Allison v. Corson

• Decision Date: 01 December 1897
• Docket Number: 176.
• Citation: 83 F. 752
• Parties: ALLISON v. CORSON et al.
• Court: U.S. District Court — District of South Dakota

83 F. 752

ALLISON v. CORSON et al.

No. 176.

United States Circuit Court, D. South Dakota, Western Division.

December 1, 1897

Edwin Van Cise and Chase & Dickson, for complainant.

C. S Palmer, for defendants.

CARLAND District Judge.

The complainant, a citizen of the state of Iowa, brings this action, as receiver of the Western Home Insurance Company against the defendants, for the purpose of enjoining the defendant John L. Burke, as county treasurer of Fall River county, S.D., from issuing, and the defendants Henry T Corson and J. W. Russell from applying for and receiving, a tax deed from said Burke, as county treasurer, for lots 1, 2, 3, and 4, block No. 23, of the Second Minnekahta addition to the town of Hot Springs, S.D., which is alleged to be of the value of more than $2,000. All the defendants are citizens of South Dakota, except Russell, who is a citizen of Vermont. On the filing of the bill, an order to show cause was granted why a temporary injunction should not issue as prayed for in said bill. A restraining clause was inserted in the order. At the hearing on the order to show cause, the following facts appeared: On June 19, 1896, the complainant, as receiver of the Western Home Insurance Company, commenced an action in the circuit court for Fall River county, S.D., for the purpose of foreclosing a mortgage on the real estate hereinbefore described, which mortgage was given to secure the sum of $10,000, by Fred D. and Ella S. Gillespie, on June 17, 1890. The defendant J. W. Russell, as trustee for certain bondholders, was the holder of another mortgage on the same property for $15,000, given by the same mortgagors. Russell was made a party defendant in the said foreclosure action and therein set up the claim that the $15,000 mortgage was a superior lien to the mortgage which was then being foreclosed in said action. The foreclosure action went to trial, and the circuit court of the county of Fall River, state of South Dakota, on the 12th day of July, 1897, adjudged and decreed that the mortgage owned by the Western Home Insurance Company was superior to the mortgage held by the defendant Russell. It further appears that on the 31st day of January 1896, the defendant Russell, finding that the land in question had been sold for delinquent taxes, and had been bid in by the county of Fall River, purchased from the treasurer of Fall River county the tax-sale certificates for the years 1892 and 1893, and paid, for the assignment of said certificates, $1,164.35; that this purchase was made while the defendant Russell was the holder as trustee of a junior mortgage on the land in question; that on the 1st day of May, 1897, defendant Russell, in order to secure funds to carry on litigation in connection with his trusteeship, for value received, sold and assigned said tax-sale certificates to the defendant Corson; that the defendant Corson, at the time of the commencement of this action, was taking the necessary steps to obtain a tax deed of the land hereinbefore described; that said land is not worth more than one-fourth of the amount due on the mortgage owned by the Western Home Insurance Company, which amount, as adjudicated by the circuit court for Fall River county, is $16,618.26; that said land has been sold under said decree of foreclosure, and bid in by the complainant herein, as receiver of the Western Home Insurance Company. The bill also alleges certain irregularities in and about the assessment of the taxes for which the land was sold, and certain irregularities in regard to the manner in which the land was sold; but none of these defects, if they exist, go to the justness or groundwork of the taxes, and in view of the affidavits submitted by the defendant Burke, and of chapter 3, Laws S.D. 1895, this feature of the case made by the bill will be dismissed as without merit.

The two grounds urged why an injunction should issue restraining the defendants Corson or Russell from receiving, and the defendant Burke from issuing, a tax deed on the certificates purchased by Russell, are: First, Russell, as holder of the junior mortgage, could not acquire a tax title to the land in question while h...