Bussen Realty Co. v. Benson

• Decision Date: 10 March 1942
• Docket Number: 37180
• Citation: 159 S.W.2d 813,349 Mo. 58
• Parties: Bussen Realty Company, a Corporation, Appellant, v. Willis W. Benson et al
• Court: Missouri Supreme Court

159 S.W.2d 813

349 Mo. 58

Bussen Realty Company, a Corporation, Appellant, v. Willis W. Benson et al

No. 37180

Supreme Court of Missouri

March 10, 1942

Appeal from Circuit Court of St. Louis County; Hon. John A Witthaus, Judge.

Reversed and remanded (with directions).

Grimm Mueller & Roberts for appellant.

(1) Inadequacy of consideration, if it be of so gross a nature as to amount in itself to conclusive and decisive evidence of fraud, is a ground for cancelling a transaction. Ellis v Powell, 117 S.W.2d 225; Mangold v. Bacon, 237 Mo. 496; Gill, Missouri Tax Titles, p. 87; Merrett v. Poulter, 96 Mo. 237; Walters v. Hermann, 99 Mo. 529; State ex rel. v. Elliott, 114 Mo.App. 562; Voights v. Hart, 226 S.W. 248; Miller v. Keaton, 236 Mo. 694; Elliott v. Penninger, 204 S.W. 188; State ex rel. Hickman v. Nathan, 229 S.W. 176; State ex rel. McKinney v. Davidson, 315 Mo. 549, 286 S.W. 355. (2) Under the undisputed documentary evidence, the admissions and stipulations of defendants, the uncontradicted evidence and all the evidence in the case, the court erred in dismissing plaintiff's petition, for the reason that such evidence established a gross and shocking inadequacy of consideration. Ellis v. Powell, 117 S.W.2d 225; Mangold v. Bacon, 237 Mo. 496; Guinan v. Donnell, 201 Mo. 173; Dougherty v. Gangloff, 239 Mo. 649; Van Graafieland v. Wright, 286 Mo. 414; Voights v. Hart, 285 Mo. 102; Gill, Missouri Tax Titles, pp. 19, 87; Mitchell v. Jones, 50 Mo. 438; Knoop v. Kelsey, 121 Mo. 642; Davis v. McCann, 143 Mo. 172. (3) Where real estate is sold at a tax sale for a price which is less than one per cent of the reasonable market value thereof, the consideration is so grossly inadequate as to shock the conscience, and to amount in itself to a fraud in law. Ellis v. Powell, 117 S.W.2d 225; Mangold v. Bacon, 237 Mo. 496; Voights v. Hart, 226 S.W. 248; Mitchell v. Jones, 50 Mo. 438; Davis v. McCann, 143 Mo. 172. (4) Where a tax sale is illegal and void the court will set the tax sale aside, remove the cloud from the title and quiet title to the property. Ellis v. Powell, 117 S.W.2d 225; Mangold v. Bacon, 237 Mo. 496; Gill, Missouri Tax Titles, p. 87; Merrett v. Poulter, 96 Mo. 237; Walters v. Hermann, 99 Mo. 890; State ex rel. v. Elliott, 114 Mo.App. 562; Voights v. Hart, 226 S.W. 248; Miller v. Keaton, 236 Mo. 694; Elliott v. Penninger, 204 S.W. 188; State ex rel. Hickman v. Nathan, 229 S.W. 176; State ex rel. McKinney v. Davidson, 315 Mo. 549, 286 S.W. 355. The court will enjoin the county collector from delivering a tax deed to the purchaser at a tax sale, or to any other person, where the tax sale is illegal and void. Ellis v. Powell, 117 S.W.2d 225; Mangold v. Bacon, 237 Mo. 496; Guinan v. Donnell, 201 Mo. 173; Dougherty v. Gangloff, 239 Mo. 649; Van Graafieland v. Wright, 286 Mo. 414; Voights v. Hart, 285 Mo. 102; Gill, Missouri Tax Titles, pp. 19, 87; Mitchell v. Jones, 50 Mo. 438; Knoop v. Kelsey, 121 Mo. 642; Davis v. McCann, 143 Mo. 172.

John A. Nolan, Wm. H. Tombrink and Joseph C. Schroeder for respondent.

(1) The dismissal of plaintiff's petition was proper, because plaintiff failed to produce competent evidence of its right to maintain the action -- the deed under which is claimed, and offered in evidence, being insufficient in law to pass title. Sanford v. Van Pelt, 314 Mo. 175, 282 S.W. l. c. 1028; 3 Pomeroy Equity Jur. (3 Ed.), sec. 1039; 1 Perry on Trusts (6 Ed.), secs. 157-159; W. J. Howey Co. v. Cole, 4 S.W.2d 861; Strother v. Barrow, 246 Mo. 241; H. V. Mott v. Morris, 249 Mo. 137; Lackland v. Walker, 151 Mo. 210. (2) The dismissal of the petition was proper, because no one attempted to exercise the right to redeem within the two year period provided by statute. Sec. 9956a, Acts of General Assembly, 1933, p. 437; Sec. 9960b, Act of General Assembly, 1933, p. 442. (3) Inadequacy of price alone, under Jones-Munger Act is not ground for setting aside sale in a proceeding instituted more than two years after sale was consummated, and, it appearing conclusively that no offer to redeem was made during the statutory two year period and the action was filed two years and seven months after the sale. Sec. 9956a, Acts of General Assembly, 1933, p. 437; Sec. 9960b, Acts of General Assembly, 1933, p. 492.

