Hatten v. Parcels of Land Encumbered with Delinquent Tax Liens

• Decision Date: 14 February 1949
• Docket Number: 40618
• Citation: 217 S.W.2d 511,358 Mo. 853
• Parties: Alvin D. Hatten, Collector of Revenue of Jackson County, Missouri, Plaintiff, v. Parcels of Land Encumbered with Delinquent Tax Liens, C. B. Kaplan, Appellant, v. J. G. Shannon, Respondent
• Court: Missouri Supreme Court

217 S.W.2d 511

358 Mo. 853

Alvin D. Hatten, Collector of Revenue of Jackson County, Missouri, Plaintiff, v. Parcels of Land Encumbered with Delinquent Tax Liens, C. B. Kaplan, Appellant, v. J. G. Shannon, Respondent

No. 40618

Supreme Court of Missouri

February 14, 1949

Appeal from Jackson Circuit Court; Hon. Emory H. Wright Judge.

Affirmed

Herbert Jacob and C. B. Kaplan for appellant.

(1) The court erred in requiring the bid of the purchaser (appellant C. B. Kaplan) to be equal to the full value of the property ($ 4000), rather than an amount which was adequate consideration for the parcel of land ($ 1750, but not more than $ 2000). Mo. R.S.A., Sec. 11201.28; Schwarz v Kellogg, 243 S.W. 179; Greenwood v. Greenwood, 96 Kan. 591, 152 P. 657; 66 C.J. 555; Phoenix Trust Co. v. Holt, 312 Mo. 563, 279 S.W. 714. (2) The court erred in failing to properly interpret the term "adequate consideration," as used in the Land Tax Collection Act, to mean a consideration so unjust and unfair as to shock the moral senses, and thus erred in refusing to confirm the sale to appellant for $ 1750. Spitcaufsky v. Hatten, 353 Mo. 94, 182 S.W.2d 86, 160 A.L.R. 990; Page v. Commonwealth, 11 S.E.2d 621; People v. Anderson, 380 Ill. 158 43 N.E.2d 997; Mo. R.S.A., Secs. 11201.23, 11201.27, 11201.41; 66 C.J. 555; Ogle v. Koerner, 140 Ill. 170, 29 N.E. 563; People v. Sandvoss, 320 Ill.App. 239, 50 N.E.2d 770. (3) The court erred in refusing to confirm the sale to the purchaser Kaplan for $ 1750 and in setting aside said sale to the purchaser Kaplan in that the court either refused to exercise any discretion or arbitrarily exercised its discretion. Judah v. Pitts, 333 Mo. 301, 62 S.W.2d 715; Harlan v. Nation, 126 Mo. 97, 27 S.W. 330; Roby v. Smith, 261 Mo. 192, 168 S.W. 965; Cockrell v. Taylor, 347 Mo. 1, 145 S.W.2d 416; People v. Anderson, 380 Ill. 158, 43 N.E.2d 997; Schwarz v. Kellogg, 243 S.W. 179; Oaklay v. Bond, 286 S.W. 27; Mo. R.S.A., Sec. 11191. Phoenix Trust Co. v. Holt, 312 Mo. 563, 279 S.W. 714; House v. Clarke, 187 S.W. 57; Bullock v. E.B. Gee Land Co., 347 Mo. 721, 148 S.W.2d 565; East Arkansas Lumber Co. v. Rainer Connell Cotton Co., 324 Mo. 706, 24 S.W.2d 1001; People v. Cutler, 323 Ill.App. 466, 56 N.E.2d 50; Warner Bros. Pictures v. Lawton-Byrne-Bruners Ins. A. Co., 79 F.2d 804; Moore v. Brigman, 198 S.W.2d 857; United States v. Land in Wayne County, Mo., 70 F.Supp. 730. (4) The court erred in requiring the purchaser Kaplan to increase his bid to $ 4000 as a prerequisite to confirmation of his bid, since such a demand by the court was either an arbitrary exercise of discretion or a failure to exercise discretion. Judah v. Pitts, 333 Mo. 301, 62 S.W.2d 715; Harlan v. Nation, 126 Mo. 97, 27 S.W. 330; Roby v. Smith, 261 Mo. 192, 168 S.W. 965; Cockrell v. Taylor, 347 Mo. 1, 145 S.W.2d 416; People v. Anderson, 380 Ill. 158, 43 N.E.2d 997; Schwarz v. Kellogg, 243 S.W. 179; Oakley v. Bond, 286 S.W. 27; Mo. R.S.A., Sec. 11191; Phoenix Trust Co. v. Holt, 312 Mo. 563, 279 S.W. 714; House v. Clarke, 187 S.W. 57; Bullock v. E.B. Gee Land Co., 347 Mo. 721, 148 S.W.2d 565; East Arkansas Lumber Co. v. Rainer and Connell Cotton Co., 324 Mo. 706, 24 S.W.2d 1001; People v. Cutler, 323 Ill.App. 466, 56 N.E.2d 50; Warner Bros. Pictures v. Lawton-Byrne-Bruners Ins. A. Co., 79 F.2d 804; Moore v. Brigman, 198 S.W.2d 857; United States v. Land in Wayne County, 70 F.Supp. 730.

George V. Aylward and T. P. Downs for respondent.

