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Stein v. Olsen

FEBRUARY 26, 1975.

MAX E. STEIN ET AL., D/B/A THORNTON, LTD., PLAINTIFFS-APPELLANTS,

v.

SIDNEY R. OLSEN, REGISTRAR OF TITLES, ET AL., DEFENDANTS-APPELLEES.



APPEAL from the Circuit Court of Cook County; the Hon. EDWARD F. HEALY, Judge, presiding.

MR. JUSTICE JOHNSON DELIVERED THE OPINION OF THE COURT:

Rehearing denied April 2, 1975.

This appeal results from a complaint having been filed by the plaintiffs-appellants (hereinafter Thornton) for a declaratory judgment seeking a declaration that a certificate of sale and tax deed, issued to Thornton, are presently valid and effective, in spite of the fact that the tax deed has not been registered in the register of titles as a memorial upon the Torrens certificate. The complaint, in addition, seeks injunction as well as other collateral relief, and in the alternative seeks damages against the County of Cook. The defendants-appellees (hereinafter County), Sidney R. Olsen, Registrar of Titles of Cook County, the County of Cook, and all parties having an interest in the subject real estate, filed their answer challenging the validity of the tax sale and the tax deed which was executed thereon. Thornton moved to strike certain portions of the defendants' answer on the grounds that the pleadings constituted a collateral attack on the tax deed proceedings and filed a motion for summary judgment on the issue of liability. The trial court denied both motions on May 20, 1971. Then the County filed a motion for summary judgment and Thornton followed with a counter motion for summary judgment. The trial judge entered his order denying Thornton's motion and granting the County's motion for summary judgment. We affirm.

In this appeal, Thornton raises the following issues for review:

1. Did the entry of orders and judgment for the registrar of titles, based on the contention that the taxes had been paid and that a tax sale and subsequent tax deed were void, constitute an unlawful and prohibited collateral attack on the tax deed proceedings?

2. Did a payment of a sum of money prior to the tax sale constitute full satisfaction of a delinquent tax lien though it is undisputed that the statutory penalty for the period from the date of forfeiture to the date of payment was not paid?

In this case Thornton, a partnership, purchased the forfeiture on certain real estate, commonly described as 7325 Luella Avenue, Chicago, Illinois, for back taxes in the year 1930. After the payment of money in the amount of $830.50, a certificate of purchase, No. F 25959, was issued and delivered to Thornton, Ltd., by the collector of Cook County, Illinois, on December 12, 1966. There was no redemption or offer to redeem during the period between December 12, 1966, and December 26, 1968, the alleged period of redemption. Consequently, on January 14 and 15, 1969, in case No. 68 CO TD 924, the circuit court directed the county clerk to issue a tax deed conveying title to the property to Thornton, Ltd. Therefore, pursuant to the court's order, tax deed No. 14750 B, dated January 14, 1969, was issued to Thornton.

On February 21, 1969, Thornton presented the tax deed, together with a certified copy of the order of January 15, 1969, directing the issuance of the deed to the registrar of titles and demanded that a new owners' duplicate certificate of title be issued to Thornton, Ltd. This request was repeated by Thornton in a letter dated April 7, 1969. Then, on November 12, 1969, another written demand was made for the above requested action but refused. Finally, on December 11, 1969, a final request was made but refused by a letter dated December 18, 1969, wherein Thornton was advised that the registrar of titles would not accept the tax deed for registration.

Olsen's refusal to accept and file the tax deed followed a routine investigation which disclosed that the delinquent tax from the year 1930 had been paid. The registrar's actions were predicated on his interpretation of several documents. The payment was listed in the 1931 tax warrant books kept by the county clerk, volume 313, page 17. Furthermore, the tax judgment, sale, redemption and forfeiture record for the year 1930 (volume 294, page 17), did not reflect entry of a judgment for which the property could properly have been sold. The investigation also revealed that the taxes due and owing for the depression years 1930, 1931, 1932, 1933, 1934 and 1935 were paid on March 30, 1936, and that the prevailing custom prior to 1932 was to add taxes due and owing for past years to the current year's tax bill for payment in one lump sum. The records disclosed that $189.45 was paid for the tax in the year 1930, and the amount paid was underlined in green ink. Although the county's record indicates that the 1930 tax was paid, no statutory penalties were paid.

The County contends that the tax deed transferring the property to Thornton was void, and the court had no jurisdiction to enter said order since it was divested of any jurisdiction in the cause by payment in 1936. Thornton, on the other hand, argues that the failure to pay the redemption amount in full, which is estimated to be $239.91, resulted in a tax liability for which the property could be validly sold. Therefore, the tax deed issued to them was valid and enforceable.

The record, in the instant case, discloses that the subject property was registered in the Torrens system of land registration, and was sold pursuant to section 272 of the Illinois Revenue Act of 1939 (Ill. Rev. Stat. 1969, ch. 120, § 753). Section 272 of the Revenue Act prescribes the procedure to be followed when property forfeited to the state is redeemed by the owner or purchased by a tax purchaser. The sale of forfeited property, however, is a sale "for nonpayment of taxes." (Keilty v. Chicago Real Estate Co. (1962), 25 Ill.2d 581, 585, 185 N.E.2d 872.) The registrar concluded, after examining the 1931 tax warrant book and the tax judgment, sale, redemption and forfeiture record for the year 1930, that the 1930 tax was paid on March 30, 1936 together with taxes for the intervening years to 1936.

The county court's annual applications for judgment and order of sale is a special statutory proceeding created by the Revenue Act of 1939, as amended. The trial court functions pursuant to special statutory jurisdiction granted in the Revenue Act. (La Salle National Bank v. Hoffman (1971), 1 Ill. App.3d 470, 474, 274 N.E.2d 640.) In order for the court to invoke its special statutory jurisdiction, the taxes on the subject property must be delinquent. Section 270 of the Revenue Act incorporates this requirement and provides as follows:

"* * * [T]he judgment itself is conclusive evidence of its regularity and validity in all collateral proceedings, except in cases where the tax or special assessments have been paid or the real estate was exempt from general taxes under this Act or was not subject to special assessments: * * *." (Ill. Rev. Stat. 1969, ch. 120, § 270.)

This provision of the statute refers to judgments which the court had jurisdiction to render. The court can invoke its jurisdiction when a tax on property is delinquent or unpaid, but neither of the conditions precedent to jurisdiction was applicable in 1969. Our findings revealed that the 1930 tax was paid in 1936. ...


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