00. THE DEED TO THE UNITED STATES CAN NOT BE RECORDED UNDER THE LAWS OF MICHIGAN UNTIL THE TAXES HAVE BEEN PAID AND A CERTIFICATE ISSUED TO THAT EFFECT BY THE COLLECTOR OF TAXES.

A-33095, AUGUST 26, 1930, 10 COMP. GEN. 92

REAL ESTATE, PURCHASE OF - TAX LIENS WHEN THE GRANTOR OF LAND TO BE ACQUIRED UNDER THE ACT OF MARCH 1, 1911, 36 STAT. 961, AS AMENDED, HAS EXECUTED A DEED CONVEYING TITLE TO THE UNITED STATES, AND THE ATTORNEY GENERAL HAS APPROVED THE TITLE, SUBJECT ONLY TO THE PAYMENT OF TAXES, SUCH TAXES MAY BE PAID FROM THE AMOUNT AGREED UPON AS THE PURCHASE PRICE AND THE BALANCE PAID TO THE GRANTOR, PROVIDED HIS ASSENT THERETO IS CLEARLY SHOWN.

COMPTROLLER GENERAL MCCARL TO THE SECRETARY OF AGRICULTURE, AUGUST 26, 1930:

I HAVE YOUR LETTER OF AUGUST 19, 1930, AS FOLLOWS:

IN CONNECTION WITH THE ACQUISITION OF LANDS UNDER THE WEEKS FORESTRY ACT OF MARCH 1, 1911 (36 STAT. 961), AS AMENDED, AND THE CLARK-MCNARY ACT OF JUNE 7, 1924 (43 STAT. 653), CONSIDERABLE DIFFICULTY HAS BEEN ENCOUNTERED BY REASON OF THE FACT THAT THE LAWS OF MICHIGAN, WISCONSIN, AND MINNESOTA REQUIRE THAT A DEED CONVEYING LAND CAN NOT BE ACCEPTED FOR RECORDATION UNTIL ALL TAXES HAVE BEEN PAID AND A CERTIFICATE TO THAT EFFECT FROM THE TAX COLLECTOR IS PRESENTED TO THE RECORDER OR REGISTRAR WITH THE INSTRUMENT TO BE RECORDED.

AN EXAMPLE OF THE SITUATION CONFRONTING THE DEPARTMENT IS AS FOLLOWS:

UNDER DATE OF MARCH 15, 1929, THE NATIONAL FOREST RESERVATION COMMISSION AUTHORIZED THE ACQUISITION OF 120 ACRES OF LAND IN OSCODA COUNTY, MICHIGAN, OFFERED TO THE DEPARTMENT AT A PRICE OF $1.50 PER ACRE BY JOHN G. BARNSDALE. TITLE TO THE PROPERTY OFFERED HAS BEEN EXAMINED AND A CONDITIONAL APPROVAL BY THE ATTORNEY GENERAL, SUBJECT ONLY TO THE PAYMENT OF TAXES, HAS BEEN RECEIVED. THE DEED CONVEYING TITLE HAS BEEN DELIVERED TO THE UNITED STATES. MR. BARNSDALE HAS BEEN REQUESTED TO MAKE PAYMENT OF THE TAXES DUE, AMOUNTING TO $54.37. IT NOW APPEARS THAT HE IS UNABLE TO RAISE THIS AMOUNT AND REQUESTS THE DEPARTMENT TO PAY SAME AND DEDUCT THAT AMOUNT FROM THE PURCHASE PRICE OF $180.00, AND REMIT TO HIM THE BALANCE DUE. THE DEED TO THE UNITED STATES CAN NOT BE RECORDED UNDER THE LAWS OF MICHIGAN UNTIL THE TAXES HAVE BEEN PAID AND A CERTIFICATE ISSUED TO THAT EFFECT BY THE COLLECTOR OF TAXES.

SECTION 8 OF THE ACT OF MARCH 1, 1911, PROVIDES AS FOLLOWS:

"THAT THE SECRETARY OF AGRICULTURE MAY DO ALL THINGS NECESSARY TO SECURE SAFE TITLE IN THE UNITED STATES TO THE LANDS TO BE ACQUIRED UNDER THIS ACT, BUT NO PAYMENT SHALL BE MADE FOR SUCH LANDS UNTIL THE TITLE SHALL BE SATISFACTORY TO THE ATTORNEY GENERAL AND SHALL BE VESTED IN THE UNITED STATES.'

