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First National Bank v. Kusper

OPINION FILED SEPTEMBER 23, 1983.

FIRST NATIONAL BANK OF WAUKEGAN, TRUSTEE, APPELLEE,

v.

STANLEY T. KUSPER, JR., COUNTY CLERK, APPELLANT.



Appeal from the Circuit Court of Cook County, the Hon. James C. Murray, Judge, presiding.

JUSTICE WARD DELIVERED THE OPINION OF THE COURT:

Rehearing denied December 2, 1983.

This appeal is from a judgment of the circuit court of Cook County holding unconstitutional Public Act 81-1076 (1979 Ill. Laws 4091), an amendment to section 235a of the Revenue Act of 1939, the section commonly known as the Scavenger Act (Ill. Rev. Stat. 1979, ch. 120, par. 716a (eff. July 1, 1980)). The judgment was entered in a declaratory judgment action filed in the name of the plaintiff trustee in behalf of the beneficiary, who owned real property that was sold pursuant to the Scavenger Act, against Stanley T. Kusper, Jr., the clerk of Cook County. Because the circuit court held a statute unconstitutional, the clerk's appeal was taken directly to this court. 73 Ill.2d R. 302(a).

The Scavenger Act is one of the several legislative means provided for the collection of delinquent taxes under the Revenue Act of 1939 (Ill. Rev. Stat. 1979, ch. 120, par. 482 et seq.) (the Revenue Act). (See generally, Lawlor, Real Property Tax Delinquency and the Rehabilitation of Multi-Family Housing Stock in Chicago, Illinois: The Role of the Collection Provisions of the Illinois Revenue Act, 26 DePaul L. Rev. 1, 5 (1976) (hereafter Lawlor).) The Scavenger Act provides for a judgment for the sale to the highest bidder of "lots upon which all or a part of the general taxes for each of 5 or more years are delinquent * * *." Ill. Rev. Stat. 1979, ch. 120, par. 716a.

A sale under the Scavenger Act is a sale of the property to the highest bidder "notwithstanding the bid may be less than the full amount of taxes, special taxes, special assessments, interest, penalties and costs for which judgment has been entered." (Ill. Rev. Stat. 1979, ch. 120, par. 716a.) In this respect, it differs from the annual sale of tax-delinquent property under section 235 of the Revenue Act (Ill. Rev. Stat. 1979, ch. 120, par. 716), which the county collector is required to conduct each year. The annual sale, which is the initial device for collecting unpaid tax debts, is a sale for the full amount of taxes owed on properties for which taxes have not been paid in any one year.

The purchaser at either of these tax sales may petition the circuit court to direct the county clerk to issue a tax deed for the property if the owner does not redeem it. Under section 266 of the Revenue Act (Ill. Rev. Stat. 1979, ch. 120, par. 747), which applies to both annual sales and scavenger sales, the petition is to be filed prior to the expiration of the period within which the owner may redeem the property. That section also requires that the purchaser give notice of the filing of this petition and of the date upon which he intends to apply for a deed pursuant to the petition to the owner, occupants of the property, and others interested in the property.

The right of the owner to redeem his property after a tax sale is assured by the Constitution of Illinois and is governed by provisions of the Revenue Act. The statutory and constitutional provisions in effect at the time of the scavenger sale of the plaintiff's property, which took place on August 29, 1980, provided that, with certain exceptions not applicable here, property sold at a tax sale could be redeemed within two years from the date of the sale. (Ill. Ann. Stat., 1970 Const., art. IX, sec. 8(a), Constitutional Commentary, at 233 (Smith-Hurd 1971); Ill. Rev. Stat. 1979, ch. 120, par. 734.) (The period of redemption has since been shortened for certain types of properties sold at a scavenger sale. Ill. Ann. Stat., 1970 Const., art. IX, sec. 8 (1981), as amended eff. Jan. 1, 1981 (Smith-Hurd Supp. 1982); Ill. Rev. Stat. 1981, ch. 120, par. 734.)

Property sold at the annual sale may be redeemed by paying the amount for which the property was sold plus an interest penalty. (Ill. Rev. Stat. 1979, ch. 120, par. 734.) Prior to Public Act 81-1076 (hereafter the amendment), which became effective on July 1, 1980, the Scavenger Act provided, apart from a minor difference regarding the interest penalty, that "[r]edemptions may be made from [scavenger] sales * * * in the same manner and upon the same terms and conditions as redemptions from [annual] sales * * *." (Ill. Rev. Stat. 1979, ch. 120, par. 716a.) This meant that in redemptions from a scavenger sale, unlike cases of redemptions from an annual sale, the full amount of taxes owed need not be paid by the owner in order to redeem the property. The reason for the difference is, as we have stated, that a bid at the scavenger sale, unlike a bid at the annual sale, may be for less than the full amount of taxes due. Remarkably, on the 6,000 items of property sold at scavenger sales between 1967 and 1973 the average bid was only $143. Lawlor, 26 DePaul L. Rev. 1, 8 (1976).

The amendment, which we consider here, adds two provisions to the Scavenger Act. First, it provides that, in order to obtain a certificate of purchase at a scavenger sale, a purchaser must deliver to the county clerk an affidavit stating that at the sale he did not bid on property for which he is the party, or the agent of the party, responsible for paying the delinquent taxes. The constitutionality of that provision was not challenged.

The other provision, which the circuit court held invalid, adds the following paragraph to the Scavenger Act following the part of the statute providing for redemption under the same terms as those applicable to the annual sale:

"For sales taking place after January 1, 1980, notwithstanding the above, except for single family residential units, the amount required to be paid for redemption shall also include an amount equal to all delinquent taxes on such property which taxes are delinquent at the time of sale. All amounts received in excess of the amount required to be paid for redemption shall be apportioned by the county among the taxing districts in which such property is situated." 1979 Ill. Laws 4093.

The real plaintiff in interest here, that is, the beneficiary, who is a property owner whose tax-delinquent property was sold in a scavenger sale, charged that the amendment was unconstitutionally vague, a deprivation of the constitutionally protected right of redemption in violation of due process and equal protection, and an impairment of the obligation of contracts. Too, the plaintiff said that the exception in favor of single-family residential units was a violation of the right to equal protection, was arbitrary and capricious, and a violation of the prohibition against special-privilege legislation set out in article I, section 16, of our constitution (Ill. Const. 1970, art. I, sec. 16). The judgment of the circuit court that the amendment was unconstitutional was solely upon the ground that the exception for single-family residential units was an unconstitutionally vague classification. It did not find merit in the other grounds advanced by the plaintiff.

Before we may consider the correctness of the circuit court's disposition of the constitutional question, we must resolve certain procedural issues. Although the clerk urges that we, in any event, consider the important constitutional question raised on his appeal, he submits three procedural contentions that, if accepted, would make it unnecessary to decide the constitutional issue. The clerk maintains (1) that the plaintiff lacks standing to challenge the amendment and that the question is now moot; (2) that declaratory relief was not proper here; and (3) that the plaintiff is barred by collateral estoppel from ...


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