Harrell v. Surface et al.

• Decision Date: 04 November 1942
• Docket Number: No. 26162.,26162.
• Citation: 165 S.W.2d 322
• Parties: BLANCHE HARRELL, APPELLANT, v. WALTER J. SURFACE, HAZEL R. SURFACE, RUSSELL DESCHAMP, MAYME DESCHAMP, HIMMELBERGER-HARRISON LUMBER COMPANY, A CORPORATION, HENRY BURLOCK AND BERT WALKER, RESPONDENTS.
• Court: Missouri Court of Appeals

165 S.W.2d 322

BLANCHE HARRELL, APPELLANT, v. WALTER J. SURFACE, HAZEL R. SURFACE, RUSSELL DESCHAMP, MAYME DESCHAMP, HIMMELBERGER-HARRISON LUMBER COMPANY, A CORPORATION, HENRY BURLOCK AND BERT WALKER, RESPONDENTS.

No. 26162.

St. Louis Court of Appeals, Missouri.

Opinion filed November 4, 1942.

Appeal from Circuit Court of Cape Girardeau County. — Hon. James C. McDowell, Judge.

AFFIRMED.

Merrill Spitler, R.F. Baynes and Harry Bock for appellant.

(1) In absence of statutory provisions to the contrary, tax liens follow into the purchaser's hands, and the duty of the owner to pay taxes or to redeem from tax sales is absolute. 61 C.J. 936; Kansas v. Hannibal Ry., 77 Mo. 180; Schmidt v. Smith, 57 Mo. 157; Scott v. Shy, 53 Mo. 478. (2) Purchase of realty at a tax sale by one whose duty it is to pay taxes thereon operates merely as a payment of such taxes. Duffley v. McCaskey, 134 S.W. (2d) 62; McCune v. Goodwillie, 204 Mo. 306. (3) The holder of a note secured by a deed of trust, either known or unknown, must be made a party defendant or the tax title is void against a purchaser at a foreclosure sale under the deed of trust. Stafford v. Fizer, 82 Mo. 393; Gitchell v. Kreider, 12 Mo. App. 497, 84 Mo. 472; Boatmen's Bank v. Grewe, 13 Mo. App. 335, 84 Mo. 477; Cowell v. Gray, 85 Mo. 169; Taff v. Tallman, 277 Mo. 157, 209 S.W. 868. (4) Where the real purchaser is the owner, or shall be obligated to pay the taxes for which nonpayment such lands are sold, then any such sale merely operates as payment of the taxes, pro tanta, and cannot strengthen title of that owner against valid lien holders. Sec. 9953A, Original Laws of 1933, page 425; Amended, Laws of 1939, page 850; Sec. 9954B, Laws of 1933, page 425. (5) Under the Jones-Munger Act, the owner is charged with the payment of the taxes and it is his duty to so pay them and he cannot, for the purpose of cutting out or invalidating subsisting liens against the land, permit them to sell and take a deed therefor as such action is fraud against the lienholder. Schlefly v. Baum, 108 S.W. (2d) 363.

Robert A. Dempster and Bailey & Bailey for respondents.

(1) When testimony goes into the record without objection, although it may not be within the pleadings, and is treated as an issue in the suit, the appellate court will consider the pleadings broadened or amended so as to conform to the proof. Sec. 1265, R.S. Mo. 1939; Sternkopt v. Cawein, 63 S.W. (2d) 443, 447, and cases cited; Solomon v. Moberly Light & Power Co., 303 Mo. 622, 262 S.W. 367; Johnson v. Scheerer, 109 S.W. (2d) 1231, 1237. (2) Holder of deed of trust, where no issue of right to redeem is raised, cannot foreclose deed of trust where property has sold under a superior tax lien, although such holder was not made a party to the tax suit. The holder's remedy, if any, is by a proceeding in equity to redeem. Richards v. Earls, 345 Mo. 260, 133 S.W. (2d) 381, 387; Ch. 74, Art. 9, R.S. Mo. 1939, p. 2913; State ex rel. v. Bader, 36 Mo. 259, 78 S.W. (2d) 835; Schlafly v. Baumann, 341 Mo. 755, 108 S.W. (2d) 363. (3) Any person interested in lands sold for taxes under Jones-Munger Act may redeem same within two years of date of sale. Sec. 11145, R.S. Mo. 1939. (4) Collector's deed resulting from sale of land for taxes under Jones-Munger Act is prima facie evidence of proper assessment of taxes, regularity of all proceedings, and fee simple title of the grantee in said deed. Sec. 11150, R.S. Mo. 1939. (5) The holder of certificate of purchase for sale for taxes under Jones-Munger Act is immediately endowed with inchoate title, after two years redemption period without redemption by the owner he is endowed with equitable title, and when he presents his certificate of purchase and secures collector's deed, he calls in the legal title also and becomes endowed with fee simple title. Sec. 11149, R.S. Mo. 1939; Gilmore v. Hibbs, 152 S.W. (2d) 26; City of St. Louis v. Baumann, 153 S.W. (2d) 31.

ANDERSON, J.

