Arnold v. Carafides, 143

• Citation: 282 Md. 375,384 A.2d 729
• Decision Date: 07 April 1978
• Docket Number: No. 143,143
• Parties: Ellen P. ARNOLD v. Evangelos P. CARAFIDES.
• Court: Court of Appeals of Maryland

Page 375

282 Md. 375

384 A.2d 729

Ellen P. ARNOLD v. Evangelos P. CARAFIDES.

No. 143.

Court of Appeals of Maryland.

April 7, 1978.

Kevin M. O'Connell, Rockville (Betts, Clogg & Murdock, Rockville, on brief), for appellant.

Elbert R. Shore, Jr., Rockville (John T. Bell, Frank S. Cornelius, Bell & Cornelius and Alfred L. Rehder, Rockville, on brief), for appellee.

Argued before MURPHY, C.J., and SMITH, DIGGES, LEVINE, ELDRIDGE, ORTH, and COLE, JJ.

SMITH, Judge.

We shall here hold that a motion to set aside a tax sale decree made out a case of constructive fraud. Accordingly, we shall be obliged to reverse a refusal to reopen a proceeding brought by appellee, Evangelos P. Carafides (Carafides), under Maryland's tax sale statute, Maryland Code (1957) Art. 81, §§ 70-123, to foreclose the equity of redemption of appellant, Ellen P. Arnold (Mrs. Arnold), in certain land of hers in Montgomery County. ¹

The Law

Maryland Rule BS40 provides:

"The procedure for tax sales, including provisions for the order of publication, shall be in accordance with Code, Article 81, Sections 70 to 123."

Section 97 provides that the sections of the subtitle relative to foreclosure of rights of redemption by equity suits are to "be liberally construed as remedial legislation to encourage the foreclosure of rights of redemption by suits in the equity courts and for the decreeing of marketable titles to property sold by the collector." This was said by our predecessors in Thomas v. Kolker, 195 Md. 470, 475, 73 A.2d 886, 888 (1950), to be a declaration by the General Assembly "that the public interest in marketable titles to property purchased at tax sales outweighs considerations of individual hardship in every case, except upon a showing of lack of jurisdiction or fraud in the conduct of the foreclosure."

Under § 100 a suit to foreclose the equity of redemption of the owners of land sold at tax sales may be filed "at any time after the expiration of one year and a day from the date of sale in any of the counties" of this State, but "within two years of the date of the certificate of sale . . .." The proceeding is to be brought "in the equity court of the county in which the land is located . . .." § 102. Section 103 governs parties to the proceeding. The plaintiff is to be the holder of the certificate of sale. The defendants are to include the owner of the land "as disclosed by a search of the land records of the county, of the records of the register of wills of the county, and of the records of any court of law or equity of the county." In addition, if the property is subject to a ground rent, "the parties defendant shall be the owner of the fee-simple title and the owner of the leasehold title as disclosed by a search" of the same records. Any mortgagee of the land or his assignee of record "named as such in any unreleased mortgage recorded among the land records of the county" is to be included among the parties defendant.

Service of notice is governed by § 106. A subpoena is to be issued "for all parties defendant named in the said bill who are residents of this State and upon such bill the same process by summons, notice or otherwise shall be had to procure the answer and appearance of all such defendants as is had in other cases in equity," except as otherwise provided in the subtitle relative to tax sales. A notice by publication is required by § 107 to be issued at the same time the subpoena is issued under § 106. That notice is to be "directed to all parties defendant, known and unknown, naming the known parties defendant and including the unknown parties defendant and all other persons having an interest in the property by the designations" for which provision has previously been made. It is to "issue in the manner now, or which may be hereafter prescribed by law, for the issuance of an order of publication against nonresidents," except as otherwise provided in the subtitle relative to tax sales, "and shall be published and the publication thereof proved as in cases of orders of publication against nonresidents." In Hauver v. Dorsey, 228 Md. 499, 502, 180 A.2d 475, 476 (1962), our predecessors said they thought "it was the purpose and effect of the language of Art. 81, sec. 107 . . . to adopt whatever is the current legal procedure in regard to publication against nonresidents." Rule 105 as it then existed was held applicable in that case.

