Jones v. Black

• Decision Date: 13 June 1907
• Citation: 90 P. 422,18 Okla. 344,11 Am.Ann.Cas. 753
• Parties: JONES v. BLACK.
• Court: Oklahoma Supreme Court

90 P. 422

18 Okla. 344, 11 Am.Ann.Cas. 753

JONES v. BLACK.

Supreme Court of Oklahoma

June 13, 1907

For majority opinion, see 88 P. 1052.

Dissenting opinion.

BURWELL J.

The majority opinion in this case is placed upon the ground that a mortgagee has a lawful right, in the absence of an agreement to pay the taxes, to purchase the land covered by his mortgage at tax sale, and acquire a tax title as against the mortgagor. The opinion is based upon authorities from Kansas, Wisconsin, Alabama, New York, and Minnesota. We will first consider the case of Reimer et al. v. Newel, 49 N.W. 865, 47 Minn. 237, which is cited in support of the majority opinion. In that case the mortgagee had died, and Newel became the administrator of the estate of the mortgagee. The land was sold at tax sale, and Newel purchased it in his individual name. In considering the case, Mr Justice Mitchell said: "The last point made is that defendant has no right to set up a tax title against the plaintiffs. The facts are that one Abby L. Newel, deceased of whose estate defendant was administrator, held, at the time of her death, a mortgage on the premises, executed by one Reimer (to whose interests plaintiffs had succeeded), in which the mortgagor covenanted to pay the taxes on the premises. Neither the mortgagee nor her administrator had ever gone into the possession of the mortgaged premises. Defendant purchased at the tax sale in his own name individually, and not as administrator. Conceding, in the language of counsel 'that there is substantial identity of defendant and mortgagee in this case,' there was nothing to prevent him from acquiring against the mortgagor, or his successors in interest, a tax title on the premises. Whatever may be the rule in other jurisdictions, or whatever may be thought of the policy of permitting a mortgagee in any case to acquire, as against the mortgagor, a tax title on the mortgaged premises, there can be no doubt but that, under our statute, this may be done where, as in this case, the mortgagee is neither legally nor equitably bound to protect the property against the sale or the taxes for which the sale is made. The evidence (upon which plaintiff's counsel lays much stress) tending to show that defendant made his purchase at the tax sale as a payment of the tax, and not for the purpose of acquiring a tax title adverse to either the mortgagor or the mortgagee, was not such as to require a finding to that effect; and the court has expressly found that the purchase was not intended to operate as a payment of the tax, nor was the tax title taken by the defendant for the protection of the mortgagor or the mortgagee." It will be seen that this decision was controlled by express statutory provisions, and was not influenced by the general law on the subject.

