Volume 8 - Opinions of Counsel SBEA No. 4
Taxes (enforcement) (conveyance in lieu of foreclosure) - Real Property Tax Law, § 1170:
A tax district may accept a conveyance of an interest in tax delinquent real property pursuant to section 1170 of the RPTL as satisfaction for unpaid taxes even prior to the commencement of an in rem foreclosure proceeding.
This opinion concerns section 1170 of the Real Property Tax Law (RPTL), which authorizes tax districts to accept a conveyance of an interest in real property “in lieu of prosecuting an action to foreclose a tax lien” in rem. The State Comptroller has said that the word “prosecuting” in this statute means the carrying on of an action already commenced (15 Op. State Compt. 394 (1959); Op. State Compt. 78-1016). We respectfully disagree with these Opinions; we believe that a tax district may accept conveyance of an interest in tax delinquent real property as satisfaction of a lien for those taxes even prior to the commencement of an in rem foreclosure proceeding.
Our research suggests that the New York rule and, indeed, the general rule, is that the word “prosecute” is a far more comprehensive term than is suggested by the Comptroller. For example, in construing the word “prosecute” in section 63(3) of the Executive Law, the Supreme Court, Suffolk County, said that “the ordinary meaning of the word ‘prosecute’ . . . connotes the beginning as well as the carrying on of a criminal action” (People v. Zara, 44 Misc.2d 698, 255 N.Y.S.2d 43, at 46-47 (1961)). In the context of section 50-i of the General Municipal Law, another New York court declared that “although the Legislature uses the words ‘prosecuted or maintained’ in paragraph one, it clearly means ‘commenced’.” (Colantuono v. Valley Central School District, 90 Misc.2d 918, 396 N.Y.S.2d 590, at 591 (Sup.Ct., Orange County, 1977)).
These New York cases are consistent with judicial interpretations elsewhere. A Massachusetts court, construing a tax abatement statute, declared that “the right to ‘prosecute’ a proceeding doubtless includes the right to ‘commence’ a proceeding [citation omitted]” (Boston Five Cents Savings Bank v. Assessors of Boston, 311 Mass. 415, 41 N.E.2d 283, at 286 (S.Jud.Ct., Mass., 1942)). A Virginia court has said that “In common and ordinary acceptation according to the definition given by lexicographers, and authorities generally, the word ‘prosecution’ means the institution and carrying on of a suit or proceeding . . .” (Sigmon v. Commonwealth of Virginia, 200 Va. 258, 105 S.E.2d 171, at 178 (S.Ct. Of App., 1958)). Finally, in comparing the words “instituted” and “prosecuted” in a state statute applicable to actions on promissory notes, the Alabama Court of Civil Appeals concluded that although the latter term has a broader meaning than the former, “The term ‘prosecute’. . . is defined to include commencement or institution of suits as well as the pursuit of the remedy thereafter” (Stewart v. Svetlay, 46 Ala.App. 601, 246 So.2d 670, at 672 (1971)).
We believe that this interpretation is consistent with the obvious purpose of section 1170. It is an axiom of statutory construction that “the meaning to be attached to a word or phrase is usually to be ascertained from the context, the nature of the subject treated of, and the purpose or intention of the Legislature . . .” (McKinney’s Consolidated Laws of New York Annotated, Book I, Statutes, § 97, p. 214 (1971)). Section 1170 of the RPTL is derived from former section 166-k of the Tax Law, which was enacted in 1939 as part of the “Uniform Delinquent Tax Enforcement Act” (L.1939, c.692). The purpose of that Act “was to afford municipalities a practicable and adequate remedy to foreclose on tax liens and to collect delinquent taxes by the sale and delivery of marketable titles following foreclosure” (Application of Wolford, n.o.r., 130 N.Y.S.2d 250, at 254 (Broome County Court, 1954)).
Based upon the foregoing it is our opinion that the word “prosecuting”, as used in section 1170 of the RPTL, comprehends either the commencement or carrying on of an in rem tax foreclosure proceeding or both. We do not believe that the statute either requires or implies that the proceeding must have been commenced {*} before the tax district may accept a conveyance of interest in the real property in lieu of foreclosure. Indeed, such a construction would result in a waste of municipal time and money (namely, the publication costs). If the purpose of tax collection statutes is to make the municipality whole for the delinquency, no purpose would be served by requiring the institution of proceedings against a parcel, when the parties have already agreed to a transfer of title to the premises in satisfaction of the unpaid tax.
September 9, 1983
{*} Note that the second paragraph of the form notice set forth in section 1124(1) of the RPTL provides that “the filing of such list [the list of parcels to be foreclosed] constitutes the commencement . . . of an action . . . to foreclose the tax liens”.