Home Building & Loan Ass'n v. City of Spartanburg

• Decision Date: 10 November 1937
• Docket Number: 14567.
• Parties: HOME BUILDING & LOAN ASS'N v. CITY OF SPARTANBURG et al. (No. 2).
• Court: South Carolina Supreme Court

194 S.E. 139

185 S.C. 313

HOME BUILDING & LOAN ASS'N v. CITY OF SPARTANBURG et al. (No. 2).

No. 14567.

Supreme Court of South Carolina

November 10, 1937

Action by the Home Building & Loan Association in the original jurisdiction of the Supreme Court against the City of Spartanburg and others to set aside a tax sale.

Report of W. C. Cothran, Special Referee, follows:

On June 1, 1936, the City of Spartanburg sold the six pieces of property described in the complaint to satisfy its lien for taxes, at which time the plaintiff held fee simple deeds to each of said lots. Prior to the sale, the plaintiff attempted to stop the sale by injunction, the application therefor having been made before his honor Judge G. B. Greene. The application was refused by Judge Greene without prejudice whereupon this action was commenced in the original jurisdiction of the Supreme Court, the object being to set aside the tax sale upon grounds specifically referred to hereafter.

Prior to this action another action was brought in the court of common pleas for Spartanburg county by the same plaintiff against the same defendants, demanding similar relief. The action culminated in a decree by his honor Judge Oxner in January, 1937, which will also be further mentioned. The present case presents several issues which were neither submitted to nor passed upon by Judge Oxner. In the case decided by him there is no difference in the status of the plaintiff in that case and here, as in both cases the plaintiff was the owner of the lots involved in fee simple.

The defendants filed objection to the jurisdiction of the court and also filed a demurrer by certain of the defendants asking that as to them the complaint be dismissed upon the ground that no cause of action was stated against them. For the reasons stated in my report in the case of Cleveland v. City of Spartanburg et al., 194 S.E. 128, filed today, the objection to the jurisdiction of the court cannot be recommended although it is recommended that the demurrer be sustained.

In view of the former action in which the decree of Judge Oxner was filed, I have grave doubts as to the proper maintenance of the additional grounds presented in the present case other than the ground relative to the penalty charged upon the 1936 taxes. The objections urged before Judge Oxner and passed upon by him were:

(1) The tax sale was void because of failure to levy and seize the property prior to the sale.

(2) That the tax sale was void because the lien of the city for taxes had expired.

(3) That the tax sale was void because it included penalties which were charged without legal authority.

The additional grounds presented in this action and not presented to Judge Oxner are:

(1) No attempt to first collect the taxes from the personal property.

(2) Failure to furnish amount of taxes due prior to sale.

(3) No penalty for 1936 taxes.

In the case of Holcombe v. Garland & Denwiddie, 162 S.C 379, 160 S.E. 881, 884, the court quotes from the case of Johnston-Crews Co. v. Folk, 118 S.C. 470, 111 S.E 15, as follows: "If the identity of the parties and the identity of the causes of action have been established, the former adjudication is conclusive, not only of the precise issues raised and determined, but of such as might have been raised affecting the main issue."

It would thus appear that the first and second questions above set forth as not being presented to Judge Oxner could and should have been presented in the other action and should thereby be concluded. However, as this objection is not specifically raised and is not referred to in the brief of counsel, the new grounds will be considered.

The grounds passed upon by Judge Oxner are now the subject of appeal to the Supreme Court, 194 S.E. 143, the record for appeal having been filed in that court. It would, therefore, be rather a useless undertaking on my part to offer any recommendation to that court as to what disposition it should make of Judge Oxner's decree. A correct disposition of that appeal will be made at an early date regardless of what recommendation I might care to offer.

The first of the so-called additional grounds will now be considered: It is that there was no attempt to collect this tax against the personal property of the plaintiff before recourse was had against the real estate.

For many years it was considered the general rule that the personal property of the delinquent taxpayer should first be exhausted before recourse be had against the real property ( Ebaugh v. Mullinax, 34 S.C. 364, 13 S.E. 613, cited in Taylor v. Strauss, 95 S.C. 295, 78 S.E. 883), and, in the Ebaugh Case it was also held that the lien on the real property remained valid in case the personal property was insufficient to pay the amount of delinquent taxes. However, in 1902, section 2570 of the present Code was passed by the General Assembly, providing as follows: "The distress and sale of personal property shall not be a condition precedent to seizure and sale of any real property hereunder."

An exactly similar provision is to be found in section 2833 of the present Code under the heading of "Property Liable for Distress and Sale for Delinquent Taxes."

In the case of Town of Cheraw v. Turnage, 184 S.C. 76, 191 S.E. 831, 836, the decree of the circuit judge, affirmed on appeal, contains the following statement: "The exhaustion of the personalty appears to be a prerequisite to collection out of the real estate," and cites section 2853 of the Code and annotations thereunder as his authority. This section of the Code prescribes the form of tax executions to be issued by the county treasurer to the sheriff, directs the sheriff to levy by distress and sale of the personal property, and, if sufficient personal property cannot be found, then by distress and sale of the land. The annotations first cite the case of Ebaugh v. Mullinax, supra, and also the case of Curtis v. Renneker, 34 S.C. 468, 13 S.E. 664, as showing that under certain statutes the personal property must first be exhausted before the land can be sold. Then the annotation proceeds as follows: "But under late tax Acts, the failure to exhaust the personalty does not necessarily defeat the title of the purchaser to land," citing cases.

Although they are not mentioned in this note, the "late tax acts" are evidently the sections of the Code above referred to. As the statement in the Turnage Case was not at all necessary for the proper decision of that case, it being used merely to demonstrate a distinction between a tax and a paving assessment lien, it may well be considered as obiter dicta on the part of the circuit judge.

I therefore recommend that this objection on the part of the plaintiff be not sustained.

The next additional ground is that the tax collector failed to furnish the amount of taxes due by the plaintiff.

It is true that section 2831 of the Code provides for the payment of all taxes due by mortgagor to the mortgagee, and, under this section, the plaintiff herein had the right to pay the taxes due by the owner of the property for its own protection. By said section, it is implied that the holder of the mortgage has the right to obtain from the proper authorities the exact amount to be paid else his statutory right to make payment would be incomplete. However there is nothing in the law which makes compulsory on the city authorities the duty or obligation to furnish such information, and certainly nothing to render invalid a tax sale when the information was not furnished. It is said in 61 C.J. 1998, that fraud or mistake of the officer which prevents the owner from paying his taxes is sufficient ground to set aside a sale. That is the only authority cited by the plaintiff to sustain the objection now being considered, and its inapplicability is apparent at a glance, there being no evidence whatsoever of either fraud or mistake on the part of the city. In fact, the testimony shows that one of the attorneys for the plaintiff went to the city hall in order to get information about these taxes. He was told that the office force was very busy, and that the young ladies in the office were busy working on the tax books. He was asked to come back after office hours and the books would be opened for his inspection, and that the exact amounts due would be given to him. Just why the attorney and the tax collector never met for the purpose of getting the desired information I am unable to say, as each rather heatedly blames the other. Suffice it to say that they did not meet, and the exact figures were not obtained. As there is no law requiring the furnishing of the information, and no penalty for failing to furnish it, I recommend that this ground of objection be not sustained. I am forced to say, however, that a little more patience, consideration, and co-operation on the part of both parties would have produced better results. As stated by some very wise...