Taxpayers' League of Wayne County v. Wightman
| Decision Date | 14 March 1941 |
| Docket Number | 30914 |
| Citation | 296 N.W. 886,139 Neb. 212 |
| Parties | TAXPAYERS' LEAGUE OF WAYNE COUNTY: v. DONALD S. WIGHTMAN ET AL., APPELLEES C. H. HENDRICKSON, APPELLANT, |
| Court | Nebraska Supreme Court |
APPEAL from the district court for Wayne county: CHARLES H. STEWART and ADOLPH E. WENKE, JUDGES. Reversed, with directions.
REVERSED.
Syllabus by the Court.
1. A city purchasing and foreclosing a tax sale certificate on real estate does so as trustee of an express trust for the use and benefit of all entitled to participate in the distribution of the proceeds, and such trustee may not bid in the property without paying the amount of bid.
2. On a judicial sale to satisfy a decree in which there was granted a first lien to a holder of a tax sale certificate bought at public tax sale, and a second lien on the same property in favor of a city under a private tax sale for subsequent paving taxes, the sheriff accepted a bid made in the name of the city clerk who was not a lienholder, for an amount sufficient to satisfy both decrees, but no part thereof was paid, or in any way satisfied, and report of sale was presented to court for confirmation and a decree of confirmation secured pro forma, without the attention of the court being called to the fact that bid was not paid, and sheriff's deed issued to bidder without any part of the consideration being in any way satisfied; held, that such proceedings amounted to more than a mere irregularity; that they constituted a constructive fraud and were void, and were not cured by the decree of confirmation; and, further, that the liens of the decrees under which the property was offered for sale were not satisfied or barred thereby.
3. In such case, an action may be maintained by a resident taxpayer to protect interests of city and public without showing any interest or injury peculiar to himself.
4. While it was essential that the plaintiff allege in his petition refusal of city to institute action or join in the action instituted, and ordinarily such allegation should be established by evidence, yet, where the city is made a party defendant and joins issue by answer contesting the plaintiff's cause of action, a demand will be deemed waived, as a demand under such circumstances would be an idle ceremony.
Appeal from District Court, Wayne County; Stewart and Wenke, Judges.
Action by the Taxpayers League of Wayne County and C. H. Hendrickson, on behalf of themselves and all other persons similarly situated, against Donald S. Wightman and Edith Wightman. Thereafter C. H. Hendrickson filed an amended petition against Donald S. Wightman, Edith Wightman, Walter S. Bressler, Hazel Bressler, and the City of Wayne to have a sheriff's deed issued to Walter S. Bressler as the result of a tax foreclosure proceeding and the quitclaim deed executed by Walter S. Bressler and Hazel Bressler to Donald S. Wightman, canceled, to have the City of Wayne decreed to be the owner of the realty, and for equitable relief. From a decree denying the petition and quieting title in Donald S. Wightman, as against the City of Wayne, C. H. Hendrickson appeals.
Decree reversed, and cause remanded with instructions to render decree in accordance with opinion.
C. H. Hendrickson, pro se.
H. E. Siman and H. D. Addison, contra.
Heard before SIMMONS, C. J., ROSE, EBERLY, PAINE, MESSMORE and YEAGER, JJ., and ELDRED, District Judge.
Originally the Taxpayers' League of Wayne county, Nebraska, and the appellant, C. H. Hendrickson, filed a joint petition in the district court for Wayne county, alleging that action was brought on behalf of all other persons similarly situated who care to join in the petition. Donald S. Wightman and Edith Wightman were at first the only defendants. Some preliminary motions and demurrers were acted upon by the trial court and by ruling on the last demurrer it was held that the petition, in its then form, did not state facts sufficient to constitute a cause of action in favor of either plaintiff. The Taxpayer's League does not file, or join in, any further pleadings filed in this case, although its name is still carried as a party plaintiff. No final judgment appears to have been entered as to said Taxpayers' League.
On March 23, 1939, an amended petition was filed by C. H. Hendrickson, plaintiff, v. Donald S. Wightman, Edith Wightman, Walter S. Bressler, Hazel Bressler, and the city of Wayne, defendants. Plaintiff, C. H. Hendrickson, as a resident and taxpayer of the city of Wayne, is seeking to have a sheriff's deed issued to defendant Walter S. Bressler for three lots in said city, as the result of a tax foreclosure proceeding, and also a quitclaim deed executed by Walter S. Bressler and Hazel Bressler, his wife, to Donald S. Wightman, canceled; and that the city of Wayne be decreed the owner of said property, and for equitable relief. All defendants answered and, after a few admissions of formal allegations, deny generally all allegations of said amended petition, and plead that the property was sold for fair and reasonable value. No specific affirmative relief is asked by any of the defendants, but defendant Wightman asked for dismissal of plaintiff's amended petition and for general equitable relief. October 17, 1939, decree was entered denying prayer of petition and quieting title to property involved in the defendant Donald S. Wightman, as against the city of Wayne. Plaintiff, C. H. Hendrickson, has appealed.
