Tinsley v. Atlantic Mines Co.

• Decision Date: 13 June 1904
• Citation: 77 P. 12,20 Colo.App. 61
• Parties: TINSLEY v. ATLANTIC MINES CO.
• Court: Colorado Court of Appeals

77 P. 12

20 Colo.App. 61

TINSLEY v. ATLANTIC MINES CO.

Court of Appeals of Colorado

June 13, 1904

Appeal from District Court, Gilpin County.

Proceeding by Thomas Tinsley against the Atlantic Mines Company to foreclose a mortgage. From a judgment for defendant plaintiff appeals. Affirmed.

F.J Mott, for appellant.

W.H Davis, for appellee.

GUNTER J.

Appellant sued to foreclose a mortgage upon certain real estate, made appellee one of defendants to the action, and in his complaint therein, inter alia, alleged: "And the aforesaid defendants and the Atlantic Mines Company, a corporation, have, or claim to have, some interest or claim upon said property, or some part thereof, which interests or claims are subsequent and subject to the lien of plaintiff's mortgage." This is the only allegation of the complaint of any claim of appellee to the realty covered by the mortgage, and the only allegation therein showing any reason for making it a party defendant. Appellee answered separately, alleging that it owned certain of said real estate by virtue of a tax deed made August 29, 1893, based on a tax sale made July 11, 1890 for the delinquent taxes for 1889, concluding its answer with the prayer, "Wherefore this defendant asks to go hence without day." As appears from the complaint, the date of appellant's mortgage was November, 1889. The replication denies a tax sale at any time of said real estate, or that appellee has any interest therein under a tax deed. It attacks the validity of the alleged tax deed on account of certain infirmities in the procedure leading up to the tax deed, and because said real estate was not subject to taxation for the year 1889. It is not charged in the complaint or replication that the tax title of appellee was acquired by any fraud or collusion between it and the mortgagor, nor that the mortgagor has any interest whatever in the tax deed. The title of appellee claimed through its tax deed is independent, adverse, and paramount to the title of the mortgagor and the mortgagee. The alleged interest of appellee under the tax deed is not derived from nor connected with the estate mortgaged, but is hostile to the claim of the mortgagor and mortgagee.

The effect of the answer of appellee was to disclaim that it had or claimed to have, any interest subsequent and subject to the lien of appellant's mortgage (Roberts v. Wood, 38 Wis. 68), and to aver that it had an interest paramount to the interest of the mortgagor and mortgagee, not derived from nor connected with the estate mortgaged. Its title to the property was deraigned through the tax procedure prescribed by our statute, which is a proceeding in rem. "A lien for taxes does not stand on the footing of an ordinary incumbrance, and is not displaced by a sale under a pre-existing judgment or decree, unless otherwise directed by statute. It attaches to the res without regard to individual ownership, and when it is enforced by sale pursuant to statute the purchaser takes a valid and unimpeachable title." Osterberg v. Union Trust Co., 93 U.S. 428, 23 L.Ed. 964. "It may therefore be laid down as a rule that, when a tax is laid upon land as such, irrespective of separate estates, liens, or interests, and is collected by a valid tax sale, the purchaser will take a clean title liberated from the lien of a prior mortgagee." Black on Tax Titles (2d Ed.) § 425. "A tax title, from its very nature, has nothing to do with the previous chain of title; does not in any way connect itself with it. It is a breaking up of all previous titles. The party holding such titles, in proving it, goes no further than his tax deed. The former title can be of no service to him, nor can it prejudice him. It was well said by counsel in argument on this point that a tax sale operated on the property, not the title. In an ordinary case it matters not how many different interests may be connected with the title, what may be the particular interest of the party in whose name the property may be listed for taxation. It may be a mere equitable right. If the land be regularly sold for taxes, the property, accompanied with a legal title, goes to the purchaser, no matter how many estates, legal or equitable, may be connected with it." Gwynne v. Niswanger, 20 Ohio 564; Lebanon M. Co. v. Rogers, 8 Colo. 34, 39, 5 P. 661. Upon the ground that its rights in the mortgaged premises as pleaded in its answer could not be determined in this action without its consent, appellee moved for an order of dismissal as to it. The order was made, and for its review the case is here.

