Court Opinion

ID: 9712245
Source: CourtListenerOpinion
Date Created: 2023-08-26 04:50:01.02383+00
Date Added: 2024-06-11T18:23:11.044298
License: Public Domain

Hammond, J.,
delivered the following dissenting opinion.
The statute says that a final decree foreclosing an equity of redemption shall not be reopened “except on the ground of lack of jurisdiction or fraud in the conduct of the proceedings to foreclose.” Code, 1951, Art. 81, Sec. 111. James v. Zantzinger, 202 Md. 109, held that the fact that a resident of Maryland was not served with process, although the statute directs that he shall be, did not deprive the court of jurisdiction, because a proceed*274ing to foreclose an equity of redemption is in rem, and notice by publication is sufficient. In the instant case the court holds that there was no fraud in the conduct of the proceeding, although the appellee, the tax purchaser and complainant below, showed complete indifference as to whether the defendants, the former owners, were or were not residents, and entire lack of effort towards finding their address, describing them in the bill as residents of Washington, D. C. After two non ests, they were proceeded against by publication as nonresidents, although they were residents of Maryland and entitled to actual notice by service of process under the explicit provisions of the statute, Code, 1951, Art. 81, Sec. 104, and the fact could not have failed to have been ascertained by the most casual inspection of the tax rolls.
The manifest purpose of the statute was to give finality and conclusiveness to tax sales and to afford purchasers of tax titles security from attack based on frivolous or formal defects in the tax sale or the foreclosure proceedings. The purpose should not be frustrated by the courts. I think, however, that the present case goes much too far and opens the way for easy and legal evasion of the requirements of personal service upon residents of the State and that the result is neither called for by the statute nor sound.
In James v. Zantzinger, supra, it was recognized that “* * * the statutory provisions as to notice required to terminate the taxpayer’s right to redeem from a tax sale are mandatory and must be strictly followed”, but it was held that the address given the sheriff in that case was the last known address of the defendant and so sufficient, even though the sheriff was unable to serve the defendant, because he had moved. The words of the statute “fraud in the conduct of the proceedings to foreclose” clearly embrace an intentional and wilful failure to personally serve one entitled to such service. It is not alleged in the instant case, nor do I suggest, that the appellee deliberately and purposefully intended to deceive the court or to prevent actual service on the ap*275pellants. If he had, there would be no question, I take it, that this constituted fraud in the conduct of the proceedings which would invalidate the decree. Croyle v. Croyle, 184 Md. 126; Margos v. Moroudas, 184 Md. 362. There is no difference in the consequences if the failure to serve a resident of the State entitled to service comes about from complete lack of effort or egregious error in the effort. Under the decision of the Court in the instant case, a plaintiff in a tax foreclosure sale who desired to prevent actual notice to a resident entitled to such notice, could always say that he just forgot to look for the correct address or that he looked but just somehow failed to find it. Actual fraud would be almost always impossible of proof. I think that the conduct of the appellee in the case before the Court amounted to constructive fraud in the conduct of the proceedings and that this is sufficient under the statute to invalidate the decree of foreclosure, at least as against the certificate holder who conducted the proceedings. A bona fide purchaser from the complainant in foreclosure without notice would, I believe, be in a different position because the decree is not void for lack of jurisdiction but voidable for constructive fraud against the one chargeable with such fraud.
“The term fraud is used in various senses. It may involve an evil intent or it may consist only of a wrongful act done to the injury of another. The former is actual fraud, the latter constructive. The former involves moral turpitude or intentional wrong. The latter may exist without the imputation of bad faith or immorality.” Stroh v. Dumas (Vt.), 84 A. 2d 408, 411.
“By constructive fraud is meant * * an act done or omitted, not with an actual design to perpetrate positive fraud or injury upon other persons, but which, nevertheless, amounts to positive fraud, or is construed as a fraud by the court because of its detrimental effect upon public interests and public or private confidence’.” Bank v. Board of Education of City of New York, 305 N. Y. 119, 111 N. E. 2d 238, 239.
