Opinion
No. 36173.
October 28, 1946. Suggestion of Error Overruled December 9, 1946.
1. MORTGAGES.
Purchase by mortgagor's wife of land sold to State for delinquent taxes after trustee's sale thereof to third person in foreclosure of deed of trust amounted merely to a redemption from tax sale so far as interest of purchaser at trustee's sale was concerned and inured to the benefit of such purchaser.
2. MORTGAGES.
One who purchases at valid foreclosure sale of real estate mortgage or deed of trust acquires thereby all the interests of both mortgagor and mortgagee in and about the mortgaged property and may protect himself under their rights.
3. MORTGAGES.
When mortgagor conveys property to trustee and thereby authorizes trustee to make sale thereof in case of default in payment of secured debt, trustee in making sale is the agent of mortgagor as well as of mortgagee and his deed evidencing a valid sale is of the same legal effect as if mortgagor and mortgagee had made the deed themselves, since purchaser pays purchase money to and for the mortgagor on the debt held by mortgagee.
APPEAL from the chancery court of Humphreys county, HON. J.L. WILLIAMS, Chancellor.
R. Leon Bass, of Belzoni, for appellant.
Government lands are not taxable, and there is no sufficient showing of a valid tax deed until it has been shown that the lands become taxable by becoming the subject of private ownership.
Acoff et al. v. Roman, 172 Miss. 141, 159 So. 555.
There was an utter failure to show that the title had passed out of the United States Government, and therefore the failure to show a valid tax sale.
Lyon Co. et al. v. Ratliff, 129 Miss. 342, 92 So. 229.
In all such cases, as in an action of ejectment, the complainant must show title in himself from the government down, or he must show title by adverse possession, actual or constructive, for the statutory period, or he must show title from the defendant, or that both derive their claim from a common source, and that his is the better title from that source.
Long v. Stanley et al., 79 Miss. 298, 30 So. 823; Griffith's Mississippi Chancery Practice, Sec. 216.
Appellee and his grantor have been in possession of this land for more than three years under this tax deed, and consequently appellee's title has been perfected.
Hamner v. Yazoo Delta Lumber Co., 100 Miss. 349, 56 So. 466; Smith et al. v. Leavenworth, 101 Miss. 238, 57 So. 803.
The title of the defendant to the land claimed under the tax sale has been perfected by the lapse of the statutory period, without regard to any defect of power. The title becomes perfect by lapse of time, whatever its original infirmity may have been.
Carlisle v. Yoder, 69 Miss. 384, 12 So. 255.
If the trustee transfers the trust property to a third person with the consent of the beneficiary who is not under an incapacity, the trust is terminated and the trustee is under no liability for making the transfer.
Restatement of the Law, Trusts, Chap. 10, Sec. 342 (b), p. 1053.
Section 3 of Chapter 196, Laws of 1934, is more than a mere statute limiting the time within which to bring an action to cancel the title of the State to land sold to it for taxes (cf. Russell Investment Corporation v. Russell, 182 Miss. 385, 178 So. 815), for, on the expiration of the time limit in Section 1 of the Chapter, it "extinguishes all the right in and to such land, of any and all persons whatsoever."
Lee v. Smith, 189 Miss. 636, 198 So. 296.
Whatever rights appellees had in the land in question were totally extinguished by the tax sale to the State and the elapse of the period of redemption, and what the State afterwards did with its admittedly complete and valid title is of no concern to appellees from a legal standpoint. If fraud was perpetrated against the State, — and for the purpose of the present case and for that purpose only we will concede that there was, — that point can be raised only by the State.
Reliance Investment Co. v. Johnson, 188 Miss. 227, 194 So. 749.
The facts upon which the plaintiff's right to sue is based, and upon which the defendant's duty has arisen, coupled with the facts which constitute the latter's wrong, made up the cause of action.
Cox et al. v. American Freehold Land Mortgage Co. of London, 88 Miss. 88, 40 So. 739; Hutchinson v. Ainsworth, 73 Cal. 452, 15 P. 82, 2 Am. St. Rep. 823.
A warranty deed without a special covenant to that effect does not warrant against future imposition of taxes against property sold.
Robertson v. Singleton, 156 Miss. 220, 125 So. 421.
The warranty certainly did not guarantee that there would be no taxation in the future, nor the character and extent of it; that is one of the things that runs as an incident of government. The taxing authorities have the right for the general purposes of the government to levy taxes against property, and the warranty does not apply to any future incumbrance not specially warranted against.
Robertson v. Singleton, supra.
One who has bought in land under a deed of trust, being entitled to the income, is bound to pay the taxes.
Sevier v. Minnis, 71 Miss. 473, 15 So. 234.