(1) There was no error in the action of the court in requiring the bid of the purchaser (Appellant, C. B. Kaplan) to be equal to the average found by the court of various types of appraisals made. Mo. R.S.A., Sec. 11201.1-53; Spitcaufsky v. Hatten, 182 S.W.2d 86, 353 Mo. 94, 160 A.L.R. 990; Miller v. Richards, 305 Ky. 624, 205 S.W.2d 308; Webster's New International Dictionary; Ozias v. Renner, 64 N.E.2d 326; In re United Toledo Co., 152 F.2d 210; Bussen Realty Co. v. Benson, 159 S.W.2d 813, 349 Mo. 58; Voights v. Hart, 285 Mo. 102, 226 S.W. 248. (2) There was no error of the court with regard either to interpretation of the term "adequate consideration" as used in the Land Tax Collection Act or refusal to confirm the sale to appellant for $ 1,750. Mo. R.S.A., Sec. 11201.28; Spitcaufsky v. Hatten, supra; Walker v. Smith's Admx., 130 S.E. 768, 144 Va. 824; Rader v. Bussey, 145 N.E. 192, 313 Ill. 226; 50 C.J.S. 59; Payne v. Terrell, 159 P.2d 539. (3) The court did not err in refusing to confirm the sale to the purchaser Kaplan for $ 1750 and in setting aside the sale to the purchaser Kaplan. Mo. R.S.A., Sec. 11201.1-53; Spitcaufsky v. Hatten, supra. (4) The court did not err in requiring appellant to increase his bid from $ 1750 to $ 4000 and there is no reasonable basis for the charge that the court either arbitrarily exercised its discretion or failed to exercise discretion. Mo. R.S.A., Sec. 11201.1-53; Spitcaufsky v. Hatten, supra; Walker v. Smith's Admx., supra.

OPINION

Van Osdol, C.

Appeal from an order disapproving the sale of a described tract of real estate in Jackson County. The sale was had under the provisions of the Land Tax Collection Act, Sections 1 to 52, inclusive, Laws of Missouri, 1943, p. 1029 et seq., Mo. R.S.A. § 11201.1 et seq. The case involves the construction of the Act, particularly Section 28 thereof, Laws of Missouri, 1943, pp. 1051-1052, Mo. R.S.A. § 11201.28.

Suit was filed September 29, 1945; and default judgment was rendered for $ 826.44, May 21, 1946. The land was sold to purchaser-appellant Kaplan, the highest bidder, for $ 1750 and the sheriff filed his report of sale April 27, 1947. June 5, 1947, movant-respondent filed motion to disapprove the sale on the ground the bid of $ 1750 was so inadequate as to constitute constructive fraud. It was alleged by movant that the land was of the reasonable market value of $ 6000.

Respondent is one of two heirs of the original owner, respondent's mother, who died September 23, 1946. Respondent resides in the residence building on the land.

The property is a lot 33 1/3' X 130', 4037 McGee Street, with a fiveroom frame residence building thereon. The house was built in 1902. It has "all public improvements," but there is no garage and no driveway. The house is covered with an asbestos or "composition" roof. The lot slopes, a "pretty good drop," down from the front. The house has "settled some" and it could "stand a coat of paint," not having been painted for seven years; but there is no siding missing, and no cracks in the foundation. The guttering, although loose in front, is in good condition. The inside needs some papering.

Respondent testified he had been "offered up to $ 8500" for the property; two houses in the neighborhood sold for $ 3750 and $ 4100, respectively, in 1930 or 1932. Expert testimony varied as to the property's reasonable market value.

Respondent's witnesses put the property's value at from $ 5500 to $ 6356. They estimated the rental value to be $ 50 per month. Appellant's witnesses estimated its market value at $ 2000, and the rental value at $ 25 per month. Respondent's witnesses were of the opinion repairs costing $ 200 to $ 300 were needed, and one witness estimated the value of the lot alone to be $ 1500. Appellant's witnesses testified the house "needs much repair." It would require the expenditure of $ 1000 to $ 1500 to put it in "a liveable condition." After such repairs the market value of the property would not be in excess of $ 4000; the lot alone should be valued at $ 500.

At the conclusion of the evidence introduced at the hearing on respondent's motion, the trial judge expressed the (verbal) opinion the bid of $ 1750 was less than half of the property's "probable worth" and announced he would hold the bid inadequate. In his discussion, the trial judge referred to Section 11385, Laws of Missouri, 1945, p. 1950, Mo. R.S.A. § 11385. In so doing, the judge said, "I was just indicating, however, the judgment of the legislature as to what is a fair price." And the judge announced he was "setting the price at $ 4000." However, the appellant did not tender a sufficient sum to bring the bid to $ 4000, but tendered a sum of $ 250 additional to the bid of $ 1750. Thereupon the trial court entered an order and judgment disapproving the sale. The judgment recited the "value of said parcel of land was determined by the court to be $ 4000."

Appellant contends the trial court's action was arbitrary. It is urged the trial court erred in interpreting the term "adequate consideration" as used in the Section 11201.28, supra. Appellant says "adequate consideration" should be interpreted as such a consideration as is not so unjust and unfair as to "shock the moral senses," and that the trial court interpreted the term to mean an amount equivalent to the "full value" of the property.

The Section 11201.28, supra, provides that, after the sheriff has sold any parcel of real estate, the court shall, upon motion of any interested party, set the cause down for hearing to confirm the foreclosure sale thereof. The court is directed to hear offered "evidence of the value . . . and (the court) shall forthwith determine whether an adequate consideration has been paid . . . and if the court finds that adequate consideration has been paid, he shall confirm said sale. . . If the court finds that the consideration paid is inadequate, the purchaser may increase his bid to such amount as the court may deem to be adequate, whereupon the court may confirm the sale. If however, the purchaser declines to increase his bid and make such additional payment, then the sale shall be disapproved . . ."

In the case of Spitcaufsky v. Hatten, 353 Mo. 94, 182 S.W 2d 86, this court (en banc) said the main objectives of the Land Tax Collection Act are summarily to...