Title: In re Cook County Treasurer

State: illinois

Issuer: Illinois Supreme Court

Document:

In re Application Cook Co. Treasurer, No. 85156 (Ill. S.Ct.) 

Docket No. 85156-Agenda 37-September 
1998.
Opinion filed December 31, 1998.
JUSTICE HEIPLE delivered the opinion of the court:
Murray Williams redeemed a parcel of property located at 4446 
S. Greenwood in Chicago after it was sold at a tax sale to Loop Mortgage 
Corporation. The circuit court of Cook County granted Loop Mortgage's petition 
to expunge the redemption. Williams appealed, and the appellate court reversed, 
holding Williams, acting under power of attorney for the owner of record title 
to 4446 S. Greenwood, had a right to redeem the property under section 21-345 of 
the Property Tax Code (35 ILCS 200/21-345 (West 1996)). 294 Ill. App. 3d 557. We 
granted leave to appeal (166 Ill. 2d R. 315) in order to determine whether the 
owner of record title to the property, even if she has no legal or equitable 
title to the property, has a right to redeem. We hold an owner of record title 
who has no legal or equitable interest in the property has no right to redeem, 
but we affirm the appellate court on different grounds.
BACKGROUND
At the time of her death in 1986, Halove Abram owned a property 
located at 4446 S. Greenwood in Chicago. Abram died intestate, and her sister 
Chappel Cummings inherited the property. Cummings is incompetent, and Cummings' 
daughter Agnes Lee has authority to act on her behalf regarding the property. In 
1989, Lee signed a contract to sell 4446 S. Greenwood to Alfred Smith. There is 
a substantial disagreement between the parties regarding the terms of their 
agreement, but it is undisputed that Lee conveyed a warranty deed to Smith for 
the property at 4446 S. Greenwood. Smith never recorded the deed, and Halove 
Abram remained the owner of record. Smith took possession of 4446 S. Greenwood 
immediately after Lee signed the contract.
Smith paid the back taxes up to tax year 1989, but neither 
Smith nor Lee paid property taxes for tax years 1990 and 1991. Fitz Corporation 
purchased 4446 S. Greenwood at a tax sale in 1993. Fitz Corporation subsequently 
sold its interest in the property to Loop Mortgage Corporation. Loop Mortgage 
filed a petition for tax deed, and notified Smith, Cummings and Lee, among 
others, that the redemption period would expire on April 1, 1995.
Agnes Lee subsequently informed Smith that she was rescinding 
her contract to sell 4446 S. Greenwood and executed a contract for the sale of 
the property to Murray Williams. Lee gave Williams power of attorney to act on 
her behalf, and Williams redeemed the property before the redemption period 
expired. Loop Mortgage filed a petition in the circuit court to expunge the 
redemption, arguing Williams had no redeemable interest in the property because 
Lee, his principal, had conveyed a warranty deed to Smith which extinguished her 
interest in the property. The trial court agreed and expunged the 
redemption.
Williams appealed, and the appellate court reversed. 294 Ill. 
App. 3d 557. The appellate court, relying primarily on this court's decision in 
Weiner v. Jobst, 22 Ill. 2d 11 (1961), held that the owner of record 
title, even if she has neither equitable nor legal title to the property, has a 
right to redeem the property from a tax sale under section 21-345 of the 
Property Tax Code. 294 Ill. App. 3d at 561.
ANALYSIS
Both the Illinois Constitution and the Property Tax Code contain provisions 
regarding the right to redeem property sold at a tax sale. Article IX, section 
8(b), of the Illinois Constitution provides, "The right of redemption from all 
sales of real estate for the nonpayment of taxes or special assessments *** 
shall exist in favor of owners and persons interested in such 
real estate for not less than 2 years following such sales." (Emphasis added.) 
Ill. Const. 1970, art. IX, §8(b). Similarly, section 21-345 of the Property Tax 
Code provides:
Whether a party who has record title, but not legal or 
equitable title, to a property sold at a tax sale has a right to redeem under 
section 21-345 of the Property Tax Code is a question of statutory 
interpretation, which this court reviews de novo. See Lucas v. 
Lakin, 175 Ill. 2d 166, 171 (1997).
The law favors redemptions, and the redemption statute will be 
liberally construed unless injury to the tax purchaser results. Franzen v. 