Mr. Vestal, by his purchase under the deed of trust, became entitled to the income arising from the estate; and it was his duty, while in the enjoyment of the estate, to pay the taxes, and he could not free himself from this obligation by relinquishing to another the land, or permitting it to be sold for taxes and bought by another.
Sevier v. Minnis, supra.
The purchasers at the sale under the decree to enforce that mortgage acquired the title of the land in the exact position it was in at the date of the mortgage, unaffected by any charge upon it by the subsequent act of the mortgagors.
Bainbridge v. Woodburn, 52 Miss. 95.
The date of the execution of the mortgage fixes the rights of the foreclosure purchaser, his title relating thereto, and not to the time of completion of the foreclosure proceedings.
41 C.J., Mortgages, Sec. 1112.
In accordance with the general rule that a purchaser at a judicial sale takes the property subject to other valid liens resting thereon unless expressly stipulated otherwise, it is held that a purchaser of property at a mortgage foreclosure sale takes the property subject to tax liens.
37 Am. Jur., Mortgages, Sec. 779.
Accordingly, where neither the mortgagor nor the mortgagee pays the taxes extended against mortgaged property, and suit is brought to foreclose the mortgage, without reference to the taxes, and no order is made by the court to pay the taxes out of the proceeds of the sale, the sale is made subject to the unpaid taxes. The rule of caveat emptor applies.
37 Am. Jur., Mortgages, Sec. 780.
Can appellant rely on estoppel, when he, and he alone, is responsible for the facts that constitute the estoppel? We think not. An estoppel against an estoppel destroys each other.
Hopkins v. Hopkins, 174 Miss. 643, 165 So. 414; Barringer v. Dauernheim, 127 La. 679, 53 So. 923; 5 Ann. Cas. 845, note; 10 R.C.L. 841, Sec. 146; 21 C.J. 1110.
While there is authority to the contrary, it is very generally held that where it is shown that a complainant in a bill to set aside a fraudulent conveyance participated in or instigated such conveyance, the court will, as a general rule, leave him in the position he was instrumental in creating, and will hold that he is estopped by his conduct from attacking the conveyance.
27 C.J. 481-2, Sec. 131.
But the wife is not bound by the deed or covenants of the husband; she is neither a party or privy to the deed, is not liable to an action on its covenants, and her title cannot be divested or affected by the operation thereof. This is sufficient for the decision of this case; for, as the plaintiffs have not the legal title to the land, they cannot maintain an action of ejectment for its recovery.
Carter et al. v. Bustamente, 59 Miss. 559.
The doctrine of laches, although resembling limitations, is not based upon, nor bound by, any express statute of limitations. A long or protracted delay in the prosecution of rights is presumed to have produced the situation last mentioned and equity looks with so little favor upon such prosecutions that it will not entertain them, although no express statute of limitations is available, unless facts are shown which will rebut the presumption of injustice arising out of the apparently undue delay, or which will excuse the same.
Griffith's Mississippi Chancery Practice, Sec. 33.
Nor does the doctrine of mere laches ever operate in this State to bar the bringing of a suit; but the right to bring a suit, either in law or in equity, may be not barred as of limitations, but cut off as of right and equity, if the facts in the case shall show clearly that the conduct of the party suing has plainly been such as to operate against him an estoppel within the meaning of the well-known laws of estoppel.
Lake v. Perry, 95 Miss. 550, 49 So. 569.
Equity will not lend its aid to one who is guilty of unconscionable conduct and great laches in asserting rights, where deeds of record indicate title in others.
Barron v. Federal Land Bank of New Orleans, 182 Miss. 50, 180 So. 74.
Whatever is enough to excite attention, or put a party on inquiry, is notice of everything to which such attention or inquiry might reasonably lead. Sufficient information to lead to the knowledge of a fact, shall be sufficient to charge him with the knowledge of that fact.
Parker v. Foy, 43 Miss. 260; First National Bank of Laurel v. Johnson, 177 Miss. 634, 171 So. 11.
V.B. Montgomery, of Belzoni, for appellee.
The appellee and appellant claim under a common source of title, and deraignment of title in such cases is unnecessary from the government down to the common source.
Simpson et al. v. Ricketts et al., 185 Miss. 280, 186 So. 318; Westerfield v. Merchant, 93 Miss. 791, 47 So. 434; Gillum v. Case, 67 Miss. 588, 7 So. 551; Richards v. Lee, 91 Miss. 657, 45 So. 570; Dockery v. Zerkowsky, 186 Miss. 31, 189 So. 797; People's Bank v. West, 67 Miss. 729, 7 So. 513, 8 L.R.A. 727; Slack v. Swaim (Miss.), 8 So. 545; Griffith's Mississippi Chancery Practice, Sec. 216, p. 214, Sec. 348, p. 353.
