Horton v. Johnson

• Decision Date: 28 May 1941
• Docket Number: 13576.
• Citation: Horton v. Johnson, 192 Ga. 338, 15 S.E.2d 605 (Ga. 1941)
• Parties: HORTON v. JOHNSON et al.
• Court: Georgia Supreme Court

15 S.E.2d 605

192 Ga. 338

HORTON v. JOHNSON et al.

No. 13576.

Supreme Court of Georgia

May 28, 1941

Rehearing Denied June 18, 1941. [Copyrighted Material Omitted] [Copyrighted Material Omitted]

Syllabus by the Court.

1. Where an owner of realty, who allows taxes thereon to become delinquent and the realty to be sold at tax sale, enters into a conspiracy with one not the purchaser at the tax sale, to defeat an outstanding security deed to the realty, and through fraudulent representations made in pursuance of the conspiracy causes the holder of the security deed to fail to redeem the realty from the tax sale, within the redemption period, and the other party to the conspiracy has acquired from the purchaser at the tax sale an option to purchase the tax title to the realty, equity will grant relief to the holder of the security deed against the exercise of such option, where the purchaser at the tax sale is willing to accord him the privilege of redemption but for the option contract.

'One who is bound to pay the tax on property can not strengthen his title by purchasing at a tax sale; such purchase shall be treated as payment.' Code,§ 92-8105. So where another than the owner of realty sold for taxes holds an option to acquire from the purchaser at such tax sale the tax title thereto for the benefit of the owner, under circumstances of fraud as stated above, after the legal period for redemption from such tax sale has expired, the holder of an outstanding security deed to such realty, who by grace of the holder of the tax title is accorded the privilege of redeeming the realty from the tax sale, is likewise entitled to relief in a court of equity.

2. The security deed involved was properly admitted over the objection that 'it did not appear how it got into the hands of plaintiff, by transfer or otherwise, and because it did not appear what connection it had with the case,' when considered with other evidence that showed that plaintiff was the holder of the deed and legal title to the land it conveyed.

3. The objections to the admission in evidence of the assumption and extension agreement between Mrs. Smith and the plaintiff's testatrix, Mrs. Gholstin, were properly overruled.

4. Neither the third nor the fourth special ground of the motion for a new trial is complete, in that in neither does it appear what party offered the evidence objected to. Sims v. Sims, 131 Ga. 262, 62 S.E. 192; City of LaGrange v. Cotter, 29 Ga.App. 577(1), 116 S.E. 204. They therefore present nothing to be passed on by this court.

5. The document objected to in the fifth ground of the motion for new trial was properly admitted as a circumstance on the issue of conspiracy.

6. No error was committed by the trial court in overruling the objection to the admission in evidence of an execution for 1929 state and county taxes, which was levied on December 11, 1936, with sale thereunder had in January, 1937, on the ground that it was void because barred by the statute of limitations.

7. The tax execution for 1929 city taxes issued by the City of Atlanta, although shown to have been dormant when levied, was admissible under the pleadings in this case, as a circumstance to show a course of dealings by one of the defendants as the owner of the realty involved, relatively to taxes thereon.

8. The excerpt from the charge on conspiracy, complained of in the eighth ground of the motion for new trial, shows no reversible error.

9. Complaint is made that the following portion of the charge was not authorized by the evidence and was harmful: 'If you believe from a preponderance of the evidence, and under the rules I have given you, that Mrs. Smith was the owner of the property, and by some trick she schemed to acquire a tax deed to the property, and became the purchaser, to the hurt and harm of the plaintiff, and that such scheme was carried out through the instrumentality of Miss Horton, the said Miss Edgarda Horton having known that she was the instrument of Miss Horton's mother, the defendant, then and in that event you would be authorized to find for the plaintiff.' This charge was adjusted to the evidence, and was not error for any reason assigned.

10. Where the owner of realty bound to pay taxes thereon allows the realty to be sold to a third person at a tax sale, and such owner, through fraud practiced on the holder of an outstanding security deed, later acquires the tax title thereto even after expiration of the period for redemption of the realty from the tax sale, the effect thereof is to place the title conveyed by the tax sale back into such owner, subject to the deed given to secure a debt.

11. The portion of the charge complained of in the eleventh ground of the motion, though slightly inaccurate, shows no reversible error, when considered in the light of the pleadings and the evidence, and in connection with the entire charge.

