American Baptist Missionary Union v. Hastings

75 N.W. 713, 72 Minn. 484, 1898 Minn. LEXIS 727

• Court: Supreme Court of Minnesota
• Decided: June 9, 1898
• Docket: Nos. 10,973-(101, 12)
• Status: Published

Opinions

MITCHELL, J.

This case was here on a former appeal. 67 Minn. 303, 69 N. W. 1078. Stated according to their legal effect, the facts found on the subsequent trial on the merits were as follows:

In June, 1889, one Barber mortgaged certain premises to plaintiff, covenanting to pay all taxes. Shortly afterwards Barber conveyed the premises to one Munger, subject to the mortgage, which the grantee assumed and agreed to pay. A few days later Munger conveyed to one Duffus, subject to the mortgage, which the grantee assumed and agreed to pay. Shortly afterwards Duffus executed a mortgage to Barber, plaintiff’s mortgagor. Barber assigned this mortgage to the defendant Weeks. March 27, 1890, Weeks went into possession as mortgagee. May 26, 1891, Weeks took from the state an assignment certificate for the taxes of 1889, the amount paid therefor being $492.77. July, 1891, Weeks foreclosed his mortgage by action, bid in the property for the amount of principal and interest due thereon, and the sale was confirmed. July, 1892, the redemption on Weeks’ foreclosure having expired, and there having been no redemption, he became owner in fee, subject to plaintiff’s mortgage. December 17, 1894, plaintiff foreclosed, and bid in the property for the amount of the principal and interest due on its mortgage. December 17, 1895, there having been no redemption from plaintiff’s foreclosure, it became owner of the premises, and Weeks surrendered the possession to it.

Weeks, while in possession, did not pay the taxes for 1893 and 1894, amounting to $789.81, which plaintiff was compelled to pay after it acquired absolute title under its foreclosure. It will be noted that these taxes accrued, not while Weeks was in possession as mere mortgagee, but while he was in possession as owner from July, 1892, to December, 1895. In February, 1896, plaintiff, under protest, redeemed from the sale for taxes of 1889 (for which Weeks had an assignment certificate), and then brought this action to .recover the money. Weeks claims the right to it to reimburse himself for what he paid to the state for the certificate. What Weeks paid out, while in possession as mortgagee and as owner, for repairs, improvements, and taxes for 1890, 1891, and 1892 on the premises, amounted to as much or more than all that he received for rents and profits during the same period.

1. Conceding, without deciding, that if Weeks’ mortgage had been executed by Barber, he would have had an equitable right as against plaintiff to hold the assignment certificate for the taxes of 1889 as security for what he had paid out; and conceding, without deciding, that this right would not have been affected by his going into possession as mortgagee, except to the extent that he would be compelled to account for the rents and profits,—still there are conclusive reasons why he has no such right under the facts of this case. The mortgage under which he claims was executed, not by, but to, Barber, who was plaintiff’s mortgagor, and who had expressly covenanted in the mortgage to pay all taxes on the premises. In the face of his own covenant, Barber would not be allowed to hold the assignment certificate, even as security for what he had paid for it; and Barber could not, by assigning the mortgage, give his assignee any greater rights than he himself had. Weeks stands exactly in the shoes of his assignor, Barber.

2. After the redemption period on Weeks’ foreclosure expired in July, 1892, he became absolute owner of the premises, and held precisely the same title and bore the same relation to them and to the parties interested in them as if he had taken an absolute deed immediately from Barber. While he may not have been personally liable to plaintiff to pay the current taxes on the premises, yet as owner in possession he equitably owed the duty to do so both to the state and to the plaintiff. During two of the years while he was thus in possession as owner he failed to pay the current taxes, which plaintiff was afterwards compelled to pay, amounting to more than Weeks had previously paid for the taxes of 1889. Therefore assuming, without deciding, that he had originally an equitable right to be reimbursed for the taxes of 1889, this equity was destroyed by his subsequent failure to pay the current taxes for 1898 and 1894. If there appears to be anything inequitable in the result to which this leads, it is but the consequence of the peculiar relation to the title which Weeks voluntarily assumed. Plaintiff is still out of pocket by reason of the default of Barber and those claiming under him.

While all of the foregoing facts may have appeared in the record on the former appeal, yet neither of the grounds upon which we now base our decision was specifically urged by counsel, nor was either brought to the attention of the court or passed upon by it. Neither was there anything decided on the former appeal, so as to become the law of the case, inconsistent with the views now expressed. The first part of the former opinion merely decided that Weeks’ relationship to the property and the parties was such that he could not acquire a tax title as against the plaintiff. The second part, as we construe it, merely held that, assuming, without deciding, that Weeks might have the right to hold the tax assignment certificate as security for what he had paid out, the burden was on him first to account for the rents and profits while he was in possession of the premises.

Judgment affirmed.