Olson v. Chapman

• Decision Date: 11 July 1940
• Docket Number: 27762.
• Citation: 104 P.2d 344,4 Wn.2d 522
• Parties: OLSON et al. v. CHAPMAN et al.
• Court: Washington Supreme Court

104 P.2d 344

4 Wn.2d 522

OLSON et al. v. CHAPMAN et al.

No. 27762.

Supreme Court of Washington, En Banc.

July 11, 1940

Action by John G. Olson, individually and as administrator de bonis non of the estate of Olaf G. Olson, deceased, and others against Sarah Elizabeth Chapman and others, to recover amounts paid in taxes, and to have the same declared a first lien. From a judgment for defendants, plaintiffs appeal.

Reversed with instructions.

BLAKE C.J., and MAIN, J., dissenting.

Appeal from Superior Court, Lewis County; Herbert H. Sieler, Judge pro tem.

Scott Langhorne & McGavick, of Tacoma, for appellants.

Delos Spaulding, of Morton, for respondents.

SIMPSON Justice.

Plaintiffs instituted this action to recover a personal judgment for amounts, with interest at ten per cent, which they and their predecessor in interest had paid in taxes on defendants' interest in certain real property owned by plaintiffs and defendants as tenants in common, and to have the same declared to be a first lien against defendants' interest in the property.

The complaint alleged the payment of taxes upon the property for many years and that the payments were made to protect the interest which plaintiffs had in the property.

Defendants denied the allegations of the complaint, and, by an affirmative answer, alleged that the action was not begun within the time limited by statute.

The cause was tried to the court and judgment rendered in favor of defendants. Plaintiffs have appealed.

The claims of error will be noted as we proceed.

The historical facts and circumstances, as disclosed by the record, may be narrated as follows: Prior to December 19, 1913, defendant J. L. Reese and his wife, Martha Katherine Reese, were the owners of the land in Lewis county upon which this lien is sought. On that date they contracted to sell an undivided one-third interest therein to Olaf G. Olson. Mrs. Reese died February 2, 1917. July 5, 1917, Reese conveyed to Olaf G. Olson his community interest in the undivided one-third interest in the property. Olson died November 24, 1924. August 6, 1925, Reese, as administrator of his wife's estate, conveyed her community interest in the undivided one- third share in the property to Jennie Olson, administratrix of the Olaf G. Olson estate.

August 21, 1925, two-thirds interest in the real property was distributed to respondents (excepting J. L. Reese). The estate of Olaf G. Olson was distributed to appellants.

Subsequent to entry of the decree of distribution in the Olson estate, a bookkeeper discovered, among the effects of Olaf G. Olson, papers showing that September 9, 1920, Olson redeemed a certificate of delinquency issued by the treasurer of Lewis county for unpaid taxes on the real estate in question, and that he had continued, until his death, to pay annually the full amount of taxes subsequently levied against the property.

December 6, 1938, appellant John G. Olson was appointed administrator de bonis non of the Olaf G. Olson estate and authorized to prosecute this action.

The evidence of tax payments made by Olaf G. Olson was found in an old envelope left by him. The certificate of redemption showed that he paid the full amount of taxes levied on the property for the years 1915 to 1919, inclusive, with accrued interest, totaling $278.98. Tax receipts made out to him for the full amounts levied for the years 1920 to 1923, inclusive, totaled $130.87.

Appellants also introduced in evidence tax receipts for the years 1925 to 1928, inclusive, totaling $484.94. These payments were made by Jennie Olson as administratrix of the Olson estate and later as trustee of the interests of appellants. In view of the fact that it was admitted by appellants that respondents repaid two- thirds of the amount levied for that year, taxes for the year 1924 are not involved in this appeal.

Respondent J. L. Reese testified that he had repaid to certain unnamed and unidentified persons, assumed by him to be agents of Olaf G. Olson, two-thirds of the amounts paid by Olson for taxes levied for the years 1920 to 1924, inclusive, and for 1926, but that his receipts had been stolen. No evidence was introduced showing contribution to have been made by respondents for amounts paid in redeeming the certificate of delinquency, or for payment of the full amount of taxes for the years 1925 to 1928, inclusive, other than those for 1926.

