Mount Clemens Sav. Bank v. State Land Office Bd., 55.

• Decision Date: 05 June 1944
• Docket Number: No. 55.,55.
• Citation: 14 N.W.2d 817,309 Mich. 153
• Parties: MOUNT CLEMENS SAV. BANK v. STATE LAND OFFICE BOARD.
• Court: Michigan Supreme Court

309 Mich. 153

14 N.W.2d 817

MOUNT CLEMENS SAV. BANK

v.STATE LAND OFFICE BOARD.

No. 55.

Supreme Court of Michigan.

June 5, 1944.

Action by Mount Clemens Savings Bank, a Michigan banking corporation, against State Land Office Board, a body corporate, for a declaratory judgment as to proper distribution of money paid by federal government for land formerly owned by petitioner, sold to state for delinquent taxes, and condemned by the United States for public use. From a judgment in favor of petitioner, respondent appeals.

Judgment reversed and judgment in favor of respondent entered.

Appeal from Circuit Court, Macomb County; George W. DesJardins, judge.

Before the Entire Bench, except REID, J.

Herbert J. Rushton, Atty. Gen., Edmund E. Shepherd, Sol. Gen., of Lansing, and Elbern Parsons, Asst. Atty. Gen., for appellant.

Nunneley & Nunneley, of Mount Clemens, for appellee.

SHARPE, Justice.

Petitioner filed a petition in the circuit court of Macomb county for a declaration of rights as to who is entitled to condemnation moneys paid by the federal government. The facts are not in dispute. The petitioner, Mount Clemens Savings Bank, acquired the lots in question in 1932. Because of unpaid taxes the lots in question were bid to the State of Michigan at the 1939 tax sale, and on November 29, 1940, the property was deeded to the State by the Auditor General. The property was due to be put up for sale at public auction by the State land office board under the provisions of Act No. 155, Pub.Acts 1937, as amended, at the regular public auction sale conducted by said board which began February 2, 1941. No sale of the lots was conducted on that date owing to the fact that the United States seized the title of the property by condemnation petition with declaration of taking. The award on condemnation which has been tendered by the United States is approximately $3,000. The amount of delinquent taxes cancelled by vesting title in the State was substantially the full amount of the award.

Petitioner, claiming that if the condemnation had not intervened it would have acquired the property at the State land office board sale for $760, and that it had been deprived of that right by the action of the United States in seizing the title before such a sale was made, filed a motion in the United States District Court for the Eastern District of Michigan asking for a distribution of the award of approximately $3000 as follows: $760 to the State land office board, and the balance to petitioner, as owner of the property prior to vesting of title in the State. The petition in the district court is being held in abeyance until the ownership of this fund is established in the State court. The trial court, after hearing the cause, entered a declaratory judgment in favor of petitioner in which it was determined that the State of Michigan was entitled to $760, and petitioner entitled to the balance, in the distribution of the condemnation award in question. The State land office board appeals and urges that the State, as absolute fee title owner of the lands in question on the date of seizure by the United States, was entitled to the entire award.

Petitioner urges that it had a granted special right to acquire title to this property at a mandatory public sale; that this right is private property within the meaning of the...