Lee v. Harrison

270 S.W.2d 173, 196 Tenn. 603, 32 Beeler 603, 1954 Tenn. LEXIS 427

• Court: Tennessee Supreme Court
• Decided: February 11, 1954
• Status: Published

Opinions

Mr. Chief Justice Neil

delivered the opinion of the Court.

The complainant, Edgar Allen Lee, Sr., filed his original hill in the Chancery Court of Bledsoe County against the above named defendants, claiming title to certain lands “lying partly in Bledsoe County and partly in Cumberland County (describing it by metes and bounds) containing 5000 acres” with certain specific lands excluded the several alleged owners being named in the bill. The number of lands thus excluded consists of 25' or more separate tracts of land. The complainant alleges that “he is in the actual, open, peaceable and exclusive possession by fenced, cleared, and cultivated fields and enclosures and that he and those through whom he claims have been in the actual, open, public and exclusive possession of the land hereinafter described for more than 30 continuous years.” Following the description above referred to the bill charges that the property involved constitutes “a part of Grants 2745 to William Pegg and Grant 3701 to Wiley Skillern, which Grants were originally for 5000 acres each.” The bill further alleges that “the defendant Tenn-Cumberland Corporation has recently obtained a deed to said land which was executed by W. F. Seals and wife bearing date of January 9, 1947, and recorded January 9', 1947, in the Register’s Office of Bledsoe County, which deed it is charged is champertous and void and constitutes a cloud on title. ’ ’ It charges that “the defendant G. E. Harrison is claiming title to the land through Pocahontas & Sewanee Coal & Iron Co., a corporation which went into bankruptcy August 16, 1923”; that this claim is also void.

The bill further charges that the “defendants are threatening to enter upon the land and make enclosures which threatened acts further complicate and injure complainant’s title and right of possession.”

The complainant claims title to said lands “by de-raigning title to the Grants aforesaid and by adverse possession under a recorded assurance of title for more than 30 years.”

The defendant Harrison filed an answer disclaiming any interest in any lands lying within Grant 2745; but puts in issue all material averments of the bill with respect to complainant’s title and possession of lands within Grant 3701, and averring that he is the owner and holder of the recorded title to Grant 3701.

The original bill and answer of the defendant Harrison were filed January 1, 1951, and February 3, 1951, respectively. A pro confesso was taken against the Tenn-Cumberland Corporation and the cause proceeded to proof. During the taking of proof the complainant sought leave, which was granted, to file a supplemental bill, October 23, 1951, the effect of which was to allege the existence of a tax deed which was filed as an exhibit to the testimony offered by the defendant Harrison. This tax deed is claimed to be void for many reasons, and complainant asks that it be declared void and a cloud on title.

The defendant Harrison filed a demurrer and answer to the supplemental bill which the Chancellor overruled. A,t the March term of court, 1952, the defendant Tenn-Cumberland Corporation’s motion to set aside the pro confesso was sustained. Whereupon the defendants filed an answer and demurrer to both the original and supplemental bill. Both of the demurrers to the supplemental bill are identical.

The foregoing statement of the case is in a large measure the findings of the Chancellor and is correct.

We deem it unnecessary to discuss the sufficiency of the pleadings other than to say that they present the following questions: (1) the alleged invalidity of tax deeds held by the defendants, and (2) whether or not the defendant’s plea of Code Section 1611 is applicable to this controversy.

The record discloses the following additional finding of facts by the Chancellor. The complainant put in evidence his chain of title to portions of Grants 2745 and 3701. The former was the ‘‘William Pegg Grant” from the State of Tennessee, bearing date of November 19, 1832, for 5,000 acres of land and described in the bill; the latter, known as the “Wiley Skillern Grant” from the State of Tennessee, bearing date of February 10, 1835, and containing 5,000 acres and described in the bill.

The defendant Harrison put in evidence his chain of title to that portion of Grant 3701, claimed by complainant. His claim commences with a Tax Deed bearing date of May 11, 1882, which was executed by J. P. England, trustee for Cumberland County to Cicero B. Duncan and purports to convey title to 14 different tracts, including the Wiley Skillern 5',000 acre Grant or tract of land for taxes for the years 1878-1879. In addition to the foregoing the defendant Harrison put in evidence a deed from the State of Tennessee to W. P. Seals purporting to convey the land involved in this suit and which is the deed referred to in the supplemental bill and claimed to be illegal and void.

