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HomeMy WebLinkAbout98-5973 civil (2)IN RE: RETURN AND REPORT Of TAX SALE HELD BY TAX CLAIM BUREAU ON SEPTEMBER 28, 1998 IN RE: · IN THE COURT OF COMMON PLEAS OF · CUMBERLAND COUNTY, PENNSYLVANIA 98-5973 CIVIL PETITION FOR REFUND OF PART OF THE MONEY PAID FOR A PROPERTY AT A TAX SALE OPINION AND ORDER OF COURT Bayley, J., December 10, 1999:- PVT Enterprises Partnership was the owner of an apartment building at 24 Hollar Avenue in the Borough of Shippensburg, Cumberland County. The taxes were not paid and the property was scheduled for a tax sale by the Cumberland County Tax Claim Bureau. On September 28, '1998, the property was sold to Elam Reiff and Mary Reiff for the upset price of $18,632.33. With transfer tax and recording fees the total amount paid by the Reiffs was $20,321.30. On November 20, '1998, PVT Enterprises Partnership filed objections and exceptions to the tax sale. Elam Reiff and Mary Reiff intervened. The issue raised by PVT Enterprises Partnership was whether it had been provided with proper legal notice of the sale. Following a hearing, an order was entered on August '16, '1999, supported by a written opinion, dismissing the objections and exceptions to the tax sale. No appeal was filed from that order. On October '1, '1999, Elam Reiff and Mary Reiff filed a "Petition for refund of incorrect upset sale price." Petitioners allege that they were the only bidders for 24 Hollar Avenue at the tax sale on September 28, 1998; they bid and paid the publicly 98-5973 CIVIL TERM announced upset sale price and all costs for a total of $20,321.30; that the amount of taxes owed on the property were incorrectly calculated; and the upset price should have been $9,263.33 if the taxes had been correctly calculated. The Reiffs averred that as a result of the announced incorrect upset price they paid $9,370 more for the property than warranted for which they seek a refund. A Rule was entered against the Cumberland County Tax Claim Bureau and PVT Enterprises Partnership to show cause why the relief requested should not be granted. Both parties answered the Rule and admitted all of the facts alleged in plaintiffs' petition but not the conclusions therein. The petition is supported by the Tax Claim Bureau and opposed by PVT Enterprises Partnership. The issues have been briefed and are ready for decision. The Cumberland County Tax Claim Bureau set the upset price pursuant to the authority granted to it in Section 5860.605 of the Real Estate Tax Sale Law 72 P.S. 5860.101 et. seq., titled "Upset sale price," which provides: The bureau shall fix as the upset price to be realized at the sale of any property upon a claim absolute, the sum of (a) the tax liens of the Commonwealth, (b) the amount of the claim absolute and interest thereon on which the sale is being held, (c) the amount of any other tax claim or tax judgment due on such property and interest on the judgment to the date of sale, (d) the amount of all accrued taxes including taxes levied for the current year, whether or not returned, a record of which shall be furnished to the bureau by tax collectors, receivers of taxes and taxing districts, (e) the amount of the municipal claims against the property, and (f) the record costs and costs of sale, including pro rata costs of the publication of notice and costs of mail and posted notices in connection with the return of the claim and mail and posted notices of sale .... No sale of property shall be made by the bureau unless a bid -2- 98-5973 CIVIL TERM equal to the upset price is made. If no bid equal to the upset price is received, the sale shall be continued without further advertisement in order to give the bureau a chance to sell the property at private sale, or to petition court for an order to sell the same, freed and discharged of all liens as hereinafter provided. No upset sale may be continued beyond the end of the calendar year, and no property may be sold at private sale or judicial sale unless the property has first been exposed to upset sale and was not sold at upset sale. (Emphasis added.) Sections 5860.607(d) and (g) of the Real Estate Tax Sale Law provide: (d) Any objections or exceptions to such a sale may question the regularity or legality of the proceedings of the bureau in respect to such sale, but may not raise the legality of the taxes on which the sale was held, of the return by the tax collector to the bureau or of the claim entered. In case any objections or exceptions are filed they shall be disposed of according to the practice of the court. If the same are overruled or set aside, a decree of absolute confirmation shall be entered by the court. (g) If no objections or exceptions are filed or if objections or exceptions are finally overruled and the sale confirmed absolutely, the validity of the tax, its return for nonpayment, the entry of the claim, or the making of such claim absolute and the proceedings of the bureau with respect to such sale, shall not thereafter be inquired into judicially in equity or by civil proceedings by the person in whose name such property was sold, by a grantee or assignee, by any lien creditor or by any other person, except with respect to the giving of notice under the act, to the time of holding the sale, or to the time of petitioning the court for an order of sale. There shall be no period of redemption after such sale and the sale shall be deemed to pass a good and valid title to the purchaser, free from any liens or encumbrances whatsoever, except such liens as are hereafter specifically saved, and in all respects as valid and effective as if acquired