Smith v. Carlson

On June 13, 1935, Marion County, Oregon, commenced a suit against Max Highstone and numerous other persons in the circuit court of the state of Oregon for Marion county to foreclose a certain certificate of delinquency issued on November 24, 1934, to said county for unpaid taxes. In this suit there were over 1,100 parties and parcels of real property involved, including the parcel of real estate owned by defendants Oscar Carlson and Hanna Carlson, which is the same parcel of real property described in plaintiff's complaint. Certain proceedings were had in such foreclosure suit, and on November 20, 1935, a judgment, decree and order of sale were entered. This judgment, decree and order of sale provided in part that the property owned by defendants should be sold by A.C. Burk, as sheriff of Marion county, Oregon, for the nonpayment of such delinquent taxes. On December 21, 1935, A.C. Burk, as sheriff of Marion county, Oregon, offered for sale the several parcels of real property referred to in said foreclosure suit, including the property owned by defendants. On said date plaintiff purchased the premises owned by defendants and asserts that he paid therefor the sum of $526.97, said sum being the amount of taxes due thereon. Thereafter, on December 26, 1935, the sheriff made, executed and delivered to plaintiff a deed conveying said premises. On January 1, 1936, plaintiff alleges that he went into possession of said premises and on that date leased the premises to a tenant by the name of Jack Fox, who paid rent thereon to plaintiff. At the time the case at bar came on for trial in the lower court, the first tenant had moved off the premises and a new tenant was occupying the property, and also paid rent to plaintiff, as plaintiff asserts. On February 21, 1936, plaintiff commenced this suit against defendants to quiet title to said premises.

The complaint contains the usual allegations in a suit to quiet title. On April 14, 1936, the defendants filed an answer which consisted of a general denial and also asked for the affirmative relief that the title to said premises be quieted in defendants. No tender of any taxes paid by plaintiff was made in such answer.

On November 2, 1936, defendants deposited with the clerk of the court the sum of $581 to compensate plaintiff for the amount he had paid in consideration of the deed. At the time of the trial, on March 15, 1937, defendants filed a supplemental answer and therein pleaded the tender of $581 made on November 2, 1936. At the time of the trial defendants urged a number of objections to and defects in the tax sale in the case of Marion County v. Highstone et al. Plaintiff contended that the tender of defendants was neither timely nor sufficient in amount, and for this reason defendants were not entitled to raise objections to such foreclosure suit. In addition to this plaintiff contended that the proceedings in the tax foreclosure suit were regular and a sufficient compliance with the statute pertaining thereto.

On May 18, 1937, the court entered a decree dismissing plaintiff's suit and granting to defendants the relief prayed for by them, that the title to said premises be quieted in defendants. No provision was made in such decree for the payment to plaintiff of the money paid into court by defendants. On June 15, 1937, the court entered an order permitting defendants to draw down the money paid into court. Plaintiff appeals from said judgment and decree. Plaintiff assigns that the court erred in making and entering a decree herein dismissing plaintiff's suit. Plaintiff submits that in a tax foreclosure suit there are only a judgment and order of sale, and the sheriff's deed is prima facie evidence of the regular entry of the sale and all antecedent proceedings, citing §§ 69-820 and 69-828, Oregon Code 1930.

Such a sheriff's deed is only prima facie evidence of the regularity of the sale and of the antecedent proceedings and may be attacked on account of invalidity shown in the record. There are several defects claimed by defendants in the foreclosure proceedings. It will be necessary to notice only a portion of them.

Defendants contend, among other things, that the decree and notice of sale are defective and void as to the defendants Oscar Carlson and Hanna Carlson. The decree of foreclosure as to defendants Oscar Carlson and Hanna Carlson, as shown by Exhibit 2, is as follows:

"Oscar Carlson Hanna Carlson, (Assess Current Roll), 62 acres in Sec. 25, Tp. 6, S.R. 1 W. of the Willamette Meridian, in Marion County, Oregon, more particularly described in Book 163, Page 572, and Book 171, Page 234, Record of Deeds for Marion County, Oregon; Page 3 of Delinquent Certificate in Book form numbered pages 1 to 49 inclusive, issued to Marion County, State of Oregon, November 24, 1934, for taxes 1930 and years prior thereto, years and amounts, to-wit: 1930, $116.88, with penalty $.70, with interest to November 24, 1934, $13.25, with 8% per annum interest from December 1, 1934, and the further sum of $2.50 as costs herein; * * *"

The notice of sale followed the description in the decree. The foreclosure decree against defendants is for the 1930 tax, "$116.88, with penalty $.70 with interest to November 24, 1934, $13.25, with 8 per cent per annum interest from December 1, 1934, and the further sum of $2.50 as costs herein." It will be noticed that the decree does not specify whether the 8 per cent per annum is to be computed on the $13.25 or upon the $116.88, or on both of said amounts. It provides for 8 per cent interest from December 1, 1934, but it does not specify for what time the 8 per cent would be computed, but presumably until paid. The decree is indefinite as to the amount that the defendants would be required to pay to redeem their property from the tax sale.

