11.010 Omitted Tax Title Purchaser in Title Suit

Top  Previous  Next

Requirement 11.010

Omitted Tax Title Purchaser in Title Suit

 

 Severed Mineral Tax Title.  On September 1, 1964, the Probate Judge of DeWitt County ordered the sale of the minerals underlying the captioned property for nonpayment of ad valorem taxes assessed to “Owner Unknown.”  Pursuant to that order, the minerals underlying that land were sold to Mary R. Purchaser on January 4, 1965.  The probate court order of the sale did not state that the tax collector “was unable to collect the taxes assessed against such land or the owner there of, without a sale of such land” as required by the tax code then in effect. See Pollak v. Milam, 67 So. 381 (Ala. 1914).  On January 8, 1968, the Probate Judge of DeWitt County granted the mineral estate underlying the captioned property to Mary R. Purchaser, by tax deed recorded in Real Property  Book 500, page 1.  Purchaser then conveyed those minerals to MR Land Company by deed dated January 8, 1968, and recorded in Real Property  Book 500, page 13.  Eight years later, MR Land Company conveyed those minerals to Purchaser Coal  Company by deed dated January 8, 1976, and recorded in Real Property  Book 600, page 13.

 The abstract does not contain a copy of the tax collector’s report to the Probate Court of DeWitt County.  That report is important, because Alabama cases construing the tax code that was in effect in 1964 required the tax collector to state that the tax collector “was unable to collect the taxes assessed against such land or the owner there of, without a sale of such land.”   Without that statement, the Probate Court had no jurisdiction to sell the land for nonpayment of taxes. See Pollak v. Milam.  We doubt that the tax collector’s  report, which is now over 45 years old exists or can be located.

 The abstractor’s report shows that John Q. Owner has  exclusively assessed and paid ad valorem taxes on the coal underlying the captioned property from the year 2000 through the current date.  It further shows that  his predecessor in title,  JQ Coal Company, exclusively assessed and paid ad valorem on the coal underlying the captioned property  for the tax years 1980 through 1999.  There is no indication in the abstractor’s report that either MR Land Company or Purchaser Coal Company assessed and paid ad valorem taxes on the coal underlying the ten acre parcel after the year 1968 or that either claimed that coal after that date.  Also, there is no indication that any one, including MR Land Company, Purchaser Coal Company, John Q. Owner, or  JQ Coal Company has ever exercised actual possession over the coal under the captioned property.

 The abstract contains a copy of an January 7, 1980,  in rem decree quieting title to the coal underlying the captioned property in John Q. Owner, as entered by the Circuit Court of DeWitt County in the case of John Q. Owner v. Six Hundred Forty (640) Acres of Land, et al., Civil  Action No CV-79-0001, In the Circuit Court of DeWitt County, Alabama.  John Q. Owner  is your lessor as to the coal underlying the captioned property.  The documents furnished to us indicate that John Q. Owner, did not name Purchaser Coal  Company as a defendant in that suit.  The judgment indicates that the in rem bill to quiet title named as defendants “Persons Unknown” and that notice was published.

 The Alabama Supreme Court has held that notice by publication is inadequate when a claimant’s identity is known and the claimant’s specific location could have been ascertained. Walker v. Cleary Petroleum Corp., 421 So.2d 85 (Ala. 1982).  The real property records in the Probate Court of DeWitt County identified Purchaser Coal  Company as a claimant to the coal underlying the captioned  property  as early as 1976.  Since John Q. Owner filed his in rem bill to quiet title in 1979, he would have known of the identity of Purchaser Coal  Company.  Furthermore, the current online database maintained by the Secretary of State of Alabama shows that Purchaser Coal  Company is an existing corporation located in Cuero, Alabama.  These facts indicate that the failure to name and serve Purchaser Coal  Company. as a defendant in the in rem bill to quiet title, could adversely impact the preclusive effect of the judgment in that lawsuit as to the claim of Purchaser Coal  Company.

 The risk of failure to your lessor’s title to the coal underlying the captioned property depends upon whether the survey and inspection report and the possession affidavits requested in Requirements 1 and 2 establish whether Purchaser Coal  Company. ever exercised actual possession over that coal.  If there is no evidence that anyone exercised actual possession over that coal, your lessor, John Q. Owner, would appear to have the superior title over any claim that Purchaser Coal  Company  may assert to the coal underlying the captioned property.  John Q. Owner claims under a chain of title commencing with the patentee from the United States and continuing to the current day.  John Q. Owner is currently exclusively assessing and paying ad valorem taxes on the coal underlying the ten acre parcel.  On the other hand, Purchaser Coal  Company claims under a tax sale and a tax deed that may prove to be jurisdictionally deficient.  Furthermore, the records furnished to us indicate that Purchaser Coal  Company has not assessed and paid ad valorem taxes on the coal underlying the captioned property for over thirty-three years.  Under these facts, it appears that it would be a reasonable business risk to assume that John Q. Owner would prevail over Purchaser Coal  Company in any title dispute over the coal underlying the captioned property. See  Whitehead v. Hester, 512 So.2d 1297 (Ala. 1987).  On the other hand, if Purchaser Coal  Company exercised actual, adverse possession over that coal, the superiority of John Q. Owner’s title could be subject to a more serious risk of title failure.

 Requirement:   If the survey and inspection report and the possession affidavits show actual, adverse possession by Purchaser Coal  Company of the coal under the captioned property, we shall supplement this requirement.  Otherwise,  if you are unwilling to accept the reasonable risk of title failure due the Purchaser Coal  Company tax title, please advise us accordingly, and we shall supplement this requirement.

Copyright 2011 by Edward G, Hawkins. All rights reserved.