by a sheriff's deed. (Emphasis added.) In the case sub judice, the Reiffs made no objections or exceptions to the sale. The objections and exceptions that were filed by PVT Enterprises Partnership were overruled. Accordingly, pursuant to Section 5860.607(d),"[a] decree of absolute -3- 98-5973 CIVIL TERM confirmation shall be entered by the court." (Emphasis added.) In Wilkes-Barre v. Luzerne County Tax Claim Bureau, 4 D. & C.2d 399 (1954), the City of Wilkes-Barre and the Wilkes-Barre School District filed objections to the confirmation of a tax sale in which the upset price was erroneously set at $723.07 rather than the correct amount of $6,788.16. The purchaser at the tax sale paid $5,263.16 less than what should have been the correct upset price. Noting that the Real Estate Tax Sale Law at 72 P.S. Section 5860.607(d) provides that "Any objections or exceptions to such a sale may question the regularity or legality of the proceedings of the bureau in respect to such sale," the Court of Common Pleas of Luzerne County concluded: Section 608 of the Act of July 7, 1947, supra, 72 PS {}5860.607, provides for the invalidation of a sale made by the tax bureau if objections filed to the same are sustained. By reason of the requirement that any sale made is subject to confirmation by the court it seems clear that until the confirmation of the sale the purchaser is in effect a mere preferred proposer: Parker v. Dickinson, 196 N. C. 242, 145 S. E. 231. Confirmation renders the sale no longer executory, but executed. The bidder becomes a purchaser and is thereafter regarded as an equitable owner of the property: Langyher v. Patterson, et al., 77 Va. 470-473. The price for which the premises were sold was clearly inadequate. The acceptance of the bid resulted from a clerical error in that the taxes returned for several years prior to 1950 had not been included in determining the upset price. The sale as made was prohibited by the express language of section 605 of the Act of 1947, supra, that 'no sale of property shall be made by the bureau unless a bid equal to the upset price is made .... ' Therefore, the objections are sustained, the sale to Albert invalidated and we now direct that another sale of the property be held in conformity with the Act... (Emphasis added.) In Wilkes-Barre, in contrast to the case sub judice, the City of Wilkes-Barre, -4- 98-5973 CIVIL TERM and the Wilkes-Barre School District filed objections to the sale which objections were sustained because the sale was prohibited by law. Here, the Reiffs filed no objections or exceptions to the sale and waited a month and a half after the objections and exceptions of PVT Enterprises Partnership were overruled to file this belated petition seeking a refund of part of the money they paid for the property at the upset sale. Furthermore, the sale was not against the law as was the sale in Wilkes-Barre. The Reiffs purchased the property for the upset price set by the Tax Bureau. It cannot be said that if the upset price had been correctly calculated the Reiffs would have been able to purchase the property for $9,370 less than they paid. At a lower upset price there may have been other bidders who would have bid up the price of the property. Notwithstanding, the Tax Claim Bureau suggests that Section 5860.617 of the Real Estate Tax Law should be applied here. That section titled "Errors as to description; names, etc., may be amended on petition," provides: When a property has been sold under the provisions of this act, and there are errors in the description or in the spelling of any person's name, or other obvious errors in the claim, or in the return to court, or in any petition relative to the proceedings, or in the bureau's tax deed, such error may be amended by a petition to court for a rule on all parties interested to show cause why the records should not be amended and such errors corrected. After hearing on the rule, the court may make such order relative thereto as to it seems just and proper. (Emphasis added.) The type of error referred to in this Section is not applicable to the present case because there is no record to amend. While the Tax Claim Bureau incorrectly calculated the upset price, the Reiffs submitted the highest bid on the property which -5- 98-5973 CIVIL TERM was accepted because that price was met. On these facts, Section 5860.205(d) mandates that the Tax Claim Bureau distribute the proceeds according to the following order of distribution: (1) First, to the Commonwealth, by payment to the State Treasurer through the Department of Revenue, for satisfaction of tax liens of the Commonwealth only if the total amount of such liens or such portion thereof have been included in the purchase price and paid by the purchaser or the property is sold at judicial sale pursuant to this act. (2) Second, to the respective taxing districts in proportion to the taxes due them. (3) Third, to taxing districts or municipal authorities for satisfaction of municipal claims. (4) Fourth, to mortgagees and other lien holders, in order of their priority, for satisfaction of mortgages and liens as they may appear of record, whether or not discharged by the sale. (5) Fifth, to the owner of the property. (Emphasis added.) For the foregoing reasons, the following order is entered. ORDER OF COURT AND NOW, this //'OIL' day of, December, 1999, the petition of Elam Reiff and Mary Reiff, IS DENIED. Edgar B. Bayley, -6- 98-5973 CIVIL TERM David A. Greene, Esquire For PVT Enterprises Partnership Stephen D. Tiley, Esquire For Tax Claim Bureau of Cumberland County Sally J. Winder, Esquire For Elam Reiff and Mary Reiff :saa -7-