*276“A constructive fraud is usually defined as ‘a breach of duty which, irrespective of moral guilt, the law declares fraudulent because of its tendency to deceive * * *\” Johnson v. Radio Station WOW (Neb.), 14 N. W. 2d 666.
Under any of the definitions, the actions and omissions of the appellee in this case seem to me to be a clear example of constructive fraud. He had a definite obligation to ascertain whether the appellants were residents of Maryland or not, and if they were, to use reasonable diligence to ascertain their correct address — that at which they could be served. Cases in various states show that a plaintiff, before he can resort to service by publication, must exercise due diligence to ascertain the residence of a defendant and that his efforts must be honest, conscientious, reasonable and well directed. 72 C. J. S., Process, Sec. 58, p. 1076. Klinger v. Milton Holding Co. (Fla.), 186 S. 526. See also Callner v. Greenberg (Ill.), 33 N. E. 2d 437, 440; State v. Bagby’s Estate (Tex.), 126 S. W. 2d 687; White v. White (Wash.), 163 P. 2d 137; Narum v. Cheatham (Calif.), 15 P. 2d 1106. As the Court in Callner v. Greenberg, supra, put it, the inquiry must be as full as the circumstances permit.
The Code gives evidence of the obligation of a plaintiff in a tax foreclosure case to use diligence. Art. 81, Sec. 104, says that when two successive subpoenas have been returned non est, or when one has and there is-“proof by affidavit that a defendant has kept out of the way or has secreted himself to avoid service of the subpoena, or whose whereabout may be unknown, such defendant shall be deemed to be served by the publication * * * as if he were a non-resident.” Certainly, the necessity of affidavit as to the impossibility of service if only one subpoena has been returned non est, leads to the conclusion that the Legislature meant that two successive non ests should be the equivalent of the facts made out in the affidavit only if the two subpoenas were reasonably calculated to permit service. Marx v. Ebner, 180 U. S. 314, 45 L. Ed. 547. There must be inferred *277an obligation on the plaintiff to make a real attempt to find an address which will permit service. Indeed James v. Zantzinger, supra, itself recognizes this because it justifies the result there by saying, in effect, that the address given was the best obtainable. Complete indifference to whether a defendant is or is not a resident, and as to where he may be served if he is, is the precise equivalent in result, as I have indicated, of a studied design to avoid serving him. This was noted by the Supreme Court of Nebraska in Herman v. Barth, 124 N. W. 135, 137. There the Court said: “Why should the validity of the judgment depend upon whether the party making such affidavit was mistaken as to the defendant’s residence, or knowingly misrepresented such place of residence? In either event, the affidavit is a false one, and the jurisdictional fact — nonresidence of the defendant — cannot be supplied by the good faith of the party who asserts it.” The Supreme Court of Florida had essentially the same problem before it, that faces the Court in this case, in Klinger v. Milton Holding Co., supra. There it was originally held that an affidavit of nonresidence, based upon insufficient information, and erroneous, would not give jurisdiction under an order of publication and that the decree foreclosing the tax sale should be set aside as void for lack of jurisdiction. On a motion for rehearing, the Court gave thorough and well reasoned consideration to the problem and, although finding that the plaintiff in foreclosure had not used due diligence in the making and filing of the affidavit as he was required to do, and that it was defective for this reason, went on to hold that this was not a jurisdictional defect which rendered the decree void but merely such a defect as made it voidable. In other words, it held that a bona fide grantee from the complainant in foreclosure would obtain good title since such a grantee is chargeable only with notice of jurisdictional defects and not with notice of error or irregularity. The former judgment reversing the decree of the lower court was adhered to but the case was remanded to allow *278the former owner to amend his bill and show, if he could, that the buyer from the complainant in foreclosure was not a purchaser for value without notice. See also Callner v. Greenberg, supra, (Ill.), 33 N. E. 2d 437.
I think that the term fraud, used in the statute as a grounds for setting aside a decree, may, consistently with the purposes and intentions of the statute as a whole, be read to include constructive fraud, and that a decree obtained against a resident by publication without effort to effect personal service, was a decree obtained by constructive fraud and as between the former owner and the complainant in foreclosure should be set aside. I would reverse the decree.