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Volume 7 - Opinions of Counsel SBEA No. 75

Opinions of Counsel index

Correction of errors (refund) (mistaken payment by non-owner) - Real Property Tax Law, §§ 504, 556:

A person who mistakenly pays taxes on another’s property is not entitled to an administrative refund of taxes. That person’s remedy, if any, is against the owner of the parcel.

We have been asked whether an administrative refund may be obtained where a person pays taxes on someone else’s property. Two parcels were assessed in the name of a taxpayer, who owned only one of them. He paid the tax bill for the parcel which he did not own, and he has asked for a refund of this payment. Taxes levied against his own parcel remain unpaid for the 1978-79 school year and the 1979 county/town year. It has been suggested that the taxpayer is entitled to a refund, based upon opinions of the State Comptroller (3 Op. State Compt. 320 (1947); 15 id. 417 (1959); Op. State Compt. 77-318) and the judicial decision in Loconti v. City of Utica, 61 Misc.2d 855, 306 N.Y.S.2d 772 (S.Ct., Oneida Co., 1969).

It is our opinion that no refund is available under these circumstances. We believe the authorities cited are inapposite. The first two administrative opinions were reversed by the Comptroller in a subsequent Opinion (see, 16 Op. St. Compt. 162 (1960)); the Loconti case is distinguishable on its facts and we respectfully disagree with Op.State Compt. 77-318 which relies largely on Loconti for its conclusions.

Provision for the administrative refund of real property taxes paid is set forth in section 556 and subdivision 4 of section 556-a of the Real Property Tax Law. The former applies to refunds for “clerical errors” and “unlawful entries”, the latter to those for “errors in essential fact”, as those terms are defined in section 550. An examination of these definitions reveals that not one applies to an assessment of taxable real property to the wrong owner.

Subdivision 4 of section 504 of the Real Property Tax Law provides that “an error . . . in entering . . . the name of [an] owner [on an assessment roll] . . . shall not prevent the levy, collection and enforcement of the payment of the taxes thereon if the parcel can be identified and located with reasonable certainty”. Therefore, unless a parcel description is erroneous in other substantial aspects, a mere incorrect entry of the name of the owner will not invalidate an assessment or the tax levied thereon (see, Slud v. Guild Properties, 6 Misc.2d 188, 119 N.Y.S.2d 347 (S.Ct., Sullivan Co., 1952), aff’d 280 App.Div. 1018, 116 N.Y.S.2d 748 (3d Dept., 1952), rearg. den. 281 App.Div. 776, 117 N.Y.S.2d 920 (3d Dept., 1953)).

This is consistent with the “in rem” concept underlying New York’s system of taxing property (Real Property Tax Law, § 304), which places the burden of the tax on the property itself, and makes the name of the person to whom it is assessed secondary and merely “for the purpose of identification” (Smith v. Russell, 172 App.Div. 793, 159 N.Y.S. 169, at 172 (4th Dept., 1916)). A name would only be relevant for the purpose of imposing a personal liability upon the “owner” listed on the roll (see, Real Property Tax Law, § 926; Haight v. Mayor, 99 N.Y. 280, 1 N.E. 883 (1885)).

Acknowledging that there is no statutory authority for an administrative refund of taxes, is there some common law judicial relief obtainable against the municipal corporation? We think not. We are referred to the decision in Loconti v. City of Utica, supra. The Loconti case is clearly distinguishable on its facts from those presented and those which were the subject of Op.State Compt. 77-318. In Loconti, the property was not liable for the tax; in this instance and in the case reviewed in Op.State Compt. 77-318, the property was liable but the person who paid the tax was not.

In the Loconti case, the State of New York acquired title to the payer’s real property subsequent to taxable status date but prior to the lien date for city taxes. Where the State or Federal government acquires title to real property before lien date, the property is immune from taxation and no liability may be imposed thereon (see, 4 Op.Counsel SBEA No. 60). Thus, in Loconti, the city was not entitled to receive taxes on the property. Under those circumstances, a case can be made out for a “mutual mistake of fact”, as the court concluded.

The same circumstances are not present in this case or in Op.State Compt. 77-318. In the latter, a city acquired title to certain real property subsequent to taxable status date. A party other than the city paid the next school tax bill. However, the immunity rule cited above with respect to State and Federal acquisitions does not apply to transfers to municipal corporations (see, e.g., 2 Op.Counsel SBEA No. 33), and, therefore, the property remained liable to taxation and the collector was entitled to accept payment of the bill. Similarly, the property in this case was liable for those taxes, even if the payor was not personally liable.

In sum, the tax was valid, the collector was entitled to accept payment and under no duty to ask if the person paying was liable therefor, and the payer’s option, if any, is to seek reimbursement from the true owner. (Whether any recovery would be available against the true owner is dubious at best. See, Hubbard v. Blanchard, 113 App.Div. 789, 99 N.Y.S. 262 (2d Dept., 1906), where the court reversed a judgment in favor of the plaintiff who was seeking recovery of a paving assessment he had erroneously paid on defendant’s property. See also, Nat’l. Bank of Ballston Spa v. Board of Supervisors, 106 N.Y. 488, 13 N.E. 439 (1887); Koehler v. Hughes, 4 Misc. 236, 24 N.Y.S. 760 (S.Ct., N.Y. Co., 1893).)

Very briefly, we note that the other opinions of the Comptroller cited (3 Op.State Compt. 320 and 15 id. 417) have long since been overruled by the Comptroller himself. In 16 Op.State Compt. 162 (1960) (see also, 17 id. 400 (1961)), the Comptroller stated that after reviewing those earlier opinions “we are now convinced that both. . .are, from a legal point of view, incorrect. And, from a practical point of view, they are illogical and unreasonable.” As support for this conclusion, the Comptroller relied upon the following:

(1) that a tax collector is under no obligation to determine if the person offering payment is the owner of the real property, an agent of the owner, or someone else legally liable for that payment; and

(2) that a refund of a tax, due and payable, under these circumstances would have an extremely unsettling effect upon public records (e.g., on records of title and tax liens).

In regard to this second point, the Comptroller stated:

Such refund would necessarily require the revival of the previously discharged lien or the imposition of the new lien. In the case of the latter, the owner of the parcel, who may well have relied on the recorded payment, would find himself faced with a new tax, without notice of [sic] the opportunity to be heard. On the other hand, an attempted revival of the prior lien would affect title searchers, an effect which operates against the very integrity of the public records. (Emphasis added).

November 15, 1979