Smith v. Lawler
| Decision Date | 01 September 1991 |
| Docket Number | No. 1847,1847 |
| Citation | 93 Md.App. 540,613 A.2d 459 |
| Parties | Amanda E. SMITH, Substitute Trustee, et al. v. Frank LAWLER et ux. , |
| Court | Court of Special Appeals of Maryland |
Carl A. Harris, Easton, and Russel A. Arlotta (Kramer & Gorney, Chartered, on the brief), Oxon Hill, for appellees.
Argued before ALPERT, WENNER and CATHELL, JJ.
This appeal involves three consolidated cases. Two of the cases involve tax sale foreclosures and the third case involves a subsequent foreclosure on a deed of trust. All three of the cases involve the real property known as Unit No. 423 A-204, Building No. 3, of the Georgian Garden Condominium (hereinafter the Property) located in Prince George's County.
The Property was sold by the Collector of Taxes for Prince George's County at a tax sale as a result of nonpayment of the real estate taxes levied against the subject property. Richard P. Arnold purchased the Property at the 1985 tax sale 1 and instituted an action to foreclose the right of redemption (CAE86-15663). A final judgment was entered, which allegedly gave him vested title. Arnold failed to pay the purchase price and Prince George's County obtained a judgment against him.
The County resold the Property at a tax sale in 1988. At this time, the claimed unpaid taxes were $14,156.80, which included the unpaid purchase price from the prior sale in the amount of $9,651.16 that the County had reduced to judgment against Arnold. 2 The Property was purchased by Frank Lawler for $18,000.00. Lawler paid the unpaid taxes Unfortunately, the title abstractors failed to discover, and appellees were unaware of, a lien on the Property resulting from a deed of trust that secured a note from Delores LaVern Poole, a former owner of the Property, for the principal sum of $24,735. The deed was duly recorded among the land records prior to the institution of both tax foreclosure actions. Through a series of transactions, the deed of trust was assigned to the Cadle Company. As a result of nonpayment of the sums secured by it, appellant Amanda Smith, substitute trustee, instituted foreclosure proceedings (CAE91-08043). The Property was sold to appellant Cadle Company.
at the time of sale and the [613 A.2d 461] remainder was to be paid in the event he obtained a final judgment in a subsequent tax sale foreclosure proceeding. Lawler filed a Complaint to Foreclose the Right of Redemption (CAE88-20976). On March 21, 1989, a final order was signed, conveying to Lawler title to the Property. On April 21, 1989, a tax sale deed from Prince George's County was recorded among the Land Records which purportedly conveyed title to the Property to appellees Frank and Laura Lawler, as tenants by the entirety
On May 2, 1991, appellees moved to reopen both of the tax foreclosure actions. The court ordered that the tax sale cases, CAE86-15663 and CAE88-20976, be consolidated with the deed of trust foreclosure, CAE91-08043, pursuant to a motion filed by appellees. The circuit court ordered that the tax sale orders be vacated and set aside and that appellants be added as party defendants to the tax sale proceedings. The trial judge ruled that appellees were entitled to an equitable lien for the sums they paid at the 1988 tax sale. Appellants filed this timely appeal and appellees cross appealed.
Appellants present us with five issues:
I. Whether the trial court erred by acting other than to simply ratify or deny ratification of the foreclosure sale.
II. Whether the trial court erred in establishing an equitable lien in favor of the appellees having priority over the deed of trust upon which the foreclosure occurred.
III. Whether the trial court erred in permitting the appellees to collaterally attack the final ruling in the tax sale cases by raising issues exclusive to the tax sale cases as exceptions to the ratification of the foreclosure sale.
IV. Whether the trial court erred in establishing a lien which is not reflected by the land records.
V. Whether the trial court erred in ordering that the tax sale orders and the deed to the appellees from Prince George's County be set aside and voided.
In their cross appeal, appellees make the following contentions:
1. After properly setting aside and voiding the tax sale order and tax sale deed in CAE88-20976, as required by due process and section 14-845(a) of the Tax-Property Article, the circuit court erred in failing to invoke the statutory tax sale redemption procedures under section 14-845(b) of the Tax-Property Article.
2. After properly setting aside and voiding the tax sale order and tax sale deed in CAE88-20976, as required by due process and section 14-845(a) of the Tax-Property Article, the circuit court erred in failing to establish a statutory lien on the property in favor of appellees for 3. After properly setting aside and voiding the tax sale order and tax sale deed in CAE88-20976, as required by due process and section 14-845(a) of the Tax-Property Article, the circuit court erred in failing to provide full equitable relief to appellees by establishing an equitable lien for all of the taxes and interest paid by appellees.
all of the tax sale purchase money paid by appellees, as [613 A.2d 462] required by section 10-137(a) of the Prince George's County Code.