YOUR DECISION IS REQUESTED WHETHER IN CASES SUCH AS ABOVE CITED AND UNDER THE SAME CONDITIONS THE DEPARTMENT WOULD BE AUTHORIZED TO PAY THE TAXES DUE AFTER DELIVERY OF THE DEED TO THE UNITED STATES AND THE APPROVAL OF THE TITLE BY THE ATTORNEY GENERAL, DEDUCTING THE AMOUNT SO PAID FROM THE PURCHASE PRICE.

IN THE EXAMPLE GIVEN IN YOUR LETTER IT APPEARS THAT THE GRANTOR OF THE LAND TO BE ACQUIRED HAS CONSENTED TO THE DEDUCTION FROM THE PURCHASE PRICE OF THE AMOUNT OF THE TAXES DUE IN ORDER THAT PAYMENT MAY BE MADE OF THE TAXES, AND THAT HE MAY RECEIVE THE BALANCE OF THE PURCHASE PRICE. IN SUCH CASE THE PAYMENT OF THE ACCRUED TAXES BY THE UNITED STATES IS NOT A PAYMENT OF TAXES AS SUCH, BUT IS A PAYMENT NECESSARY TO OBTAIN A VALID FEE SIMPLE TITLE FREE OF ALL ENCUMBRANCES, AND IS IN REALITY A PART OF THE PURCHASE PRICE AGREED UPON BY THE GRANTOR AND THE UNITED STATES. LIENS SUCH AS TAXES, MORTGAGES, ETC., USUALLY ARE FOR ADJUSTMENT BETWEEN GRANTOR AND GRANTEE THROUGH DEBITS AGAINST THE PURCHASE PRICE WHEN PAYMENT OF THE CONSIDERATION MONEY TAKES PLACE. A MEMORANDUM OF SETTLEMENT SHOWING THE DEBITS AND CREDITS IS USUALLY MADE AT THE TIME FIXED FOR SETTLEMENT AND IS AGREED TO BY BOTH PARTIES SIGNING THE SAME. LIENS ARE SATISFIED ACCORDINGLY AND THE DEED PLACED ON RECORD; A FEW DAYS ARE THEN ALLOWED TO ELAPSE TO BRING DOWN THE RECORD TO SHOW THE DEED OF RECORD AND THAT NO ENCUMBRANCES HAVE BEEN ENTERED OF RECORD IN THE MEANTIME. IF THE RECORD THEN APPEARS CLEAR, PAYMENT TO THE GRANTOR OF THE BALANCE OF THE CONSIDERATION MONEY FOLLOWS FORTHWITH. THIS PROCEDURE SHOULD BE FOLLOWED SO CLOSELY AS LOCAL PRACTICES PERMIT.

THERE SHOULD APPEAR ON THE VOUCHER ON WHICH THE GRANTOR IS PAID A NOTATION SHOWING THE PURCHASE PRICE, THE AMOUNT DEDUCTED FOR TAXES, AND THE BALANCE DUE THE GRANTOR, AND THE DATE, AMOUNT, ETC., OF THE CHECK, INCLUDING THE DATE OF ITS DELIVERY. THE VOUCHER SHOULD BE ACCOMPANIED, ALSO, BY SUCH MEMORANDUM OF SETTLEMENT AS MAY HAVE BEEN MADE SHOWING THAT THE GRANTOR HAS APPROVED THE SETTLEMENT INCLUDING THE DEDUCTION OF THE AMOUNT DUE FOR TAXES, AND PROPER RECEIPTS FOR THE TAXES PAID BE ATTACHED.

YOU ARE ADVISED THAT IN OTHERWISE PROPER CASES SIMILAR TO THAT STATED IN YOUR LETTER THE DEPARTMENT IS AUTHORIZED TO PAY THE TAXES DUE WHEN THERE HAS BEEN DELIVERY OF THE DEED TO THE UNITED STATES, APPROVAL OF THE TITLE BY THE ATTORNEY GENERAL, AND THE GRANTOR APPEARS AT THE SETTLEMENT AND THEN OR OTHERWISE APPROVES THE DEBIT OF LIENS AGAINST THE PURCHASE PRICE, THE DEED BEING THEREUPON AT ONCE PLACED ON RECORD, AND ALL IN ACCORDANCE WITH THE PROCEDURE HEREIN OUTLINED. SEE DECISION OF MARCH 26, 1929, A- 26462.