Moore v. Crisp

• Decision Date: 23 April 1963
• Docket Number: No. 39645,39645
• Citation: 383 P.2d 221
• Parties: Charles C. MOORE, Plaintiff in Error, v. Effie D. CRISP, Willice A. Crisp, Jr. and Jerry Crisp, Defendants in Error.
• Court: Oklahoma Supreme Court

Page 221

383 P.2d 221

1963 OK 97

Charles C. MOORE, Plaintiff in Error, v. Effie D. CRISP, Willice A. Crisp, Jr. and Jerry Crisp Defendants in Error.

No. 39645.

Supreme Court of Oklahoma.

April 23, 1963.

Rehearing Denied July 2, 1963.

Syllabus by the Court

As between successive mortgagees, one holding a tax deed has merely a lien enforceable under his mortgage, and the tax deed puts him in no better position than would a tax receipt.

Appeal from the District Court of Oklahoma County; Wm. L. Fogg, Judge.

Action by Charles C. Moore to cancel a tax deed issued by the County Treasurer of Oklahoma County to Effie D. Crisp. Upon trial of the issues, judgment was in favor of Effie D. Crisp quieting her title, and the plaintiff, Charles C. Moore, appeals. Reversed and remanded with directions.

Claude E. Love, Oklahoma City, for plaintiff in error.

John B. Ogden, Oklahoma City, for defendants in error.

WELCH, Justice.

The parties will be referred to by name or by their trial court designation.

The plaintiff alleges he is the owner and holder of a first mortgage, executed by Willice A. Crisp, covering certain real property in Oklahoma City. That Effie D. Crisp, Willice A. Crisp's mother, is the holder of a second mortgage executed by Willice A. Crisp covering the identical property; that Willice A. Crisp failed to pay the taxes thereon and at tax sale the same was sold and certificates issued which certificates were afterwards assigned to Effie D. Crisp. The tax certificates were subsequently surrendered and a tax deed was issued by the County Treasurer. Plaintiff prays for cancellation of the tax deed, alleging that Effie D. Crisp and Willice A. Crisp had fraudulently conspired to obtain the tax deed. Plaintiff also claimed or contended that the defendant holding a second mortgage could not obtain a valid tax title.

The evidence shows that Willice A. Crisp died during the pendency of the action and the same was revived in the names of his heirs, Willice A. Crisp, Jr., and Jerry Crisp. All of the transactions here involved occurred some years before Mr. Crisp died. On April 23, 1954, Crisp executed and delivered a first mortgage to Moore covering the property, and the mortgage was duly and recorded; thereafter Crisp executed and delivered a second mortgage covering the identical premises to his mother Effie D. Crisp, and which mortgage was also filed and recorded. Taxes became delinquent and on the sale, tax certificates were duly issued and the same were subsequently assigned to Effie D. Crisp. On December 9, 1958, tax deeds were issued by the County Treasurer to Effie D. Crisp and under which she claims title and which Moore seeks to cancel.

While Moore argues two propositions, we will only discuss the contention that the holder of a junior mortgage cannot purchase the property at a tax sale and thereby acquire title as against a prior mortgage.

The precise question involved herein has never been presented to this court. As between mortgagee and mortgagor we have held the mortgagee may purchase the mortgaged property at tax sale and acquire title as against the mortgagor. See Jones v. Black, 18 Okl. 344, 88 P. 1052, 90 P. 422; Price v. Salisbury, 41 Okl. 416, 138 P. 1024, L.R.A.1917D, 520; Owens v. Williams, 180 Okl. 324, 68 P.2d 836; Stith v. Gidney, 193 Okl. 175, 141 P.2d 1003. However, a different rule applies as between the holder of a first mortgage and subsequent mortgages.

In 37 Am.Jur. Sec. 1165, p. 417, the following rule is stated:

'The general rule is that the holder of a junior mortgage cannot purchase the mortgaged property at a tax sale and thereby acquire title as against a prior mortgagee. Where he does buy, his purchase is deemed to have been made by him as an interested party for the protection of the estate. In support of this rule, it has been declared that since the junior mortgagee has the right to pay the taxes for the protection of his security, it would be inequitable to permit him to acquire title by purchasing the property for the delinquent taxes, and thereby defeat the lien of the senior mortgagee. * * *'

In 140 A.L.R. 322, the author states:

'The weight of authority is to the effect that a junior mortgagee cannot cut off the rights of a senior mortgagee by purchasing the mortgaged property at a tax sale. * * * [Smith v. Lewis] 20 Wis. 350; [Avery v. Judd] 21 Wis. 262; [Fair v. Brown] 40 Iowa 209; [Porter v. Lafferty] 33 Iowa 254; [Stears v. Hollenbeck] 38 Iowa 550; Jones on Mortgages, 680.'

Supporting the above general rule, the Supreme Court of Washington, in the case of The Oregon Mortgage Co., Limited v. Leavenworth Securities Corporation, 197 Wash. 436, 86 P.2d 206, held:

'As against the senior mortgagee, junior mortgagee holding a tax deed does not have title but merely a lien enforceable under his mortgage, and his deed puts him in no better position than would a tax receipt.'