Rule 105 concerns service of process where there is in rem or quasi in rem jurisdiction. In Sanchez v. James, 209 Md. 266, 270, 120 A.2d 836, 837 (1956), this Court said, "The law is established that tax foreclosure proceedings are in rem and not in personam." Rule 105 b pertains to publication when the whereabouts of a defendant are unknown. In that case the court may direct service of process by publication if "the plaintiff files a statement under oath or produces other sworn evidence setting forth a circumstantial account of the efforts made to locate the defendant which satisfies the court that reasonable efforts to locate the defendant have been made in good faith . . .." Rule 111 provides that in any action in which rights relating to land are involved a defendant may be proceeded against pursuant to Rule 105 or, if his whereabouts are unknown, in lieu of the methods in Rule 105 b "the court may order the sheriff to set up a copy of the order of publication upon the land." Upon proof "of the fact and date of posting . . . made by certificate of the sheriff filed in the proceeding" such service of process "shall be in all respects as effectual to bind the land and to affect the title thereto as if personal service had been made upon such defendant," with an exception not here pertinent.

Under § 113 no proceeding may be brought to reopen any final decree entered in a tax sale case such as this "except on the ground of lack of jurisdiction or fraud in the conduct of the proceedings to foreclose," with the proviso "that no reopening of any final decree on the ground of constructive fraud in the conduct of the proceedings to foreclose shall be entertained unless the application therefor . . . is made within one year from the date of the final decree."

This Case

Carafides purchased this and another piece of property at a tax sale in Montgomery County on June 10, 1974. Within the time limited by § 100, he filed his bill of complaint to foreclose the equity of redemption of Mrs. Arnold and of the owner of the other parcel. ² In accordance with § 102 the bill of complaint contains a description of the land in question "in substantially the same form as the description appearing on the collector's tax roll" with the addition, however, of a reference to the liber and folio at which the deed to Mrs. Arnold is recorded. The address of Mrs. Arnold was listed in the bill of complaint as "unknown." ³ An order of publication was passed, purportedly in the form required by § 107. However, it listed the parties defendant only as "Crispin Corporation et al.," Crispin being the owner of the other parcel of land in the proceeding. ⁴ The order was published in a local newspaper. No attempt was made at that time to proceed against Mrs. Arnold by publication. No subpoena was ever issued for her.

Carafides sought a decree pro confesso against Mrs. Arnold. The circuit judge to whom the petition was submitted "decline(d) to enter the 'decree pro confesso' submitted" because, among other reasons, service upon Mrs. Arnold "appear(ed) to be defective," referring to §§ 106 and 107 and Rule 105. Counsel for Carafides then submitted an affidavit which reads in its entirety:

"AFFIDAVIT PURSUANT TO MARYLAND RULE 105

"I HEREBY CERTIFY that I have personal knowledge of the facts contained herein and am competent to testify concerning the same.

"I am counsel for the Plaintiff in the above entitled case; that I have made reasonable and diligent efforts to identify and locate the Defendant, Ellen P. Arnold, by investigation through local directories and by sending the attached letter, both by first and third class mail, to her last known address as it appears in the County Assessments Office. The letter was returned marked 'Addressee Unknown'; that I know of no person who might reasonably have information as to the Defendant's whereabouts.

"I DO SOLEMNLY declare and affirm, under penalties of perjury, that the contents of the aforegoing Affidavit are true and correct."

The address to which reference was made was "5530 Wisconsin Avenue, Chevy Chase, Maryland 20015." He appended to his affidavit a copy of an envelope, returned by the post office, which had been sent to Mrs. Arnold at that address under date of March 18, 1976, together with copy of its contents. He then made a motion "pursuant to Maryland Rule 111 . . . for leave to proceed by publication against Ellen P. Arnold, Defendant, in accordance with Maryland Rule 105 on grounds that this is an action in which rights relating to land are involved . . . and the whereabouts of Defendant Ellen P. Arnold, are unknown." An order was then passed directing "that process be served on the Defendant, Ellen P. Arnold" by the sheriff's "causing a copy of the Order of Publication, Bill of Complaint to Foreclose Right of Redemption, and Summons to be set up upon the land" here involved. This was done. On August 24, 1976, a decree was entered foreclosing the equity of redemption of Mrs. Arnold.

On March 22, 1977, Mrs. Arnold filed a petition to vacate the decree. She alleged, among other things, that the deed to her of the property in question had been prepared by the attorneys representing her in the petition to vacate; that the name and address of that law firm appeared on the deed; that her "address . . . on the tax records of ...