Donichy, 9 Ill. 2d 382, 387 (1956). The tax purchaser's mere failure to 
procure a tax deed, however, does not preclude liberal construction of the 
redemption statute because the tax purchaser recovers the amount it paid for the 
tax certificate upon redemption. In re Application of Du Page County 
Collector, 98 Ill. App. 3d 950, 952 (1981). A complete stranger to the 
property has no right to redeem, but neither section 21-345 of the Property Tax 
Code nor article IX, section 8(b), of the Illinois Constitution requires 
complete legal title in order to redeem. Franzen, 9 Ill. 2d  at 387 
(contract to convey property creates a redeemable equitable interest in 
property); People v. Hess, 7 Ill. 2d 192, 199 (1955) (equitable owner 
of shares of a dissolved corporation has right to redeem property owned by 
corporation). A party seeking to redeem a property sold at a tax sale need only 
have an " `undefined' interest" in the property. Hess, 7 Ill. 2d  
at 197. A party asserting a right to redeem under section 21-345 of the Code 
must have some interest, however incomplete or undefined, in the property, but 
an interest nonetheless.
Loop Mortgage argues Williams has no right to redeem the 
property on Lee's behalf because Lee conveyed a warranty deed to Smith which 
extinguished all of her interest in the property. We agree. A warranty deed 
conveys a fee simple estate to the grantee. Urbaitis v. Commonwealth 
Edison, 143 Ill. 2d 458, 468 (1991); 765 ILCS 5/9 (West 1996). The 
grantee's failure to record the deed does not affect the deed's operation as a 
conveyance. Lucas v. Westray, 408 Ill. 243, 248 (1951). The deed is 
effective upon delivery. Lucas, 408 Ill.  at 248. It is axiomatic that 
the grantor of a valid warranty deed cannot defeat the grantee's title to the 
property based on the grantee's failure to record. Gibson v. Brown, 214 Ill. 330, 337-38 (1905) (grantee's failure to record deed does not divest 
grantee of title). The grantee's failure to record the deed may affect the 
grantee's rights vis-a-vis a third party who purchases the property without 
notice of the grantee's unrecorded interest (see 765 ILCS 5/30 (West 1996)), but 
the grantee's failure to record does not resuscitate the grantor's interest in 
the property.
Williams cites Weiner v. Jobst, 22 Ill. 2d 11 (1961), 
for the proposition that the owner of record title alone has a sufficient 
interest in the property to redeem. Williams' reliance on Weiner is 
misplaced. In Weiner, the agent of the legal owner attempted to redeem 
the property, but the court held that the legal owner could not redeem because 
one of the deeds in its chain of title had not been recorded. "[A] stranger to 
the record title," the Weiner court concluded, "has no right to 
redeem." Weiner, 22 Ill. 2d  at 15. The General Assembly subsequently 
passed an amendment to the Code which eliminated Weiner's requirement 
that a party seeking to redeem must have a recorded interest in the property. 
Ill. Rev. Stat. 1973, ch. 120, par. 734 (now codified, as amended, at 35 ILCS 
200/21-345 (West 1996)).
Williams argues the amendment to the redemption statute did not 
repudiate the implication in Weiner that owners of record could redeem 
even without legal or equitable title to the property. Nothing in 
Weiner, however, implies an owner of record, even if she does not have 
legal or equitable title to the property, has a right to redeem. The 
Weiner court, even though it held the owner of legal title could not 
redeem unless its interest in the property was recorded, did not identify who, 
if anyone, could redeem the property. In fact, the dissent in Weiner 
noted the effect of the majority's holding was no one could redeem the property 
because "[o]f course the grantor [of the] unrecorded deed could not redeem, for 
it had no interest in the property." Weiner, 22 Ill. 2d  at 19-20 
(Schaefer, C.J., dissenting). Thus, Weiner simply did not address 
whether record title alone, without either legal or equitable title, is 
sufficient to redeem.
Williams contends the owner of record title is entitled to 
notice of the tax sale and expiration of the redemption period, and all parties 
who have a right to notice also have a right to redeem. The plain language of 
the redemption and notice provisions, however, demonstrates not all parties 
entitled to notice have a right to redeem. Under section 21-345 of the Code, an 
"owner or person interested" in the property has a right to redeem. 35 ILCS 
200/21-345 (West 1996). By contrast, section 22-10 of the Code requires the tax 
purchaser to notify the "owners, occupants and parties interested" in 
the property. (Emphasis added.) 35 ILCS 200/22-10 (West 1996). Thus, based on 
the plain language of the Code, an occupant is entitled to notice, but does not 
have the right to redeem unless, of course, the occupant is also an owner or 
person interested in the property.
