Martel v. Bearce

• Decision Date: 15 November 1973
• Citation: 311 A.2d 540
• Parties: Rosaire MARTEL v. Laurence C. BEARCE d/b/a Bearce's Super Market.
• Court: Maine Supreme Court

Page 540

311 A.2d 540

Rosaire MARTEL v. Laurence C. BEARCE d/b/a Bearce's Super Market.

Supreme Judicial Court of Maine.

Nov. 15, 1973.

Rocheleau & Fournier, by William Rocheleau, Jr., Paul C. Fournier, Lewiston, for plaintiff.

Linnell, Choate & Webber, by G. Curtis Webber, Auburn, for defendant.

Before WEATHERBEE, POMEROY, WERNICK and ARCHIBALD, JJ.

WEATHERBEE, Justice.

This case comes to us on appeal from the judgment of a Justice in the Superior Court holding that a sheriff's sale of real estate, record title to which was in a person other than the debtor, was a nullity and that the Plaintiff purchaser was entitled to recover back the purchase price from the creditor who had levied on and sold the property. We deny Defendant's appeal.

The property in question had been owned during her lifetime by a Miss Payson. In 1964 Defendant had brought an action against her on which he subsequently obtained a judgment. On March 6, 1969, after her death, the Defendant levied his execution against this lot of land. On April 1, 1969, after public notice, an execution sale of this lot was held at the county sheriff's office.

However, in the meantime, the real estate taxes on the land had not been paid and a tax lien certificate had been filed in the Registry of Deeds against the property for each of two years. These liens matured in 1965 and 1966 and thus, by operation of law, ¹ the City of Auburn had become the record title holder on November 26, 1966. ²

At the time of the sale, the Plaintiff, in person, bid $800.00 for the property and a higher bid of $1200.00 was made by another person for an absent principal. The Defendant's attorney, in the presence of the Plaintiff, gave the agent of the highest bidder-and then, by telephone, his principal-a disclosure of title defect, the extent of which disclosure is in dispute.

The Presiding Justice (who heard the matter jury-waived) made, at Defendant's request, several specific findings of fact concerning this disclosure:

'(7) Upon receiving the bids from defendant (sic) and the representative of the other bidder whose bid was higher than plaintiff's defendant's attorney explained to the latter, within the hearing of the plaintiff, that the property was subject to an expired tax lien, that the title could only be established through legal proceedings against Madelyn Wardwell, that he was 'buying a lawsuit', and that, as a result of the foregoing, he had not expected to receive any bids.

(8) At the request of the representative of the other bidder, defendant's attorney called the bidder on the telephone, within the hearing of the plaintiff, and repeated the same explanation as to the nature of the interest in the land being sold.

(9) As a result of the foregoing explanation over the telephone, the other bidder asked permission to and did withdraw his bid.

(10) After concluding his telephone conversation, defendant's attorney asked plaintiff if he had heard the conversation, to which plaintiff replied that he had.

(11) Defendant's attorney then asked if plaintiff wished to withdraw his bid as the other bidder had done to which he replied that he did not.' ³

These findings of fact by the Justice are supported by the record and we do not find them to be clearly erroneous.

The Justice also found as a matter of fact and law that

'at the time of the attachment of the real estate by the Defendant the third party debtor had no legal interest in the real estate and that the Defendant acquired no interest of any legal description in the real estate allegedly attached and that the legal effect of the Sheriff's sale was a nullity. In the absence of any legal right, title or interest acquired by the Defendant by virtue of his alleged attachment and levy of sale, the purported sale of the Defendant's interest in the real estate was without consideration and was a nullity.'

The Defendant-Appellant contends that as the record demonstrates only the existence on the records of the Registry of Deeds of the two undischarged tax lien certificates, the Justice must have assumed that the City of Auburn had proceeded correctly in each of the steps necessary to the valid assessment of taxes and the filing of effective tax lien certificates. The Defendant asserts that a conclusion that the record title passed into the City of Auburn upon the maturity of these liens can be made only upon proof-which is not present here-that each of those preliminary steps had been taken correctly.

