Summary
recognizing the all-encompassing terms of “forever barred” and “in any other proceeding” in § 44–9–31
Summary of this case from Medeiros v. Bankers Trust Co.Opinion
August 6, 1974.
PRESENT: Roberts, C.J., Paolino, Kelleher and Doris, JJ.
1. REAL PROPERTY. Tax Sale. Collector's Deed. Title. In relation to a tax sale, the collector's deed is in the nature of an independent grant from the sovereign which bars or extinguishes all former titles, interest and liens not specifically exempted, and the title conveyed is absolute, subject only to defeasance by redemption. G.L. 1956 (1970 Reenactment) §§ 44-9-1, 12, 24, 25 and 29.
2. TAXATION. Tax Sale on Realty. Petition to Foreclose Right of Redemption. Plea of Adverse Possession. After tax sale of their house, respondents continued to live therein for over 11 years after the sale, hence they were entitled to raise defense of adverse possession in answer to petition to foreclose right of respondents to redemption. G.L. 1956, § 34-7-1, (1970 Reenactment) § 44-9-12.
3. ADVERSE POSSESSION. Tax Sale. Adverse Possession Claimed by Taxpayer. Adverse possession in favor of persons whose house is sold in tax sale and who continue to live in the home cannot run from any date earlier than one year after the sale, namely the date when the purchaser at the tax sale can first seek to collect rents or to gain possession under the pertinent statute. G.L. 1956 (1970 Reenactment) § 44-9-12.
4. REAL PROPERTY. Adverse Possession Claimed by Taxpayers Following Tax Sale of Property. In pointing to the law applicable to adverse possession the court indicates that claimants who assert such a claim of title against the purchaser at a tax sale have the burden of convincing the trial justice that their occupation had ceased to be subordinate to the purchaser and that it had become so overt as to ordinarily come to such purchaser's attention. G.L. 1956, § 34-7-1.
PETITION to foreclose a taxpayer's right of redemption, before Supreme Court on appeal of defendants from judgment pursuant to decision entered in Superior Court by Murray, J., heard and appeal sustained, judgment vacated, and cause remanded to Superior Court for further proceedings.
George Ajootian, for petitioner.
James Farrell McAleer, for respondents.
This petition to foreclose a taxpayer's right of redemption was brought pursuant to the pertinent provisions of G.L. 1956 (1970 Reenactment) ch. 9 of title 44. It was heard and granted by a justice of the Superior Court. The respondents have appealed. Hereafter, we shall refer to the litigants by their last names.
In 1951, the Sylvestres purchased a single-family home that was located in Cranston. On May 25, 1960, the city's tax collector held a tax sale. He sold the Sylvestres' home to Picerne. The Sylvestres have continued to live in the home during the entire period from the time of the sale to the institution of this action, October 4, 1971, a period in excess of 11 years. Picerne has continued to pay the taxes due the municipality, but at no time has he taken any steps to seek rent or possession of the residence the Sylvestres call home.
The narrow, novel, and interesting issue raised by the Sylvestres' appeal is whether they may raise in these proceedings the defense of adverse possession. The trial justice said no. We say yes.
To place the issue presently before us in its proper perspective we will relate in narrative form the pertinent portions of ch. 9 of title 44 which relate to a municipality's efforts to enforce the collection of its taxes and to the relationship between the defaulting taxpayer and the tax sale foreclosure. For better readability, we will footnote the relevant sections and include the material portions thereof as an appendix.
Municipal taxes that are assessed against a person's real or personal property are a lien against his real estate for a period of at least three years. This lien is superior to any other lien, encumbrance or interest in the property with the exception of an easement or a restriction. After the tax sale is held, the tax collector is required to execute and deliver to the purchaser a deed which conveys a "title" which shall be held as security for the repayment of the purchase price plus all intervening taxes, costs, interest and penalties. A deed recorded within 60 days of the sale is prima facie evidence of the validity of the "title" conveyed. The purchaser has no right to either seek possession or demand rent until one year after sale.
General Laws 1956 (1970 Reenactment) § 44-9-1.
General Laws 1956 (1970 Reenactment) § 44-9-1.
General Laws 1956 (1970 Reenactment) § 44-9-12.
General Laws 1956 (1970 Reenactment) § 44-9-12.
General Laws 1956 (1970 Reenactment) § 44-9-12.
Following the expiration of the one-year period, whoever holds the tax title may bring a petition in the Superior Court to foreclose "all rights of redemption thereunder." However, any person having an interest in land sold for nonpayment of taxes has an opportunity to redeem the property by the payment of the requisite amount to the purchaser even up to the time the petition to foreclose is pending in court. Once the foreclosure decree has been entered, the title conveyed by the tax collector's deed becomes "absolute."
General Laws 1956 (1970 Reenactment) § 44-9-25.
General Laws 1956 (1970 Reenactment) § 44-9-29.
General Laws 1956 (1970 Reenactment) § 44-9-24.
The solution to the pending dispute is to be found by determining what passed at the 1960 sale. Picerne argues that since all he received was the city's lien, the Sylvestres, enjoying a possession under a legal title which was not adverse, cannot claim to hold possession under another title which is adverse. In taking this position, he relies on Nichols v. Reynolds, 1 R.I. 30 (1840). Since Picerne's premise is faulty, the case he cites is inapposite.