Douglas, J. Tipton, Clark, Hays, JJ., and Gantt, C. J., concur; Leedy, J., dissents in separate opinion; Ellison, J., dissents and concurs in opinion of Leedy, J.

OPINION

DOUGLAS

The plaintiff corporation, a company to hold the real estate belonging to the Bussen family, has sued in equity to set aside a tax sale of a parcel of its real estate situated in St. Louis County and to enjoin the collector from delivering a deed for such parcel to the purchaser at such sale.

The land in question was quit claimed to plaintiff in 1931. The 1929 taxes had not been paid. In November, 1934, the collector, for a consideration of $ 11, sold the land because of such unpaid 1929 taxes, then delinquent in the amount of $ 10.59, and issued the usual tax sale certificate to the purchaser. The land comprised seven and a fraction acres, unimproved but suitable for subdivision. The petition alleges its reasonable value to be $ 2000; the evidence showed its value to be as high as $ 4500. The land was not redeemed within the two-year period of redemption. However, no deed was executed by the collector to the purchaser because of the threat of this suit and its subsequent institution.

There is no question about the regularity of the proceedings; it is agreed that the statutes were followed in every respect. The court below dismissed plaintiff's petition and it has appealed.

The land was sold under the provisions of the Jones-Munger tax law which law was then applicable to St. Louis County. [Laws 1933, pp. 425-449, Sec. 11117 et seq., R. S. 1939.] This law adopted in 1933 replaced the law relating to delinquent taxes which had been in effect since 1877. [Laws 1877, p. 384.]

The one and only question presented and for decision is whether relief should be granted solely because of the inadequate consideration. The amount was less than one per cent of the lowest value placed on the real estate. Under our decisions involving the then existing tax laws, this amount is so grossly inadequate as of itself alone to amount to fraud. But in view of the changes brought about by the Jones-Munger law should we now set aside a tax sale on the sole ground of the inadequacy of the consideration? Is such a reason still applicable?

Let us first review the development of this rule in tax cases. Tax sales have always been carefully scrutinized by this court. More than one hundred years ago this court said a tax sale belonged with those proceedings which are summary and ex parte and that it "is against common right and against the law." It pointed out that tax sales must be "strictly pursued and also strictly proved" because otherwise a man may be deprived of his property contrary to the constitution. [Morton v. Reeds, 6 Mo. 64.]

Later, in another appeal of the same case, we first touched on the element of inadequacy of consideration at a tax sale. The tax law then was somewhat similar to the present Jones-Munger law. It provided for a sale by the collector who issued a certificate to the purchaser. During the two years following the sale the owner could redeem but if he failed to do so then the collector deeded the property to the holder of the certificate. In that case the holder failed to record his certificate within the proper time. This court held such failure made the proceeding void. It refused to discuss its reasons, saying: "He who wishes to obtain an estate worth thousands, for less than ten dollars, under and by virtue of the law, is not to be permitted to ask why he should be required to do this or to do that. It is an answer, that it is required by law. Ita lex scripta est. He claims by the law, then by that law let his pretensions be judged." [Reeds v. Morton, 9 Mo. 877.]

In cases involving judicial sales in the usual civil cases this court at first refused to upset such sales on the ground of inadequacy of price alone. But later on we made an exception where we found the inadequacy to be gross and shocking. We said in Phillips v. Stewart, 59 Mo. 491: "It is well settled that inadequacy of price, unaccompanied with fraud or unfair dealing, is not a distinct ground for relief in equity jurisprudence. There are sometimes cases of such unconscionableness or inadequacy in a bargain, that they demonstrate some gross imposition or some undue influence, and there the interference is placed upon the satisfactory ground of fraud. . . . But where the sale is open and unaffected, the rule undoubtedly is, that mere inadequacy is not sufficient, unless it be so gross as of itself to prove fraud or imposition on the part of the purchaser." (Our italics.)

The tax laws in the meantime had been changed. In 1877 the provision for summary tax proceedings were repealed and the regular course of civil procedure was followed in foreclosing the tax lien. There was provided a suit for taxes, judgment and sale by the sheriff under execution as in other civil suits.

Thereafter, in a suit to set aside the tax sale, we said: "Mere inadequacy of price is insufficient to set aside a judicial sale. There must be some fraud in the transaction as a general rule, where the sale is open and no improper practices are shown on the part of the purchaser, unless the inadequacy is so gross as per se to amount to prove fraud in one of its numerous manifestations on the part of the purchaser." [Walters v. Hermann, 99 Mo. 529, 12 S.W. 890.]

A few years later in a suit to set aside an execution sale and deed on a judgment on a note and for foreclosure of a mortgage this...