An actual or threatened sale of real property is not so coercive as one of personalty, since while personalty is actually seized the possession and enjoyment of real property is not immediately affected. The purchaser takes subject to a right of redemption, and even after the expiration of the redemption period he can obtain possession only by an action of ejectment. A tax sale of realty may, however, affect its value by creating a cloud on title. It is therefore held that taxes paid to prevent or remove a cloud on title may be recovered as paid under compulsion.1
1 Allowing a recovery: Kansas, etc., R. Co. v. Commrs., 1876, 16 Kan. 587; Atchison, etc., R. Co. v. Commrs., 1892, 47 Kan. 722; 28 Pac. 999; In re Edison Co., 1897, 22 App. Div. 371; 48 N. Y. Supp. 99, (aff. 1898, 155 N. Y. 699; 50 N. E. 1116); Allen v. Burlington, 1873, 45 Vt. 202. And see Mills' Guardian v. City of Hopkinsville, 1889, 11 Ky. Law Rep. 164; 11 S. W. 776; Tuttle v. Everett, 1875, 51 Miss. 27; 24 Am. Rep. 622; Bank of Commonwealth v. The Mayor, etc., of N. Y., 1780, 43 N. Y. 184. Contra: Railroad Co. v. Commrs., 1878, 98 U. S. 541; Raisler v. Mayor of Athens, 1880, 66 Ala. 194; City of Chicago v. Fidelity Bank, 1882, 11 111. App. 165; Smith v. Readfield, 1847, 27 Me. 145; Wilson v. Pelton, 1883, 40 Oh. St. 306; Dunnell Mfg. Co. v. Newell, 1886, 15 R. I. 233 ; 2 Atl. 766. See Conley v. City of Buffalo, 1909, 65 Misc. Rep. 100; 119 N. Y. Supp. 87.
In Tennessee, when the tax books are in the hands of the county trustee, they have the force of a judgment and execution, and a payment made under protest may be recovered. Bright v. Halloman, 1881, 7 Lea (75 Tenn.) 309. But, though the tax books are in the hands of the trustee, if the taxes are not yet delinquent, payment is held not compulsory. Cincinnati, etc., R. Co. v. Hamilton County, 1908, 120 Tenn. 1; 113 S. W. 361.
2 See Dunnell Mfg. Co. v. Newell, 1886, 15 R. I. 233; 2 Atl. 766.
Under what circumstances a sale for taxes constitutes a cloud on title is not entirely clear. It is generally said that if the invalidity of the tax or assessment appears on the face of the record - as for lack of jurisdiction or by reason of the unconstitutionality of a statute - the sale does not constitute a cloud on title.2 Said the Supreme Court of California, in Phelan v. San Francisco:3
"The payment of a tax to prevent a threatened sale of real property is not compulsory, unless the conveyance by the officer will have the effect to deprive the owner of some defense to the tax, or throw upon him the burden of showing its illegality. If the officer's want of authority will appear upon the face of the deed, or if the illegality of the proceedings will necessarily appear in any attempt by the purchaser to disturb the owner in the possession of the land, a payment to prevent such sale is not made under duress."
1 Gill v. City of Oakland, 1899, 124 Cal. 335; 57 Pac. 150; City of Denver v. Evans, 1906, 35 Colo. 490; 84 Pac. 65; Keehn v. McGilli-cuddy, 1898, 19 Ind. App. 427; 49 N. E. 609; Whitney v. City of Port Huron, 1891, 88 Mich. 268 ; 50 N. W. 316; 26 Am. St. Rep. 291 ; Amer. Bapt. Miss. Union v. Hastings, 1897, 67 Minn. 303; 69 N. W. 1078; Peyser v. Mayor of New York, 1877, 70 N. Y. 497; 26 Am. Rep. 624; Vaughn v. Village of Port Chester, 1892, 135 N. Y. 460; 32 N. E. 137; Galveston Gas Co. v. Galveston, 1881, 54 Tex. 287; Montgomery v. Cowlitz County, 1896, 14 Wash. 230; 44 Pac. 259. Contra: Lamborn v. County Commrs., 1877, 97 U. S. 181, (administering law of Kansas); Falls v. City of Cairo, 1871, 58 111. 403.
