Page 18 - John Hundley 2009

Merger of Prior Taxes into Tax Deed Does Not Apply Until Deed Is Properly Issued

The merger of prior taxes into a tax deed does not apply until a tax deed is properly issued under 35
ILCS 200/22-40(a), a panel in the First District has ruled.
In Application of County Treasurer, 389 Ill.App.3d 398 (2009), the assignee of the buyer of 2000-01
taxes sought a deed wiping out liens of subsequent sales of 1987-88 taxes (sold
to a different purchaser) under the proviso in 35 ILCS 200/22-40(b) that the court
in issuing such a deed “find[s] that the lien of those delinquent taxes has been or
will be merged into the tax deed grantee’s title”. Arguing that the 1987-88 taxes
had been delinquent when his assignor bought the 2000-01 taxes, plaintiff
prevailed on the trial court to merge those liens into the deed he received, without
redeeming them. The Appellate Court reversed, because § 22-40(a) requires, for
issuance of the deed, that “all forfeitures and sales which occur subsequent to the
sale have been redeemed”. Although the taxes at issue were for years prior to
the plaintiff’s claim, their sale occurred after his assignor’s purchase. Thus, a deed could not properly be
issued without those taxes being redeemed, and since they had not been, the deed was ineffective.
In Application of County Collector, 391 Ill.App.3d 656 (2009), another panel recently agreed. There the
issue was whether a tax purchaser had to give certain notices under other provisions of the Property Tax
Code to subsequent purchasers of subsequent years’ taxes. Because the court found such notice
required and not given, the application for a deed was improper, it said.
Merger By Deed Does Not Apply to Mutual Mistake About Tax Assessments

The doctrine of merger by deed does not apply when the parties to a transaction make a mutual
mistake regarding property tax assessments, the Illinois Supreme Court has held.
In Czarobski v. Lata, 227 Ill.2d 364 (2008), the contract provided for proration at
closing and execution at closing of an agreement for final proration “when the
complete assessment information is available”. That agreement was not executed,
the court said, because the parties were mutually mistaken as to the accuracy of
recent tax information. After closing, taxes were changed far more than the
preliminary statement relied upon would have indicated. Under those circum-
stances, the doctrine of mutual mistake prevented the doctrine of merger by deed from applying, it ruled.

Creating Judgment Lien Requires Strict Compliance With Statute

Creating a judgment lien by recording against realty requires strict compliance with 735 ILCS5/12-101,
the First District has ruled. In Maniez v. Citibank, 383 Ill.App.3d 38 (2008), the court noted that at
common law a judgment did not create a lien on real estate, and that the judgment
lien was “purely a statutory creation.” To be effective, a memorandum of judgment
OOPS! must be recorded and an enforceable judgment must stand behind the

memorandum, the court said, with “enforceable judgment” meaning one on which
execution may issue. Because the memorandum in Maniez contained a typo as to
the judgment date, it referred the reader to a non-existent judgment and was ineffective, the court ruled.

--John Hundley, Jhundley@lotsharp.com, 618-242-0246
John\Sharp Thinking\#24.doc
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