The case of Smith v. Lewis, 20 Wis. 350, is also relied upon. I cannot interpret this case as supporting the position taken by my Brethren. Lewis was a junior mortgagee and foreclosed his mortgage, purchased subsequently the certificate issued at the tax sale, went into possession of the land, and sought to set up the tax title thus acquired by him against the lien of the first mortgagee. In other words, it was claimed that the tax sale of the land and the obtaining of the tax deed cut off the lien of the first mortgagee. The syllabus of the case states the rule of law adopted by the court. It is as follows: "Where a second mortgagee of land purchases on foreclosure of his mortgage, he cannot acquire an absolute title, free from the lien of the first mortgagee, through an assignment to him of an outstanding certificate, and a deed issued thereon." Wisconsin has statutory provisions which in a measure control the payment of taxes by the mortgagor and mortgagee; but that court in express and positive language lays down the rule, for which I here insist, in the case of Burchard & Others v. Roberts, 70 Wis. 111, 35 N.W. 286, 5 Am. St. Rep. 148. Mr. Justice Lyon, in discussing the case, said: "The question is whether the mortgagees of the land are in any better position than Doty, the mortgagor, to acquire title thereto by purchasing at the tax sale and taking certificates of sale. We have been referred to no case decided by this court, and are not aware that there is any such case, in which it is held that a mortgagee may, in this State, cut off the mortgagor's equity of redemption by acquiring title to the mortgaged land under a tax deed. True, several cases determined by this court are cited by the learned counsel for defendant as holding that a mortgagee may thus acquire adverse title; but an examination of those cases will show that none of them so hold." Then the learned justice expressly distinguishes all of the cases decided by that court which were cited in that case in support of the doctrine adopted by this court in the case at bar, expressly commenting upon Sturdevant v. Mather, found in 20 Wis. 576, the syllabus of which is in the following language: "It seems that a mortgagee (not in possession) may acquire title as against the mortgagor by purchase under a superior lien, whether at a tax sale or at a sheriff's sale, under a prior judgment. Per Dixon, C.J. It was, however, not necessary to decide that question in this case." Finally, the learned justice, after discussing these prior decisions of the Supreme Court of Wisconsin, said: "It is plain that none of the above cases sustain the proposition to which they are cited. On the contrary, we are satisfied on principle and authority, and especially in view of the statute which will presently be cited, that in the present case the purchase of the land at tax sale for the mortgagees, and the taking of the tax certificates thereon, must be regarded as for the protection of the estate and the mutual benefit of the mortgagees and mortgagor. As was said by Dixon, C.J., in Fisk v. Burnette, 30 Wis. 102, such purchase and the taking of the certificates must be regarded as so much money advanced to the mortgagor on the faith of the security. The above reference is to St. 1898, §§ 1158-1160. These sections, in effect, add the amount so paid for taxes by the mortgagee to the mortgage debt, and extend the security of the mortgage over it. These statutory provisions give the mortgagee an adequate remedy to reimburse himself for the taxes thus paid by him, and are inconsistent with the idea that he may cut off the mortgagor's equity of redemption in the mortgaged premises by acquiring an adverse title thereto under tax proceedings. Moreover, without regard to statutory provisions, there is high authority for thus holding on general principles of law. Judge Cooley, in his treatise on the Law of Taxation, says: 'It cannot be said in such a case that either mortgagee or mortgagor is under no obligation to the government to pay the tax. On the contrary, the tax being one that purposely is made to override the lien of the one as well as the title of the other, it might well, as it seems to us, be held that neither mortgagor nor mortgagee was at liberty to neglect the payment as one step in bettering his condition at the expense of the other, but that the presumption of law should be that the party purchasing did so for the protection of his own interest merely. And so in general are the authorities. Pages 503, 504, and cases cited in notes.' This language of Judge Cooley is quoted approvingly in Mr. Freeman's learned note to Blake v. Howe, 15 Am. Dec. 684. This doctrine commends itself to our judgment as reasonable and just." From this positive sentence used by the Supreme Court of Wisconsin in this later case, it is expressly held that, in the absence of statute, a mortgagee, whether in or out of possession, in the absence of a contract to pay taxes, cannot acquire a tax title as against his mortgagor.

The case of Walthall's Executors v. Rives, 34 Ala. 91, was not a tax case. The court in that case simply held that a mortgagee was not estopped from buying the land which was sold to satisfy a judgment which was prior to his mortgage. The case of Harrison v. Roberts, 6 Fla. 711, is exactly like the case just referred to. No claim was made by the mortgagee that he had purchased at tax sale, as shown by the statement of the law of the case by the court in the following language: "There is no rule of law or principle of equity which prevents a first mortgagee from purchasing the mortgaged property when sold at sheriff's sale under a judgment, prior to the mortgage; and in such case he takes absolute title."

The case of Waterson v. Devoe, 18 Kan. 223, fully supports the majority opinion, and the doctrine is again reaffirmed in the case of McLaughlin v. Acom, 58 Kan. 514, 50 P. 441. The Kansas Supreme Court, in other cases, however, state that a mortgagee in possession cannot by purchase at tax sale cut off the right of redemption by the mortgagor. This point I will consider later.

The case of Williams v. Townsend, 31 N.Y. 415, is the only other case relied upon which I have not considered. The mortgage gave the mortgagor the right, upon default of the mortgagor to do so, to pay the taxes. The court said "Where a mortgagee has the right, in default of the mortgagor, to pay taxes and assessments, and collect them as part of the mortgage debt, he cannot, by bidding in the premises at a tax sale, and taking a certificate thereof, deprive the mortgagor of the right given him by statute to redeem the sale for taxes." It is further said in the body of this opinion that "a mortgage is a mere security for a debt, and there is no such relation of trust or confidence between the maker and holder of a mortgage as prevents the latter from acquiring title to its subject-matter, either under his own or any other valid lien." But the same court,...