Beach v. Thrift Investment Co.

33 Ohio Law. Abs. 416, 20 Ohio Op. 12, 1940 Ohio Misc. LEXIS 380
CourtCuyahoga County Common Pleas Court
DecidedDecember 26, 1940
DocketNo 496425
StatusPublished

This text of 33 Ohio Law. Abs. 416 (Beach v. Thrift Investment Co.) is published on Counsel Stack Legal Research, covering Cuyahoga County Common Pleas Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Beach v. Thrift Investment Co., 33 Ohio Law. Abs. 416, 20 Ohio Op. 12, 1940 Ohio Misc. LEXIS 380 (Ohio Super. Ct. 1940).

Opinion

OPINION

By McNAMEE, J.

The land described in the petition was forfeited to the state by omission from the foreclosure list followed by publication pursuant to §5718-2 GC, and was offered for sale at public auction on March 19, 1940. Plaintiff was the highest bidder at the sale, paying ten per cent of the purchase price plus $1.25 to cover the cost of an auditor’s deed. Averring that he is ready, willing and able to pay the balance of such purchase price, plaintiff seeks a declaratory judgment praying that his rights and status as a purchaser be determined, and that he be adjudged the owner of said property free and clear of all liens and encumbrances.

The defendant, Adolph Pasternak, ■ is the holder of a mortgage on said property and contiguous parcels of land including the property described in the cross petition of defendant Jontzen.

Cross petitioner Jontzen was the purchaser at a forfeited land sale of the property described in his cross petition. Unlike plaintiff said cross petitioner has paid the full purchase price and received the deed from the eounty auditor. The cross petitioner joins in plaintiff’s prayer for a declaratory judgment asking that his title to said property be adjudged free and clear of the defendant Pasternak’s mortgage and of all other liens and encumbrances thereon. The property sold to cross petitioner Jontzen by the auditor consists of a parcel of 3.446 acres which is a part of a parcel consisting of 12.29 acres. The latter parcel was forfeited to. the state under the provisions of §5744 GC, by omission from the foreclosure list followed by publication. There was no forfeiture of the 3.446 acre parcel except as this parcel constituted part of the larger one of 12.29 acres.

Defendant Pasternak asserts that the sales to the plaintiff and cross petitioner are invalid by reason of defects in the proceedings anterior to the sales. He further claims that he has the right to- redeem'the property bid in by plain[418]*418tiff, inasmuch as the plaintiff herein has not received a deed from the county auditor. In open court defendant Pasternak offered to pay all taxes, assessments, interest and penalties assessed against the property purchased by plaintiff for the purpose of redeeming the same, and in April 22, 1940, he tendered the sum of $2,650.00 to the county auditor in payment of all charges against said property This tender was refused by the auditor solely because of the pendency of this action.

Defendant Pasternak further contends that neither the -sales of forfeited lands nor the auditor’s deed to the cross petitioner are efficacious to destroy or affect the validity and priority of his mortgage liens upon the properties in question.

The syllabus of Kahle v Nisley, 74 Oh St 328, reads as follows:

“Where, under §2899, Revised Statutes, lands have been duly forfeited to the state for the non-payment of taxes and penalty, a valid sale and conveyance of such lands by the county auditor, extinguishes all previous titles thereto, either legal or equitable, and invests the purchaser with a new and perfect title to said lands, discharged from all previous liens and incumbrances.”

In its decision in the Kahle case the Supreme Court adhered to the law as declared in Jones v Devore, 8 Oh St 430, wherein it is stated, at page 432 of the opinion:

“A valid tax title therefore extinguishes all previous titles, legal or equitable, inchoate or perfect; and the purchaser takes the premises discharged from all previous liens and incumbrances whatever. The tax is assessed upon the land itself, and is a paramount lien upon it; and its payment can be enforced only by the sale of the specific property taxed. All persons having any interest in the premises must, therefore, see to the payment of the taxes at their own peril.”

In the Jones case also the Supreme Court quoted with approval from Gwynne v Niswanger, 20 Ohio 556 (1851) as follows: “A tax title from its very nature has nothing to do with the previous chain of title; does not in. any way connect itself with it. It is a breaking up of all previous titles. The party holding such title, in proving it, goes no further than his tax deed; the former title can be of no service to him, nor can it prejudice him. It matters not how many different interests may be connected with the title, what may be the particular interest of the party in whose name the property may be listed for taxation; it may be a mere equitable right; if the land be regularly sold for taxes, the property, accompanied with a legal title, goes to the purchaser, no matter how many estates, legal or equitable, may be connected with it.”

See also Heffner v North Western Life Insurance Company, 123 U. S. 309.

In Cech v Schultz, 132 Oh St 353, 8 OO 113, the Supreme Court cites with approval the syllabus of the Kahle case (supra) and in the third paragraph of the syllabus of the Cech case it is held:

3. "Sections 5744 and 5762 GC (114 Ohio Laws, 838 and 841), plainly indicate that a purchaser at a land forfeiture sale acquires, as against the owner not merely a lien, but a prima facie and absolute title to the property, where the statutory proceedings have been legally complied with and no constitutional rights of the owner have been abridged.”

Thus from 1851 to the latest pronouncement of the Supreme Court in 1937 it has been uniformly held by the court of highest resort in this state that a purchaser at a tax sale or at a sale of land forfeited for nonpayment of taxes, upon receipt of the auditor’s deed, obtains an absolute estate in fee simple free from all existing liens and encumbrance.

Defendant Pasternak asserts, however, that §8542-1 GC, (effective August [419]*4191937) is effective to preserve the validity and priority of his mortgage liens upon the lands acquired by the State through forfeiture and sold to the plaintiff and cross petitioner herein.

He further contends that upon forfeiture of land to the state under the provisions of §5744 GC, the state obtains only the title, right, interest and claim of the former owner subject to liens and encumbrances existing therein.

The latter proposition will be first (considered. Sec. 5744 GC reads:

“Every tract of land and town lot offered for sale in foreclosure proceedings, as provided in the next preceding chapter, and not sold for want of bidders, and every tract of land and town lot omitted from foreclosure proceedings and duly advertised as provided in this chapter shall be forfeited to the state. Thenceforth all the right, title, claim, and interest of the former owner or owners thereof, shall be considered as transferred to, and vested in the state, to be disposed of as the General Assembly may direct.”

The defendant vigorously urges that “no statute has ever said that the state gets a title free from liens. It gets (by forfeiture) the title of the former owner; that what is sold at forfeited land sale is not the state of Ohio’s title but the title of the former owner divested by administrative process”.

The importance of the question presented justifies a careful examination ’of the argument thus made.

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Bluebook (online)
33 Ohio Law. Abs. 416, 20 Ohio Op. 12, 1940 Ohio Misc. LEXIS 380, Counsel Stack Legal Research, https://law.counselstack.com/opinion/beach-v-thrift-investment-co-ohctcomplcuyaho-1940.