Under our law, the collector's deed is in the nature of an independent grant from the sovereign which bars or extinguishes all former titles, interests and liens not specifically excepted. The title conveyed is absolute, subject only to defeasance by redemption. Accord, Hefner v. Northwestern Life Ins. Co., 123 U.S. 747, 8 S.Ct. 337, 31 L.Ed. 309 (1887); Whiteman v. Mattson, 167 Colo. 183, 446 P.2d 904 (1960); Greene v. Esquibel, 58 N.M. 429, 272 P.2d 330 (1954); Broadhurst v. American Colloid Co., 85 S.D. 65, 177 N.W.2d 261 (1970); 2 Cooley, Law of Taxation, ch. XV 910, at 960-62 (1903).
Picerne's reliance upon the so-called lien theory is understandable. As a part of ch. 9 of title 44, the Legislature has included a suggested set of forms which can be used in various matters such as the perfection of a tax title, the redemption of property, or the assignment of tax titles. Picerne's petition is designated as "Form No. 5" and is entitled "Petition To Foreclose Tax Lien." The body of the form makes it clear that a person using this form is asking "* * * that the rights of all persons entitled to redeem from said proceedings may be foreclosed" and that the court enter a decree declaring that the petitioner's title "is absolute." It might be better if Form No. 5 were called "A Petition To Foreclose The Right Of Redemption."
In rejecting the Sylvestres' efforts to prove their adverse possession, the trial justice ruled that the statutory procedures set forth in the tax-sale statute precluded any attempt in this regard. She apparently felt that the Sylvestres could not invoke the doctrine of adverse possession until Picerne had first foreclosed the right of redemption and then attempted to evict them. The trial justice based her ruling on § 44-9-31. In essence, this section requires a person claiming an interest in the real estate who wishes to raise any question concerning the validity of the petitioner's title to file an answer in which is specifically set forth the matter upon which he relies "* * * or else be forever barred from contesting or raising the question in any other proceeding." She interpreted this section as limiting the challenge to questions involving the procedures taken prior to and relating to the sale. We will not take such a narrow view of the statute.
The phrases "forever barred" and "in any other proceeding" are all-encompassing. Furthermore, § 34-7-1 states that adverse possession can be pleaded "* * * to any action that shall be brought for such lands, tenements or hereditaments" and, if "proved" shall be a bar to such action. Accordingly, we believe that the Sylvestres should have been offered the opportunity to present the defense of adverse possession.
[3, 4] Finally, we wish to offer a comment or two about the tasks facing the Sylvestres after our remand. Since § 44-9-12 bars the purchaser from seeking rents or possession until a year after the sale, the earliest that the Sylvestres' adverse possession could have begun to run was May 25, 1961. See Davis v. Girard, 80 R.I. 237, 95 A.2d 847 (1953). Here, they must prove by clear and convincing evidence, actual, open, notorious, hostile, continuous and exclusive possession of the Cranston premises for the full statutory period of 10 years. Spangler v. Schaus, 106 R.I. 795, 264 A.2d 161 (1970). They have the burden of convincing the trial justice that their occupation had ceased to be subordinate to Picerne and had become so overt as to ordinarily come to Picerne's attention. See Walsh v. Morgan, 60 R.I. 349, 198 A. 555 (1938); First National Bank v. Dispeau, 32 R.I. 396, 79 A. 945 (1911). Whether the Sylvestres will succeed in this regard is not before us. All we decide today is that the holder of a tax title who procrastinates in foreclosing the right of redemption runs the risk of having his title divested by a successful showing of the requisite adverse possession.
It should be pointed out that the collector in conducting a tax sale is not looking for the highest bidder as that term is commonly understood. This official is required to sell the smallest undivided portion which brings into the municipality's coffers the money due it. The collector may sell the whole only in the event that no person offers to take a smaller portion. General Laws 1956 (1970 Reenactment) § 44-9-8. As a practical matter, the only offer made in most sales is for the whole interest. However, in those instances where a smaller interest is sold, the purchaser may foreclose the redemption as it relates to his interest and then bring a partition suit. Picerne's deed conveyed the entire interest.
The due process rights relative to notice of the sale to those having an interest in the real estate are recognized in G.L. 1956 (1970 Reenactment) §§ 44-9-9 and 44-9-11. The collector is directed to post notice of the time and place of the sale in two or more public places within his city or town at least three weeks prior to the event. In addition, he must insert in a newspaper published within the municipality a detailed notice of the sale listing its time and place, the specific properties to be sold identified by their assessor's plat and lot number, and the name of the person against whom the assessments have been made. The notice must be published at least three weeks before the sale and, weekly thereafter, a newspaper notice of the sale must be published informing the readers that the property listed in the original notice will be sold at public auction. Furthermore, mortgagees of record are to be given at least a 20-day notice of the sale. This notice is to be sent by registered or certified mail or to be personally served. Experience has shown that most mortgagees upon receipt of the notice will pay the back taxes and charges. They will then add this amount to the principal due on the mortgage. There is evidence that the Sylvestres had mortgaged their property.
The respondents' appeal is sustained. The judgment appealed from is vacated, and the cause is remanded to the Superior Court for further proceedings. 44-5-1
This appeal was originally heard by four justices with the Chief Justice not taking any part in its consideration. In February 1974, by a Per Curiam decision an equally divided court affirmed the judgment entered in the Superior Court. Picerne v. Sylvestre, 112 R.I. 682, 315 A.2d 62 (1974). Subsequently, we granted the Sylvestres' motion for a reargument before the full court. Picerne v. Sylvestre, 112 R.I. 945, 316 A.2d 348 (1974). Reargument has resulted in unanimity.