Simms v. Scheve

COLE, Judge. The single question presented in this case is whether the entry of a decree pro confesso against defaulting parties is a condition precedent to a final judgment in a tax sale foreclosure proceeding. Geraldine Scheve purchased fifteen properties at a tax sale on May 14,1979, in Prince George’s County. On August 22, 1980, she brought suit in the Circuit Court for Prince George’s County to foreclose the equity of redemption of the owners of the property.

Virginia Simms was the owner of property designated as C-5 in Scheve’s Bill of Complaint. This property consisted of two improved acres and the family residence. The property was assessed for tax purposes at $17,000 with an indicated value of approximately $34,000. Simms was served with a subpoena in this matter but failed to file a responsive pleading.

On February 18, 1981, Scheve obtained a final decree foreclosing the equity of redemption. On July 2, 1981, Simms filed a motion to vacate the decree and fix the amount necessary for redemption, asserting a failure to comply with Maryland Rules 310 and 611. A hearing was held before the Circuit Court for Prince George’s County and the motion was denied. Simms appealed.

In an unreported opinion, Simms v. Scheve, No. 1503, September Term, 1981, filed September 7, 1982, the Court of Special Appeals affirmed the Circuit Court, reasoning that Md.Code (1957, 1980 Repl.Vol.) Art. 81, § 112 indicates an exception in the foreclosure proceeding to the general equity practice of a decree pro confesso. Simms petitioned this Court for certiorari seeking an answer to the question: ³ Are the provisions of Maryland Rules 310, 675 and 611 as to the entry of a decree pro eonfesso applicable to the foreclosure of an equity of redemption proceeding regarding tax sales under Article 81, § 97 et seq. of the Annotated Code of Maryland? We granted the petition to consider this important issue. We begin our resolution of the issue by examining the Maryland law generally relating to tax sales.

The tax sale procedure is set forth in Md.Code (1957, 1980 Repl.Vol., 1982 Cum.Supp.) Art. 81, §§ 70--123C, and our cases have held that for a tax sale to be effective substantial compliance with the statute is required. Free v. Greene, 175 Md. 36, 42 , 199 A. 857 (1938); McMahon v. Crean, 109 Md. 652, 666 , 71 A. 995 (1909). In this regard, the prescription of the statute is clear and simple. Unpaid taxes on real estate constitute a lien on that property.

Section 70(a). Generally, within two years from the date taxes become in arrears the jurisdiction’s collector must sell the land. Section 72. Notice of the proposed sale must be given to the owner at least thirty days before the property is advertised for sale and the owner is notified that if he does not pay the taxes within thirty days, the property will be sold.

Section 75. After the sale is properly advertised, § 76, the property is sold at public auction. Section 80. The purchaser of the property is given a certificate of sale which includes a description of the property, the amount for which the property was sold, and information as to the time in which an action to foreclose the owner’s right of redemption must be brought.

Section 83. The owner may redeem the property at any time until the right of redemption has been finally foreclosed by paying the required sum to the collector, who transfers the money to the purchaser in exchange for the tax sale certificate. Section 92. Sections 97-123C of Article 81 define the purchaser’s ability to foreclose the right of redemption.

These provisions are to be “liberally construed as remedial legislation to encourage the foreclosure of rights of redemption by suits in ⁴ the equity courts and for the decreeing of marketable titles to property sold by the collector.” Section 97. See Dampman v. Litzau and Sonntag, 261 Md. 196, 202 , 274 A.2d 347 (1971); Thomas v. Kolker, 195 Md. 470, 475 , 73 A.2d 886 (1950). The holder of the certificate of sale may file a bill to foreclose the owner’s right of redemption after one year and a day from the date of sale in the counties. 1 The bill must be filed within two years or the certificate is void. The owner may redeem the property at any time until the right of redemption has been finally foreclosed.