In Gill v. City of Oakland, supra, it was said that although the plaintiff might have obtained an injunction against the sale of his property, he also had the right to pay under protest and then to bring an action at law to recover the amount paid. But in Hoke v. City of Atlanta, 1899, 107 Ga. 416; 33 S. E. 412, restitution was denied on the ground that at the time the payment was made proceedings to enjoin the collection of the tax had been instituted, in which the plaintiff might have joined.
2 San Francisco, etc., R. Co. v. Dinwiddie, 1882, 8 Saw. 312; 13 Fed. 789, (administering law of California); Phelan v. San Francisco, 1898, 120 Cal. 1; 52 Pac. 38; Murphy v. City of Wilmington, 1880, 6 Houst. (Del.) 108; 22 Am. St. Rep. 345; Sears v. Marshall County, 1882, 59 la. 603; 13 N. W. 755; Detroit v. Martin, 1876, 34 Mich. 170; 22 Am. Rep. 512; Shane v. St. Paul, 1880, 26 Minn. 543; 6 N. W. 349; Fleetwood v. City of New York, 1849, 2 Sandf. (N. Y. Superior Ct.) 475.
31898, 120 Cal. 1,5; 52 Pac. 38.
But if this test is adopted, the rule that the plaintiff can recover only when the sale creates a cloud on title would seem to be too narrow, since the market value of property may be seriously affected by a sale that does not constitute a technical "cloud." This is recognized in the Michigan case of Whitney v. Port Huron,1 in which, referring to the statement in a previous case that a sale of land for the non-payment of an assessment laid under a statute which is unconstitutional and void would not create a cloud upon the owner's title, the court said:
"This may be good law when applied to proceedings under an unconstitutional enactment, which is no law, and is held to confer no rights upon any one, as all must be presumed to know that it is unconstitutional and void; but it cannot be applied to cases where the statute under which the proceedings to levy the tax are taken is constitutional, and where the illegality of the tax is claimed from irregularities or defects in the statutory proceedings. If it were so, it would require of the landowner a greater knowledge of the law than attorneys, or even courts, possess. For instance, in the present case, able attorneys for the defendant are claiming that the tax paid by the plaintiff was a legal one, and that all the proceedings in assessing it were lawful; yet at the same time they argue that, if it should be determined by this Court to be illegal for any reason, then the plaintiff's payment must be considered a voluntary one, and she cannot recover what she has paid, because she and every one else are presumed to know that the tax is void, and that a sale under it could convey no title, and therefore cast no cloud over her title. But the fact remains, as every one knows, that a tax deed or any other purported conveyance of land does cloud the title, and that it can never be sold or exchanged as readily, and seldom for as great a price, as when unincumbered, although it may be patent to the courts that such a deed or conveyance is void and of no consequence, as far as the holding of the title is concerned; and, in my opinion, the owner of the land has the right, in law and equity, to treat every such tax deed or other conveyance as a cloud upon his title, and to take such steps to get rid of it, or to prevent its issue or record, as the law authorizes, when the title is actually clouded, as defined by some of the authorities. A cloud upon a title is but an apparent defect in it. If the title, sole and absolute in fee, is really in the person moving against the cloud, the density of the cloud can make no difference in the right to have it removed. Anything of this kind that has a tendency, even in a slight degree, to cast doubt upon the owner's title, and to stand in the way of a full and free exercise of his ownership, is, in my judgment, a cloud upon his title which the law should recognize and remove."
1 1891, 88 Mich. 268, 271; 50 N. W. 316; 26 Am. St. Rep. 291. See also Keener, "Quasi-Contracts," pp. 424-5.