The case presents but one question for determination; that is, whether the alleged paramount title of appellee against its timely objection made in the trial court could be litigated in this action. If it could not be, the ruling of the trial court dismissing the action as to appellee on its motion should be affirmed. In Wells v. Francis, 7 Colo. 396, 415, 4 P. 49, the court, among other questions, was considering whether certain parties who claimed by title paramount to vendor and vendee were necessary parties to the proceeding to establish a vendor's lien. In holding that they were not, the court said: "The action of appellant against Francis for a vendor's lien was analogous to the proceedings for foreclosure of a mortgage. The equitable doctrine may be considered thoroughly established that the only necessary parties to the latter action are the mortgagor, mortgagee, and persons who have acquired rights or interests through them in the mortgaged premises. Sometimes, also, prior incumbrancers may be brought in for the purpose of liquidating their demands. But a person claiming adversely to the title mortgaged has no interest in the mortgage, cannot be affected thereby, and should not be made a party to the foreclosure suit. The rights of such a person cannot, except by consent, be litigated and settled in such proceeding. And a bill which undertakes to accomplish this object is bad on demurrer for misjoinder and multifariousness." As is seen from the excerpt, the reason upon which the ruling is made is that the party holding the paramount title has no interest in the mortgage, and cannot be affected by the foreclosure proceeding. The authorities cited in support of the decision are Dial v. Reynolds, 96 U.S. 340, 24 L.Ed. 644; Croghan v. Minor, 53 Cal. 15; Banning v. Bradford, 21 Minn. 308, 18 Am.Rep. 398; Chamberlain v. Lyell, 3 Mich. 448, 459; Roberts v. Wood, 38 Wis. 68.

Dial v. Reynolds was an action to foreclose a trust deed, to quiet the title of the trustee, to remove the cloud cast upon it by one Reynolds, and to enjoin him from further prosecuting a certain action of ejectment. It was sought in the action to litigate the title of Reynolds which he claimed to be paramount to that of the trustor and trustee. The trial court sustained a demurrer by Reynolds for misjoinder and multifariousness, and dismissed the action. On appeal the judgment below was affirmed, the court, inter alia, saying: "It is well settled that in a foreclosure proceeding the complainant cannot make a person who claims adversely to both the mortgagor and mortgagee a party, and litigate and settle his rights in that case. Barbour, Parties in Equity, 493, and the cases there cited. This case was one of fatal misjoinder and multifariousness, and the proper course for Reynolds was to demur. Story, Eq.Pl. § 284b." Peters v. Bowman, 98 U.S. 56, 25 L.Ed. 91; Chapin v. Walker (C.C.) 6 F. 794, 2 McCrary, 175; Farmers' L. & T. Co. v. San Diego St. Car Co. (C.C.) 40 F. 105.

Croghan v. Minor was an action to foreclose a mortgage, and a defendant who claimed an interest in the mortgaged realty, not derived from nor connected with the estate mortgaged, but hostile to the claim of the mortgagor and mortgagee, was impleaded. Judgment below went against the mortgagor and this defendant. On appeal the court said the action should have been dismissed as to this defendant, and reversed the case, with instructions to enter an order to such effect. Inter alia, the court said: "It is manifest that those claiming either legal or equitable estates adversely to that of the mortgagor are not proper parties to such proceeding, as they have no interest in the subject-matter of the action;" and as one authority for the ruling cited San Francisco v. Lawton, 18 Cal. 465, 79 Am.Dec. 187. San Francisco v. Lawton (the opinion in which was written by Justice Stephen J. Field) was a suit to foreclose a mortgage, and it appeared in the course of the action that certain of the parties defendant claimed title under a patent from the Mexican government and a tax deed. The court said: "Adverse titles to the premises held by parties claiming by mortgage from the mortgagor prior to the mortgage, or from third parties prior or subsequent to the mortgage, are not subjects for determination in this suit;" and, speaking specially of the title claimed by the tax deed and patent, said: "Their validity is not the proper subject for determination in the present suit. *** If there were no other reasons than the assertion of these adverse titles for making them parties, the suit should have been dismissed as to them." The Supreme Court of California has adhered to the doctrine as announced in Croghan v. Minor, and has cited the case with approval in Ord v. Bartlett, 83 Cal. 428, 23 P. 705; Cody v. Bean, 93 Cal. 578, 29 P. 223; Sichler v. Look, 93 Cal. 608, 29 P. 220; and Murray v. Etchepare, 129 Cal. 318, 319, 61 P. 930.

In Banning v. Bradford--an action to foreclose a mortgage--the complaint alleged as to defendants other than the mortgagor that they "claim some estate or interest in said mortgaged premises accruing subsequent to the lien of said mortgage." One of these defendants set up a...