Hardisty v. Kay

• Decision Date: 09 February 1973
• Docket Number: No. 173,173
• Citation: Hardisty v. Kay, 268 Md. 202, 299 A.2d 771 (Md. 1973)
• Parties: John T. HARDISTY v. Jack KAY et al.
• Court: Maryland Court of Appeals

Page 202

268 Md. 202

299 A.2d 771

John T. HARDISTY v.Jack KAY et al.

No. 173.

Court of Appeals of Maryland.

Feb. 9, 1973.

S. Churchill Elmore, Rockville (Lambert, Furlow, Elmore & Heidenberger, Rockville, on the brief), for appellant.

Hillel Abrams, Silver Spring, for appellees.

Argued before MURPHY, C. J., and SINGLEY, SMITH, DIGGES and LEVINE, JJ.

DIGGES, Judge.

This is an appeal from a decree of the Circuit Court for Montgomery County, sitting in equity, which has awarded appellees, Jack Kay and Harold Greenberg, a judgment against appellant, John T. Hardisty, for $19,860.13.This amount represents the balance owed on the purchase price bid at a tax sale of a 9.154 acre parcel of land in Montgomery County which amazingly, and for some unexplained reason, neither party to this suit seems to want.It is from that adverse judgment that Hardisty has appealed.

The facts of this case are not disputed but the application of the law to these facts is and presents a question of first impression to this Court.This entire dispute revolves around the proper interpretation of various sections of Maryland Code(1957)1969 Repl.Vol., 1972 Cum.Supp.), Art. 81, §§ 70-123, governing tax sales.Some time prior to June 10, 1968, D. A. Dayhoff, Collector of Taxes in Montgomery County, properly instituted procedures to sell a number of parcels of land in Montgomery County in order to obtain payment of unpaid State and County taxes.One of these parcels, the subject of this dispute, was owned by appellees and was described in the tax sale advertisemtnt as:

'Parcel of land called 'Northwest', containing 9.154 acres of land, located in the Thirteenth Election District-Wheaton Outside, Montgomery County, Maryland.'

Pursuant to Art. 81, § 75, the last owners of these parcels as appearing on the collector's tax rolls were warned that unless the taxes due were paid before June 10, 1968, the collector would proceed to sell the property to satisfy the indebtedness.The taxes on the 'Northwest' parcel were not paid and, as warned, the property was sold at a public auction.The highest bidder on that parcel was Walter R. Hardisty.Upon being issued a certificate of sale, he assigned all his rights, title and interest in the certificate to appellant as permitted by Art. 81, § 84.The successful bid of Hardisty on the 'Northwest' parcel was $21,000 and included the $1,139.87 that was owed the collector.This latter amount, which included the taxes, interest and penalties due as well as the expenses incurred in making the sale, was immediately paid to the collector as required by Art. 81, §§ 80,81.

Article 81, § 92 provides that 'the owner or other person having an estate or interest in the property sold by the collector may redeem the said property at any time until the right of redemption has been finally foreclosed.'Before foreclosure proceedings are instituted, redemption is accomplished by paying the collector the whole amount of money received from the sale, together with interest at the rate of 6% per annum from the date of sale.Art. 81, § 93.If this right of redemption is not exercised within one year of the sale date, the holder of the certificate of sale, his heirs, or assigns, may file a bill in equity to foreclose all rights of redemption of the property to which the certificate relates.Art. 81, § 101.But, even after this one year period, the same right continues until finally barred by the decree of foreclosure.The bill must be filed within two years of the date of sale or it is void and all rights of the certificate holder cease; the monies paid are forfeited and are applied to pay the arrears of taxes on the property.Upon the filing of a bill to foreclose the right of redemption, subpoenas are issued commanding all named resident defendants to appear in court on a certain day (at least 60 days from the date of filing the bill) to answer or to redeem the property and warning them that upon failure to do so a final decree will be entered foreclosing such rights.Art. 81, § 106.Additionally, an order of publication is required so as to similarly warn all other persons, known or unknown, who have an interest in the property.Art. 81, § 107.Once an action to foreclose is instituted, a party redeeming the property must apply to the court to have the amount necessary for redemption fixed.Art. 81, § 94.

