Smith v. D. R. G., Inc.

• Decision Date: 17 June 1975
• Docket Number: No. 58171,58171
• Citation: 331 N.E.2d 614,30 Ill.App.3d 162
• Parties: William L. SMITH et al., Petitioners-Appellants, v. D.R.G., INC., Defendant-Appellee.
• Court: United States Appellate Court of Illinois

Page 614

331 N.E.2d 614

30 Ill.App.3d 162

William L. SMITH et al., Petitioners-Appellants, v. D.R.G., INC., Defendant-Appellee.

No. 58171.

Appellate Court of Illinois, First District, Second Division.

June 17, 1975.

William Cousins, Jr., Chicago, for petitioners-appellants.

Allan L. Blair and David R. Gray, Chicago, for defendant-appellee.

LEIGHTON, Justice.

This appeal presents an issue that requires us to decide whether notice of a tax deed proceeding received by an owner-resident of real estate from his wife satisfies a statutory requirement that the notice be served on the owner personally. This question arises from a proceeding under section 72 of the Civil Practice Act brought by appellants William L. Smith and his wife, Betty L. Smith, to vacate an order that authorized issuance of a tax deed to appellee, D.R.G., Inc. The material facts are not in dispute.

I.

On May 27, 1969 real estate improved by a single family brick residence with an attached garage, owned and occupied by William L. Smith and Betty L. Smith, was sold to D.R.G., Inc. for $143.04, the principal, interest and costs in a tax foreclosure of one installment of special assessments on the property. The period of redemption was extended to December 27, 1971, but expired without redemption by the Smiths. On Suptember 8, 1971, as authorized by the Revenue Act, DRG, as the tax purchaser, petitioned for a tax deed. Application to the court was made on January 6, 1972; and to it were attached two affidavits. One, executed by DRG's agent, a process server, stated that on September 13, 1971 he served a copy of the notice on William L. Smith by handing and leaving it with him personally. The other, executed by DRG's lawyer, stated that on September 13, 1971 he personally served William L. Smith and Betty L. Smith with notice which told them that the period of redemption was to expire on December 27, 1971, and that application for a deed would be made on January 6, 1972.

The Smiths did not appear at the January 6 hearing; and on January 19, 1972, the court heard a prove-up of DRG's claim that it had complied with all notice requirements of the Revenue Act. The evidence presented consisted of testimony by DRG's lawyer and two process servers, one of whom executed the affidavit concerning personal service of the notice on William L. Smith. Without saying that he was the server, the lawyer testified that personal service was made on the parties; and that an agent of DRG was going to testify '* * * as to the service, or, at least, as to some of them.' As the last witness, the process server who had sworn to the personal service on Smith then testified that sonal service on Smith then testified that on September 13, 1971, he went to the her about her husband; that she said he was in the bathroom; that he gave Betty Smith two copies of the notice, one to give William Smith; and that he saw William Smith come out of the bathroom, take the notice from his wife and look at it. From this testimony, the affidavits and exhibits, the trial court entered an order finding that all persons entitled to notice had been served in the manner required by the Revenue Act. Issuance of the tax deed to DRG was ordered.

A few days short of five months later, in fact, after the deed was recorded, William Smith and his wife filed a pleading designated 'Petition and Complaint in Chancery Filed Under Section 72 of C.P.A. to Set Aside the Tax Deed.' In it, after describing their interest in and DRG's activities concerning the subject real estate, they alleged that the affidavit of the process server saying he had personally served William Smith with the required notice by leaving a copy with him personally was false and fraudulent; that the process server's testimony at the prove-up of DRG's application for the deed showed that personal service of notice on William Smith as required by the Revenue Act was not made; that the process server's claim of giving the notice to Betty Smith who in turn gave it to William Smith was false and fraudulent; that William L. Smith was not at home when the process server visited there; that William Smith was not served with notice personally as required by section 744 of the Revenue Act; and that the tax deed was void because DRG as the tax purchaser had not complied with the notice requirements of the Act. The Smiths prayed, among other relief, that an order be entered vacating issuance of the tax deed and removing it as a cloud on the title to their real estate.

DRG moved to dismiss the petition. The motion was denied. Then, it filed an answer. Thereafter, the trial court heard a motion by the Smiths for a temporary injunction. This was also denied. A short time later, an order was entered in which the court found (1) that after September 24 and November 26, 1971, the Smiths obtained estimates of redemption which showed them the amounts of money needed to redeem their property from the tax sale; (2) that they had not established any ground entitling them to relief under section 72 of the Civil Practice Act; (3) that DRG did not commit any fraud in procuring the tax deed; (4) that William L. Smith was not personally served with notice by the process server on September 13, 1971; and (5) that on the day in question, Smith received a copy of DRG's application for the tax deed, the notice being given to him by his wife, Betty Smith.

