Court Opinion

ID: 9791698
Source: CourtListenerOpinion
Date Created: 2023-08-31 02:16:20.38571+00
Date Added: 2024-06-11T07:37:37.935632
License: Public Domain

DENECKE, J.
Mrs. Scoggins brought a suit in equity to set aside *373a deed of property upon which her house was located. The deed was from the City of Portland to State Construction Corp. and was given because Construction Corp. purchased the property at a sale foreclosing the City’s lien which secured a delinquent assessment for sidewalk construction.
In 1959 the City of Portland constructed a sidewalk upon the property of Mrs. Scoggins and her then husband. An assessment was made against the property and Mrs. Scoggins and her husband made several annual payments. Mrs. Scoggins was divorced in 1964; however, she remained upon the property. According to her testimony she thereafter received no notice of the annual installments and made no payments. The assessments became delinquent, the property was put up for sale, and was sold, all, according to Mrs. Scoggins’ testimony, without any kind of notice to her.
In June 1965 the property was sold to State Construction Corp. for $225.44, the amount of the delinquency and the maximum which could be received by the City under OES 223.525. The property is allegedly worth $10,000. In June 1968 the City delivered a deed to Construction Corp.
Mrs. Scoggins alleged in her complaint that she did not receive notice of the proceedings; that Construction Corp. would be unjustly enriched if it retained the property; and prayed for a decree that the deed to Construction Corp. be declared void. The trial court found for Mrs. Scoggins and Construction Corp. appeals.
The procedure is governed by OES 223.505-223.595. The statutes provide for notice of sale to the delinquent owner, for public sale and a certificate of sale to the purchaser, and a one-year period of re*374demption which can be accomplished by paying the purchase price, interest and a penalty. If no redemption is had within the year, the City delivers a deed to the purchaser. OES 223.575 provides:
“The effect of the deed shall be to convey to the grantee therein named the legal and equitable title in fee simple, to the real property described in the deed, excepting only the lien of the city on such assessments or liens as were not included in the foreclosure proceedings. The deed shall be prima facie evidence of title in the grantee, except as stated in this section,' and that all proceedings and acts necessary to make such deed in all respects good and valid have been had and done. Such prima facie evidence shall not be disputed, overcome or rebutted, or the effect thereof avoided, except by satisfactory proof of either:
“(1) Fraud in making the assessment or in the assessment, or in the procuring of the lien.
“(2) Payment of the assessment or lien before sale or redemption after sale.
“(3) That payment or redemption was prevented by fraud of the purchaser.
“(4) That the property was sold for a lien or assessment for which neither the property nor its owner, at the time of sale, was liable, and that no part of the assessment or lien was assessed or levied upon the property sold.”
This statute provides in essence that the deed is prima facie evidence that all notices required by statute, such as notice of foreclosure, sale, etc., have been given. The act also provides that this prima facie evidence cannot be disputed except for the four grounds set out in the statute.
At trial Construction Corp., in essence, introduced its deed from the City and rested. Since ade*375quaey of notice is not in issue under the statute, Construction Corp. did not attempt to put in any evidence of what notice the City had given Mrs. Scoggins. Mrs. Scoggins testified that she had not received any notice of actions taken by the City. Mrs. Scoggins did not claim at trial or in this court that the failure to give notice deprived her of her property without due process of law.
The trial court reasoned that Construction Corp. knew or should have known that Mrs. Scoggins would not have suffered her $10,000 house to be forfeited to pay $225 unless she was unaware of what was happening. For this reason the trial court was of the opinion that Construction Corp. had a duty to inform Mrs. Scoggins of the facts and its failure to do so constituted fraud within the meaning of the above-quoted statute and, therefore, the prima facie case made by the deed had been successfully rebutted.
1, 2. The trial court was in error for two reasons: First, fraud was not pleaded nor made an issue in the trial court or this court. Second, there is no evidence of fraud. A trial or appellate court sitting as a court of equity is not free to disregard clear statutory requirements regardless of the apparent injustice of the result. Evans Products v. Jorgensen, 245 Or 362, 372, 421 P2d 978 (1966).
Mrs. Scoggins alleged in her complaint that the City published notice of the sale in the Daily Journal of Commerce, a newspaper; however, Mrs. Scoggins was not apprised of the sale. She further alleged: “The defendant has been unjustly enriched in the approximate amount of $9,700.00 at the expense of plaintiff, who had no notice of the proceedings nor the opportunity to pay the lien.”
*3763,4. Fraud is only one of many grounds for claiming that the other party was unjustly enriched. Restatement, Restitution, Table of Contents. The purpose of pleadings is to inform the parties of the issues. A pleading of unjust enrichment without pleading the alleged ground such as mistake, coercion, undue influence, or fraud does not adequately inform.
Even more important, in the trial court Mrs. Scoggins did not claim fraud. In oral argument in this court counsel was explicit in stating that he was not contending that she was entitled to relief upon any of the statutory grounds, including fraud. He stated that the reason he had gone into equity was to seek avoidance of the unjust result that the application of the statute would bring about. With fraud not being made an issue in the trial court, Construction Corp. would be prejudiced if we now considered the issue. At trial Construction Corp.’s attorney stated that he had checked the record and as far as he could see the City had given notice to Mrs. Scoggins in accordance with the statute; however, Mrs. Scoggins’ contentions and the posture of the case in the trial court made that issue irrelevant.
Even if fraud, as that term is used in the statute, were in issue, there is no evidence of fraud.
5. In lieu of any evidence to the contrary, we must assume that the legislature was using “fraud” in its customary legal sense. “Fraud” in its customary legal sense does not encompass the failure of one in Construction Corp.’s position to notify one in Mrs. Scoggins’ position that she must pay $225 within a certain period or lose her home.
6. A failure to disclose facts can be fraud; however, such a failure amounts to fraud only where there is a *377duty to disclose. The Comment to Restatement, Restitution § 8, p 33, states: “Except in a few special types of transactions, such as insurance contracts and transactions between a fiduciary and his beneficiary, there is no general duty upon a party to a transaction to disclose facts to the other party. i:= * * [However], a person who, before the transaction is completed, knows or suspects that the other is acting under a misapprehension which, if the mistake were mutual, would cause the transaction to be voidable, is under a duty to disclose the facts to the others.”
Comment b. to § 472, 2 Restatement, Contracts, pp 897-898, provides:
“A party entering into a bargain is not bound to tell everything he knows to the other party, even if he is aware that the other is ignorant of the facts; and unilateral mistake, of itself, does not make a transaction voidable (see § 503). But if a fact known by one party and not the other is so vital that if the mistake were mutual the contract would be voidable, and the party knowing the fact also knows that the other does not know it, non-disclosure is not privileged and is fraudulent.”
Both of these sections concern a nondisclosure by one party to a bargain or transaction to the other party. Mrs. Scoggins and Construction Corp. were strangers and had no dealings with one another.
In a lengthy dissection of the subject W. Page Keeton outlines the instances in which a third party, not a party to the transaction, should have or has a duty to disclose. 15 Tex L Rev 1, 7-11 (1936). None of these instances are comparable to the present case.
In most, if not all cases of fraud, one essential element is some sort of reliance by the party claiming to be defrauded; reliance upon a misrepresentation *378of the other party, whether that misrepresentation he an affirmative one or by a nondisclosure. Here, Mrs. Scoggins did not and conld not in any way rely upon any thing Construction Corp. did or omitted doing.
Reversed with instructions to dismiss Mrs. Scoggins’ suit and to enter a judgment for State Construction Corp. granting it possession of the premises.