Boatmen's Savings Bank v. Grieve
| Decision Date | 01 December 1890 |
| Citation | 14 S.W. 708,101 Mo. 625 |
| Parties | Boatmen's Savings Bank, Appellant, v. Grewe |
| Court | Missouri Supreme Court |
Appeal from St. Louis City Circuit Court. -- Hon. Daniel Dillon Judge.
Reversed and remanded.
Cunningham & Eliot for appellant.
(1) The good faith and belief in an absolute title, which is required in equity as a condition of the allowance for improvements made upon land of which the possessor is not the owner, is determined by the same considerations and principles which govern the question of what is an innocent purchaser for value. "In good faith" is equivalent to "without notice." Lee v. Bowman, 55 Mo 400; Coover v. Johnson, 86 Mo. 533. Any fact which should put an ordinary man on inquiry is notice. Major v Buckley, 51 Mo. 227. (2) The grantee in a quitclaim deed from one charged with equities cannot be an innocent purchaser; nor are improvements placed by him on the premises erected "in good faith." Sharp v. Cheatham, 88 Mo. 510. He takes only such rights as his grantor had. Ridgway v. Holliday, 59 Mo. 444. He is not without notice of a prior fraud. Stivers v. Horne, 62 Mo. 473; Oliver v. Piatt, 3 How. (U. S.) 333, 410. Improvements are allowed only to holder of warranty deed. Pulliman v. Robinson, 1 T. B. Mon. 228. (3) While constructive notice imparted by the records will not impair the good faith otherwise existing in one placing improvements upon land to which he has no title, or which is subject to redemption in his hands; if the purchase is of a tax title to such land, for a consideration less than one-fifth of the value, by a quitclaim deed, it becomes such neglect not to make inquiries, as is the equivalent of actual notice of the state of the title. Hill v. Tissier, 15 Mo.App. 299; Sensendoerfer v. Kemp, 83 Mo. 581; Mason v. Black, 87 Mo. 329. Any circumstances from which the court may fairly infer that a suspicion existed as to the title will debar defendant from improvements. Cole v. Johnson, 53 Miss. 94. This case was cited with approval by Justice Blatchford in Bank v. Hudson, 111 U.S. 66. For cases of gross neglect see Foley v. Kirk, 33 New Jersey Eq. 170; Eck v. Hatcher, 58 Mo. 235. Purchase at a sheriff's sale and for a low price. Murphy v. Smith, 86 Mo. 333. Inadequacy of price as a circumstance to put buyer on inquiry. LeNeve v. LeNeve, 2 White and Tudor L. C., part 1, p. 35. The holder of a tax title is not allowed for improvements. Jacks v. Dyer, 31 Ark. 334. (4) In an accounting, between a purchaser at a foreclosure sale under a first mortgage proceeding, to which a second incumbrancer has not been made a party, and such second incumbrancer (for the purposes of redemption), the purchaser should be charged with the rents and profits of the land; and, if the circumstances are such as to entitle the purchaser to receive compensation for the improvements made by him on the premises, the rents and profits should be calculated upon the basis of the land as improved. Bollinger v. Chouteau, 20 Mo. 95. Allowance for improvements goes no further than mere indemnity; and, if the defendant has used the improvements long enough to compensate him, equity is satisfied. Bright v. Boyd, 1 Story Ct. Ct. 478. While the person redeeming pays for the improvements, he partially gets the benefit of them in the increased rents and profits allowed. Bank v. Hudson, 111 U.S. 66. Defendant is charged with rents and profits of the property, as improved. Jones on Mortgages, sec. 1129. When the defendant himself occupies the land, the value must be determined by experts. Jones on Mortgages, sec. 1122. The rule, as stated above, was adopted in the following cases: Montgomery v. Chadwick, 7 Iowa, 114; Wetmore v. Roberts, 10 How. Pr. 56; Harper's Appeal, 64 Pa. St. 315; Dozier v. Mitchell, 65 Ala. 511; Givens v. McCalmont, 4 Watts, 460. The rule allowing improvements does not extend to providing a good investment. Benedict v. Gilman, 4 Paige, 62. Preference should not be given to defendant for the value of his improvements over the interest of the plaintiff in the lands. R. S. 1889, sec. 4649; Railroad v. Shortridge, 86 Mo. 662; Stump v. Hornback, 94 Mo. 26.