Williams, in an attempt to reconcile the fact that the 
categories of those who possess a right to redeem and those who are entitled to 
notice are not coextensive, relies on the appellate court's reasoning that 
owners of record title have such a "significant" interest in the property that 
they are among a special category of persons to whom failure to provide notice 
will bar the tax purchaser from obtaining a tax deed. Occupants, however, also 
reside in this category even though occupants as such possess no right to 
redeem. The notice provision states that a tax purchaser is not entitled to a 
tax deed if the tax purchaser fails to notify the occupants of the property. See 
35 ILCS 200/22-10 (West 1996).
The appellate court reasoned that the owner of record must have 
a right to redeem because " `the right to redeem from a tax sale covers a 
broader group than those entitled to notice of a request for [a tax] 
deed.' " 294 Ill. App. 3d at 560, quoting In re Application of the 
County Collector, 167 Ill. App. 3d 521, 526 (1988). The appellate court's 
logic is fundamentally flawed because it incorrectly assumes that the larger 
group includes the smaller group. United States Representatives, for example, 
may be a larger group than United States Senators, but it does not follow that 
all Senators are Representatives.
The owner of record undoubtedly is entitled to notice of the 
tax sale and redemption period. First Lien Co. v. Marquette National 
Bank, 56 Ill. 2d 132, 136 (1973). A tax purchaser who fails to notify the 
owner of record does so at his own peril because the owner of record almost 
always will be the owner of legal title to the property, or at least a party 
with some redeemable interest in the property. In this case, however, the owner 
of record has no interest in the property because she conveyed a warranty deed 
to Alfred Smith which extinguished all of her interest in the property. 
Therefore, Williams, acting on power of attorney from Agnes Lee, did not have a 
redeemable interest in the property.(1)
This court, however, may affirm the appellate court's decision 
on any grounds which are called for by the record, regardless of whether the 
appellate court relied on other grounds. Leonardi v. Loyola University, 
168 Ill. 2d 83, 97 (1995). Although Williams may not redeem the property based 
on Agnes Lee's interest in the property (she has no interest), Williams himself 
has a redeemable interest in the property because he signed a contract to 
purchase the property. Unlike an owner of record title who has neither an 
equitable nor a legal interest in the property, a contract purchaser has an 
equitable interest in the property which gives him a right to redeem. 
Franzen v. Donichy, 9 Ill. 2d 382, 387 (1956). Whether 
Williams actually closed on the property makes no difference; the contract to 
purchase itself is sufficient to create an equitable interest in the property.(2) 
Franzen, 9 Ill. 2d  at 387.
Loop Mortgage argues Agnes Lee had no redeemable interest in 
the property to convey to Williams, but this ignores Smith's failure to record. 
See 66 Am. Jur. 2d Records & Recording Laws §161 (1973) ("the 
rights acquired by a bona fide purchaser of real estate without notice of an 
unrecorded deed are not measured by the actual interest of the seller in the 
land, but rather by his apparent interest"). Smith's failure to record may not 
affect his title to the property vis-a-vis Lee, but it undoubtedly affects 
Smith's rights vis-a-vis a bona fide purchaser without notice. 765 ILCS 
5/30 (West 1996) (unrecorded deed void against a subsequent purchaser without 
notice). Loop Mortgage insists Williams had knowledge of both the deed Lee 
conveyed to Smith and Smith's possession of 4446 S. Greenwood, but these 
arguments miss the mark. Tax deed proceedings are not designed, nor are they the 
appropriate forum, for trying substantial disputes as to title. In re 
Application of Du Page County Collector, 98 Ill. App. 3d at 953. These 
proceedings are very limited in nature, and the only issue presented in these 
proceedings is whether Williams is within the class of persons entitled to 
redeem. Hess, 7 Ill. 2d  at 201. It is immaterial whether Smith 
ultimately would prevail over Williams in an action to quiet title to the 
property. It is sufficient for our purposes here that Williams, as a contract 
purchaser, has an equitable interest in the property which entitles him to 
redeem the property.
Based on our conclusion Williams' contract to purchase 4446 S. 
Greenwood gives him a redeemable interest in the property, we need not address 
Williams' argument that Smith fraudulently procured the warranty deed from 
Lee.
The judgment of the appellate court is affirmed.
Affirmed.
JUSTICE McMORROW, specially concurring:
Until 1986, the subject property was owned by Halove Abram, whose title to 
the property was recorded. When Abram died in 1986, her daughter Chappel 
Cummings inherited the property. Because Cummings was incompetent, however, 
Cummings' daughter Agnes Lee was authorized to act on Cummings' behalf with 
respect to the property.(3) 
In 1989, Lee entered into an agreement to sell the property to Alfred Smith, 
pursuant to which she gave him a warranty deed. Smith did not record this 
deed.
