Gritchell v. Kreidler

• Decision Date: 27 June 1882
• Citation: 12 Mo.App. 497
• Parties: CHARLES A. GRITCHELL, Respondent, v. AUGUST KREIDLER, Appellant.
• Court: Missouri Court of Appeals

12 Mo.App. 497

CHARLES A. GRITCHELL, Respondent,

v.AUGUST KREIDLER, Appellant.

St. Louis Court of Appeals, Missouri.

Jun. 27, 1882.

1. A proceeding to collect back taxes is not a proceeding in rem.

2. In a proceeding for back taxes the owner must be brought into court.

3. Notice to the trustee under a deed of trust of the pendency of a suit for back taxes on the mortgaged land is not notice to the holder of the notes.

4. The cestui que trust has a beneficial interest in the land, which does not pass under a sale for back taxes unless he was a party to the suit.

5. The maker of a deed of trust to secure notes is the owner of the property as in the case of a mortgageor.

6. In an action of ejectment the defendant against whom there has been a judgment and execution, cannot defeat a recovery of possession by setting up title in a third person under whom he holds as tenant.

7. ON A REHEARING.--Whatever rights of possession the defendant in execution has, the purchaser at a sale under the execution acquires.

8. The provisions of the statute concerning the expiration of the plaintiff's right of possession pending the suit, have no application to this case.

9. A defendant in execution cannot, as against a purchaser at the execution sale, set up a right of possession acquired between the date of the sale and the trial of the ejectment suit brought against him by the purchaser.

APPEAL from the St. Louis Circuit Court, LINDLEY, J.

Affirmed.

HOLMES & TALBOT, for the appellant: A proceeding to enforce the state's lien for back taxes is not a proceeding in rem.-- Rankin v. Chandler, 2 Brock. 125. The judgment in such a proceeding is binding only on the parties to the suit.-- Hogan v. Smith, 11 Mo. App. 314. The beneficial owners must be made parties, and if not made so their interests will not pass under the execution sale.--Blackwell on Tax Tit. 631; Doyle v. Bank, 14 Ala. 622; Hopper v. Malleson, 16 N. J. Eq. 382.

S. HERMANN and G. D. BANTZ, for the respondent: In a suit for back taxes the only necessary party is the owner of the property.--Rev. Stats., sect. 6837. The owner of real estate is either the mortgageor or the trustee in the deed of trust. The benficiary, or holder of the notes, is simply the owner of a chattel, and in no sense the owner of the land.-- Kennett v. Plummer, 28 Mo. 142; Johnson v. Houston, 47 Mo. 227; Potter v. McDowell, 43 Mo. 93; White v. Wear, 4 Mo. App. 341; Hubbard v. Gilpin, 57 Mo. 445. An action for the enforcement of the state's lien, for taxes, under the present revenue act, is a proceeding in rem; and, when the proceedings are regular, conveys the fee, divested of all encumbrances placed on the property by the former owner.--Rev. Stats., sects. 6838, 6839; Blackwell on Tax Tit. (4th ed.) 630; Delaney v. Gault,30 Pa. St. 63; Pidgeon v. The State, 36 Ill. 251; Atkins v. Hinman, 2 Gilm. 437; Fager v. Campbell, 5 Watts, 288; Dunlap v. Gallatin County, 15 Ill. 9; Parker v. Baxter, 2 Gray, 189; Doe v. Gledney, 8 Ga. 479; Jones v. Devore, 8 Ohio St. 431; Anschutz v. McClelland, 5 Watts, 490; Cooley on Tax. 358, 359, 360, et seq. The defendant in an execution, who is subsequently sued in ejectment, on a title acquired at the execution sale, cannot defend by showing an outstanding title.-- Matney v. Graham, 59 Mo. 191; Boyd v. Jones, 49 Mo. 202; Page v. Hill, 11 Mo. 149; Laughlin v. Stone, 5 Mo. 43; Hogan v. Smith, 11 Mo. App. 314.

BAKEWELL, J., delivered the opinion of the court.

