Pratt v. Woolley

• Decision Date: 20 October 1976
• Docket Number: No. 74-271-A,74-271-A
• Parties: Ernest PRATT v. William A. WOOLLEY et al. ppeal.
• Court: Rhode Island Supreme Court

Page 424

365 A.2d 424

117 R.I. 154

Ernest PRATT v. William A. WOOLLEY et al.

No. 74-271-Appeal.

Supreme Court of Rhode Island.

Oct. 20, 1976.

[117 R.I. 163] Joan M. Montalbano, North Providence, for petitioner.

Taft & McSally, James J. McKenna, Providence, for William A. Woolley and Jeanette H. Woolley.

Beals, Jerue & DiFiore, David K. Duffell, Providence, for Suburban Land Co.

OPINION

DORIS, Justice.

This is a petition to foreclose a taxpayer's right of redemption brought pursuant to the provisions of G.L.1956 (1970 Reenactment) chapter 9 of title 44. The petition to foreclose was heard by a Superior Court justice who denied the petition but ordered the petitioner's promissory note to respondent cancelled and denied respondent's claim for compensation for repairs. The respondent Suburban Land Company (Suburban) has appealed. The question to be decided by us is the scope of jurisdiction granted to the Superior Court by chapter 9 of title 44.

The pertinent facts are as follows. In 1969, land owned by respondents, William A. and Jeanette H. Woolley, was sold at a tax sale (the first tax sale). ¹ The land was purchased by Suburban. Thereafter, Suburban spent a substantial sum in making necessary repairs to the property. Within the required statutory period, the Woolleys redeemed the property.

In May 1972, the property was again sold for taxes (the second tax sale), and again purchased by Suburban. In October of that year Suburban conveyed the property, subject to the right of redemption, to petitioner Ernest Pratt. Suburban received from petitioner a cash downpayment and a promissory note secoured by a mortgage on the subject property.

In November 1973, in order to make his title absolute, Pratt filed the petition to foreclose any right of redemption which is the subject of this appeal. That petition was filed pursuant to § 44-9-25, which provides as follows:

'After one (1) year from a sale of land for taxes, except as provided in §§ 44-9-19 to 44-9-22, inclusive, whoever then holds the title thereby acquired may bring a petition in the superior court for the foreclosure of all rights of redemption thereunder. Such petition shall set forth a description of the land to which it applies, with its assessed valuation, the petitioner's source of title, giving a reference to the place, book and page of record, and such other facts as may be necessary for the information of the court. Two (2) or more parcels of land may be included in any petition brought by a town, as purchaser of such title or titles, if such parcels are in the same record ownership at the time of bringing such petition (Form 5).'

By the terms of § 44-9-29, persons claiming an interest in the subject property have a right to redeem the land:

'Any person claiming an interest, on or before the return day or within such further time as may on motion be allowed by the court, shall, if he desires to redeem, file an answer setting forth his right in the land, and an offer to redeem upon such terms as may be fixed by the court. Thereupon the court shall hear the parties, and may in any case in its discretion make a finding allowing the party to redeem, within a time fixed by the court, upon payment to the petitioner of an amount sufficient to cover the original sum, costs, penalties, and all subsequent taxes, costs and interest to which the petitioner may be entitled, together with the costs of the proceeding and such counsel fee as the court deems reasonable. The court may impose such other terms as justice and the circumstances warrant.'

The Woolleys exercised their statutory right and offered to redeem the property. Suburban filed an answer noting its interest as a mortgagee and also filed a claim for reimbursement from the Woolleys for the repairs to the property performed prior to the second tax sale.

A hearing was held on the above described issues. At the hearing, petitioner sought additional relief. He requested the court to cancel the promissory note Suburban for the balance of the purchase price of the property in the event that the Woolleys were allowed to redeem. A final decree was entered according to which the Woolleys were allowed to redeem the subject land. The decree also ordered Suburban to cancel the promissory note and denied Suburban's claim for compensation for repairs. The disposition of the latter two issues is challenged by Suburban. On appeal to this court Suburban urges that the Superior Court was without jurisdiction to rule on either the promissory note or the claim for improvements.

