Morey Engineering & Construction Co. v. St. Louis A. Ice Rink Co.

Decision Date28 March 1912
PartiesMOREY ENGINEERING & CONSTRUCTION CO. v. ST. LOUIS ARTIFICIAL ICE RINK CO. et al.
CourtMissouri Supreme Court

Action by the Morey Engineering & Construction Company against the St. Louis Artificial Ice Rink Company and others. From a judgment for plaintiff, defendants appeal. Affirmed.

H. A. Loevy, for appellants. Carter, Collins & Jones, David Goldsmith, and Chas. W. Bates, for respondent. Rodgers & Koerner, Lambert E. Walther, and T. P. Young, amici curiæ.

FERRISS, J.

This is an action brought in the circuit court of the city of St. Louis by the contractor to whom the city of St. Louis issued a special tax bill, for the improvement of Cook avenue, for the sum of $721.31 against a lot of ground on said Cook avenue, charged with said special tax bill. The defendants (appellants here) are the St. Louis Artificial Ice Rink Company, owner of the equity of redemption in said lot, and the owners and holders of certain notes secured by two deeds of trust upon the said lot, together with their trustees. The first deed of trust was dated November 1, 1898, and recorded on the 5th day of November, 1898, securing the payment of $15,000, with interest; and the second deed of trust was for $2,060, executed on the 14th day of July, 1900, and duly recorded on the same date. The ordinance for the improvement of Cook avenue, for which the tax bill in question was issued, was approved April 7, 1902, and the tax bill was issued May 7, 1903. Judgment below was for plaintiff.

The record presents a single question: Under the charter of the city of St. Louis, has the lien of a special tax bill, issued for street improvements, priority over a deed of trust which antedates the tax bill?

Defendants contend that tax liens, whether general or special, have no priority over earlier incumbrances, unless such priority is accorded by statute; and that this is certainly true as to special tax assessments for street improvements, which, it is claimed, are essentially different from general taxes. Defendants contend, further, that the charter under which the tax bill in controversy was issued does not give priority to the lien for the special tax; and that it is therefore inferior to the lien of their deeds of trust, which are earlier in point of time. On the other hand, respondent contends that in this state both general and special tax liens have priority, (a) in the absence of statutory direction to the contrary, and (b) such priority of the special tax lien is fairly inferable from the language of the statute (charter) creating the lien. We will discuss these propositions in order.

First, as to general taxes. From an early date, this state has maintained the policy of impressing upon real property a lien for the taxes assessed thereon. In 1815 the territorial laws provided that the taxes on confirmed lands should be a perpetual lien. Territorial Laws, 1814-15, p. 59. In 1820, a perpetual lien was declared by statute upon all lands for the taxes thereon. Laws 1820, p. 97. To the same effect in 1835 R. S. 1835, p. 541. The revisions of 1845-55-65 contain no such express provision; but the revenue acts from 1835 to 1872 have been construed to recognize and reserve this lien of the state. The general revenue law enacted in March, 1872, reintroduced the express provision reserving to the state a lien upon real property for the taxes thereon. Wagner's Statutes 1872, p. 1170, § 60. From its earliest decisions on the question, this court has uniformly ruled that real estate taxes are a lien upon the property against which they are assessed; and, further, when the question has arisen, that they are prior to all other liens. In May, 1877, our Legislature enacted a statute (now section 11,499, R. S. 1909) making the judgment for such taxes a first lien. The decisions, however, presently to be referred to, were upon taxes levied prior to the enactment of this statute, upon which they in no wise depend, and to which no reference is made in the cases.

In 1864, in the case of Blossom v. Van Court, 34 Mo. 390, 86 Am. Dec. 114, the taxes were said to be an incumbrance on the land, and covered by the covenant contained in the words "grant, bargain and sell." McLaren v. Sheble, 45 Mo. 130, is to the same effect, and speaks of the "lien of the tax imposed by virtue of the assessment." Both cases hold that the lien of the tax takes effect from the initial point of the assessment, and by virtue of the assessment. We come next to the case of Stafford v. Fizer, 82 Mo. 393. As this case is discussed fully pro and con by appellants and respondent, we will examine it at length. This was an action in ejectment. James A. Clark, the common source of title, executed a deed of trust in 1863. In 1878 suit was filed by the state for the taxes for the years 1868 to 1878, inclusive. Sale under judgment for taxes and execution thereon October 30, 1878, to plaintiff. There was a sale under the trust deed in April, 1879, to the defendants. This suit filed in 1880. In the tax proceeding, Clark, the trustee and one of the beneficiaries in the trust deed, were made defendants. One other beneficiary was not made a defendant. It was contended by the plaintiff that the tax sale gave a complete title as against both beneficiaries in the trust deed. The court states the question presented for adjudication thus: "Whether the deed of a purchaser at execution sale under a proceeding to enforce the state's lien for taxes is good against the beneficiary in a deed of trust, antedating the origin of the tax lien, who has not been made a party to the proceedings."

After stating, further, that the question was new in this court, the opinion proceeds: "But the principles of law, as well as the decisions of this court governing the enforcement of liens on real estate, ought to furnish a sufficient guide for us in determining it. It will be observed that we are dealing with two liens, one created by law in favor of the state, which necessarily takes precedence of other prior as well as subsequent liens, on account of its peculiar character (R. S. 1879, §§ 6831, 6832; Blossom v. Van Court, 34 Mo. 390 ; McLaren v. Sheble, 45 Mo. 130; Dunlap v. Gallatin Co., 15 Ill. 7; Almy v. Hunt, 48 Ill. 45; Binkert v. Wabash Co., 98 Ill. 205); the other in favor of creditors, created by the act of the debtor. These two liens have been foreclosed, and the purchasers stand opposed to each other with deeds under the proceedings respectively employed for enforcing them. The lien of the state is the superior one, although subsequent in time, a superiority in-invariably accorded to it, in absence of some legislative declaration to the contrary. Cadmus v. Jackson, 52 Pa. 295; Doane v. Chittenden, 25 Ga. 103; Hopper v. Malleson, 16 N. J. Eq. 382; Cooper v. Corbin, 105 Ill. 224. No system of jurisprudence would command respect which failed to maintain and enforce the benefits of this priority by all necessary and, reasonable proceedings to that end."

The holding of the court is that a beneficiary in a prior deed of trust, who is not a party to the tax suit, has still the right to redeem as a junior lienor by proper action in that regard. Speaking of the revenue law which required the collector to bring suit against the owner of the property, the court says: "I do not see how to escape the conclusion that a cestui que trust in a deed of trust is an owner, within the meaning of this act, if his interests are to be affected by the proceeding authorized." It was concluded in that case that, inasmuch as the right to redeem was not asserted, and as it was apparent that plaintiff had the superior title, she should recover.

It is suggested that what the court says in the first above extract from the opinion as to the priority of the lien, and upon the general rule of...

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