Here, the owners did not attempt to redeem the property which is the subject of this dispute either before or after the institution of an action for foreclosure by Hardisty.Rather, the appellees filed an answer to that action which affirmatively stated that they had no interest in redeeming the 'Northwest' parcel.Thereafter, at the instance of appellant, a final decree was entered declaring that the rights of the defendants to redeem were forever foreclosed and vesting an absolute and indefeasible title to the 'Northwest' parcel in fee simply in Hardisty.All that remained for him to do to obtain execution of the deed to this property from the collector of taxes was to pay the balance of the purchase price together with all taxes, interest, and penalties that had accrued since the date of sale.

Up until this point, no party to this suit disputes that all requirements of the Code were adhered to and everything had proceeded smoothly.But after having obtained the decree which foreclosed all rights of redemption and 'vested in (him) an absolute and indefeasible title in fee simple in the property,'(Art. 81, § 112) Hardisty balked at paying the balance owed.When more than eight months passed without appellant paying the balance required, appellees filed a petition in the foreclosure case to compel payment.The appellant answered this petition by averring that he was not required to pay the balance as this was merely a condition precedent to the issuance of the deed by the collector and that he'has no wish to acquire said property and does not intend to obtain a deed thereto . . . and has elected to forfeit the amount of $1,139.87 paid on account of the purchase price.'

In his memorandum of points and authorities submitted to the court to aid it in considering the petition to compel payment, Hardisty stated that:

'in an effort to assure (appellees) that he has in fact elected to forfeit the not inconsiderable sum of $1,139.87 which he paid the Collector of Taxes in consideration for the issuance of the Certificate of Tax Sale, and in an effort to remedy the divestation of (appellees') title of which they complain by their petition herein, does hereby offer unto (appellees) his undertaking to prosecute his motion to amend the Final Decree of this Honorable Court by seeking to have deleted that portion of such Decree which provides for the divestation of (appellees') title to such 9.154 acres of land.(Appellant) has had prepared and does herewith offer to file his motion for such relief.'

Hardisty followed through on this offer and did, in fact, file a petition to amend the decree of court which had foreclosed the right of redemption and divested appellees of their title.By this petition he sought to strike that portion of the decree which had these effects.However, the trial court concluded that it was barred by Art. 81, § 113 from even entertaining the petition to amend its final decree and, therefore, denied the request.And, after a hearing, the chancellor concluded that the appellees were entitled to the balance of the purchase price bid and, accordingly, he rendered a money judgment in their favor.It is from this judgment that Hardisty has appealed.

Here, appellant has fashioned three arguments designed to bring about a reversal.Hardisty posits that the chancellor erred: (i) when he held that he was prohibited by Art. 81, § 113 from reopening the final decree of the court; (ii) when he entered the judgment against appellant in the amount of the unpaid portion of the bid; for, it is contended that the chancellor lacked the authority to so act; and (iii) by so doing, the court has exposed appellant to the possibility of double payment-i. e. the necessity of paying this judgment to appellees as well as having to pay the balance owed to the collector of taxes in order to obtain his deed.

(i)

Appellant's first contention is that the chancellor erred when he concluded that Art. 81, § 113 prohibited him from even entertaining the motion to amend the decree which foreclosed appellees' right of redemption and vested title in Hardisty.That section in pertinent part reads:

' § 113.Decree conclusive.

No application shall thereafter be entertained to reopen any final decree rendered under the provisions of this subtitle except on the ground of lack of jurisdiction or fraud in the conduct of the proceedings to foreclose . . ..'

The purpose for this provision and the others of this Article is '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.'Art. 81, § 97.'In other words, the legislature has declared 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.'Thomas v. Kolker, 195 Md. 470, 475, 73 A.2d 886, 888(1950).See alsoKaylor v. Wilson, 260 Md. 707, 712, 273 A.2d 185(1971).Here, there is no allegation or suggestion of lack of jurisdiction or fraud.

We think the legislature has been explicit in its language and clearly expressed its intention that a final decree is conclusive and no application shall thereafter be entertained unless it falls within the exempted categories.Appellant argues, however, that we must read this section in conjunction with § 112 and when this is done, he contends, it is apparent that such finality only attaches to the decree as it affects the rights of a defendant and not those...