Empire Furniture Co. v. Hanley

• Decision Date: 11 November 1948
• Docket Number: 8.
• Citation: 62 A.2d 342,191 Md. 386
• Parties: EMPIRE FURNITURE CO. v. HANLEY.
• Court: Maryland Court of Appeals

62 A.2d 342

191 Md. 386

EMPIRE FURNITURE CO. v. HANLEY.

No. 8.

Court of Appeals of Maryland

November 11, 1948

Appeal from Circuit Court, Baltimore County; Frederick Lee Cobourn Judge.

Action by Claude A. Hanley against Empire Furniture Company by the last board of directors and trustees to foreclose right of redemption from tax sale. From an adverse decree, defendants appeal.

Reversed and remanded with directions.

A. David Gomborov, of Baltimore (H. Lee Brill and A Jerome Diener, both of Baltimore, on the brief), for appellant.

Milton R. Smith and Francis T. Peach, both of Towson, for appellee.

Before MARBURY, C.J., and DELAPLAINE, COLLINS, HENDERSON and MARKELL, JJ.

MARBURY Chief Judge.

This case was started by the appellee, who filed his bill of complaint in the Circuit Court for Baltimore County to foreclose all rights of redemption in four lots, in said county under the Act of 1943, chapter 761 as amended by the Act of 1944, Special Session Chapter 7, and the Act of 1947 Chapter 71 and codified as Sections 71A to 90W, both inclusive, of Article 81 of the Code of Public General Laws 1947 Supplement. The bill showed that the taxes for which these lots were sold with interest from the date of sale amounted, roughly, to $2500 for the first lot, $1200 for the second, $500 for the third and $600 for the fourth. In addition, 1946 and 1947 taxes had been paid by the appellee, and he was entitled to the costs set out in the Act. The appellants, who are the last Board of Directors of the Company to which the lots were assessed when they were sold for taxes, and the trustees, under a mortgage made by said company, answered, admitting the pertinent facts as to the sales, but alleging additional facts under which they contend that the amounts necessary for redemption are $88.10 for each lot, plus taxes and interest, the total, including court costs, amounting to $603.86. At the same time, they filed a petition for redemption and paid in to court the said amount of $603.86. After an answer was filed to this petition, a hearing was had, and the Chancellor held that the appellee's contention was correct and that the appellants could redeem the property by paying to the plaintiff the amounts set forth in the certificate of sale with interest at six percent from the date of the original tax sale to the date of redemption, together with all taxes paid by the appellee and costs. The result of this order is that the appellants, in order to redeem, would be obliged to pay substantially the amounts claimed by the appellee From this order the appeal was taken here

The primary question to be decided is the amount which the appellants have to pay for redemption, and the great difference between the figures presented by them, and those claimed by the appellee, is due to the different interpretation placed upon the statute by the respective parties. The figures are not in dispute, but the qusetion is whether the appellants are obliged to pay only the amounts paid by the appellant to the County Commissioners, plus interest, taxes, etc., or whether, in order to redeem, they are obliged to pay the amounts for which the property was sold by the Treasurer to the County Commissioners at the original tax sale.

The facts, briefly, are as follows: The four lots, belonging to the Empire Furniture Manufacturing Company, were sold separately and in separate years, by the Treasurer of Baltimore County, and in each case they were sold to the County Commissioners at public auction for the amount of the taxes due, with costs of sale. The sales were made in 1934, 1937, 1938 and 1939, respectively, and the lots were conveyed to the County Commissioners by deeds executed respectively in 1937, 1939, 1940 and 1941. Subsequently, prior to January 2, 1945, the appellee offered to purchase from the County Commissioners these four lots, together with six other lots which they owned, and which were more or less contiguous, for the sum of $800 and advertising costs. The lots were then advertised in a county newspaper for sale on January 2, 1945, and at that time, were purchased by appellee for the sum of $881 as an entirety. The County Commissioners allocated the proceeds of this sale as $88.10 for each lot. On January 17, 1945, the County Commissioners executed and acknowledged and delivered to the appellee a deed conveying to him the four lots. On September 29, 1945, the Treasurer issued to the County Commissioners a separate certificate of sale for each of the four lots showing on each certificate the amount of the original sale by him to them. These certificates of sale were assigned by the County Commissioners to the appellee on October 30, 1946, and on September 24, 1947, the appellee filed the bill of complaint herein.

The Act of 1943, Chapter 761 (with some minor changes, not applicable to this case, made by the Act of 1944, Special Session, Chapter 7, and the Act of 1947, Chapter 71) provided a comprehensive system of tax sales for the counties (with some local differences) and for the City of Baltimore. The City provisions are different from those for the counties and are essentially the same as those in the Act of 1941, Chapter 540 which we construed in the case of Gathwright v. Mayor and City Council of Baltimore, 181 Md. 362, 30 A.2d 252, 145 A.L.R. 590. The Act of 1943 not only provides for tax sales, but also for the procedure of foreclosing the equity of redemption of the owner. These provisions were discussed by us in the recent case of Shapiro v. National Color Printing Co., Md., 60 A.2d 679. The foreclosure proceedings are applicable to two separate situations; one where the tax sale was before the passage of the statute, and the other where the tax sale was made under the statute. In the last situation, with which we are not concerned here, the holder of the certificate of sale may file his bill to foreclose the equity of redemption any time after the expiration of a year and a day from the date of sale, and must file it within two years after the date of the certificate of sale. Section 90. By Section 89H a purchaser at a tax sale made prior to December 31, 1943 (which is the case here), is empowered to proceed to foreclose the rights of redemption. In such case, he gets from the Collector a certificate by surrendering whatever receipt or instrument he has, evidencing payment of the necessary part of the purchase price, and thereafter, as the holder of the certificate, he can proceed to foreclose within the two year period provided in Section 90. However, he does not have to get the certificate, and thereby be bound to foreclose, but may continue to hold the property under the provisions of any prior existing laws. He may be satisfied with the condition of his tax title and may elect not to foreclose. If he does elect to foreclose, then the right to redeem attaches and continues until the final decree of the foreclosure proceedings. See Sections 89B and 90, and Shapiro v. National Color Printing Co., supra.

The purchaser at a sale made by the Collector is given a certificate of sale, Section 83, and this is true, whether the sale is made to a private purchaser or is made to the County Commissioners or other taxing agency. Section 88. The County Commissioners, or such taxing agency, may sell and assign a certificate of sale. Section 89. When the owner redeems, the Collector notifies the holder of the certificate of sale that the property has been redeemed, and that upon the surrender of the certificate all redemption money received by him will be paid to the holder. The collector also delivers to the person redeeming the property a certificate of redemption which can be recorded in the land records and has the same effect as a release of mortgage. Section 89B. Section 89C provides the amount required for redemption, which is the whole amount of money received by the Collector from the sale of the property, together with interest at the rate of six percent per annum from the date of sale...