I

We will first consider the power of the Superior Court to cancel petitioner's promissory note to Suburban. The petitioner argues that the redemption of the land by the Woolleys constituted a failure of consideration with respect to its note to Suburban. Thus, petitioner claims, it was within the equitable powers of the Superior Court to cancel the note. We cannot agree.

The jurisdiction of the Superior Court is solely statutory in nature and cannot be extended by judicial interpretation. Boss v. Sprague, 53 R.I. 1, 162 A. 710 (1932). An examination of the statutory foundation of a tax sale foreclosure proceeding reveals that such a proceeding is not an ordinary civil action. It is a unique procedure created by statute for a limited purpose; to provide a forum for the exercise of the right to redeem the subject land. In entertaining a petition to foreclose, the Superior Court may hear only those matters which the statute specifically empowers it to hear.

This limitation of the court's jurisdiction is a consequence of the procedural differences between an ordinary civil action and a statutory foreclosure petition. For example, the petitioners must ascertain all parties interested in the subject land, but a copy of the petition need not be served upon such parties; simple registered or certified mail notice of the existence of a petition is all that is required. Section 44-9-27. An answer to the petition is required only if a party desires to redeem. Section 44-9-29. No provision is made for the assertion of any rights other than the right to foreclose or the right to redeem. No provision is made for any additional responsive pleadings. The model forms provided in the statute make no provision for the litigation of any issues aside from the right to redeem the subject land. Section 44-9-46.

That the tax sale foreclosure proceedings were intended by the Legislature to be governed by procedural rules quite different from those applicable to ordinary civil actions is further indicated by Super.R.Civ.P. 81(a)(2). That rule exempts tax sale foreclosure petitions from the operation of the Rules of Civil Procedure. Professor Kent comments that the rationale for this exclusion is that the tax sale statute provides fully developed statutory procedures which it was considered undesirable to alter. 1 Kent, R.I.Civ.Prac. § 81.2 at 551.

In light of the differences described above it would be manifestly unfair for the Superior Court to hear at a foreclosure proceeding claims which were unrelated to the taxpayer's redemption rights. The statutory mechanism provided for the resolution of tax title disputes simply cannot be used to satisfactorily litigate other, unrelated claims. The case at bar is an excellent example of the unfortunate consequences which can result from a court attempting to exercise its general jurisdiction in a limited statutory action. The validity of the promissory note to Suburban was entirely unrelated to petitioner's right to foreclose or the Woolleys' right to redeem. Consequently, nowhere in the original petition, nor in the motion to amend by which Suburban was named respondent, was the issue of the promissory note raised. It follows that neither Suburban not the court had pretrial notice of that contested issue. Suburban of course filed no responsive pleading concerning petitioner's attempt to cancel the note. Presumably no discovery was available to either party. Yet, despite such unorthodox proceedings, the court ordered Suburban to cancel the promissory note.

For the reasons discussed above, we conclude that the cancellation of the promissory note was beyond the jurisdiction of the Superior Court. Although the exact issue has not previously come before this court, our prior decisions support this conclusion. ² In Worrell v. Beach, 63 R.I. 95, 7 A.2d 666 (1939), a trustee filed a 'petition for directions' that was not authorized by statute. The trial court heard the petition and filed a written decision. On appeal to this court, the parties briefed and argued relevant questions of probate law. We refused to hear the appeal and ordered the petition dismissed. We said:

'But we are aware of no authority by which the superior court, under its general equity jurisdiction or under its statutory equity jurisdiction, has the right to determine upon a mere petition the questions involved in this proceeding. The usual and uniform procedure to obtain any relief under the equity court's general equity jurisdiction is by a bill of complaint, unless otherwise provided by statute. A petition is not ordinarily considered as a permissible substitute for a bill of complaint. The nature of the proceedings and the consequent pleadings and practice under each are different. A bill of complaint is formal and requires an answer or other pleading; whereas a petition is more...