In 1993, the property was sold at a tax sale to Fitz Corporation, which sold 
its interest to Loop Mortgage Corporation (Loop). Loop filed a petition for tax 
deed and notified Cummings, Lee, and Smith of the redemption period. In 1995, 
Lee entered into a contract to sell the property to Murray Williams. Williams 
notified Smith that Lee had decided to rescind her contract with Smith. Lee gave 
Williams power of attorney to act on her behalf with respect to the redemption. 
As Lee's agent, Williams redeemed the property before the expiration of the 
redemption period.
Loop filed a petition to expunge the redemption on the basis that Williams 
had no right to redeem the property as Lee's agent because the deed Lee gave to 
Smith extinguished her interest in the property. Williams responded that the 
transfer to Smith was invalid because Smith obtained the deed by fraud. After an 
evidentiary hearing, the circuit court expunged the redemption because it found 
that Lee had conveyed the property to Smith.
Pursuant to Williams' appeal, the appellate court reversed the circuit court. 
The appellate court held that the holder of record title to a piece of property 
has a right to redeem that property from a tax sale, even without legal or 
equitable title to the property. According to the appellate court, Lee therefore 
had the right to redeem the property at issue in this case, and Williams had the 
power to redeem it on her behalf. Although it upheld the redemption, the 
appellate court expressly refused to decide the validity of Lee's transfer to 
Smith. The court explained that this issue involved a determination separate 
from that concerning redemption rights and should be addressed in a quiet title 
action.
The majority affirms the appellate court's judgment upholding the redemption. 
However, it rejects the appellate court's conclusion that Williams was entitled 
to redeem the property on Lee's behalf. According to the majority, a party who 
has record title, but not legal or equitable title, to property sold at a tax 
sale has an insufficient interest in the property to entitle her to redeem under 
section 21-345 of the Property Tax Code (35 ILCS 200/21-345 (West 1996)). The 
majority concludes that, because Lee conveyed a warranty deed to the property to 
Smith, she is not an "owner or person interested" with redemption rights under 
the Code. Despite its determination that Lee had no right to redeem the 
property, the majority finds that Williams' redemption of the property was valid 
because his agreement to purchase the property from Lee gave him his own 
redemption rights.
Although I join in the majority's holding that the redemption of the property 
in this case was valid, I cannot agree with the majority's analysis. Contrary to 
the majority, I believe that, even absent legal or equitable title to a piece of 
property, the owner of record of that property has an interest sufficient to 
entitle her to redeem the property from a tax sale. Consequently, Williams' 
redemption of the property on Lee's behalf was proper. In addition, I disagree 
with the majority's conclusion that Williams' own interest in the property may 
serve as a basis for upholding the redemption.
I cannot agree with the majority that Lee had no redemption rights as a 
result of the warranty deed she conveyed to Smith. As an initial matter, the 
validity of this transfer is in dispute. Throughout these proceedings, Williams 
has maintained that Smith procured the warranty deed by fraud. The majority 
fails to address this argument. Instead, the majority assumes the 
validity of Lee's transfer to Smith and relies on the warranty deed to support 
its holding that Lee had no right to redeem the property. As the majority itself 
recognizes, however: "Tax deed proceedings are not designed, nor are they the 
appropriate forum, for trying substantial disputes as to title." Slip op. at 7, 
citing In re Application of Du Page County Collector, 98 Ill. App. 
3d 950, 953 (1981). Based on this principle, it is improper for the majority to 
premise its determination of Lee's redemption rights on her transfer of the 
property to Smith when there is a dispute as to the validity of this 
transfer.
In addition, even assuming the validity of Lee's conveyance to Smith, I 
cannot agree with the majority's holding that she had no right to redeem the 
property. According to the majority, an owner of record title has no right to 
redeem a piece of property absent legal or equitable title to that property. 
This holding is contrary to the plain language of the Property Tax Code and the 
Illinois Constitution.
Section 21-345 of the Property Tax Code provides in relevant part:
This language indicates that persons entitled to redeem and 
persons with the legal or equitable title to the redeemed property are two 
different groups. It follows that a party may have a redeemable interest in 
property without legal or equitable title to the property. Similarly, with 
respect to the constitutional tax redemption provisions, the use of the 
" `more informal phrase "persons interested in the real estate" rather than 
a more precise phrase such as "persons having a legal or equitable interest in 
the real estate" ' " indicates that " `strict legal or equitable 
interests' " were not intended. In re Application of County 
Collector, 49 Ill. App. 3d 1048, 1054 (1977) (holding that an individual 
who had transferred her interest in property to another for security for the 
payment of a loan had a redeemable interest), quoting In re Application of 
the County Treasurer, 16 Ill. App. 3d 385, 390 (1973).
