Memorandom on property tax

 

Memorandum of Law

Re: Unlawfulness of State Property Seizure for Tax Delinquency under Organic Law and Equity

I. Introduction

This memorandum establishes the argument that property forfeitures resulting from unpaid ad valorem taxes—particularly when no just compensation is provided or substantive due process is absent—are unlawful and constitutionally defective. The arbitrary deprivation of land in this manner contradicts the Northwest Ordinance of 1787—an organic law of the United States—as well as the Fifth and Fourteenth Amendments of the U.S. Constitution. Additionally, under fundamental equity doctrines, such forfeitures amount to unconscionable takings that offend longstanding maxims of fairness, proportionality, and fundamental justice.

II. Legal Framework

A. The Northwest Ordinance as Organic Law

The Northwest Ordinance of 1787, acknowledged as an organic law within 1 U.S.C. § 1, explicitly affirms private property protections.

Article II states: > "No man shall be deprived of his liberty or property but by the judgment of his peers or the law of the land..."

Here, the phrase "law of the land" prefigures due process protections later enshrined in the Constitution, implying that property cannot be lawfully seized absent proper adjudication.

Additionally, Article III states: > "Religion, morality, and knowledge being necessary... schools and the means of education shall forever be encouraged. The utmost good faith shall always be observed... and laws founded in justice and humanity shall from time to time be made for preserving peace and property."

This affirms that any governmental action regarding property must be grounded in justice, humanity, and good faith—not arbitrary seizure through taxation without full due process and compensation.

B. Constitutional Protections – Fifth & Fourteenth Amendments

The Fifth Amendment guarantees: > "...nor shall private property be taken for public use, without just compensation."

The Fourteenth Amendment extends this principle to state action: > "...nor shall any State deprive any person of life, liberty, or property, without due process of law..."

Thus, governmental seizure of property based purely on tax delinquency—without proportional safeguards or equitable remedy—violates these fundamental protections.

III. Case Law Supporting the Argument

1. Tyler v. Hennepin County (598 U.S. ___, 2023) The Supreme Court struck down Minnesota’s retention of surplus proceeds from tax foreclosures as an unconstitutional taking, stating: > “A taxpayer may owe the government money, but that does not entitle the government to take more than what is due.”

This reinforces the argument that excessive forfeitures violate the Takings Clause. If retention of surplus proceeds is unconstitutional, then complete seizure of land without full compensation is even more unlawful.

2. Nelson v. City of New York (352 U.S. 103, 1956) The Supreme Court held that surplus proceeds from tax foreclosure sales belong to the original owner unless expressly claimed by government statute—highlighting that forfeiture beyond tax debt must be justified by proper legal process.

3. Horne v. Department of Agriculture (576 U.S. 350, 2015) This case reaffirmed that physical takings require just compensation, reinforcing the argument that real property cannot be appropriated arbitrarily.

These cases collectively support the position that excessive tax foreclosures contravene constitutional protections, especially when government seizes more than what is strictly owed.

IV. Unlawfulness of Tax-Based Property Seizures

Modern tax forfeiture regimes frequently result in disproportionate property loss for minor tax delinquencies—often eliminating homeowners' entire equity. This directly contradicts due process, the spirit of the Northwest Ordinance, and equitable principles of fairness.

Considerations:

• Homeowners can lose real estate worth hundreds of thousands of dollars over minor unpaid tax debts.
• The state often retains excess proceeds from tax sales, unjustly profiting from forfeitures.
• Procedural safeguards are minimal, diminishing substantive due process protections.

V. Equitable Analysis – Why Tax Forfeitures Violate Fundamental Justice

Under core principles of equity jurisprudence, excessive property forfeiture falls outside lawful bounds:

1. "Equity abhors a forfeiture."

• The loss of an entire estate over minor delinquency is disproportionate and unconscionable.

2. "Equity regards as done what ought to be done."

• The rightful owner retains an equitable claim even when legal title is stripped via taxation.

3. "Unjust enrichment is impermissible."

• States unlawfully profit when they seize property and retain surplus equity beyond owed taxes.

Constructive Trust Argument:

• Courts applying equitable remedies could impose a constructive trust on improperly seized property, requiring restitution for surplus value lost in tax sales.

VI. Historical Foundations – Allodial Title & Land Patents

American legal tradition originally recognized allodial title, meaning land ownership was absolute and free from feudal obligations—including taxation.

Land patents issued under early U.S. governance conferred perpetual ownership, reinforcing that private land was not inherently subject to forfeiture by government decree.

The Northwest Ordinance’s property protections align with this concept: government cannot arbitrarily strip land from rightful owners.

VII. Proposed Remedy

To align modern tax law with constitutional and equitable principles, a structured remedy should be pursued:

1.Mandatory Surplus Refunds:

o   Ensure excess value beyond tax debt is returned to dispossessed property owners.

2.Proportional Compensation for Forfeiture:

o   If forfeiture occurs, the owner must receive the full fair market value of the seized property.

3.Constructive Trust & Judicial Oversight:

o   Courts should intervene to prevent unjust enrichment and protect fundamental property rights.

4.Legislative Reform for Due Process:

o   Statutory safeguards requiring equitable balancing before any governmental property takings.

5.Equitable Tracing of Mortgage-Backed Assets and Securities:

o   Ensure accountability for all devised, demised, derived, or otherwise created financial instruments linked to mortgage obligations and asset transfers, preventing hidden exploitation within securitization structures.

6.Restoration of All Allodial Land Warrants and Patents:

o   Recognize and uphold the validity of all allodial land patents ever issued, ensuring their protection for forever, following the original language of the land patent to reaffirm private property sovereignty beyond statutory encroachments.

VIII. Conclusion

State-driven forfeitures of private property based on tax delinquency violate organic law, constitutional guarantees, and the core principles of equity. This memorandum establishes that:

• The Northwest Ordinance prohibits arbitrary property seizure.
• The Fifth and Fourteenth Amendments require just compensation and due process.
• Supreme Court precedents affirm excessive tax forfeitures are unconstitutional.
• Equity abhors forfeiture and demands fundamental fairness.
• Legislative and judicial action are needed to rectify unlawful tax seizures.

Accordingly, property takings via tax foreclosure must undergo strict scrutiny, ensuring fundamental fairness and equitable restitution.

Respectfully submitted, Prepared by: [Insert Name] Date: [Insert Date]