This was an action in ejectment, begun in May, 1880. The answer sets up that defendant, on September 1, 1875, being owner in fee of the premises in question, executed a deed of trust upon them, his wife joining in the conveyance, to one Bertram as trustee, to secure to Barbara Staedler a negotiable promissory note for $1,100, payable to her order three years from the date of the deed of trust, and also the interest notes. This deed was duly recorded. Afterwards, Mrs. Staedler died, and Harter qualified as her executor. At the maturity of the note defendant did not pay it, but agreed with Mrs. Staedler to occupy as her tenant, paying rent to her. After her death defendant went on paying the rent to her executor. Bertram declined to execute the trust, and Wislizenus, having been appointed trustee in his place, at the request of the holder of the note, and in accordance with the terms of the deed, conveyed the property to Holmes, and executed and delivered to him a deed for the same. Defendant then attorned to Holmes, and is still in possession as tenant of Holmes. Before the foreclosure, suit had been begun in the circuit court of the city of St. Louis, under the back-tax law for back taxes on this property for 1877. This action was in the name of the state, to use of the collector, against defendant and Bertram, who was then trustee. Barbara Staedler was then dead, and her executor was not made a party. Judgment was rendered in this action on November 26, 1879, against defendants, finding the taxes claimed a lien upon this property, and ordering a special execution in accordance with the act of April 12, 1877, providing for the collection of delinquent taxes, and the amendments thereto. The premises were sold on April 27, 1880, under this execution, and plaintiff purchased, and received a sheriff's deed. After Mrs. Staedler's death, her executor, Harter, became owner of the notes. No one having any interest in the notes was made a party to the tax-suit.

Plaintiff demurred generally, that the facts set forth in the answer do not constitute a defence, and specially, that the beneficiary in the deed of trust is not a necessary party to a proceeding to enforce the collection of back taxes against real estate. The demurrer was sustained, and there was a final judgment for the plaintiff.

It is contended that no proceeding under the revenue law can affect the interest of one having any beneficial interest, whether legal or equitable, in the land sold for taxes, unless he be made a party to the proceeding.

Some of the states, as California, provide for a proceeding to collect taxes assessed against real estate which is strictly a proceeding in rem. In such cases the tax-law is notice to everybody; and any person interested in the land must pay the tax, if he would protect the land. If the tax is not paid and there is a sale, an independent title vests in the purchaser, free from all liens, and every interest carved out of the fee. Blackwell on Tax Tit. (4th ed.) 630.

In such cases there is a provision for a judgment against the land, where the owner is not sued at all. The People v. Fox, 39 Cal. 624. Where the process is served on the thing itself, and this service authorizes the court to give judgment against the thing without notice to any individual, the proceeding is strictly in rem.

But the Missouri statute for the enforcement of payment of back taxes upon lands by suit, provides for service upon the owner as in ordinary suits, by summons, if he can be served; otherwise by publication. Rev. Stats., sect. 6837. The action is to be prosecuted against the owner of the property. The judgment (sect. 6838), “if against the defendant, shall describe the land;” a special fieri facias is issued upon it, and the judgment is a first lien upon the land; the writ commands the sheriff to sell the property, and the deed (sect. 6839) shall convey a title in fee to the purchaser.

The owner must be brought in or his rights are not affected by the sale. Accordingly, in the present case, Kreidler, who owned the fee, was made a defendant, and also Bertram, the original trustee under the deed of trust executed by Kreidler.

According to the modern doctrine, the mortgageor, until the mortgagee enters for breach, is the owner. This is true of an ordinary mortgage; but a deed of trust, according to the form used in this state, is also an absolute conveyance on its face, with the same condition of avoidance if the debt is paid. The addition of a person to sell without judicial proceedings does not change the nature of the instrument.

Bertram was a mere naked trustee; we do not see how notice to him can be regarded as notice to the beneficiary under the deed of trust. He was under no obligation to pay the taxes; nor, in assuming to act as trustee, did he incur any obligation of notifying the holder or holders of the negotiable promissory notes secured by this mortgage, of the pendency of any tax-suit against the property to which he might be made a party as trustee in the deed of trust.

The cestui que trust in the deed of trust was not, strictly speaking, an owner of the land; but he had a beneficial interest in it; and in order that that interest might be affected by the proceedings under the suit to enforce the taxes against the land, we think it was necessary that he should be made a party to the action. The legislature, in providing that the owner should be made a party, manifestly intended that the title should not be divested out of the beneficial owner of real estate without giving him his day in court. Such interest as Kreidler had in the land when the action was begun, passed by the sheriff's deed; but we do not think that the interests of the mortgagee, who was not a party to the proceeding, were affected by it. Whether the mortgagee or cestui que trust can be called an “owner,” within the meaning of the word as used in the act, we need not examine. As the proceeding is not in rem, we do not see how it can affect those who are not parties or privies. If it was the intention of the legislature that the proceedings should have regard to the land rather than to the owners of the land, and that a sale should destroy all interests in the land, and pass title, free from all liens and encumbrances upon the former estate, this intention should have been clearly expressed. We have already said, in Hogan v. Smith (11 Mo. App. 314), that a judgment in a tax-suit does not affect those who are not parties to it.

It may be difficult, and indeed...