Collector of Revenue of Jackson County v. Parcels of Land Encumbered with Delinquent Taxes

• Decision Date: 11 February 1952
• Docket Number: No. 41757,41757
• Citation: 362 Mo. 1054,247 S.W.2d 83
• Parties: COLLECTOR OF REVENUE OF JACKSON COUNTY v. PARCELS OF LAND ENCUMBERED WITH DELINQUENT TAXES et al.
• Court: Missouri Supreme Court

Page 83

247 S.W.2d 83

362 Mo. 1054

COLLECTOR OF REVENUE OF JACKSON COUNTY v. PARCELS OF LAND ENCUMBERED WITH DELINQUENT TAXES et al.

No. 41757.

Supreme Court of Missouri, En Banc.

Feb. 11, 1952.

Rehearing Denied March 10, 1952.

Harry Howard, Kansas City, for M. T. Williams et al.

Richard K. Phelphs, Kansas City, for Collector of Revenue for Jackson County, Missouri.

Arthur N. Adams, Jr., Kansas City, for Land Trust of Jackson County. David M. Proctor, Maurice Benson, Kansas City (Arthur N. Adams, Jr., Kansas City, of counsel), for Kansas City.

Blatchford Downing, Robert S. Eastin and Caldwell, Downing, Noble & Garrity, Kansas City, for School Dist. of Kansas City.

ELLISON, Presiding Judge.

Originally this was Land Tax Suit No. 3 brought by the Collector of Revenue of Jackson County under the 'Land Tax Collection Law,' R.S.1949, Secs. 141.210-810, V.A.M.S. Mo.R.S.A. Secs. 11201.1-53; Laws Mo.1943, pp. 1029-1062, to foreclose the lien on a great number of parcels of land in that county for state, school, county and city taxes delinquent for seventeen years, 1927-1944. Among these was a tract described as Lot 7, Resurvey of Block 1, Chase's Subdivision, an addition to Kansas City, Missouri, upon which was a twelve-apartment building located at 13th Street and Brooklyn Avenue. The title stood in the name of C. M. Oxley, as last known record owner.

After due service upon her by mail and publication, as provided in Secs. 141.410-460, Mo.R.S.A. Secs. 11201.15-19, the cause was heard in the Jackson County circuit court, Division I, and a judgment of foreclosure rendered against her by default on January 12, 1946, under Secs. 141.480 and 141.500, Mo.R.S.A. Secs. 11201.23 and 11201.24, finding the taxes and costs due totaled $23,492.29, and that they constituted a lien on the lot, and ordering a foreclosure thereof by public sale. The defendant Oxley continued in default without filing an answer, motion for rehearing or appeal throughout the waiting period of six months allowed her by Sec. 141.520, Mo.R.S.A. Sec. 11201.25. On October 15, 1946, after three ineffectual efforts to sell the tract at public auction for the total amount due in the sum of $23,492.29 as aforesaid, the same was struck off and sold by the sheriff for that amount under Sec. 141.560, Mo.R.S.A. Sec. 11201.27 to the 'Land Trust' created by Secs. 141.700 and 141.720 of said Land Tax Collection Act. Mo.R.S.A. Secs. 11201.36, 11201.37. He so reported in his report of sale.

Over three months later, on or about January 20, 1947, the representative of a real estate corporation, acting in behalf of a prospective purchaser, M. J. Sullivan, approached the County Collector's office and the delinquent tax attorney to ascertain whether the tract could be redeemed at a desirable price. The owner, C. M. Oxley, had agreed to accept $2,500 for her title. The County Collector's attorney 'o.k.'ed' the petition to reduce the delinquent tax indebtedness of $23,492.29 for which the tract had been sold by about two-thirds to $7,845.60, of which $2,845.60 would go to Kansas City and $5,000 to Jackson County and the School District.

The county court of Jackson County approved that compromise. And the minutes of the Kansas City Board of Delinquent Tax Adjustment recited that the Board would accept a settlement of the City's part of the taxes for the amount named above. The compromise also was agreeable to the prospective purchaser M. J. Sullivan. So the real estate corporation acting for Sullivan on or about January 21, 1947, had its bookkeeper M. T. Williams, as straw party or trustee for Sullivan and his heirs, take a deed to the lot in his own name from the delinquent taxpayer C. M. Oxley and her husband, at her price of $2,500.

Williams by attorney then filed in the circuit court three days later on January 24, 1947, a motion to vacate the previous default judgment of foreclosure of the lot entered January 12, 1946, and the sale thereof at auction on October 15, 1945, to the Land Trust, which, thereafter held the title under Secs. 141.700, 141.750, Mo.R.S.A. Sec. 11201.36, 11201.40. The grounds alleged in Williams' motion were: (1) that he had at all times been desirous of paying the delinquent taxes against the lot, but was delayed in doing so on account of certain flaws in the title which he deemed it necessary and expedient to correct before making such redemption; (2) that he (Williams) was now ready and willing to pay all City, County, School and State taxes against the lot at a figure satisfactory to the City, County, School and State; that it had not passed into the hands or ownership of any other person since the purchase thereof by the Land Trust; and 'that said Land Trust is agreeable to redemption of the land being made from said sale.' (Italics ours.)