Appellants maintain that the court below, in ratifying the mortgage foreclosure sale, was limited to simply ratifying the sale or denying the sale, and that by ratifying the sale subject to an equitable lien the court exceeded its authority.
Maryland Rule BR6(b)(4) provides that
[a] final order of ratification of a sale shall be passed by the court after the time for responding to any order ... has expired, if the court is satisfied that the sale was fairly and properly made, and exceptions are not filed to the report of sale, or if exceptions are filed but overruled.
Thus, if the court decides that the sale was held fairly and properly and exceptions are not filed, it shall ratify the sale. If, however, exceptions are filed that cause the court to decide that the sale was not fairly or properly held, it shall not ratify the sale.
On the other hand, Maryland Rule BR6(c) explicitly grants the court the power to "take such other action as justice may require" in the case of default by a purchaser after the sale has been ratified. The conspicuous absence of such explicit language in Rule BR6(b)(4) indicates the trial court's lack of authority to take action under BR6(b)(4) "as justice may require." Under Rule BR6(b)(4), the trial court's authority is thus limited to either ratification or denial. See Satchell v. State, 54 Md.App. 333, 339, 458 A.2d 853 (1983), aff'd, 299 Md. 42, 472 A.2d 457 (1984) (). See also In Re Leslie M., 305 Md. 477, 481, 505 A.2d 504 (1986).
The lower court, in the case sub judice, ratified the mortgage foreclosure sale subject to an equitable lien in favor of the appellees for the amount of the taxes they paid pursuant to the tax sale of the Property in 1988 and set aside and voided orders in the tax sale proceeding and also voided the tax sale deed. The only option available to the lower court was ratification or denial of the mortgage foreclosure sale. It did not have the discretion to create an equitable lien or to grant the additional orders.
We hold that Rule BR6(b)(4) gives the trial court the specific authority to ratify a foreclosure sale if the trial court finds that the sale was fairly and properly made and no exceptions are filed or exceptions are filed and overruled. If the trial judge finds that the sale was not fairly and properly held, then denial of ratification is appropriate. The rule provides no discretion or authority to do otherwise. Thus, any other action taken by the lower court, i.e., the creation of an equitable lien in favor of the appellees in the amount of $14,156.80 and the voiding and setting aside of the tax sale and the tax sale deed, was unauthorized. 3
On cross appeal, the appellees contend that the trial court in the exercise of its equitable jurisdiction has full power to hear and determine all objections that may be filed against a sale. They, thus, make an inference that the prior tax sale deed and foreclosure constitutes an exception to the mortgage foreclosure sale. In Voge v. Olin, 69 Md.App. 508, 515, 518 A.2d 474 (1986), cert. granted, 309 Md. 411, 524 A.2d 92 (1987), we held that "[t]he tax sale foreclosure statute does not expressly or impliedly preclude the circuit court from exercising its general equity jurisdiction in mortgage foreclosure proceedings." We went on to hold, however, that "until such time as the court enters a final judgment foreclosing the rights of redemption there is nothing to prevent the exercise by the court of its general equity jurisdiction based upon the tax sale redemption statute in a mortgage foreclosure action...." Voge, 69 Md.App. at 522, 518 A.2d 474. 4
While we do not perceive the tax sale matter to have been a...
To continue reading
Request your trial
-
PNC Bank v. Properties
...subsection. However, the rights of any person not included as a defendant are not affected by the proceedings. In Smith v. Lawler, 93 Md.App. 540, 552, 613 A.2d 459 (1992), we construed § 14–836(b)(2) in a factual context similar—in most but not all respects—to the case before us. In Lawler......
-
In re Wilkinson
...v. National Union Bank, 91 Md. 613, 46 A. 960 (1900); cf. Berman v. Berman, 193 Md. 614, 69 A.2d 271 (1949)); Smith v. Lawler, 93 Md.App. 540, 549, 613 A.2d 459, 464 (1992), cert. denied, 329 Md. 110, 617 A.2d 1055 (1993). The theory of the creation of an equitable mortgage is that even tho......
-
Mayor & City Council of Balt. v. Thornton Mellon, LLC
...or thereafter pursuant to motion filed within that period." Md. Code Ann., Cts. & Jud. Proc. § 6-408 ; See also Smith v. Lawler , 93 Md. App. 540, 551, 613 A.2d 459 (1992) (finding that the court had general revisory power for 30 days after the Judgment Foreclosing the Right of Redemption w......
-
Levenson v. G.E. Capital Mortg. Services, Inc.
...and, until judicially established, the subrogated lien does not exist. 73 Am.Jur.2d, § 135; 83 C.J.S., § 63; see Smith v. Lawler, 93 Md.App. 540, 549-50, 613 A.2d 459 (1992), cert. denied, 329 Md. 110, 617 A.2d 1055 (1993) (equitable liens must be established "either in a suit to enforce th......