FC Enterprises, Inc. v. Dibble, 2968.

• Decision Date: 29 March 1999
• Docket Number: No. 2968.,2968.
• Court: South Carolina Court of Appeals
• Parties: F.C. ENTERPRISES, INC., Respondent, v. Ann Wyatt DIBBLE, acting as Personal Representative for the Estate of W.W. Dibble, Appellant. Ann Wyatt Dibble, acting as Personal Representative for the Estate of W.W. Dibble, Appellant, v. C & M Petroleum Co., Inc., and F.C. Enterprises, Inc., Defendants, of whom F.C. Enterprises, Inc., is the Respondent.

335 S.C. 260

516 S.E.2d 459

F.C. ENTERPRISES, INC., Respondent, v. Ann Wyatt DIBBLE, acting as Personal Representative for the Estate of W.W. Dibble, Appellant.

Ann Wyatt Dibble, acting as Personal Representative for the Estate of W.W. Dibble, Appellant, v. C & M Petroleum Co., Inc., and F.C. Enterprises, Inc., Defendants, of whom F.C. Enterprises, Inc., is the Respondent.

No. 2968.

Court of Appeals of South Carolina.

Heard February 9, 1999.

Decided March 29, 1999.

Rehearing Denied June 19, 1999.

Certiorari Denied November 19, 1999.

Marion S. Riggs and Walter M. Riggs, both of Riggs & Riggs, of Manning, for appellant.

Bobbie C. Reaves, of Land, Parker & Reaves, of Manning; Stephen A. Spitz; and Timothy Youmans, of Collins Entertainment Corp., both of Columbia, for respondent. HUFF, Judge:

This appeal involves two consolidated cases concerning property owned by C & M Petroleum Co., Inc. (C & M) which was sold to W.W. Dibble (Dibble)¹ at a public tax sale. C & M's tenant, F.C. Enterprises, moved for partial summary judgment alleging that Dibble only purchased such title as the defaulting taxpayer owned. The trial court granted summary judgment in favor of F.C. Enterprises. Dibble appeals. We affirm.

FACTUAL/PROCEDURAL BACKGROUND

C & M was the owner of record of two adjoining tracts of land on August 10, 1992. On that date, C & M leased both tracts of land to F.C. Enterprises. F.C. Enterprises prepaid $155,000 in rent for the twenty year lease. On August 10, 1992, C & M also granted F.C. Enterprises an option to purchase the real estate. The option was incorporated by reference within the lease agreement. According to the agreement, F.C. Enterprises could exercise the option at any time during the twenty year lease period by paying the sum of $10,000. Paragraph 17 of the option provided that it shall be binding upon and inure to the benefit of the parties, their heirs, successors, assigns, and assignees. F.C. Enterprises recorded both a Memorandum of Lease and a Memorandum of Option with the county on September 14, 1992.

On March 17, 1993, the Tax Collector's office mailed C & M two notices of execution on the property in question. The notices indicated that C & M had failed to pay the 1992 taxes on the two tracts of land. The Tax Collector's Office did not receive payment and, as a result, two delinquent tax notices were sent to C & M in May 1993. The notices advised C & M that the 1992 taxes had not yet been paid and that the property would be seized and sold at a public auction if payment was not received by September 1, 1993. In August 1993, the Tax Collector posted notices of levy on the properties. A public tax sale was held on October 4, 1993. The two tracts of land were purchased by Dibble. Thereafter, the Tax Collector sent notice to C & M regarding at least one of the parcels, advising of the right to redeem the property by October 4, 1994. The Tax Collector did not send any such notices to F.C. Enterprises. The Tax Collector delivered the tax deeds to Dibble on November 17, 1994.

F.C. Enterprises moved for summary judgment asserting that Dibble only purchased such title as C & M owned at the time of the tax sale. The trial court found in favor of F.C. Enterprises and held that the tax sale was subject to the lease and option. The trial court, noting F.C. Enterprises had properly exercised its option, found that F.C. Enterprises held title to the properties in question.²

STANDARD OF REVIEW

Summary judgment is appropriate when it is clear there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Wilson v. Moseley, 327 S.C. 144, 488 S.E.2d 862 (1997). In ruling on a motion for summary judgment, the evidence and all inferences which can be reasonably drawn therefrom must be viewed in the light most favorable to the non-moving party. Id.

LAW/ANALYSIS

Dibble argues the trial court erred in granting summary judgment in favor of F.C. Enterprises. Dibble contends the tax sale was not subject to the lease and option agreements and therefore he owned the property in fee simple absolute. We disagree.

In South Carolina, the sale of property of a defaulting taxpayer is governed strictly by statute. Von Elbrecht v. Jacobs, 286 S.C. 240, 332 S.E.2d 568 (Ct.App.1985). The statutory scheme provides a mechanism for enforcing the collection of taxes. As of the thirty-first of December, all taxes for the ensuing year become a lien upon the property of the taxpayer. S.C.Code Ann. §§ 12-49-10 and 12-49-20 (1976). All taxes are due and payable between the thirtieth day of September and the fifteenth day of January after their assessment in each year. S.C.Code Ann. § 12-45-70 (Supp. 1998). "If the taxes, assessments, and penalties are not paid before the seventeenth day of March, the county treasurer shall issue his tax execution to the officer authorized and directed to collect delinquent taxes, assessments, penalties, and costs for their collection as provided in Chapter 51 of this title and they must be collected as required by that chapter." S.C.Code Ann. § 12-45-180(A) (Supp.1998). Upon payment by the successful bidder at the delinquent tax sale, the person officially charged with collection of delinquent taxes shall furnish the purchaser a receipt for the purchase money. S.C.Code Ann. § 12-51-60 (Supp.1998). The defaulting tax payer, grantee from the owner, or any mortgage or judgment creditor may, within twelve months from the date of the delinquent tax sale, redeem the real estate sold by paying the person officially charged with collection assessments, penalties and costs, together with eight percent interest on the whole amount of the delinquent tax sale bid. S.C.Code Ann. § 12-51-90 (Supp.1998). If the defaulting taxpayer, any grantee from the owner, or any mortgage or judgment creditor fails to redeem the property within the twelve months, the person officially charged with collection is required to issue a tax deed to the tax sale purchaser or the purchaser's assignee. S.C.Code Ann. § 12-51-130 (Supp.1998).

Dibble contends, because the lien for the subject taxes attached by law to the subject properties on December 31, 1991, the subsequent conveyance of a property interest, eight months after the lien attachment, would not defeat his valid tax deed. He relies on Taylor v. Mill, 310 S.C. 526, 426 S.E.2d 311 (1992) and Von Elbrecht v. Jacobs, 286 S.C. 240, 332 S.E.2d 568 (Ct.App.1985) in support of his position that his purchase of the two tracts of land at the tax sale were not subject to the lease and option agreements.

The Taylor case is clearly distinguishable from the case at hand. In Taylor, the property owner owed both federal and county property taxes. The Internal Revenue Service filed federal tax liens and eventually sold the property at a federal tax sale. Taylor, the federal tax sale purchaser, was issued a tax deed a year later but did not record the deed until three years after he received the deed. In the meantime, the...