Wood v. Morath

• Decision Date: 20 February 1922
• Docket Number: 22153
• Citation: 90 So. 714,128 Miss. 143
• Court: Mississippi Supreme Court
• Parties: WOOD v. MORATH ET AL

90 So. 714

128 Miss. 143

WOOD v. MORATH ET AL

No. 22153

Supreme Court of Mississippi

February 20, 1922

APPEAL from chancery court of Pike county, HON. R. W. CUTRER Chancellor.

1. VENDOR AND PURCHASER. Relation between owner and lessee prior to latter's receiving deed placed in escrow held that of landlord and tenant.

Where a landowner leases land to another at a monthly rental and at the same time, in accordance with a provision in the lease contract, executed a deed to the leased premises to the tenant and delivered it to another to be held in escrow for delivery to the tenant upon the payment by him of the rentals provided for in the lease contract and of all expenses incurred by the landlord for taxes, insurance, etc., the relation between the parties prior to the compliance by the tenant with the terms of the lease contract and the delivery to him of the deed held in escrow is that of landlord and tenant.

2. ESCROWS. Ordinarily instrument in escrow does not take effect until final delivery.

In an absence of an agreement to the contrary, an instrument held in escrow by a third person does not take effect until its final delivery, unless, in order to prevent a failure of justice, it becomes necessary' to make the second delivery relate back to the first and thereby cause the instrument to be effective from the first delivery.

3. LANDLORD AND TENANT. In absence of agreement tenant not obliged to pay taxes.

In the absence of an agreement to the contrary, a tenant, as between himself and his landlord, is under no obligation to pay the taxes on the leased premises.

4 CONTRACTS. Terms of unambiguous contract cannot be varied by parties acts showing construction.

The terms of a plain and unambiguous contract cannot be varied by evidence of the acts of the parties thereto indicating a construction thereof by them at variance with its terms.

HON. R W. CUTRER, Chancellor.

Bill by W. P. Morath and others against H. D. Wood. Decree for complainants, and defendant appeals. Affirmed.

Affirmed.

Justin J. Cassedy, for appellant.

Counsel for the appellee in his brief on the memorandum submitted by the court, taking up the question of whose duty it was to pay the taxes in the light of Walker v. Harrison, and Robertson v. Puffer Manufacturing Company, after citing several text-books, then proceeds to argue that the case of Walker v Harrison, is not an authority on the point presented, because the decisions cited by the court in support of the decisions in that case were based on a different state of facts, from those in the Walker case. We must assume that our court in announcing a rule from the text-books was familiar with the English rule and the reasons therefor and its application to conditions here. We point out, too, the prominent fact that the court in those cases was deciding the questions of whether the landlord or tenant should pay the taxes, and the fact that the rent may have been of different kinds, does not affect or alter the principal announced. It was still rent. These authorities support the decision of the court in the Walker case, and are controlling in the case at bar. This being especially true from the fact that in our case Morath was a tenant for a number of years, under a contract to purchase, making him even more than a tenant. Nor was the statement of the court in the Walker case that it is the duty of the tenant to pay taxes mere dictum, as intimated by the counsel for appellee. It will be noted that in the Walker case the question before the court was whether the tenant could purchase the land from the state when the land had been sold to the state for taxes prior to the beginning of the tenancy. At that time the rule had been established by many decisions in this state, that the tenant could not acquire title as against his landlord, and the court in holding that the tenant could acquire title from a third party, the state, where the land had been sold to the state prior to the beginning of the tenancy, stated that it was the duty of the tenant to pay the taxes as the reason why the tenant could not acquire title as against his landlord, thus differentiating the case it was then deciding, the Walker case, from those cases holding that the tenant could not acquire title against his landlord and this statement of the court, that it was the tenant's duty to pay the taxes, was a necessary part of the decision and not mere dicta. The Walker case is in harmony with the decisions of other courts, and the general rule that one in possession should pay taxes, and under it it was the duty of Morath to pay the taxes in the instant case.

