Holzer v. Rhodes

• Citation: 24 Wn.2d 184,163 P.2d 811
• Decision Date: 19 November 1945
• Docket Number: 29724.
• Parties: HOLZER v. RHODES et al.
• Court: United States State Supreme Court of Washington

163 P.2d 811

24 Wn.2d 184

HOLZER v. RHODES et al.

No. 29724.

Supreme Court of Washington

November 19, 1945

Department 2

Action by Julius J. Holzer against Tommie Rhodes and others to have certain defendants declared to be holding title to realty in trust for plaintiff and to require conveyance thereof to plaintiff and for other relief, wherein defendants counter-claimed. From a judgment of dismissal quieting the title of named defendant and his wife to the realty involved the plaintiff appeals.

Affirmed and remanded.

Appeal from Superior Court, Spokane County; Fred H. Witt, judge.

Royce Hurley & Roberts, of Spokane, for appellant.

Robertson & Smith and A. O. Colburn, all of Spokane, for respondents.

GRADY Justice.

This action was brought by Julius J. Holzer against Tommie Rhodes and wife and Emmett N. Warren to have the defendants Rhodes declared to be holding title to certain real estate in trust for plaintiff and that they be required to convey title thereto to him and surrender possession thereof; that plaintiff be awarded a judgment against the defendants Rhodes for the value of the use of the property and in the event title to and possession of the property could not be restored to plaintiff that he have judgment for its value. The case was tried Before the court, and at the close of the evidence submitted by plaintiff its sufficiency was challenged. The challenge was sustained and a judgment was entered dismissing the action and quieting the title of the defendants Rhodes to the real estate involved, from which this appeal has been taken. The defendant Warren did not make any appearance in the lower court and has not appeared in this court.

The substance of the complaint is that prior to May 18, 1943 Warren was the owner of lots 8 and 9 in block 2 of second addition to west Riverside addition to the city of Spokane, and on that date he sold the property at public auction to plaintiff and represented to him that it was free and clear of all encumbrances; that this representation was not true in that taxes thereon were delinquent and proceedings had been instituted to foreclose the tax lien; that all of the defendants knowing of the representations and their falsity and reliance of plaintiff upon them, fraudulently conspired to deprive him of the property and vest title thereto in the defendants Rhodes, and in pursuing their scheme they withheld from him knowledge that taxes were delinquent and proceedings had been instituted to foreclose the tax lien; that defendants intercepted and withheld from plaintiff notice of the delinquency and the institution of the foreclosure proceedings and intercepted mail intended for plaintiff notifying him of such proceedings and as a result no notice or knowledge thereof reached plaintiff until on or about July 5, 1944. It is further alleged that a judgment was entered in the foreclosure proceedings in favor of Spokane county and an order of sale was issued about May 31, 1944, and about June 17, 1944, the defendants contrived to have the property offered for sale by Spokane county; that the defendants Rhodes made the only bid at the sale and the property was sold to them for the amount of the delinquent taxes; that on July 5, 1944, a tax deed was executed and delivered to the defendants Rhodes and ever since they have deprived plaintiff of the possession of the property.

The answer and counterclaim of defendants Rhodes denied certain allegations of the complaint, admitted others and alleged affirmatively that they were the owners of the property, had made improvements thereon since acquiring title and asserted an estoppel because of knowledge on the part of the plaintiff of the making of the improvements and that plaintiff was guilty of laches. The reply of plaintiff put in issue the affirmative allegations of the answer.

The court having sustained the challenge to the sufficiency of the evidence submitted by appellant did not make any findings of fact, and in our review of the factual situation we must accept the evidence submitted by him as true and accord to him the benefit of all reasonable inferences to be drawn therefrom and interpret it most strongly against respondents and in a light most favorable to appellant.

Applying the foregoing rule and test to the record we develop the following factual situation:

The appellant purchased the property in question from Emmett N. Warren at an auction sale. He was told by the auctioneer that the property was clear of encumbrances. Before the transaction was closed appellant consulted an attorney other than his present counsel. It does not appear just what he requested his attorney to do in the way of determining the condition of the title. Warren informed him at the attorney's office that all taxes had been paid. Taxes for some years were unpaid and delinquent. Appellant received a quitclaim deed to the property from Warren and was given possession. Warren moved into a small house about six feet distant from the dwelling on the property purchased. The respondents had been hotel guests of appellant and later became his tenants on this property in the month of March, 1944. They paid monthly rent up to June 1st, but declined to pay the rent becoming due July 1st. On July 5th respondents informed appellant that the property had been sold for taxes and that they had become the purchasers thereof and for that reason would not pay any more rent.

Shortly after respondents took possession of the property as tenants of appellant a notice was mailed by the county treasurer of Spokane county addressed to Alta B. Warren, 1420 Water Street, Spokane, notifying her that taxes were delinquent and the property would be sold. Mrs. Warren had been the wife of Emmett N. Warren, but was deceased. The property stood on the tax rolls in the name of Emmett N. Warren and 1420 Water Street was the number and street of the house occupied by respondents. Respondents did not deliver the notice to Warren. They learned from it that the taxes were delinquent and the property was subject to sale. The envelope contained the return address of the county treasurer, but it was not returned to him. Some time after the county treasurer mailed the notice his deputy called at the property, inquired of Mrs. Rhodes who the owner was and was informed that she did not know his name but paid rent to a man who ran a hotel in the four hundred block on Main street. She was informed by the officer that there was to be a sale of the property for taxes and was requested to have her husband either so notify the man she mentioned or advise him to go to the treasurer's office. The respondents made no effort to inform appellant as to what they had learned of the taxes being delinquent and of the property about to be sold therefor, but instead Rhodes went to the treasurer's office and inquired as to when a sale would be made. On June 17, 1944, the property was offered for sale by the county treasurer. The respondents bid the amount of the unpaid taxes, and received a treasurer's deed to the property. It does not appear just how long Warren owned the property Before he sold it to appellant, and there is no direct evidence that he knew there were any delinquent taxes against the property when he made the sale. He was not available as a witness at the trial. There is no evidence in the record that he conspired with respondents to deprive appellant of the property, or was in any way a party to the plan concocted by respondents by passive conduct to keep appellant in ignorance of the tax sale and to purchase the property for themselves.

The first question we must consider is one raised for the first time on this appeal, and it is that appellant became barred from maintaining this action because he did not comply with Rem.Rev.Stat. § 956 and make a tender of the taxes paid by respondents Before commencing suit, and because he failed to allege in his complaint the making of the tender, and that it had been refused. Ordinarily we would not consider that type of question at this time because we have decided many times that questions not raised in the court below will not be considered on appeal. This rule does not apply when the question raised affects the right to maintain the action. However, this is not the kind of an action contemplated by the statute. No attack is being made upon the validity of the tax sale or the deed issued by the county treasurer. The action is based upon the theory that there was such a breach of duty on the part of respondents prior to their purchase of the property that they became trustees for appellant when they acquired title and thereafter held it in trust for him.

Although the action was brought and tried upon the theory of a conspiracy between Warren and respondents and a conspiracy was not proven, nevertheless the questions raised by appellant are Before us on this appeal in view of the evidence submitted.

The appellant urges that respon...