12. No error is shown in the portion of the charge complained of in the twelfth and thirteenth grounds of the motion, or in the court's failure to charge as complained of in the fourteenth ground.

Mrs. Katherine Gholstin Johnson, as the executrix of the will of Mrs. R. B. Gholstin, brought a suit in equity, naming as defendants Mrs. Corinne S. Smith, her daughter, Miss Edgarda Horton, and Interstate Bond Company. The prayers of the suit were that Miss Horton be enjoined from exercising a certain option contract which she held from Interstate Bond Company to purchase the tax title to certain realty in the City of Atlanta known as 7 Baltimore Block, and for other relief. This is the second appearance of this case in this court. In Horton v. Johnson, 187 Ga. 9, 199 S.E. 226, 228, only rulings on demurrers to the petition were under review.

It was there held that the court erred in overruling the general demurrer to the petition, because 'the petition construed most strongly against petitioner fails to show that Mrs. Smith was maker of the loan deed, or that she acted in a fiduciary capacity concerning the property, or that she expressly covenanted to pay the taxes, or that she owned the proprty and thereby was under the legal duty to pay the taxes.' The plaintiff amended her petition before judgment on the remittitur, in which amendment she alleged an express covenant on the part of Mrs. Smith to pay the taxes on the land involved, and also alleged she was the owner thereof.

The case proceeded to trial, and the evidence developed substantially the following: On July 24, 1922, H. Boyd conveyed the realty here involved to Mrs. Katherine B. Warren by deed to secure a debt, in which he expressly covenanted to pay all taxes on the premises so conveyed, as they become due. During the same month, the grantee, Mrs. Warren, 'sold to Mrs. Mary R. B. Gholstin all her right, title, and interest in and so said loan deed and note.' Thereafter Mrs. Corinne S. Smith acquired the title to this realty, subject to said loan deed. She entered into a written agreement with said Mrs. Gholstin on August 11, 1927, to extend the maturity of the debt so secured by said loan deed, and also assumed and accepted the terms, conditions, and stipulations of the said loan deed.

The City of Atlanta issued an execution for 1929 city taxes against Mrs. Smith and on said property for $215.57, which was duly transferred to Interstate Bond Company on December 10, 1930, and was levied on the realty above mentioned on January 13, 1937. Sale thereunder was made, and tax deed to said property was duly made on February 2, 1937, to Interstate Bond Company, purchaser at the tax sale. Three separate releases on different dates, each releasing for a consideration other properties, signed by Interstate Bond Company, were attached to this tax execution.

Miss Horton, the daughter of Mrs. Smith, who lived with her mother at all times involved in this suit, acting through her agent, who was the same agent who represented her mother in procuring Interstate Bond Company to have transferred to it a certain tax execution, entered into a written agreement with Interstate Bond Company on April 22, 1935, in which Miss Horton requested this company to have transferred to it 'the lien of tax deeds which are now owned by Elyea, Inc.,' covering the realty here involved. The company for a stated consideration agreed to do so, and further agreed to grant Miss Horton an option to purchase said realty at any time before July 22, 1935, for the sum of $233.81, subject to the right of others to redeem this land. The final date for the exercise of this option by Miss Horton was several times extended for a consideration, the last date being to January 22, 1938. On the same date of this contract, April 22, 1935, Elyea, Inc., conveyed by quit-claim deed to Interstate Bond Company the title acquired by it under two separate tax deeds, each dated May 1, 1934, being made by virtue of two separate tax sales under separate tax fi. fas. issued by the City of Atlanta for the years 1931 and 1932 respectively, against Mrs. Smith. These two tax deeds and the quit-claim deed described the realty here involved.

At the written request of Mrs. Smith acting through her agent, and for a consideration, Interstate Bond Company took a transfer of the tax execution for the 1934 City of Atlanta taxes against Mrs. Smith on the land involved, in which writing it was stipulated by Mrs. Smith that 'all my taxes prior to 1934 have been paid, the legal equitable title to said property is in the name of Corinne S. Smith, the taxes are assessed against Corinne S. Smith.' Interstate Bond Company agreed for a consideration not to have a levy and sale under this execution before a certain date, which was thereafter twice extended.

This same land was again sold under execution for State and County...