The defendant Tenn-Cumberland Corporation offered its charter in evidence, and while complainant insisted that it was void, the Chancellor properly held it was a de facto corporation and only the State could attack its validity by proceedings in the nature of a quo warranto. See citations under Section 3716 of Williams’ Code.

The Tenn-Cumberland Corporation also put in evidence its tax title which consists of a deed by the Clerk and Master of the Chancery Court of Bledsoe County to the State of Tennessee and a deed from the State to W. P. Seals, and a deed from W. P. Seals to the defendant corporation.

The Chancellor, in his finding of the foregoing facts, concludes by stating, ‘‘ These deeds purport to convey .the lands involved in" this controversy, or at least that is the insistence of the defendants. If this insistence is good, complainant must fail.”

The learned Chancellor held that the foregoing claim of title under the several tax deeds could only be sustained upon the theory that there was a vestiture of title as held in Tennessee Marble & Brick Co. v. Young, 179 Tenn. 116, 163 S. W. (2d) 71. It was his well considered opinion that the deeds were invalid because (1) of illegal assessment, (2) for lack of notice, and (3) Code Section 1611 had no application.

The basis of his holding that the assessment for taxes was illegal was the failure of any proper description of the land in the State’s suit to collect delinquent taxes, with particular reference to the cause in coiafirming the sale in the Chancery Court of Bledsoe County in said cause No. 1106 for the years 1928 to 1938, inclusive, and bid in by the State for the sum of $10,053.15, representing the amount of tax liens. The foregoing tax deed purports to convey title to the lands in controversy. The said lands were later (December 10, 1946) sold by the State to W. F. Seals for $3,000, representing a complete settlement of the taxes for the years 1928 through 1945. Thereafter on January 9, 1947, Seals sold and conveyed by deed to Tenn-Cumbeidand Coi-poration what pui'ports to be a fee simple title to 5,000 acre Grants Nos. 2745 and 3701.

The Chancellor further found that in the State tax suit filed in Bledsoe County (Cause 1106) the two Grants 2745 and 3701 were assessed in the name of ‘ ‘Pocahontas & Sewanee Coal Co. and Roy Rose”, referring to the deed by R. B. Schoolfield, trustee, to Roy Rose and bearing date of December 15, 1923. The decree recites that Rose was made a party defendant by publication. But, says the Chancellor, “the record reveals that publication was not made for Roy Rose and that he was without actual or constructive notice of the suit. Thus, as to him the decree of the Chancery Court divesting title out of him and vesting title in the State of Tennessee was, therefore, void.”

The Chancellor and Court of Appeals concurred in finding’ that the lands now in controversy were assessed in the name of Pocahontas & Sewanee Coal Co. and Boy Bose .and the same was sold by decree of the Chancery Court of Bledsoe County, and was later sold by the State to W. F. Seals. This disposes of petitioner’s contention that it is not the same land that is now in dispute.

The Chancellor held that the tax deeds of the defendants were void for inadequate description of the land in the State’s tax suit and for lack of notice to Bose, and that Code Section 1611, pleaded by the defendants had no application. The said Code Section reads as follows:

“No suit shall be commenced in any court of this state to invalidate any tax title to land until the party suing shall have paid or tendered to the clerk of the court where suit is brought the amount of the bid and all taxes subsequently accrued, with interest .and charges as herein provided. ’ ’

The reason given by the Chancellor for holding the foregoing Code Section inapplicable was, to use his own language, “if the assessment was void, no taxes were owing, and if none were owing there could be none paid or tendered.” The original bill was sustained and the relief .as prayed for granted.

The cause was appealed to the Court of Appeals sitting at Knoxville and that court disagreed with the Chancellor upon the determinative questions, resulting in a petition for certiorari to this Court. The disagreements, which will be pointed out, are made the basis for assignments of error. One of the errors complained of is that the dourt of Appeals erred in holding that Tennessee Marble & Brick Co. v. Young, supra, had no application; that it was also error to hold that Code Section 1611, supra, was applicable to the present controversy.