Accordingly, the court denied the petition. The issue presented is whether this denial was error. And in resolving it, we must determine whether the trial court had jurisdiction over William L Smith when it ordered the tax deed conveying his interest in the subject real estate to DRG and whether there was compliance by appellants with the jurisdictional prerequisites for their section 72 petition. Necessarily, this requires us to review the pertinent provisions of the Revenue Act and apply the principles of our law that govern jurisdiction of trial courts in cases like this one.

II.

At the time the special assessment on the Smith real estate became delinquent, section 713 of the Revenue Act required that the county collector transcribe the tax judgment, sale, redemption and forfeiture record at least five days before application for judgment of sale was made. (Ill.Rev.Stat.1969, ch. 120, § 713.) ¹ Section 706 provided that any time after the first day of September next, after all such delinquent general taxes on real estate have become due, or next after any taxes shall have been paid under protest in any year, the collector shall give notice, annually, by newspaper publication, of the intended application for judgment of sale of such delinquent real estate. (Ill.Rev.Stat.1969, ch. 120, § 706.) Section 711 required that the collector send by mail, at least five days before application for judgment, a notice informing the owner of the application. (Ill.Rev.Stat., 1969, ch. 120, § 711.) Operating in tandem with section 706 was section 716a which authorized advertisement of delinquent special assessments in the same manner as prescribed by section 706 for the sale of delinquent general taxes. Ill.Rev.Stat.1969, ch. 120, § 716a.

It appears, therefore, that compliance by the county collector with the provisions of section 713 served as a declaration or complaint in the proceeding to obtain judgment for delinquent taxes; the notices required by section 706 and 711 serve as process. (People ex rel. Brenza v. Anderson, 411 Ill. 252, 103 N.E.2d 629; People ex rel. Anderson v. Chicago and Eastern Illinois Railway Co., 386 Ill. 239, 53 N.E.2d 921.) Compliance with both the provisions of the Revenue Act which mandate preparation of the record of tax delinquent property and with those which require the giving of notice was essential to give the court jurisdiction of an application for judgment of sale by the county collector. People ex rel. Thaxton v. Coal Belt Electric Ry. Co., 311 Ill. 29, 142 N.E. 495; People ex rel. Ream v. Dragstran, 100 Ill. 286.

With regard to the real estate here involved, judgment and order of sale were entered in May 1969 on application of the county collector. No one appealed that judgment. Accordingly, 30 days from its rendition, the judgment and order became immune from collateral attack, except in two kinds of cases. ² (First Lien Co. v Markle, 31 Ill.2d 431, 202 N.E.2d 26; LaSalle National Bank v. Hoffman, 1 Ill.App.3d 470, 274 N.E.2d 640.) Therefore, the judgment entered on application of the county collector conclusively determined that there was an assessment of the property, that the assessment was legal, that the assessment was correctly computed, and that the collector had the power to satisfy the assessment by public sale. (First Lien Co. v. Markle, 31 Ill.2d 431, 202 N.E.2d 26; LaSalle National Bank v. Hoffman, 1 Ill.App.3d 470, 274 N.E.2d 640.) Neither the collector's application nor the judgment entered thereon, however, touched in any way on the ownership rights of parties interested in the subject real estate. For those interests to be reached, the Revenue Act and due process of law required that more be done. Windsor v. McVeigh (1876), 93 U.S. 274, 278--81, 23 L.Ed. 914; Rabbitt v. Weber & Co., 297 Ill. 491, 496--97, 130 N.E. 787; compare Pennoyer v. Neff (1877), 95 U.S. 714, 24 L.Ed. 565.

For this reason, the Revenue Act provided in section 716a that after judgment for sale is entered and the property is sold to the highest bidder for cash, the sale is to be confirmed by the court that entered the order. The purchaser is issued a certificate of purchase in the form governed by section 729. ³ (Ill.Rev.Stat.1969, ch. 120, §§ 716a, 729.) Section 716a gave the tax purchaser, or his assignee, the right to file a petition for issuance of a tax deed five months prior to expiration of the two-year period of redemption. (Ill.Rev.Stat.1971, ch. 120, § 716a.) To qualify for the deed, the tax purchaser had to serve the notices provided in sections 744 and 747 of the Act....