June 1, 1929, after his interest in the property had passed to the other respondents, J. L. Reese gave to Jennie Olson, as trustee, his non-negotiable promissory note in the sum of $802, intended by appellants to represent all of the taxes paid by the Olsons on the two-thirds interest in the property, which they believed to be still owned by J. L. Reese. To secure payment of the note, Mr. Reese executed a mortgage in the same amount upon the realty in question. Five interest payments on this note, each in the amount of $32.08, are admitted to have been made by respondents.

The trial court, in a memorandum opinion, gave as his reasons for finding in favor of respondents that the redeemed certificate of delinquency was not produced at the trial, information concerning it being secured from a ledger entry in the books of Olaf G. Olson; that no mention was made of the claim against J. L. Reese in the probate of the Olaf G. Olson estate; that the claim was barred for not having been timely presented in the Martha Katherine Reese estate proceedings, she being sole owner of the two-thirds interest at her death; that the statute of limitations had run against the note and mortgage executed by J. L. Reese, against any money judgment which might have been obtained against respondents, and against any other claim which appellants assert with respect to payment of the taxes; that the taxes upon the Olsons' undivided interest in the real property could have been segregated; and that there was no duty imposed upon appellants, or their predecessors in interest, to pay the taxes upon the interest now held by respondents.

This action being equitable in nature, it is triable de novo in this court. Schultz v. Kolb, 189 Wash. 187, 64 P.2d 79.

We will first consider the questions of whether the tax payments upon which appellants base their action were, in fact, made by them and their predecessors in interest, and whether repayment in terms of the two-thirds interest now owned by respondents was effected. There can be little doubt that the Olsons paid the taxes. In any event, the payments alleged were conclusively proven by evidence introduced in the trial court. We note in this connection that the certificate of redemption, mentioned in the trial court's memorandum opinion as not having been produced, was admitted into evidence along with the tax receipts for succeeding years.

As we have already pointed out, the only evidence introduced by respondents with reference to repayment was the testimony of J. L. Reese relating to the taxes for the years 1920 to 1924, inclusive, and for the year 1926. This testimony was denied by appellants.

J. L. Reese admitted payment by the Olsons and the absence of repayment by himself when he executed the note and mortgage June 1, 1929. When asked why he gave the note and mortgage, he stated: 'Well, simply because I know the heirs didn't have the money to pay it--to pay the taxes at the time and I give the mortgage to relieve them until they could see fit to pay it.'

Mr. Reese testified that he thought the amount represented by the note covered taxes only from the year 1925. Upon this basis the total of taxes and interest for the four years in question would have amounted to over $1200. It is difficult to understand how Mr. Reese, familiar as he claimed to be with the payment of taxes on the property, could have intended to obligate himself for the amount of $802 for two-thirds of only four years taxes when the annual levy on the property had averaged less than $35 prior to 1926, less than $150 since then.

Mr. Decker, agent for Jennie Olson in these negotiations with Reese, testified that he showed the latter an itemized statement covering all the taxes paid by the Olsons to that date. This memorandum was put in evidence by appellants. Reese was unwilling to deny categorically that he had seen the statement. Although Reese claimed to have made two-thirds repayment for the 1926 taxes, it is conceded that the two-third interest in the property had then passed to the other respondents. Further, the 1926 taxes were among those which he testified were, to his understanding, included in the amount represented by the note.

Respondents' approval of the action of J. L. Reese in the giving of the note is indicated in that they made five semi-annual interest payments thereon. The conduct of J. L. Reese and of the other respondents with respect to the note and mortgage directly rebuts the effect of the presumption of payment arising from lapse of time.

The burden was upon respondents to prove payment to Olson or the representatives of his estate. Palmer v. Parker, 91 Wash. 683, 158 P. 1017; First International Bank v. Rockey, 117 Wash. 663, 202 P. 268; Folco v. Sorenson, 127 Wash. 291, 220 P. 821; Zioncheck v. Hepden, 144 Wash. 272, 257 P. 835; 48 C.J. 680, § 176. We are unable to find from the record evidence sufficient to establish that respondents repaid the amounts expended for taxes.

It is contended by respondents, however, that the note and mortgage given by J. L. Reese discharged the original obligation. In this connection it must be observed that the mortgage was worthless for the reason that Reese did not own an interest in the real property at the time the mortgage was executed and delivered.

In like cases we have held that the taking of a note for a...