In the early case of Gorton v. Paine, 18 Fla. 117, the Supreme Court of Florida held that a second mortgagee cannot set up a tax title as against a prior mortgagee, since between a first and second mortgagee of land, equity regards the land as a common fund for the payment of both liens, and it is an act of fraud for a second mortgagee to acquire by tax sale a title to the land and use it to destroy the claim of the prior mortgagee.

The later Florida case of Kane v. Eustis, 106 Fla. 817, 143 So. 655, also followed this rule.

In each of the above cases the reasoning of the court was that the land was a trust for the payment of the mortgage liens and neither party could take advantage of the other in exhausting or putting beyond the reach of the other the land or the proceeds of the land by taking a tax deed thereto.

In 59 C.J.S. Mortgages § 326, p. 446, a different reasoning is set out as to why one mortgagee cannot take advantage of another mortgage holder. There it is said:

'* * * It has been held that successive mortgagees are in the same category as tenants in common, as respects payment of taxes on mortgaged premises, and that the equities of successive mortgagees as to each other respecting taxes paid by them are unaffected by a statute authorizing the tacking of the payment to the mortgage debt.'

Supporting the reasoning set out in C.J.S. supra, is the case of Norton v. Myers, 74 Minn. 484, 77 N.W. 298, 539, wherein it was held:

'As between the first mortgagee and the second mortgagee, it is the duty of each to pay the taxes; and one cannot acquire a tax title on the mortgaged premises, as against the other. This rule is not changed by section 1599, Gen.St.1894.'

In the body of the opinion the court stated:

'* * * We have held that, notwithstanding section 1599, one tenant in common cannot acquire a tax title, as against his co-tenant. Easton v. Scofield, 66 Minn. 425, 69 N.W. 326. It is there said: 'The decisions hold that his co-tenant is one of the parties whom the purchaser is 'equitably bound to protect.' It is as much the duty of one tenant in common to pay the taxes as of another. Equity holds that one such tenant must protect his co-tenant as much as he protects himself. The duty of all is the duty of each in that respect.' So may it be said that, as between the first mortgagee and the second mortgagee, it is as much the duty of the one to pay the taxes as it is of the other. In equity it was the duty of the first mortgagee to pay the taxes for himself and the second mortgagee. It was the duty of the second mortgagee to pay the taxes for himself and the first mortgagee. The duty of both is the duty of each in this respect. The decisions that hold that one mortgagee cannot acquire a tax title as against the other liken it to the case of tenants in common. * * *'

In the later case of Des Moines Sav. Bank & Trust Co. v. Eisenmenger, 183 Minn. 46, 235 N.W. 390, it was held:

'In respect to payment of taxes on the mortgaged premises, successive mortgagees are in the same category as tenants in common. One of them purchasing at a delinquent tax sale cannot acquire a tax title to the exclusion of another. All he is entitled to is reimbursement, a right to be protected by an equitable lien.'

We have never had an occasion to determine the right of one mortgagee to wipe out the lien of another mortgagee by acquiring a tax deed to the property, but we have passed on the issue as between tenants in common.

In the case of Eillis v. Williams, Okl., 297 P.2d 916, we held:

'Cotenant owners of an estate in lands stand in relation to each other of mutual trust and confidence, and neither will be permitted to act in hostility to the other in reference to the joint estate.'

For additional cases see Oklahoma Digest, Tenancy in Common, k20(1). For cases from other states as to right of the second mortgagee to acquire a tax title as against the holder of the first mortgage, see Koch v. Kiron State Bank, 230 Iowa 206, 297 N.W. 450, 140 A.L.R. 273; City of St. Louis v. Koch, (Mo.App.) 156 S.W.2d 1; Baird v. Fischer, 57 N.D. 167, 220 N.W. 892; Swope v. Jordan, 107 Tenn. 166, 64 S.W. 52; Hill v. Buffington, 106 Wis. 525, 82 N.W. 712; In re Hoyt's Estate, 246 Iowa 292, 67 N.W.2d 528; Allison v. Corson, 8 Cir., 83 F. 752; Riley v. Bank of Commerce of Roswell, 37 N.M. 338, 23 P.2d 362; Chartz v. Cardelli, 53 Nev. 13, 291 P. 311, and Horton v. Ingersoll, 13 Mich. 409.

We therefore hold as between successive mortgagees, one holding a tax deed has merely a lien enforceable under his mortgage, and the tax deed puts him in no better position than would a tax receipt.

Our attention is directed to our decision in Bereman v. Grant, 195 Okl. 330, 157 P.2d 743, where we ruled against the right of a son to acquire a tax title against a mortgagee of his father's land, and to this quotation from that opinion:

'We think taking into consideration the evidence as a whole the clear weight thereof shows such a fiduciary relationship existing between the father and the son and such a moral duty resting upon ...