On October 31, 1931, the city of Wayne brought an action in the district court for Wayne county to foreclose a tax lien on lots 1, 2, and 3, in block 6, in Crawford & Brown's Addition to Wayne, Nebraska, making Alfred H. Lewis, the fee owner, Margaret Lewis, his wife, and one Alice V. Lewis, also the holder of a tax lien, parties defendant. The claim of the city of Wayne was based on an alleged purchase by it of said real estate on June 25, 1931, at private tax sale for delinquent paving tax installments one to ten, inclusive, in paving districts No. 3 and No. 4 of said city, aggregating $ 2,495.21. A cross-petition was filed by Alice V. Lewis for foreclosure of a tax sale certificate issued to her on October 13, 1930, on a public tax sale of said premises for delinquent taxes for the year 1928, amounting to $ 75.68, and for subsequent taxes for the years 1929, $ 65.25, and 1930, $ 64.64, being general taxes assessed and levied on said property for state, county, school district and municipal purposes. March 18, 1932, decree was entered in favor of Alice V. Lewis for $ 235.72, with 12 per cent. interest from said date, which was adjudged to be a first lien on said premises, and in favor of the plaintiff, the city of Wayne, for the sum of $ 2,713.76, with 12 per cent. interest from said date, which was adjudged to be a second lien thereon. September 9, 1936, an order of sale was issued commanding the sheriff to sell said real estate to satisfy the amount on both of said liens. Sheriff's return shows he sold property on October 19, 1936, to defendant Walter S. Bressler for the sum of $ 4,600. No money was paid by bidder or any one else on said bid. September 27, 1938, sale was confirmed and deed ordered issued. Decree of confirmation does not show any money received and no order was made for disbursement of proceeds of sale. September 30, 1938, the sheriff of said county issued to said Walter S. Bressler a sheriff's deed for said premises, reciting sale to Walter S. Bressler for $ 4,600. There is no contention made by any party to this proceeding that the $ 4,600, or any part of it, was ever paid. Defendant Walter S. Bressler, at the time of the transactions involved herein, was the city clerk of the defendant city of Wayne, and he made the bid and took the sheriff's deed to the real estate as trustee for and on behalf of the city of Wayne, though proceedings do not recite that he was trustee for city. During the times mentioned, defendant Donald S. Wightman and wife were residing in Wayne, knew the said Walter S. Bressler was city clerk; that he made the bid for the property as trustee for the city of Wayne; and defendant Wightman had knowledge of that fact when he entered into an agreement for the purchase of the property.
It appears that the agreement through which Donald S. Wightman was to secure said premises from said Walter S. Bressler or said city was that he should pay $ 1,500 and receive title free and clear of all encumbrance, except subsequent paving tax installments. Wightman commenced negotiations with the mayor for said property on July 10, 1938, and after he had agreed on the price he undertook getting of quitclaim deeds from Alice Lewis Durnin and husband and Alfred H. Lewis and wife.
In payment of the consideration of $ 1,500 defendant Wightman gave one check for $ 100 and one for $ 1,034.75. He paid Alice Lewis Durnin, formerly Alice V. Lewis, who held the first lien in the tax foreclosure, for a quitclaim deed from herself and husband, executed on September 19, 1938, the sum of $ 319.21, and paid Alfred H. Lewis for a quitclaim deed from himself and wife, executed on the 19th day of September, 1938, the sum of $ 40. Defendant Wightman claims he was out about $ 200 additional on account of expense in securing these quitclaim deeds. All these transactions appear to have been had prior to the time the sheriff's sale was confirmed and sheriff's deed issued.
The checks given by the defendant Wightman, aggregating $ 1,134.75, as part payment of the purchase price, were delivered to city by the defendant Bressler, and the defendant Bressler and wife on the 5th day of October, 1938 executed and delivered to the defendant Wightman a quitclaim deed for said property. The city of Wayne on October 6, 1938, paid taxes on said property with...
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