Section 100. See Heill v. Staniewski, 265 Md. 722, 725 , 291 A.2d 449 (1972); McGarvey v. Southern Corp., 218 Md. 591, 594 , 147 A.2d 725 (1959). The purchaser initiates the foreclosure proceeding in the equity court by filing a bill of complaint, setting forth the facts and prayers detailed in § 102 and attaching the certificate of sale issued by the collector. The court issues its subpoena notifying the owner, and any other defendants, see § 103, that if they do not appear in court on or before a certain date to answer the bill or to redeem the property, a final decree will be rendered foreclosing all rights of redemption in the property.

Section 106. If two subpoenas are returned non est or if one is returned non est and proof is presented that the defendant is avoiding service, he is deemed to be served by publication. Sections 106-07. If the owner does not redeem the property within the time specified, the court passes a final decree, vesting in the purchaser an absolute and indefeasible title in fee simple in the property.

Section 112. The decree is conclusive and may not be reopened except on the ground of lack of jurisdiction or fraud in the conduct of the proceedings to foreclose. Section 113. Mrs. Simms contends that the failure to enter a decree pro confesso justifies vacating the decree under ⁵ § 113.

A decree pro confesso is defined as “[o]ne entered in a court of equity in favor of the complainant where the defendant has made no answer to the bill and its allegations are consequently taken ‘as confessed.’ It is merely an admission of the allegations of the bill well pleaded.” Black’s Law Dictionary 370 (5th ed. 1979). The use of the decree pro confesso procedure evolved to deal with the hardship formerly obtained under the common law rule that a party could only compel a defendant to respond to a bill by attaching the defendant’s person or by sequestration of his property. If these attempts failed, an answer could not be enforced and the plaintiff’s only alternative was to establish the allegations of his bill by other proof. Thus, statutes and court rules defined circumstances in which the decree pro confesso could be utilized, and today the use of this procedure has been well established. 27 Am.Jur.2d Equity § 221 (1966).

Maryland Rules of Procedure 310 b, 611 and 675 require the entry of a decree pro confesso before proceeding upon default against a party who fails to comply with the time requirements for pleading. 2 These rules are based on chap ⁶ ter 161 of the Acts of 1820. Glass v. Glass, 284 Md. 169,172 , 395 A.2d 485 (1978). E. Miller, Equity Procedure § 272, at 338-39 (1897), explains that: The object of the legislature in providing for decrees pro confesso was to provide a just and reasonably expeditious mode of obviating the delays and difficulties to which plaintiffs were subjected by defendants disobeying the mandates of the court requiring them to appear and answer bills filed against them. The design was, in the event of the defendant’s continuing disobedience to the order of the court, to give to the plaintiff a remedy against him, as nearly as may be, as expeditious and effectual as if an appearance and answer had in due time followed the order of the court.

The [rules are] a means of relief against the delay and neglect of defendants. [Footnotes omitted.] Mrs. Simms argues that when a defendant in a foreclosure proceeding fails to respond to the subpoena, a decree pro confesso must be entered prior to a final decree foreclosing the equity of redemption. She notes that Maryland Chapters 100-600 apply to special proceedings under Chapter 1100, including the tax sale foreclosure proceeding outlined in Rule B240, which provides that “[t]he procedure for tax sales, including provisions for the order of publication, shall be in accordance with Code, Article 81, Sections 70 to 123.” Additionally, she notes that § 101 of Article 81 specifically provides for the use of general equity practice in the foreclosure proceeding. For these reasons, Simms argues that the decree pro confesso was required in this case, and because the proper procedure was not followed, the foreclosure proceeding is void. For several reasons, we disagree.

The precise issue presented here has never been considered by this Court and our research has disclosed no cases from other jurisdictions resolving this issue. Apparently other ⁷ jurisdictions have not been presented with this precise issue because their statutes generally vary from Maryland tax sale law: In most states before the expiration of the time allowed the owner to redeem the property, the purchaser has neither the legal nor equitable title, nor is he entitled to possession of the land. During the redemption period he has a statutory lien on the land for the amount of his purchase money with interest thereon and