The two year statute of limitations does not apply here.
Griffin v. Griffin, 194 Miss. 622, 11 So.2d 311; 42 C.J. 245, Sec. 1890; 16 L.R.A. (N.S.) 124; L.R.A. (N.S.), 1918B, 769, 770, note.
The three statute of limitations has no application here.
Griffin v. Griffin, supra; North American Trust Co. v. Lanier et al., 78 Miss. 418, 28 So. 804, 84 Am. St. Rep. 635; Barnard v. Wilson, 74 Cal. 512, 16 P. 307.
The six year statute of limitations has no application here.
Anthony v. Bank of Wiggins, 183 Miss. 885, 184 So. 626.
There has been no laches whatever. The ten year statute applies and the case has been brought well within the limit afforded by this statute.
Gordon v. Anderson, 90 Miss. 677, 44 So. 67; Cox v. American Freehold Land Mortgage Co. of London, 88 Miss. 88, 40 So. 739; Hill v. Nash, 73 Miss. 849, 19 So. 707; Johnson v. Carter, 193 Miss. 781, 11 So.2d 196.
An after-acquired title by the grantor passes to the original grantee and those claiming under him.
Meyers et al. v. American Oil Co., 192 Miss. 180, 5 So.2d 218; Jackson v. Holt, 192 Miss. 702, 6 So.2d 915; Carter v. Bustamente, 59 Miss. 559, distinguished; Robinson v. Lewis, 68 Miss. 69, 8 So. 258, 10 L.R.A. 101, 24 Am. St. Rep. 254; Wightman v. Doe ex dem Reynolds, 24 Miss. 675; Bush v. Cooper, 26 Miss. 599; Mitchell v. Woodson, 37 Miss. 567; Edwards v. Hillier, 70 Miss. 803, 13 So. 692; Andrews v. Anderson (Miss.), 16 So. 346; Southern Plantations Co. v. Kennedy Heading Co., 104 Miss. 131, 61 So. 166; Mississippi Sawmill Co. v. Douglas, 107 Miss. 678, 65 So. 885; Harris v. Byers, 112 Miss. 651, 73 So. 614; Garner v. Garner, 117 Miss. 694, 78 So. 623; Fitzgerald v. Allen, 126 Miss. 678, 89 So. 146; Bramlett v. Roberts, 68 Miss. 325, 10 So. 56; Code of 1942, Secs. 843, 846; Mississippi Law Journal, Oct. 1945, Vol. 17, No. 3, p. 153-159; 19 Am. Jur. 641, Sec. 42; 36 Am. Jur. 811, 812, Sec. 241, p. 813, Sec. 243, p. 815, Sec. 248; 37 Am. Jur. 170, 171, Sec. 750, p. 176, 177, Sec. 762; 16 L.R.A. (N.S.) 122, 123; 52 L.R.A. (N.S.) 877, 878; 25 L.R.A. 83; L.R.A. 1918B, 769, 770, note; 58 A.L.R. 346-394, note; Restatement of the Law, Restitution, p. 780-782, Sec. 190; 42 C.J. 245, 247, Sec. 1890; 61 C.J. 1203, Sec. 1626.
Grantor or mortgagor cannot acquire outstanding tax title and set same up against grantee and those claiming under him.
Barnard v. Wilson, supra; 36 Am. Jur. 815, Sec. 248; 37 Am. Jur. 176, 177, Sec. 762; 61 C.J. 1203, Sec. 1626; L.R.A. 1918B, 769, 770, note.
The estoppel which applies to the grantor or mortgagor applies with equal force and effect to the wife of the grantor or mortgagor.
Robinson v. Lewis, supra; Stuart v. Pickett, 193 Miss. 455, 10 So.2d 207; Hatchett v. Thompson, 174 Miss. 502, 165 So. 110; Walker v. Woods, 166 Miss. 471, 144 So. 703, 148 So. 354; Humphrey v. Seale, 125 Miss. 207, 87 So. 446; Whitfield v. Miles, 101 Miss. 734, 58 So. 8; Campbell v. Herod, 193 Miss. 17, 7 So.2d 880; Wade v. Barlow, 99 Miss. 33, 54 So. 662; Patridge v. Riddick, 174 Miss. 258, 164 So. 221; Taylor v. Eckford, 11 Smedes M. (19 Miss.) 21; Herrin v. Henry, 75 Ark. 273, 276, 87 S.W. 430; 61 C.J., Taxation, Secs. 1615, 1616, 1619, 1622; 51 Am. Jur. 922, Sec. 1058; 27 C.J. 644, Sec. 409.
