Summary
In Rutherford there is no indication as to the nature of the property or its condition at the time it was purchased at the tax sale.
Summary of this case from City of Philadelphia v. WatkinsOpinion
October 7, 1948.
November 9, 1948.
Municipal claims — Sale of real property — Redemption — Necessary expenditures by purchaser — Payment by redemptor — Title insurance — Improvements — Compliance with orders of Fire Marshal — Act of May 16, 1923, P.L. 207.
In a proceeding under § 32 of the Act of May 16, 1923, P.L. 207, upon a petition of the assignee of a judgment debtor for redemption of a property sold by the sheriff under a judgment for a municipal lien, it was Held that (1) the purchaser was not entitled to reimbursement for the cost to him of title insurance on the property or (2) the cost of improvements to the property made in order that the property might be rented profitably, as distinguished from necessary expenses for maintenance; (3) the redemptor was not entitled to a credit for the rent received by the purchaser, since the property had been unrentable without the improvements made by the purchaser; and (4) the purchaser was entitled to payment of the amount expended by him to enable him to comply with the orders of the Fire Marshal.
Before RHODES, P.J., HIRT, RENO, DITHRICH, ROSS, ARNOLD and FINE, JJ.
Appeal, No. 181, Oct. T., 1948, from order of Common Pleas No. 2, Philadelphia Co., Sept. T., 1943, No. 1715, in case of City of Philadelphia v. Ulysses Rutherford et al. Order affirmed.
Proceeding upon petition by assignee of judgment debtor for redemption of premises sold by sheriff under a judgment for a municipal lien.
The facts are stated in the opinion, by GORDON, JR., P.J., of the court below, as follows:
This case came on to be heard under the provisions of Section 32 of the Act of May 16, 1923, P.L. 207; 53 PS sec. 2052, under which the petitioner, assignee of a judgment debtor, seeks to exercise his equity of redemption of a property sold by the sheriff under a judgment for a municipal lien. That Act provides that, to entitle a judgment debtor to exercise his equity of redemption, he must pay to the purchaser, inter alia: ". . . the insurance upon the property, and other charges and necessary expenses of the property, actually paid, less rents or other income therefrom, and a sum equal to interest at the rate of ten per centum per annum thereon, from the time of each of such payments." The dispute between the parties centers around various items of alleged expenditures which the respondent, the purchaser at the sale, claims he is entitled to receive before he can be required to reconvey the property to the petitioner, and has been submitted to us upon petition, answer and depositions. After careful consideration therefor, we are satisfied that the redemptor is not entitled to receive certain of the said items, and is entitled to others. Those as to which he is entitled to demand payment are six in number, and amount in all to $1,281.61. As to the others, which amount to $1,808.41, we think they are not within the provisions of the Act of 1923.
With respect to the latter items, they naturally fall into three classes. 1. An item of $40.00, representing the costs to the purchaser of title insurance on the property. This is in no sense a necessary expense. A purchaser at a sheriff sale buys the title of the debtor, whatever it may be. If he wishes to assure himself that he has brought a good title, he may, but is not required to, do so. Such an expenditure is one which he is not required to make, and hence cannot demand as a necessary expense. By such insurance he merely satisfies himself that he bought something worthwhile; but the debtor was under no obligation, contractual or otherwise, to give him that assurance: 2. With respect to the large amount of money the purchaser put into the property to make it profitable to himself, such expenditures are, we think, entirely within the category of improvements, as distinguished from necessary expenses, and as to which he is not entitled to reimbursement or redemption.
The purchaser bought the property with full knowledge of the right of redemption in the debtor and his assignee, and, therefore, took the risk of not being able to demand of the redemptor such expenditures as were not necessary to keep it in the condition in which it was bought. If this were not the rule, the door would be opened to improvements, whether they be small or extensive, which the purchaser might choose to make in the hope the property would not be redeemed. Additions to a property, such as the installation of bathrooms, plumbing fixtures and an electric lighting system, made in order that the property might be rented profitably, are not maintenance items, but improvements, and such items are, we think, clearly not recoverable from redemptor either under the Act or within the spirit and purpose of such laws.
Nevertheless, with respect to the credit that the Act requires to be given for rent received, we think that, since this property was manifestly unrentable without such improvements, during the period of possession by the purchaser, the redemptor should not receive a credit upon that account. 3. With respect to the $21.00 expended by the respondent purchaser to enable him to comply with the orders of the Fire Marshal, we think that item is properly payable by the redemptor as it is a necessary expenditure which the original owner was bound by law to make.
Accordingly, the rule will be made absolute for redemption upon payment of the petitioner of the items we have held properly allowable, and now enter the following order in the case:
And now, to wit, this 17th day of June, 1948, this case having come on to be heard on petition, answer and depositions, the rule is made absolute upon payment by the petitioner to the respondent, within thirty days, of the sum of $1,280.61, with interest at the rate of ten per cent per annum on $1,210.00 from November 18, 1946, on $21.00 from November 23, 1946, on $16.15 from May 29, 1947, on $28.46 from November 1, 1947, and on $5.00 from November 24, 1947.
Purchaser at sheriff's sale appealed.
Lester S. Hecht, for appellant.
Isadore Gottlieb, for appellee.
Argued October 7, 1948.
The order of the court below is affirmed on the opinion of President Judge GORDON.