HOLT v.KING,et al

• Decision Date: 06 December 1903
• Court: West Virginia Supreme Court
• Parties: HOLT v. KING,et al

54 W.Va. 441

HOLT v.KING, et al

Supreme Court of Appeals of West Virginia.

Submitted June 13, 1903

Decided December 12, 1903.

1. Tax Sale Assignment of Certificate.

A person holding a vendor's lien on a certain tract of land, which has been sold for the nonpayment of the taxes, proposes to the purchaser, within the year of redemption, to redeem the same; and such purchaser informs him that a subsequent lienor has demanded the right to and is going to redeem, and he afterwards informs the subsequent lienor that the prior lienor wanted to redeem, but that he preferred to allow him to make the redemption. He is then induced by such subsequent lienor, who was fully aware that the prior lienor expected him to make the redemption, to execute an assignment to him of the sheriff's certificate on payment of the redemption money, which assignment is kept secret, and no notice thereof, either by the purchaser or the subsequent lienor, is given to the prior lienor until the redemption period has elapsed-a court of equity, on application of the prior lienor, will hold such assignment to be a mere redemption of the property, and will enjoin the subsequent lienor from obtaining a deed therefor from the clerk of the county court, (p. 443).

2. Redemption Fraud.

If a purchaser of delinquent lands represents to a prior lienor, desiring to redeem the same, that a subsequent lienor demands the right to and is going to make such redemption, and afterwards such purchaser secretly assigns the sheriff's receipt to such subsequent lienor, and fails to advise the prior lienor of such assignment until too late for him to make redemption, such conduct on the part of the purchaser is fraudulent, and, if the subsequent lienor knowingly accepts ani retains the benefits of such fraud, he will be held equally gritty with the pur- chaser, especially if he is the moving cause of such purchaser's conduct though he may be entirely free from intentional wrong or mala fides, (p. 444).

Absent, Brannon, Judge.

Appeal from Circuit Court, Lewis County. Bill by M. S. Holt against John King and others. Decree for defendants, and plaintiff appeals.

Reversed.

Linn, Byrne & Cato, for appellant. W. W, Brannon, for appellees.

Dent, Judge:

M. S. Holt fded his bill in the circuit court of Lewis county against John King, W. W. Brannon, and E. A. Bennett, clerk of the county court of Lewis county, for the purpose of setting aside a tax sale of 100 acres of land to said King, and the assignment thereof made by him to said Brannon, and to prevent the clerk of the county court from making a deed therefor. Plaintiff bases his right to maintain this suit on the fact that he has a purchase-money lien against the land, and therefore had the right to redeem the same, but he does not seek to enforce such purchase-money lien. It appears, however, that there are suits pending already in which this may be done. The prayer of this bill is that plaintiff "may be awarded an injunction against the said E. A. Bennettt, clerk of the county court of Lewis county, restraining him from making such deed to said W. W. Brannon., and that said W. W. Brannon may be enjoined and restrained from taking such deed or further proceeding to obtain the same, and that he may have a decree declaring the said land redeemed, and the said assignment canceled and annulled, and that he have his costs, and such other, further, and general relief as the court may see fit to grant." Defendant Brannon appeared, entered a demurrer, and filed an answer to tin bill, claiming that he purchased the land, and did not redeem it, and denying the right of plaintiff to the relief prayed. Depositions were taken by both parties, and on a final hearing the court dismissed the bill.

Plaintiff admits in his bill that he knew of the delinquency and sale of the land, and that he intended redemption of the same, but, being informed that the defendant Brannon intended to redeem, he acquiesced therein. He then alleges various irregularities in the delinquency and sale of the land, sufficient to vitiate the same. As to these he should not be heard to speak, as he was in no wise misled by them, and had ample opportunity to redeem notwithstanding such irregularities. He knew the land had been returned delinquent, that the taxes were unpaid, that it was sold, and who the purchaser thereof was, in time to have asserted his rights. Against his own neglect a court of equity will afford him no relief.