Most of this motion was misleading or unsound in fact. It did not clearly disclose that its real object was to carry out an arrangement already made by a real estate speculator, Sullivan, and the county court whereby the delinqnent taxes would be cut two-thirds. Neither was it true that Williams had 'at all times' been desirous of paying the taxes on the lot, but had delayed doing so because of flaws in the title. He had held the title for only two or three days, and there were no flaws in it so far as this record shows. Beyond that, the statement in the motion that the Land Trust was agreeable to the redemption of the lot from the foreclosure sale was not true. The Land Trust was not even notified of the filing of Williams' motion to vacate and redeem the lot from the foreclosure judgment of January 12, 1946, and the execution sale under it to the Land Trust on October 15, 1946.

The motion was taken up by the circuit court instanter (January 24, 1947) in the absence of the court reporter and without notice to any adverse party, and was sustained on the same day and the previous default foreclosure judgment and sale were vacated and set aside. When the sheriff's report of sale of the various delinquent lands was filed on February 5, 1947, it still contained a recital of the foreclosure and sale of the lot here involved to the land trustees on October 15, 1946, but that part was scratched out with lines drawn there-through. And when the report of sale came up for confirmation on March 31, 1947, a recital was inserted that the sale of the lot had 'heretofore been set aside by the court.' It is conceded that as soon as the compromise tax settlement was agreed upon on January 23, 1947 Sullivan promptly paid to the County Collector the stipulated amount due the city, county and school district. This was the day before the circuit court vacated the foreclosure judgment and sale.

On May 8, 1947 the circuit court ordered that the foreclosure sale of certain parcels of land in Suit 3, including the lot here involved, be disaffirmed; that the lien of the tax judgments be continued; and that the sheriff readvertise and resell those parcels at public auction for cash at a subsequent sheriff's foreclosure sale. Evidently the court had forgotten that it had already set aside on January 24, 1947 the foreclosure sale of the instant lot to permit a compromise settlement of the delinquent taxes thereon without any foreclosure.

On July 3, 1947 the Land Trust filed a motion to set aside the trial court's order of January 24, 1947 vacating the foreclosure sale of the lot in suit. The trial of the cause on that motion began on November 14, 1947. On that day Williams and the purchaser Sullivan filed a lengthy motion and answer. The case in chief of the Land Trust was brief. It consisted mainly of the documentary evidence hereinbefore reviewed. In addition Mr. Wilson D. Wood, one of the three trustees of the Land Trust, and the Land Commissioner L. C. Miller testified.

Under Sec. 141.720, Mo.R.S.A. Sec. 11201.37 one of these trustees was appointed by the county court, one by the city council of the largest city (Kansas City), and one by the Board of Directors of the most populous school district (School District of Kansas City). Mr. Wood was the trustee appointed by Kansas City. He was an experienced real estate appraiser. He said that he appraised the lot in suit in mid-December, 1946, along with trustee C. R. Benton appointed by the School District, and Land Commissioner L. C. Miller, who had been appointed by the Land Trust under Sec. 141.740, Mo.R.S.A. Sec. 11201.39. They put a value of $15,000 on the property (the lot and building) and instructed the Land Commissioner to refuse any price less than $12,500 net to the Land Trust. This appraisal was made pursuant to Secs. 141.760(1, 4), Sec. 11201.41(1, 4).

Trustee Wood further stated that 'until a long time afterward' he had no knowledge or notice of any proceedings for the divestiture of the Land Trust's title to the lot in controversy. And he specifically denied knowledge of the circuit court proceedings on January 24, 1947 whereby straw party Williams by an ex parte motion filed in Land Tax Collection Suit No. 3 obtained an order vacating the foreclosure judgment and execution sale of the lot to the Land Trust on October 15, 1946. Wood said also that the Land Trust had a regular attorney at that time, Mr. Arthur N. Adams, Jr., and it is undisputed that no notice of Williams' motion was served on him. Trustee Benton, who participated in the appraisal did not testify at the trial, he being abroad at the time.

Land Commissioner Miller testified he was serving as such on January 24, 1947 when the circuit court vacated the foreclosure judgment and sale of the lot in suit so that it could be redeemed for $7,845.60, one-third the amount of the delinquent taxes due and nearly $5,000 less than the minimum sale value the Land Trustees had put on it. Miller said his office was on the same floor as the circuit court room, but that he received no notice of the hearing on the motion to vacate and did not know of it until the sheriff came into his office later...