Cook v. Pomozi (40 Ohio App. 566, 1931)

Levine, P. J.

This case comes into onr conrt on a petition in error wherein the judgment of the common pleas conrt confirming a certain tax sale as against objection of plaintiff in error, Walter E. Cook, treasurer of Cuyahoga county, is sought to be reversed.

It appears that oh December 5, 1927, Walter E. Cook, treasurer of Cuyahoga county, filed an action to foreclose an unredeemed land tax certificate on two lots. These lots were valued on the tax duplicate at $480 and $490, respectively, making a total valuation of $970. No taxes have been paid on them for about ten years, so that when the action was brought there was already due $1,823.81. Additional accumulations to August 11, 1930, brought the total tax up to $2,133.46.

The sheriff’s sale took place on July 11, 1930, and the certificate was bid in by Mr. David B. Stone for $200, and, in addition thereto, he assumed all taxes and assessments which have accumulated since issue of the certificate, namely, the sum of $283.

The plaintiff in error then filed a motion objecting to the confirmation of the sale, and after a hearing the court confirmed the sale.

It appears that in the first journal entry signed by the trial court the court found that it is not within the power or discretion of the court to refuse confirmation. A petition in error was then filed by plaintiff in error, wherein the major point contended for by the plaintiff in error was that confirmation is within the sound discretion of the court. Thereafter the trial court signed a nunc pro tunc entry saying that the phrase appearing in the first journal entry, “that it is not within the power and discretion of the court to refuse confirmation,” was so entered by a mistake of the clerk, and the subsequent journal entry corrected the same so as to make it appear that it is within the sound discretion of the court, and that in the exercise of its discretion it confirms the sale.

A supplemental journal entry was then filed by the plaintiff in error wherein the confirmation was attacked as an abuse of discretion.

There is also filed a bill of exceptions signed by the trial judge.

In the original briefs filed by the parties to this suit it seems to be conceded by both sides that the confirmation of the sale was within the sound discretion of the court, and that the sole reliance of plaintiff in error was upon the point that in this particular case the court abused its discretion. To quote from the original brief of plaintiff in error on page 3: “The great weight of authority holds that under circumstances as outlined herein, where it appears that the purchase price is grossly inadequate, that it is not mandatory upon the Court to confirm a sale, but that the Court has the power and the right to exercise sound judicial discretion.”

Then follows a long line of authorities to support this statement of the law above quoted. When- the matter came before the Court of Appeals for oral argument, plaintiff in error’s counsel departed from their original position as set forth in the original brief, and now contend that in a case like this the court has no discretion whatsoever, but is bound to refuse to confirm the sale, for the reason that the court is without power to confirm a sale in a case like this, unless the amount hid for the property was sufficient to take care of the unpaid taxes.

Defendant in error refers to several opinions of the Attorney General of the State of Ohio, the first of which is found in Volume 1 of 1922 Opinions of Attorney General of Ohio, page 682. The prosecutor of Lorain county asked him the following question: “What constitutes a legal bid for land sold for delinquent taxes under Section 5719 of the General Code?” After an analysis of all the statutes and a comparison with others, the opinion says that, so far as the sheriff is concerned, he is authorized to accept any bid. Whether the court may in its discretion refuse to confirm is reserved for further consideration. Likewise, whether a deficiency judgment can be taken for the unsatisfied balance is reserved for future consideration.

The last pronouncement cited by the Attorney General is found in Volume 2, Opinions of Attorney General of Ohio, 1928, page 1182, 27 Department Reports of the State of Ohio (1928), page 111. We quote the following statement: “It is the duty of the county treasurer, when requested by the Auditor of State, to enforce the lien of delinquent taxes and assessments, or either, and any penalty thereon, by civil action, for the sale of the premises in the Court of Common Pleas of the county, without regard to the amount claimed; and without regard to the probable amount to be obtained, in the same way mortgage liens are enforced.”

It is quite clear that for at least nine years the Attorney General has advised every prosecutor who has asked his advice and direction that land must be sold to the highest bidder, even if the full amount of the tax is not offered.

The prosecuting attorney of this county, who represents plaintiff in error, disagrees with the view expressed by the Attorney General. He calls our attention to two particular sections of the General Code, namely Section 5718 and Section 5719. Section 5718, in substance, provides that the prayer of the petition in a suit brought to foreclose the lien of the state under an unredeemed land tax certificate shall be “that the court make an order that said property be sold by the sheriff of the county in the manner provided by law for the sale of real estate on execution.”

He then calls our particular attention to Section 5719, General Code, which provides, in part, as follows: “Judgment shall be rendered for such taxes and assessments, or any part thereof, as are found due and unpaid, and for penalty, interest and costs, for the payment of which, the court shall order such premises to be sold without appraisement. [Italics ours.] From the proceeds of the sale the costs shall be first paid, next the judgment for taxes, assessments, penalties and interest and the balance shall be distributed according to law. The owner or owners of such property shall not be entitled to any exemption against such judgment, nor shall any statute of limitations apply to such action.”