The controversy therefore narrows itself down as to whether defendant Brannon redeemed or purchased the land, and, if the former, whether plaintiff has the right to maintain this suit to have such redemption declared, or to be permitted to redeem such land. A lien creditor, under section 15, chapter 31, Code 1899, has the privilege of redemption; but he is under no obligation to do so, and may waive such privilege and become a purchaser. But he cannot do both at the same time. That is, he cannot take advantage of the right to redeem in so far as the purchaser at the delinquent sale is concerned, and yet claim to be a purchaser in so far as the land owner or other lienors are concerned. A redemption, by whoever made, inures to the benefit of the land owner, and hence to all lien creditors, as it relieves land from tax delinquency, as though it had never occurred. While a purchase deprives the landowner and all other lienholders of all claim or title to the land, unless redeemed within the limit fixed by law. It world therefore be unjust to allow a lienholder, or even one claiming to be a lienholder, to compel the tax purchaser, by virtue of the statutory privilege, to submit to a redemption of the land, and yet convert it into a purchase, as to the owner and other lienors, by taking a secret assignment of the tai purchaser's rights. An open assignment is proper to secure to the lienor the right to hold the amount of taxes as a lien upon the land, or even to take the title in trust for this purpose, but not to give the lienor taking advantage of his statutory privilege of redemption fie right to hold absolute title to the property. The defendant Brannon, in his evidence, states the manner in which he obtained from the tax purchaser an assignment of his rights as follows, to-wit: "I talked with Mr. King about redeeming of him, and he was inclined to refuse the offer, and T said, 'Now, Mr. King, I have concluded to redeem the tract, ' or words to that effect, and 'I will make you a tender of the amount of money necessary if you require it, or will give you my check/ or words to that effect; and he said my check was alright, and he would make no question about that, but that he would refuse the offer. I then told him that his refusal was all right, and I had no complaint to make against him, and that T would simply go to Mr. E. A. Bennett, clerk, and pay the necessary amount, and thereby effect the redemption. He left me, and after some time returned and said that he had seen Mr. Bennett, the clerk, who had informed him that I could redeem in the manner just indicated, and he had suggested to Mr. King that he would as well allow me to redeem, and Mr. King said, T am willing to let you redeem it/ I then said to Mr. King, in the presence of Mr. R. L. Zinn, who was performing some clerical work for me along about that time, that I would prefer that he would assign his purchase to me, so that, if anybody wanted to redeem it, they would have to pay me the money, with interest, or I would hold the land. I told him that T had already borne considerable burdens to relieve the Butcher lands from forfeiture, and that all creditors had been chiefly benefitted thereby, and I did not like to increase the amount of expenditure, and layout of the money; and he said, in the presence of Mr. Zinn, that he would just as leave assign the claim to me as not, remarking that I was offering to make him whole." This plainly shows that the defendant Brannon was not making a bona fide purchase of the tax purchaser, but forcing him to permit a redemption of the property, and, after convincing the tax purchaser of his legal right to make a redemption, persuaded him to make an assignment of his rights simplv because he was being made whole, and could not avoid the alleged rights of defendant to redeem. Hence it should be treated as a mere statutory redemption, and not a purchase. Defendant Brannon, having paid money necessary to redeem, might take the title in his own name to secure repayment thereof, but he should hold as a trustee for the benefit of the land owner and other lienors who might otherwise be defrauded of their rights, and he obtain, by reason of his statutory privilege of redemption, an unconscionable advantage over them, Nor does it make any difference whether defendant Brannon had the right to redeem or not. If he did not have the right, he would be guilty of fraud in representing that he had, and thus securing a redemption under a false pretense. In either event he should hold as trustee for the benefit of those interested. In taking advantage of the statutory privilege to redeem, he puts himself in the same position as a person whose duty it is to redeem, and the attempt to convert a redemption by either into an absolute purchase is inequitable, and will be avoided at the instance and for the benefit of an interested...