The majority's holding that an owner of record has no right to redeem absent 
legal or equitable title to the property is also inconsistent with the manner in 
which Illinois courts have previously interpreted the redemption laws. Courts in 
this state have held that, for public policy reasons, the redemption laws should 
be liberally construed in favor of redemption. See, e.g., Franzen 
v. Donichy, 9 Ill. 2d 382, 387 (1956); People v. Hess, 7 Ill. 2d 192, 198-99 (1955); In re Application of the County Collector, 265 Ill. 
App. 3d 485, 492 (1994); Monreal v. Sciortino, 238 Ill. App. 3d 475, 
478 (1992). Indeed, this court has previously held that, although a complete 
stranger to a piece of property has no constitutional or statutory right to 
redeem that property, a party needs only an "undefined 'interest' in the real 
estate" to be entitled to redeem the property from a tax sale. See 
Hess, 7 Ill. 2d  at 197.
Pursuant to this precedent and the express language of the Property Tax Code 
and Constitution, therefore, the fact that Lee may not have had legal or 
equitable title to the subject property is not determinative of her redemption 
rights. So long as she had an "undefined interest" in the property, she had a 
right to redeem it. Given that the redemption laws are to be construed in favor 
of redemptions, I cannot conclude, as the majority does, that Lee's status as 
the owner of record of the property did not give her at least an "undefined 
interest" in the property. Unlike the majority, I would hold that Lee was 
entitled to redeem the property and that Williams properly redeemed it on her 
behalf.
My disagreement with the majority also extends to its decision to uphold the 
redemption based on Williams' own redemption rights. In my view, it is 
inconsistent to reject Lee's right to redeem on the basis that she had no 
interest in the property, yet find that Williams does have redemption rights 
based on a contract to purchase the property from Lee. In addition, 
given that Williams was acting as Lee's agent when he redeemed the property, I 
question the propriety of upholding the redemption based on any interest he may 
have had in the property himself. Because Williams redeemed the property on 
Lee's behalf, the validity of his redemption should depend on Lee's right to 
redeem, not on any independent right of redemption Williams may have possessed. 
Significantly, in his brief before this court, Williams argues that the 
redemption was proper because of Lee's interest in the property, and he does not 
argue that he himself had a right to redeem the property.
For these reasons, I cannot join in the majority's opinion.
JUSTICES BILANDIC and NICKELS join in this special concurrence.
Footnotes:
1. The special concurrence incorrectly assumes that we hold that only persons 
with legal or equitable title to a property have a right to redeem. To the 
contrary, a disclosed land trust beneficiary, who has neither equitable nor 
legal title to the property subject to the trust (765 ILCS 415/2(a) (West 
1996)), nonetheless possesses a redeemable interest in that property. In re 
Application of the County Treasurer & ex officio County Collector of Cook 
County for Order of Judgment & Sale Against Real Estate Returned Delinquent 
for the Year 1985, 216 Ill. App. 3d 162, 171 (1991); see 35 ILCS 200/21-345 
(West 1996) ("A right to redeem property from any sale under this Code shall 
exist in any owner or person interested in that property, other than an 
undisclosed beneficiary of an Illinois land trust"). A land trust beneficiary 
has a redeemable interest in the property because the beneficiary "has exclusive 
power to direct or control the trustee in dealing with the title to the land, 
and exclusive control of the management, operation and selling, together with 
the exclusive right to the earnings, avails and proceeds of the property." 
In re Application of the County Treasurer, 16 Ill. App. 3d 385, 390 
(1973). However, a record title owner who has conveyed his entire interest in 
the property possesses no redeemable interest. The analysis in the special 
concurrence is fundamentally flawed because it mistakes an "undefined interest" 
for an "undefinable" interest. Under the special concurrence's interpretation of 
section 21-345, anyone claiming an interest, however untenable, could redeem a 
property sold at a tax sale.
2. Of course, our determination that Williams has an equitable interest in 
4446 S. Greenwood has absolutely no bearing on whether Williams actually owns 
the property or whether his interest is superior to any other party's interest 
in the property. We recognize his equitable interest in the property solely for 
the purpose of determining whether he has the right to redeem the property after 
it is purchased at a tax sale.
3. To avoid complicating the discussion in this case, I will, like the 
majority, refer to Lee as if she were the owner of record in this case. Although 
she is in fact the representative of the heir (Cummings) to the owner of record 
(Abram), there is no dispute as to Cummings' ownership of Abram's interest in 
the property or as to Lee's authority to act on Cummings' behalf (see People 
v. Hess, 7 Ill. 2d 192, 199 (1955)