Husband and wife are always estopped to acquire outstanding title and set same up against the vendee of the other of them. Such a purchase operates as a redemption.
Griffin v. Griffin, 194 Miss. 622, 11 So.2d 311.
The facts, undisputed or else well proved, are: On January 29, 1929, one M.D. Vincent was the sole owner of the parcel of land involved herein. On that day he gave a deed of trust on the property to a named trustee to secure a specified indebtedness to J.W. McClintock, executor, the indebtedness to become due on June 1, 1929. The deed of trust was filed for record on February 1, 1929.
Default was made in the payment of the debt, another trustee was duly substituted by recorded instrument in the place of the original trustee and on March 7, 1931 the substituted trustee made a sale of the property under the powers vested in him and on the same day executed and delivered his trustee's deed to the purchaser J.W. McClintock, Incorporated. This deed was promptly recorded, and the purchaser went into the possession of the property. No point is made which would challenge the validity of the trustee's sale.
For the taxes of the year 1931 the property was assessed to M.D. Vincent, the mortgagor, the tax lien becoming effective under the law as of January 1, 1931. None of the parties paid the assessment, and for the delinquent taxes of the year 1931 the property was sold to the State at the tax sale on September 19, 1932. The validity of the tax sale is not challenged, and it is undisputed that the sale was not redeemed within the time allowed by law.
Approximately one month after the maturity of the tax title in the State, the wife of the mortgagor, Maria L. Vincent, appellant here, obtained a forfeited tax land patent from the State for the land, which she duly presented to the foreclosure sale purchaser, the appellee here. Appellee sought legal advice and was advised that the patent in the hands of appellant was good whereupon appellee surrendered possession.
Within the 10 year statute of limitations by adverse possession appellee was advised that the apparent title carried by the State patent could not be asserted by the wife of the mortgagor against the purchaser at the foreclosure sale and thereupon the latter instituted this suit to cancel appellant's claim of title and to have her purchase from the State declared to be a mere redemption from the tax sale so far as the interest of appellee, the purchaser at the foreclosure sale is concerned. There was a decree in conformity to the prayer of the bill and from that decree this appeal is before us.
Appellant makes numerous contentions in the effort to have the decree reversed, none of which are well taken, and we think only one of them would be of sufficient interest to bench and bar to justify further comment. That point is as to the relative status of appellee as a third party purchaser at the foreclosure sale.
Had the mortgagee become the purchaser at the trustee's sale the mortgagor could not have set up any after-acquired title against him, and certainly this must be true if the after-acquired title had any substantial connection in the course of events by which the purchaser at the foreclosure sale obtained his right and title; and the same disqualification would extend to the mortgagor's wife. This is settled in this State, the applicable principles being sufficiently disclosed in the recent cases, Meyers v. American Oil Co., 192 Miss. 180, 5 So.2d 218; Jackson v. Holt, 192 Miss. 702, 6 So.2d 915, and Stuart v. Pickett, 193 Miss. 455, 10 So.2d 207.
But appellant seems to take the position that because a third person, and not the mortgagee, was the purchaser at the trustee's sale, none of the stated disqualifications against the mortgagor or his wife would operate in favor of the third party purchaser. So far as we can find this precise point has not been decided by this Court but the authorities elsewhere appear to be all to the effect that one who purchases at a valid foreclosure sale of a mortgage or deed of trust acquires thereby all the interests of both the mortgagor and the mortgagee in and about the mortgaged property and may protect himself under their rights. Sufficient of the cases are cited in the annotations to Sec. 1890, Mortgages, 42 C.J. pp. 245-247, among which is Bannard v. Duncan, 79 Neb. 189, 112 N.W. 353, 126 Am. St. Rep. 661, wherein it is stated that the purchaser acquires the interest of the parties as effectually as he would have done by deed from them.
And this must be true both as a matter of principle and of policy and not only as to judicial foreclosures but as to sales by trustees. When the mortgagor conveys property to a trustee and thereby authorizes the trustee to make a sale thereof in cases of default in the payment of the secured debt, the trustee in making the sale is the agent of the mortgagor as well as of the mortgagee, and when he has made a valid sale, his deed evidencing it is of the same legal effect as had the mortgagor and the mortgagee made the deed themselves, for the purchaser pays the purchase money to and for the mortgagor on the debt held by the mortgagee. Moreover, if the third party purchaser were not entitled to the stated rights, and thus without them the mortgagor or the mortgagee or both were left at liberty to set themselves against him, the inducement to purchase at foreclosure sales would be radically depreciated to the hurt of both the parties to the instrument and particularly the mortgagor whose interest in any foreclosure sale is that the property shall bring the highest bid possible to secure.
Affirmed.
Sydney Smith, C.J., did not participate in this decision.