The- attack made upon the decree of the Chancery-Court of Bledsoe County wherein title to the lands here involved was divested out of the taxpayer and vested in the State is without merit. The Court of Appeals was correct in holding that it was not a void decree but it w.as a vestiture of title even though it may have been a defective title. Since the taxpayer had notice of the proceedings, it could not be attacked in a collateral proceeding by complainant, who paid nothing and tendered nothing to the clerk of the court as provided in Code Section 1611.

In Esch v. Wilcox, 181 Tenn. 165, 178 S. W. (2d) 770, 772, opinion by Mr. Justice Gailor, it was held that the proceedings for the collection of taxes “are not subject to be reopened and reviewed in a collateral proceeding”, and furthermore it is a “proceeding in rem, and the parties are bound by actual or constructive notice.” Code 1932, Sec. 1332. Moreover we indulge the presumption favoring the regularity of the proceeding. Jones v. Sharp, 56 Tenn. 660; Puckett v. Jenkins, 61 Tenn. 484. While it is true the record fails to show constructive notice upon Rose, a defendant nontaxpayer, there is no showing that he did not have actual notice. He did not testify and his failure to testify is not explained. He was available because the record shows he executed a quitclaim deed to the complainant for the sum of $500 which is relied on by complainant as a conveyance of title. It appears from the record that the complainant undertook to confer upon himself some semblance of “a registered color of title” by conveying the land to his wife “for love and affection”, who two days thereafter reconveyed to Mm the same land “for love and affection”. This added nothing whatever to complainant’s claim of title by adverse possession. The parties knew that the State had previously conveyed a fee simple title to W. F. Seals for $3,000, which was a compromise settlement of the taxes due.

We find no merit in complainant’s contention, as appears from the testimony of his counsel, that the land in question had never been assessed to Rose. Considering, as we do, that the tax snit was “a proceeding’ in rem”, Rose, the nontaxpayer for over twenty years, conld not regain title and possession without first tendering the amount of taxes due; and his vendee, the complainant herein, could not do so, since his right rises no higher than his vendor. The case of Tennessee Marble & Brick Go. v. Young has no application since in that case it was held that the decree of sale was void because the Chancery Court under the Moratorium Act of 1935 was without any legal authority to confirm a sale of the land. Moreover it was further held that complainant in seeking to set aside the tax deed and sale of complainant’s property was entitled to relief “by paying into court the amount of taxes due from it, together with interest and penalty.”

The record shows that the value of this property for taxation ranges from $40,000 in 1928 to $24,660 in 1942. The supplemental bill charges that it was not assessed to the owner, Roy Rose, or “in the name of anyone”. There is no proof that the complainant or his predecessor, Rose, ever paid any taxes for a period of over twenty years, and there is no offer by complainant to pay any part of the taxes due. In dealing with this situation the Court of Appeals made the following timely observation:

“We think the complainant’s position is wholly inequitable. He in effect says, ‘this land has escaped taxation for all these years; I have taken a quit claim from the owner under some sort of an arrangement I do not choose to divulge; and I want the State, to whom I have paid nothing and owe nothing, to exercise one of the highest equitable functions, namely, the removal of alleged clouds upon my title.’ ”

Conceding that there is some merit in complainant’s contention that there was as a matter of law a failure of description of the property, or inadequate description, we think Code Section 1611 is applicable and properly pleaded. We concur in the following statement by the Court of Appeals: ‘ ‘ The statute contemplates that the attack will be based upon some imperfection in the tax proceeding. Why should it not apply to an inadequate description as much as to any other defect¶” (Emphasis ours.)

As a further reason for affirming the Court of Appeals, we think Section 3, Chapter 28 of the Public Acts of 1947, and which appears in Supplement to the Official Code of 1950, as Section 8585.1, is applicable to the present controversy. It reads as follows:

“Right of action lost by failure to pay taxes for twenty years. — Any person having any claim to real estate or land of any kind, or to any legal or equitable interest therein, the same having been subject to assessment for state and county taxes, who and those through whom he claims have failed to have the same assessed and to pay any state and county taxes thereon for a period of more than twenty years, shall be forever barred from bringing any action in law or in equity to recover the same, or to recover any rents or profits therefrom in .any of the courts of this state; provided, that this section shall not apply to persons under twenty-one years of age or to persons of unsound mind if suit shall be brought by them, or any one claiming through them, within three years after the removal of such disability. ’ ’

The writ of certiorari is denied.