This State has accepted the doctrine that a mortgage is regarded as a conditional conveyance vesting the legal title in the mortgagee. All that remains in the mortgagor is the equity of redemption. First Auburn Trust Co. v. Buck, 137 Me. 172, 16 A.2d 258 (1940). When that equity of redemption has been lost by the expiration of the statutory period, nothing remains in the mortgagor except the contingency that exceptional circumstances may exist which will entitle him to equitable relief. His legal title was conveyed when he executed the mortgage and his equitable title disappeared with the expiration of the period of redemption. Smith v. Varney, Me., 309 A.2d 229 (1973).

The statute ⁴ gives to the municipality upon the recording of a tax lien mortgage certificate all the rights of the mortgagee except the right to possession. The only interest in the real estate, except the right to possession, remaining in the owner is the right to redeem the property upon paying the taxes due plus interest and costs. The passage of eighteen months' time during which the taxes remain unpaid places complete record title in the municipality. Inhabitants of Lincolnville v. Perry, 150 Me. 113, 115, 104 A.2d 884 (1954). The former owner's right of redemption-and, in fact, his title-are extinguished. As in the case of the common law mortgagor, there remains only the contingency that he may be able (if he chooses to try) to demonstrate in a legal action a failure in the procedure by which his title was lost.

It is true that facts may exist-unknown now to the Court-which could establish that there had not been strict compliance with statutory requirements, and so it is possible that the city may on some future day be found to have acquired no title at all. Arsenault v. Inhabitants of Town of Roxbury, Me., 275 A.2d 598, 599 (1971). But a similar uncertainty can exist as to title depending upon the ostensibly correct execution of a warranty deed, the effectiveness of which might some day be destroyed by proof of forgery. Horvath v. National Mortgage Co., 238 Mich. 354, 213 N.W. 202, 56 A.L.R. 578 (1927); 23 Am.Jur.2d Deeds § 139 (1965); 26 C.J.S. Deeds § 68 (1956).

In any event, the only evidence presented to this Justice justified his conclusion that-for the purposes of this case-complete title to the lot in question had passed from the assessed owner to the city. Having so found, the Justice ruled that the sheriff could convey no interest to the Plaintiff and that the purported sheriff's sale was without consideration and a nullity. He also ruled that the Plaintiff was entitled to recover the purchase price.

The Defendant insists that the sheriff attached and sold an attachable interest in the real estate. ⁵ While it is abundantly clear that a right to redeem is, by statute, a right and interest in real estate and attachable, this former owner's right to redeem had been extinguished. There remained in the administrator only the contingent right to attempt to demonstrate by legal action that the estate's lost interest in the property should be restored. So the first question becomes whether such a right is an attachable interest in land. The Defendant introduced evidence to show that in that locality it is recognized that this right in the delinquent taxpayer (and persons claiming through him) has at least a nuisance value. The existence of value alone does not make the delinquent taxpayer's contingent right an attachable interest in land, however. It is more a chose in action than an interest in land and no provision was made for the levy and sale of such contingent rights by section 2201.

In our opinion it was not intended that the statutory right of attachment of interests in land should extend to include a mere contingent right to reclaim a lost title through legal action.

We have held that other somewhat similar contingent rights were not subject to attachment in the absence of statutory authorization. A creditor was held unable to reach by attachment the equitable interest of a debtor-husband in property conveyed by a third party to the wife but purchased with the husband's money, allegedly to defraud his creditors. Fletcher v. Tuttle, 97 Me. 491, 54 A. 1110 (1903). The interest of a mortgagee in land, the mortgage upon which had not yet been foreclosed, was held not subject to attachment. Smith v. People's Bank, 24 Me. 185 (1844). ⁶ The Massachusetts Court, in McMahon v. Gray, 150 Mass. 289, 22 N.E. 923 (1889)-cited with approval in Fletcher-found that a widow's right to have dower assigned to her out of the lands of her deceased husband was still contingent as to identity of the land to be assigned and could not be attached until the assignment had been made.

We are satisfied that the contingent right of the Administrator to attempt to regain by legal action title which had been lost completely is not an attachable interest.

We note, further, that the Defendant purported to have levied his execution upon a lot of land and not upon a chose in action. We do not consider that this satisfied the requirement that the right or interest of the debtor seized and sold must be described either specifically or in terms broad enough to include it, whatever be its nature. Highland Trust Co. v. Hamilton, 134 Me. 64, 181 A. 825 (1935).

The Justice was not in error in ruling that the Defendant acquired no legal interest of the debtor and conveyed nothing to the Plaintiff.

The question then becomes: Is the purchaser entitled to...