There was a cost bill in the possession of the court, but at the time of the entry of the decree it was not then verified. It was filed and verified on November 23, 1935, which contained the charge, "Advertising, (Cost of Publication of Summons in the Oregon Statesman, a Newspaper in Salem, Marion County, Oregon) $1826.00." There being over 1,100 parcels of property, if a charge of $2.50 is made for each parcel, it would amount to $2,750 for publishing a summons, the true charge for which was $1,826. The cost should have been apportioned to the defendants at about two thirds of $2.50, or $1.66.

Section 69-815, Oregon Code 1930, provides as follows:

"* * * In foreclosures, under the provisions of this act, the provisions of chapter 6 of title VII, as to costs and disbursements, shall be applicable; provided further, that in foreclosure cases instituted by a county in which all property delinquent is proceeded against as provided in this act, the court shall include in the judgment and decree of foreclosure against each several lot and tract the proportionate amount of the costs and disbursements properly taxable thereto, the amount of which shall be determined by the court prior to the entry of judgment and decree, upon cost bill filed by the county and served on any party or parties contesting the foreclosure proceedings, and such amount taxed by the court against each such several lot and tract shall be adjudged by the court and included in the judgment and decree."

The cost of publication was not prorated or a proportional division of the actual cost for defendants to pay ascertained. The costs of $2.50, taxed against the defendant taxpayers' property, were excessive. The foreclosure proceeding as to it is void: Walton v. Moore, 58 Or. 237, 240, 113 P. 58, 114 P. 105; Barber v. Newbegin, 154 Or. 55, 58 P.2d 1254. In the last cited case, at page 60, we find: "The addition of an unauthorized sum to the amount of taxes due renders the sale void." Citing Walton v. Moore, supra; Hodgkin v. Boswell, 63 Or. 589, 127 P. 985; Watson v. Jantzer, 151 Or. 1, 47 P.2d 239.

This rule is sustained by the great weight of authority in other jurisdictions. In a note in 97 A.L.R. 842, we read the following:

"According to the majority view, a tax sale at which property is sold for more than the amount of taxes, penalties, and costs, is invalid. The rule strictissimi juris being generally applied, the slightest variation is considered sufficient to invalidate the sale."

Statutes providing for sale of property for delinquent taxes are strictly construed and never enlarged beyond their actual terms. Omission to do what the law prescribes to give the sheriff authority to sell realty for delinquent taxes, whether arising from mistake of the court, his clerk or other officer, will defeat a tax sale: Peterson v. Graham, 131 Or. 290,279 P. 553, 282 P. 1084.

The testimony shows that the value of the land involved was between five and six thousand dollars. There is a great disparity between the value of the property and the amount paid for it by plaintiff. Therefore a court will scrutinize the proceedings under which the transfer is made: Watson v.Jantzer, supra. It was appropriate for the defendants to amend their pleadings so as to include a tender of the amount paid.

Our view as to the questions to which we have referred renders it unnecessary to consider the other questions submitted.

It was assigned that it was error for the court to permit the defendants to draw down the amount of the tender. This is a suit in equity and it would be inequitable for the defendants to retain the land and also the amount that the plaintiff paid for the purchase. InBagley v. Bloch, 83 Or. 607, 163 P. 425, the court passed on the validity of a tax foreclosure, declared it invalid and remanded the cause to the lower court with directions that the one claiming ownership as against the tax title purchaser pay the purchase price within 60 days, as a condition of the removal of the tax lien from his property.

The defendants should be required to pay the amount of the purchase price paid by the plaintiff, together with interest to date of such payment. For this purpose the cause will be remanded to the circuit court to require defendants to pay the amount paid by the tax title purchaser, with interest to date of such payment, within 60 days from the date of filing the mandate in the lower court, or that, in failing to make such payment, the decree will be reversed and one rendered in favor of the plaintiff.

With the modification suggested, the decree of the circuit court will be affirmed.

Under the circumstances of this case, following the lead of the circuit court, no costs will be awarded to either party.

RAND, C.J., and BAILEY and LUSK, JJ., concur.