In re Application of the County Treasurer
2017 IL App (4th) 160707
Ill. App. Ct.2017Background
- Dealers Service, Inc. filed a petition (Jan 2016) seeking tax deeds for three Jersey County parcels after purchasing 2012 delinquent-tax certificates issued at an annual tax sale in Nov. 2013.
- Dealers Service acquired the certificates by assignment in April 2015 and acknowledged it also held pretax-sale interests: a mortgage dated March 4, 2013 (recorded April 2, 2013) and other liens/assignments recorded in 2015.
- Respondents moved to dismiss under Ill. Sup. Ct. Rule 2-619/2-619.1, arguing equity bars a lienholder/mortgagee from obtaining a tax deed (citing In re Application of Boone County Collector (Candlewick)).
- Dealers Service argued the Tax Code and Bailey establish the relevant cutoff is ownership/nonownership as of January 1 of the delinquent-tax year (Jan 1, 2012 here), and its interests arose after that date, so it was eligible to buy the certificates and seek tax deeds.
- The trial court granted dismissal, applying Candlewick’s equitable rule that a pretax-sale lienholder/mortgagee cannot acquire title by tax sale to cut off other lienholders; the appellate court affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a party with a pretax-sale mortgage/lien may obtain a tax deed when its nonownership interest arose after Jan. 1 of the delinquent-tax year | Dealers Service: timing matters; only interests existing on Jan. 1 of the delinquent year (per Bailey) disqualify; its interests arose later so it may obtain tax deed | Respondents: equity bars a lienholder/mortgagee from using tax-sale purchase to destroy other lienholders’ rights (per Candlewick); pretax-sale interest (i.e., existing before the tax sale) disqualifies purchaser | Court: Applied Candlewick—equitable principle bars a pretax-sale lienholder/mortgagee from acquiring title via tax sale; dismissal affirmed |
Key Cases Cited
- In re Application of Boone County Collector, 131 Ill. App. 3d 939 (equitable rule precluding lienholders/mortgagees from acquiring tax deeds to cut off other lienors)
- In re Application for Tax Deed, 269 Ill. App. 3d 477 (ownership for tax liability determined as of January 1 of the tax year)
- Goldberg v. Michael, 328 Ill. App. 3d 593 (discussing public policy against lienholders purchasing tax certificates to defeat other claims)
- Vulcan Materials Co. v. Bee Construction Co., 101 Ill. App. 3d 30 (discussing the purpose of tax sales and limits on their use by parties with pretax interests)