151 Wis. 619 | Wis. | 1913
Tbe trust deed wbicb this action is brought to foreclose contained tbe following provisions:
“The company [tbe mortgagor] agrees that' it will annually hereafter pay and discharge all taxes and assessments wbicb are or may be hereafter lawfully assessed or imposed upon tbe said property [tbe real estate described in said mortgage] or upon this mortgage, or tbe lien or interest created thereby, at tbe time or times when tbe said taxes or*621 assessments shall be respectively due and payable, and prior to any sale for taxes, and will at such times deliver duplicate receipts showing the payment of all taxes levied or assessments made, and will not suffer any waste thereof.”
The foregoing is the only recital found in the trust deed pertaining to taxes.
When the trust deed was executed sec. 1042<L Stats. (Supp. 1906: Laws of 1903, ch. 378), was in force and provided:
“Whenever taxable real estate shall be subject to mortgage such mortgage for the purposes of taxation shall be deemed an interest in such real estate and shall be assessed and taxed as such interest in the assessment district in which such real estate is located, and not otherwise and may be separately assessed and taxed as hereinafter provided.”
The mortgaged.property was exempt from taxation by ch. 149, P. & L. Laws of 1869.
In his opinion the circuit court states that “None of the officers or attorneys of the plaintiff knew of this exemption at the time of the execution of the mortgage, and there is nothing in the testimony to indicate that' those who acted for the defendant at that time had it in mind.”
The appellant insists that sec. 1042cZ applies to mortgages on taxable real estate only and has no application to defendant’s property which was not taxable; that under the provisions of sec. 1034, see. 1036, as amended by sec. 1, ch. 346, Laws of 1899, and secs. 1040, 1042Í, and 1056, Stats., the bonds which the trust mortgage was given to secure were assessable to the holders thereof in the assessment district where such bondholders resided, and that the defendant became liable for the payment' of such tax under the provision of the trust deed above quoted.
The respondent contends (1) that there was failure of proof to show that any of its bonds were assessed, or, if there was proof that some of them were, there is none t'o show the amount of the assessment; (2) that the bonds were not taxable; and (3) that it was not liable for the tax in any event.
It is quite apparent from tbe language used in tbe trust deed that it was drawn to meet' tbe provisions of sec. 1042d, Stats., wbicb declares a mortgage to be an interest in real estate and requires it to be assessed and taxed as sucb interest whenever tbe real estate is taxable. Tbe language used is particularly appropriate to sucb a situation. It is particularly inappropriate to meet tbe situation presented by tbe record. If it was intended t'o require tbe defendant to pay sucb taxes as might be assessed against tbe bondholders wherever they resided, very inapt language was used to create tbe obligation. Tbe entire clause is inconsistent with tbe idea that it was intended to cover a personal property tax assessed against a bondholder, and consistent with tbe idea that it was intended to cover a tax assessed against an interest in real estate. Tbe taxes were required to be paid before there was any sale for taxes. There is no lien on personal property because of tbe tax assessed on account of it. There is no sale of personal property for taxes levied because of it, as tbe term “sale” is ordinarily understood when applied to tax proceedings. Tbe provision calling for tbe delivery of duplicate receipts is proper enough where specific sums are levied for taxes on parcels of real estate. A lump sum is usually carried out wbicb includes all of tbe personal property tax of tbe individual. It, would be extraordinary to require the defendant to insist that tbe various tax collectors separate out tbe amounts levied for taxes on account of its bonds from tbe other personal property taxes assessed against tbe bondholders and compel tbe various treasurers to give duplicate receipts showing a pro tanto payment of tbe tax. Aside, however, from these makeweight's, tbe language used will not admit of tbe interpretation contended for by tbe appellant.
The first obligation can refer only to general taxes or special assessment's levied against the real estate covered by the mortgage. This seems too plain to admit of controversy. The third obligation just as plainly refers to an assessment against some interest in the mortgaged real estate. An assessment on bonds secured by mortgage is not an assessment on the lien or interest created by the mortgage. Such lien or interest is a lien on or interest in the property covered by the mortgage which enables the bondholder to have such property subjected to the payment of the bond.
If the plaintiff has any standing in court it must be because a tax imposed on the bondholder is a tax on the mortgage as well. The appellant contends that the bonds and mortgage were made at the same time and as part of the same transaction and are to be construed together as if they were parts of the same instrument; that one may explain or modify the other, and that the words “note and mortgage,” “mortgage indebtedness,” “mortgage interest,” “interest created by mortgage,” and “mortgage” mean one and the same thing, namely, a credit secured by mortgage. Erom this it is argued that the word “mortgage” as used in paragraph numbered (2), supra, means “personal property,” and that there was a covenant on the part of the mortgagor to pay taxes on the real estate which was mortgaged to secure the loan, and on the personal property which was created by the loan as well. The sum and substance of the argument is that the word “mortgage” as used in this particular part of the trust deed is broad enough to include and does include any assess
We do not think that an agreement to pay taxes assessed against the collateral held as security for the payment of a note or bond comprehends and includes an agreement to pay taxes assessed against the credit itself or against the note or bond which evidences that credit, where the collateral security consists of a mortgage interest in real estate. There arose out of the transaction between these parties the debt and the corresponding obligation to pay, the bonds which evidenced such debt, and which are property, and the mortgage which' was given to secure the payment of the debt. The legislature might tax the credit or the bonds or the mortgage. The imposition of a tax because of the debt or the evidence of it is ,not necessarily a tax on the security. This is well illustrated by sec. 1042d, which provides for a tax on a mortgage interest in real estate at the place where the mortgaged property is located, which the debtor may be compelled to pay by contract, and which is frequently levied in a jurisdiction which is not the domicile of the creditor. We think it is plain that the matter of obligating the defendant to pay taxes that might be assessed against the bondholders was not within the contemplation of the parties when the trust deed was executed; that the words “mortgage” and “lien or interest created thereby” were used as synonymous terms, and that it would be a strained and unwarrantable construction of the clause quoted from the trust deed to hold that the obligation to pay any taxes that might' be assessed against the mortgage required the defendant to pay the personal property tax of the bondholders levied because of the bonds. The case was correctly decided by the trial court.
By the Court. — Judgment affirmed.