Security Mortgage Co. v. Herron
| Decision Date | 04 July 1927 |
| Docket Number | (No. 132.) |
| Citation | 296 S.W. 363 |
| Parties | SECURITY MORTGAGE CO. v. HERRON et al. |
| Court | Arkansas Supreme Court |
Appeal from Clark Chancery Court; C. E. Johnson, Chancellor.
Suit by the Security Mortgage Company against Will Herron and others. From a decree dismissing its complaint, plaintiff appeals. Affirmed.
The appellant brought this suit, as mortgagee, to redeem from the sale by the Ross drainage district, through the chancery court, certain lands sold for delinquent drainage taxes to D. and J. H. McMillan, stockholders in the Saunders Mercantile Company, for which they were acting in making the purchases.
Will Herron, the mortgagor, agreed to keep all taxes and special assessments upon the lands mortgaged paid, but failed to do so, and as owner of the legal title failed to redeem upon the sale thereof for delinquent taxes.
Prior to the expiration of the time for redemption by the owner of the legal title, Will Herron, the mortgagor, and wife, conveyed the lands by deed to the Saunders Mercantile Company in payment of a second mortgage to that company.
The mortgagors failed to redeem within the time allowed, and such failure, it was alleged, was with the intention to allow the time for redemption to expire and thereby defeat the lien of appellant, the Security Mortgage Company, under its first mortgage, and put the fee title in the Saunders Mercantile Company, holders of the second mortgage.
Plaintiff alleged the sale of the lands for the delinquent drainage taxes without any notice to it, that they were sold to D. & J. H. McMillan for the benefit of the Saunders Mercantile Company, in which they were partners, and, through the connivance of said company and said parties, purchasers of the lands, who were stockholders in the corporation, that neither the mortgagor nor the corporation, as holders of the legal title, redeemed said lands, as provided by the act creating the drainage district, and the failure to do so was "for the purpose of defeating the mortgage given to the Security Mortgage Company, as herein alleged, and to vest the title free of said lien in said D. McMillan and J. H. McMillan, for the benefit of said Saunders Mercantile Company, a corporation, and that they are now trustees ex maleficio so far as the title to said lands are concerned, and the plaintiffs are entitled to redeem said lands from said sale for drainage taxes"; alleged further that it was entitled to redeem the lands, under the provisions of Act 43 of the Acts of 1915, within five years from the sale, and offered to pay the amount necessary therefor when informed of it; also alleged it had paid the assessments on the lands, after the sale to D. McMillan, amounting to $137, to the Ross drainage district, and the state and county taxes for the year 1922, amounting to $32.09; that if the court should hold that they were not allowed to redeem from the sale for the delinquent assessment due to the Ross drainage district, that they were entitled to recover the amount of the taxes paid under their mortgage, and prayed judgment therefor.
The mortgage, which was made an exhibit to the complaint, contained a clause providing that during the time of its continuance the mortgagors "shall at all times keep the state, county and city taxes and assessments for local improvements and other purposes, fully paid, as required by law."
The parties answered denying all the allegations of the complaint, and on December 9, 1923, filed a demurrer to the complaint, which was sustained, and, plaintiff declining to plead further, the cause was dismissed for want of equity.
On the amendment to plaintiff's complaint filed on the 4th day of October, 1926, and from the admissions of the McMillans, the court found that the plaintiff was entitled to recover from them, for the drainage and other taxes paid, $169.09, declaring same a lien upon the land, and ordered a sale for the satisfaction thereof, if not paid, within 15 days, and adjudged the costs against the plaintiff.
The appeal is prosecuted by the mortgage company from the decree dismissing its...
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