On the second proposition opposing counsel takes the view that the conduct of the parties with reference to the payment of the taxes on the land cannot be looked to in determining the construction put by them on the contract, as to whose duty it was thereunder to pay the taxes, because he says this could only be done in cases where the contract is ambiguous, and that this is not such a contract, and seems to rely especially upon the case of Griffin v. Edward Eiler Lumber Company, 84 So. 225, 112 Miss. 265, in support of his position. An examination of this case shows that the contract between the parties was not construed by the court, but that the court only decided that under the contract it was, as a matter of law, the duty of the purchaser of the timber, to furnish cars upon which it was to be loaded.

It is said, however, that if the conduct of the parties is to be looked to, it does not appear that it was their intention that the taxes were to be paid by Morath. The facts with reference to this feature of the case were carefully collated in our briefs heretofore filed, and are all before the court. Nothing appears in the brief of counsel to justify us in changing our conclusion that the facts show that it was the intention of the parties that Morath should pay the taxes. The question of the deed relating back to the time of its delivery to the bank is discussed at some length by the counsel for appellee, and quite a number of authorities cited. These decisions are all founded on the fundamental principal laid down by Chancellor KENT, quoted in State v. Murphy, 16 A. & E. Annotated Cases, on page 1133, 4 Com. 454. This principle has been applied by the courts to various state of facts, and the deeds held to relate back in every case where equity and justice required it, and has not been limited to those cases alone where some disability had affected the parties, though it may find its most frequent application in that kind of cases. The doctrine announced by Chancellor KENT has been adopted by this court in Harkreader v. Clayton, 56 Miss. 383; Simpson v. McGalthery, 52 Miss. 723; Whiteheld v. Harris, 48 Miss. 710.

The last case is criticized, and said to not support the rule, but a careful reading of the opinion especially on page 719 brings us to the conclusion that it does support the rule, and we find that the court cites Chancellor KENT in support of its decisions. Under the rule so well established, it is very manifest that the deed in the instant case should be held to relate back, and take effect at the time of its first delivery, that is when delivered to the bank.

The law on the first and second propositions submitted by the court and the facts of this case irresistibly lead to the conclusion that it was Morath's duty to pay the taxes, and that Wood is in no way liable to him for the consequence of his failure to do so.

Moreover, the case of Mohn v. Joslin, 142 N.W., is so absolutely conclusive against any right of Morath to recover damages against Wood in this suit on a breach of warranty, and warranty alone, that counsel evades a discussion of it.

That the equities are all with Wood is not disputed, and a fair and candid view of the whole case seems to us to be that it was well understood that Morath should pay the taxes, and he ought not to now, after his negligence has brought him misfortune, be permitted to shift the responsibility to Wood. This being true, it is necessary that the deeds should relate back to the time of first delivery, in order to prevent injustice, and this would bring the case under the established rule in this, as well as other states; while taking the case as presented by the pleadings and decided by the lower court, a clean-cut suit on the warranty in the deed, it comes squarely within the rule in Mohn v. Joslin, and in either event the complainant Morath cannot recover.

George Butler, for appellee.

First: Whose duty was it in the light of Walker v. Harrison, 75 Miss. 665, and Robertson v. Puffer Mfg. Co., 112 Miss. 890, to pay the taxes on the land? We stated in our original brief (paragraph five) the following: "The rule is universal that the lessor is bound to pay the taxes during the life of the lease. And as above pointed out, if this be construed as a contract for sale the vendor remained in possession and it was his duty to pay the taxes. 27 R. C. L. 542.

At that time we did not overlook the case of Walker v. Harrison, but as counsel for appellant in their reply brief did not take issue on this point, we deemed it unnecessary to enter into a discussion or explanation of Walker v. Harrison.

In 18 Enc. Law, in dealing with leases at page 650, the following statement is made: "Liability for and agreements relating to taxes. 1. In General: All, general taxes and assessments imposed upon the lands, are in the absence of statutory or contract provisions to the contrary, to be paid by the lessor; but tenants for life are themselves bound to pay taxes, annually assessed upon the premises. 16 R. C. L.

In Taylor's Landlord and Tenant, section 341, it is said "Another obligation which the law imposes upon a...