Swofford v. Colorado Nat. Bank of Denver, 80CA0789
| Decision Date | 16 April 1981 |
| Docket Number | No. 80CA0789,80CA0789 |
| Citation | 628 P.2d 184 |
| Parties | John F. SWOFFORD, Plaintiff-Appellee, v. The COLORADO NATIONAL BANK OF DENVER, Defendant-Appellant. . II |
| Court | Colorado Court of Appeals |
Richard E. Falcone, Colorado Springs, for plaintiff-appellee.
Davis, Graham & Stubbs, A. Bruce Campbell, Steven J. Merker, Denver, for defendant-appellant.
John F. Swofford brought an action under C.R.C.P. 105, naming the Colorado National Bank of Denver (the bank) as a defendant, seeking a judgment that he is the owner of Lot 555 in the Woodmoor Greens Subdivision by virtue of a treasurer's deed issued to him because of the titled owners' failure to pay back taxes. The bank appeals from the granting of Swofford's motion for summary judgment. We reverse.
In 1972, William and Peggy Phillips purchased Lot 555 from the Woodmoor Corporation (Woodmoor). They executed and delivered a promissory note for $11,025 payable to the order of Woodmoor and gave a deed of trust to secure payment of the note. The deed of trust was duly recorded.
Woodmoor then pledged the Phillips' note, among others, to the bank as collateral security for a loan. Woodmoor endorsed the note to the bank and delivered it and the deed of trust to the bank on July 25, 1973. Neither the pledge agreement nor the endorsed note nor the assignment of the deed of trust was recorded.
In early 1974, Woodmoor became bankrupt. The bankruptcy court enjoined and stayed all of Woodmoor's creditors from taking any action to enforce any security interests in any property owned by Woodmoor. Thereafter, the bank applied to the bankruptcy court for relief from that stay and for permission to enforce its security interest in the Phillips' note, among others.
On March 25, 1976, that court entered an "Order of Abandonment of Property and Granting Relief from Stay" (abandonment order), which was duly recorded, along with an attached exhibit, with the clerk and recorder of El Paso County. That order provided, in pertinent part:
"The Colorado National Bank of Denver, its successors or assigns, may hereafter commence or continue any court action or public trustee's proceeding naming the bankrupt as a party for the sole purpose of enforcing its security interest in the real property subject to the deeds of trust listed in Exhibit A hereto or the adjudication of title to the real property listed on Exhibit A attached hereto ...."
Exhibit A was entitled:
"Real Properties Securing Promissory Notes Under Deeds of Trust to Public Trustee Pledged by the Woodmoor Corporation to the Colorado National Bank of Denver."
The Phillips were listed in Exhibit A as the makers of a promissory note in the original amount of $11,025 and as grantors of a deed of trust to Lot 555, and a legal description of the property was included.
Meanwhile, on November 3, 1975, Lot 555 was sold for 1974 delinquent taxes to Swofford for $165. Three years later, see § 39-11-120, C.R.S.1973, Swofford requested the El Paso County treasurer to issue him a treasurer's deed for the lot. Pursuant to § 39-11-128, C.R.S.1973, the Treasurer served notice on a number of persons that Swofford had requested a treasurer's deed, but the bank was not served with any such notice. Accordingly, the bank did not exercise its right to redeem Lot 555, and, on May 25, 1979, Swofford was issued a treasurer's deed, which was duly recorded.
Before the treasurer is authorized to issue a treasurer's deed:
"The treasurer shall serve or cause to be served, by personal service or by either registered or certified mail, a notice of such purchase ... upon all persons having an interest or title of record in or to (the land) ...." Section 39-11-128(1)(a), C.R.S.1973.
Citing Siler v. Investment Securities Co., 125 Colo. 438, 244 P.2d 877 (1952), the bank asserts that it was a person having an interest of record and was required to be served with notice and, in the absence of such service, the treasurer's deed was invalid. We agree.
The purpose of § 39-11-128, C.R.S.1973, is to forbid the issuance of a treasurer's deed unless notice is given to persons with an interest in the property, "particularly to one having the right of redemption." Bogue v. Miles, 107 Colo. 320, 111 P.2d 1055 (1941). Among those having the right to redeem is any person having a legal or equitable claim in the real property. See § 39-12-103(1), C.R.S.1973; Boyle v. Culp, 159 Colo. 423, 412 P.2d 543 (1966).
By virtue of the pledge agreement and Woodmoor's endorsement and delivery of the Phillips' note and the deed of trust, the bank's initial interest was a perfected security interest in the instruments, such being personal property. S...
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