Judson & Reyburn for respondent.
(1) The tax lien is the superior lien. Williams v. Hudson, 93 Mo. 524; Allen v. McCabe, 93 Mo. 138; Cowell v. Gray, 85 Mo. 169; Gitchell v. Kriedler, 84 Mo. 473; Bank v. Grewe, 84 Mo. 477; Myers v. Bassett, 84 Mo. 479; Stafford v. Fizer, 82 Mo. 393. (2) Mere inadequacy of price obtained at a sheriff's sale does not put the purchaser on inquiry. Wade on Notice, p. 17, sec. 24; Rorer Judicial Sales, sec. 549; 1 Blackwell, Tax Titles [5 Ed.] sec. 551; Black. Tax Titles, sec. 103; State ex rel. v. Sergeant, 76 Mo. 557; s. c., 12 Mo.App. 228. (3) Defendant's rights are fairly within and protected by the statute. R. S. 1889, sec. 4645. (4) Defendant is not to be charged with the rents and profits of the property. Atkinson v. Henry, 80 Mo, 670.
-- This is a suit in equity to redeem lots 17 and 18 in Belt's addition to St. Louis from a sale of the lots for payment of taxes, and for possession. The facts are these:
Manning Mayfield, by a deed of trust dated the first of June, 1876, conveyed the lots to Henry Belt in trust to secure Mayfield's note of the same date for $ 292.50, due in one year and payable to George Belt and Francis Tafts. The note was duly assigned to the plaintiff within twenty days after its date. Thereafter the collector commenced suit to enforce the lien for taxes for the year 1876. The parties named in the deed of trust were made defendants, but the plaintiff, the then owner of the note, was not made a party to that suit. Judgment was rendered in the tax suit, and by virtue of a special execution issued thereon the sheriff sold the property in February, 1880, lot 17 to Hiemenz and lot 18 to Walker. The defendant purchased both lots from the last-named persons, receiving a quitclaim deed from Hiemenz in May, 1880, and a warranty deed from Walker in July, 1881. Defendant improved lot 17 in 1880 by erecting a dwelling-house and outhouses thereon at a cost of some two thousand dollars, and subsequently he made some improvements of no great value on the other lot.
Plaintiff caused both lots to be sold under the deed of trust on the first of September, 1881, and became the purchaser at that sale, and thereafter commenced this suit to redeem.
The circuit court found that defendant was entitled to $ 78.09 on account of the tax sales, and that he was entitled to seventeen hundred dollars, "being the present value of the permanent improvements made on said land by defendant since the sale for taxes." The decree allows the plaintiff to redeem upon the payment of $ 1,778.09. Should plaintiff fail to redeem within a specified time, the defendant is allowed to redeem by paying the mortgage debt and taxes paid by the plaintiff. Both parties failing to redeem the decree goes on to order a sale, and, after the payment of costs, the proceeds are to be paid out as follows: First, to defendant, $ 78.09; second, to plaintiff, for taxes paid by it, $ 19.83; third, to the defendant, seventeen hundred dollars; and, fourth, to plaintiff, the remainder.
1. The plaintiff appealed from this decree, and the first objection is, that the court erred in requiring it to pay for the improvements.
The lien for unpaid taxes was paramount to that created by the deed of trust. As the plaintiff, the holder of the debt secured by the deed of trust, was not made a party to the tax foreclosure suit, it has the right to redeem from the tax sale. Boatmen's Savings Bank v. Grewe, 84 Mo. 477, following prior adjudications. The defendant, therefore, occupies a position like that of one who is in possession under a defective foreclosure sale. In such cases the purchaser, who has made valuable improvements in the belief that he has acquired an absolute title, is entitled to be paid the value of the improvements, in case the premises are redeemed. 2 Jones on Mortgages [4 Ed.] sec. 1128; Martin v. Ratcliff, ante, p. 254. The same rule must be applied in the present case.
2. It is further insisted that defendant was not a purchaser in good faith. We have held, under the occupying-claimant law that constructive notice implied by a recorded deed is not sufficient to defeat a claim for improvements. Stump v....
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