This is a suit to foreclose a deed of trust and for other relief. The trial court found for defendants and entered a judgment dismissing plaintiff's suit, whereupon plaintiff appealed.

The petition alleged that on September 17, 1927, the defendants Walter J. Surface and Hazel R. Surface, his wife, being the owners of certain real estate (farm land described in said petition), duly executed a deed of trust, whereby they conveyed said real estate to W.P. Oliver, trustee, to secure the payment of an indebtedness of said defendants to John F. Lilly and Blanche Harrell, which indebtedness was evidenced by a promissory note in the principal sum of $1814, dated September 17, 1924, and payable on or before ten years after the date thereof.

The petition further averred that said note was not paid at maturity, and that the principal sum, and interest from the date of said note, were due.

The petition then alleged that after the execution and before the maturity of said note, same was assigned and endorsed to plaintiff by the said John F. Lilly, and that plaintiff became and at the time of the filing of this suit was the holder of said note.

The petition then averred that defendants Russell Deschamp and Mayme Deschamp had or claimed some interest in, or lien upon, the premises described in the deed of trust, the precise nature of which was to plaintiff unknown, but that whatever rights said defendants Russell Deschamp and Mayme Deschamp might have were inferior and subject to plaintiff's rights in and to said property; that the defendant Himmelberger-Harrison Lumber Company claimed an interest in said property by reason of a deed of trust, but that said rights so claimed were subject to and inferior to plaintiff's prior claim; that defendants Henry Burlock and Bert Walker claimed some interest in said real estate, but whatever rights or interest they had were subject to the prior rights of plaintiff.

The petition prayed: (a) for a decree for the amount of said debt; (b) that any interest, lien, or equity of redemption of the defendants or anyone claiming under them be foreclosed; (c) that said premises be ordered sold and the proceeds of the sale applied, first, to the payment of the costs and expenses of this action; and second, to the payment of said debt and interest; (d) that defendants Walter J. Surface and Hazel R. Surface be adjudged to pay plaintiff any deficiency that might remain on said note after the application of the proceeds of the sale to it; and (e) general relief.

Thereafter the defendant Himmelberger-Harrison Lumber Company filed an answer averring that it was asserting no right, title, claim or interest in the premises.

Defendant Russell Deschamp filed a separate answer, in which he alleged that the land in question was sold for taxes under the so-called Jones-Munger Act, on November 3, 1937, to Harry Woodruff and Emma Woodruff, and that the usual certificate of sale was on said date delivered to said purchasers by the Collector of Revenue of Stoddard County; that on June 2, 1938, for valuable consideration, said certificate was assigned to defendant Russell Deschamp.

Said answer of Russell Deschamp further alleged that on November 24, 1939, after the two-year period of redemption had expired, said Russell Deschamp presented said certificate to the Collector of Stoddard County, and said Collector executed and delivered to him a deed to said land, under which deed Russell Deschamp became the owner in fee of the land in controversy free from the alleged lien which plaintiff sought to have foreclosed in this suit.

Said answer further averred that plaintiff, if she held said alleged lien, failed at any time between November 3, 1937, and November 24, 1939, to redeem the land in controversy, and because of her laches in failing to redeem, she was barred and estopped from foreclosing said alleged lien.

The answer prayed that the court deny plaintiff the right to foreclose said lien and that the suit be dismissed at plaintiff's costs.

Defendant Mayme Deschamp for answer filed a general denial.

No answer appears for defendants Henry Burlock and Bert Walker.

The facts developed at the trial were as follows:

On September 17, 1924, appellant Blanche Harrell and John Lilly, as owners of the real estate involved in the suit, consisting of 80 acres of land situated in Stoddard County, Missouri, sold said land to Walter J. Surface. As part payment of the purchase price Surface and his wife executed a promissory note for $1814, payable to Blanche Harrell and John Lilly on or before ten years from date, and secured the note with a deed of trust on the land purchased. No payments were ever made on the note, and the deed of trust securing same is the one sought to be foreclosed by this suit.

Sometime after the execution of the note, appellant and Lilly endorsed and delivered the note to Dr. Fristoe, to hold as collateral security to an obligation owed to him by appellant. Dr. Fristoe retained possession of the note until shortly before this suit was filed, when it was delivered to appellant.

On November 4, 1935, The Little River Drainage District instituted proceedings against the land in question to enforce collection of delinquent taxes due it for the years 1930, 1931, 1932, 1933, and 1934, but neither appellant nor Dr. Fristoe were made parties. Said suit went to judgment and the land was sold under the judgment on December 8, 1936, to Cornucopia Farms, Inc., for $266.

Thereafter, and on November 3, 1937, the land was again sold (third sale), this time by the Collector of Revenue of Stoddard County for delinquent state and county taxes amounting to $428.19.

Harry Woodruff and Emma Woodruff, who bid $50, bought the land at said sale, and secured a certificate of purchase in the usual form.

On January 10, 1938, Cornucopia Farms, Inc., who purchased at the drainage tax sale, conveyed the land to M.G. Gresham, and, on the same day, Gresham conveyed by warranty deed to respondents Russell and Mayme Deschamp,...