It is therefore argued by the prosecutor that by virtue of the provisions of Sections 5718 and 5719, read together, it becomes apparent that while the property against which the lien is to be foreclosed is to be sold generally, in the manner provided by law for the sale of real estate on execution, that all the provisions relating to the sale of real estate on execution are not to apply because there is to be no appraisement, nor are there to be any exemptions.

The prosecutor maintains that the state has the right to take the property for taxes and to hold the same until it is redeemed by the owner, rather than permit speculators to purchase such property for little or nothing at the expense of the state and county, and then allow it to become delinquent for another four-year period, in the meantime having a chance to sell it at a handsome profit; and, further, that the power of the state to collect its taxes does not depend upon or fluctuate with economic conditions.

While we agree with the prosecutor that measures should be taken to protect the state and county against the rapacity of speculators, who seek to appropriate land sold for taxes for inadequate prices, yet it seems to us that all of this is remedied by vesting the trial court with discretion to confirm or to refuse to confirm the sale under the particular circumstances presented in each case. A protection is thereby afforded to the county and state against the activities of speculators. If the court in a given case finds that the consideration embodied in the bid offered at the sheriff’s sale is grossly inadequate, in view of the real value of the land, it then becomes the court’s clear duty to refuse to confirm the sale. If, on the other hand, the court is of the opinion that, in view of the present value of the land, the bid embodies the best price that can be obtained for the land, it may then confirm the sale.

In order to adopt the theory of the prosecuting attorney, it would be necessary for the court not merely to interpret the existing law, but in effect to also legislate and supplement the same. Section 5719 empowers the court to render judgment for taxes and assessments found due and unpaid, etc., for the payment of which the court shall order such premises to be sold without appraisement. The power of the court to make such order in the absence of legislation to the contrary includes the power to approve the sale if the court finds the price just and proper.

It will be noticed that in Section 5719 the following language is found: “From the proceeds of the sale the costs shall be first paid, next the judgment for taxes, assessments, penalties and interest and the balance shall be distributed according to law.” If the prosecutor’s contention be correct, that under no circumstances can the court approve such a sale unless the amount bid is sufficient to pay delinquent taxes, there would be no need to set forth in the statute that the costs shall first be paid. Quite the contrary would be true. The state would be entitled to its delinquent taxes first, for without that no sale could be confirmed. The fact that the Legislature sets forth that the court costs shall first be paid out of the proceeds contemplates clearly a situation where the proceeds of the sale may not be sufficient to take care of all the taxes.

In the case of Lessee of Buckley v. Osburn, 8 Ohio, 180, we find a more aggravated situation than could be claimed to exist in the present case. It appears that in October, 1823, a judgment was recovered in-favor of the state for taxes, penalties and interest in the sum of $111.60, with $5.60 costs. In July, 1824, the land was offered for sale under the judgment and was not sold for want of bidders. In December, 1828, it was offered for sale again, and was sold to W. for 25 cents. W. conveyed his certificate to R., and the County Auditor made a deed to R. We quote from the opinion the following language, pages 182 and 185, which should be pertinent to this case:

“Any person acquainted with the history of the state knows of the difficulty that existed in the collection of taxes in early times, and of the difficulty of sustaining sales which were made of lands for the non-payment of taxes.”

“Under the act of 1822 the land could not be sold unless for the amount of the judgment; but under the act of 1827 it was to be sold to the highest bidder. ’ ’

The upshot of the decision was to hold the sale valid under the particular circumstances. There are considerations of public policy which make it more beneficial to the state to vest the trial court with sound discretion to confirm or not to confirm the sale, depending upon the particular circumstances of each case. It seems to us a greater advantage that the state could take a loss, if necessary, and sell the land at the best price obtainable, so as to make the collection of future taxes on the land more probable. We are unwilling, in any event, to substitute the judgment .of the court for that of the Legislature, and we therefore content ourselves with the interpretation of existing laws, which, in our opinion, do not admit of the viewpoint taken by the prosecuting attorney. We adopt the contention found in the original brief of the prosecuting attorney that to confirm or refuse to confirm a sale of land sold for taxes is within the sound discretion of the court.

On the question as to whether the court abused its discretion, we must, of course, have recourse to the bill of exceptions. A perusal of same discloses that it consists in the main of remarks of counsel containing no admissions or statements tending to show that the price bid for the land at the sheriff’s sale was grossly inadequate. We must therefore assume, in the absence of a statement to the contrary, that the court had before it all the circumstances necessary to a proper determination of the matter before it. There is not a vestige of evidence found in the bill of exceptions even hinting at the fact that the price bid at the sheriff’s sale was, so out of proportion to the real value of the land as to be deemed grossly inadequate. There is no suggestion anywhere as to the real market value of the land at the time of the sale. We cannot therefore say upon this record that the court abused its discretion in confirming the sale.

The judgment of the common pleas court is therefore affirmed.

Judgment affirmed.

Wbygandt and Vickery, JJ., concur.