Dale v. M'Evers

2 Cow. 118 | Court for the Trial of Impeachments and Correction of Errors | 1823

Woodworth, J.

gave his opinion nearly as follows:— This cause having been heard in the Court below) upon the" pleadings, the defence set up in'the answer must be taken as trueand the only question is, whether the respondents are to be reimbursed what they paid, as bidders and purchasers at the auction.1,

Answer must be taken as true.

Tax equivalent to a senior mortgage or judgment.

The corporation had a right to impose this tax, and when" laid, it be came a lien on the lots, overreaching the' mortgage of the respondents. (2 R. L. 420, s. 186. Id. 442, s. 259.) . It was, as'to therh,-equivalent to aseriior mortgage or jhdgihent; - and the assessment not being paid after proper demand and ntiticé, the corporation had a right to sell the lots' for such a "term of years as the purchaser at auction should consider worth the amount of the tax. They did so sell; the respondents bid this amount for a term of one year, and became purchasers of the mortgaged premises for that time, taking a lease of the corporation.

It is now urged that the respondents have not brought themselves within, the rule which allows a junior incumbrancer to pay off a senior incumbrance and tack it to his ownthat they are not to be regarded as having extinguished'this .incumbrance by payment, but by a purchase under it for their owri benefit. .

Effect of the purchase.

I think the" objection is well taken; The. respondents must be considered as having agreed to pay the tax for the privilege of holding a year. Their purchase is an admission that the térrn was worth the sum paid by them. This purchase turns'out in evidence not to.have been a very dear one; for the answer asserts (and it must be taken as'proof) that had it been left to the bidder next below the respondents, the term would have been extended but for a few months, or at most, one year. Now, can the Court make a new contract for these parties'? Shall we.say to them, “you were of necessity bound to make this purchase, and we will indemnify you, by reimbursing the sum paid, without taking into account the value of the term which you have purchased and enjoyed ?” The respondents have taken the remedy into their own hands. They have purchased,-and (as we are to .intend) have had the use of the-land for a year at their own price; and yet the decree in the Court below allows them the whole sum paid, without abatement. It gives them both the term, and the money which they have paid for it.

The Chancellor puts this on the ground of necessity. I do not see it in this light. I admit there was a necessity of paying off the incumbrance, but not of purchasing under it. On paying the assessment, the respondents might have come into the Court of Chancery, and said, “We have been under a legal necessity of paying a senior incumbrancer, in order to save ourselves. Now, upon the equitable principle of substitution, we-claim to stand in the place of the corporation, and be refunded from the proceeds of the sale under our decree.” There are several cases decided by the Chancellor, which would have sanctioned such a claim. It is recognized in the case of The Silver Lake Bank v. North, (4 John. Ch. Rep. 370.) There is, a provision in the act under which this assessment was made, which would seem to sanction such a course. The 175th section declares, (2 R. L. 408,) “That if any money so to be assessed, be paid by any person, when, by agreement or by law, the same ought to have been borne and paid by some other person, it shall then be lawful for the person paying, to sue for, and recover the money so paid, with interest and costs, as so much money paid for the use of the person, who ought to have paid the same.” In this case, the respondents need not have gone to their action. The law would not do so idle an act as to turn them round to such a remedy. Ah parties were before the Court of Chancery upon a matter cognizable there, and the whole would have been a very proper subject of adjustment in that Court.

It was not ro ga^noceLity, though pay-have hoec!1Sllt

But the respondents have not chosen to take this remedy. They have suffered the property to be sold : they have themselves purchased and possessed it under the act, and they must abide the bargain which they have made.

Suppose the appellants had filed a cross bill against the respondents, praying an account of the rents and profits during the year. The plain answer would have been : “ We are the purchasers of this property, and hold it by a lease from the corporation, for which we have paid an equivalent; and we are not bound to account. The whole subject has been before the Chancellor, and is disposed of.” This would be a conclusive answer.

In granting the prayer of the respondent’s bill, we take from the appellants all the benefit of competition at the sale. If the respondents had not purchased, this assessment would have been paid by some other bidder, for a term of two years, at most, according to the answer. Thus the corporation would have been paid : the respondents could not have been materially injured ; and the whole sum would have been saved to the appellants.

I am clear for reversing the decree.

Answer conclusive.

Sutherland, J.

No replication having been put m to the answer, it is to be considered as true throughout, upon the plain and obvious principle .that the respondents, by not filing a replication, and thereby putting the facts contained in the answer in issue, have deprived the appellants of the opportunity to prove them.

Effect of its being considered so in this case.

It is, then, to be taken as an admitted fact in the case, that if the respondents had not become the purchasers at the auction, some other person would have paid the assessment for the use of the premises during two years. This fact is positively asserted in the answer. The annual value of the premises, therefore, is proved to have been between 7 and 800 dollars, at least. In this view of the case admitting the purchase by the respondents to have been compulsory, and that it was necessary for the preservation of their right, under their mortgage, it would seem to be manifest that they could have no equitable claim upon the appellants for any thing more than the difference between the sum paid by them for the lease for a year, and the actual value of the premises for that term. They purchased for the sole purpose of guarding their rights as mortgagees. They went into possession under that purchase in judgment of law; and there is nothing in the case to show that they did not in fact. They were then mortgagees in possession with an equitable claim, or lien, for the amount which they had been compelled to pay in order to obtain the possession, but unquestionably liable to account for the rents and profits of the mortgaged premises. Under the pleadings and proofs in this case, can the respondents be permitted to say, that the use of the premises for a year was not worth the full amount paid by them ? There is no such allegation in their bill. They merely say, “ that to prevent a sale of the premises for a long term of years, they were compelled to pay the amount of .the assessment, and take a lease of them for a year.” Not an allegation or intimation any where in the bill, as to their annual value. The answer states the mode and circumstances of the sale—that it was at public auction—that there were other bidders who would have paid the assessment, for the use of the premises for a few months longer than they were bid off for by the respondents.

Use of premises fot a year mud. be presumed worth what was paid.

I think the respondents, under the circumstances of this case, are concluded from saying that the use of the premises for a year was not worth the amount paid by them.

But it was not necessary for the respondents to pay the assessment, in order to protect their rights as mortgagees. A sale under the assessment did not affect the title to the premises. It gave to the purchaser only a right to the temporary use and enjoyment of them. The mortgagees had still a right to foreclose their ‘mortgage, and to sell the mortgaged premises, subject to the right acquired under the assessment. If the law had directed the assessment to be collected by an absolute sale of the premises, instead of a lease for a term of years, the cáse wduld have been very different. Then the ..tifie Would have-passed under-the sale, and unless the mortgagees became the purchasers, the lien of their mortgage would have been gone.. That would have been clearly a compulsory .purchase.

But it was not necessary to pay assessment to protect respondent’s rights.

Under the circumstances of this case, I cannot but consider the purchase as voluntary,- and that the -respondents have no equitable claim to be reimbursed the amount of the assessment, thus paid :by them, out of the proceeds of the sale of the mortgaged premises. -I am accordingly of opinion, that so much of the decree of the Chancellor as directs :such reimbursement, should be reversed.

Savage, Ch. J.

concurred in the result of these opinions.

For reversing, in part, 20. For affirming,

A majority of the Court being of this opinion, the following order was entered:

This cause having been argued by counsel, and due consideration had thereon; and it appearing to this Court that the payment of the amount of the assessment upon the mortgaged premises, as stated in the pleadings, and made by the respondents, was not made by necessity, to deliver the mortgaged premises from incumbrance, and for the benefit of all the parties concerned therein; but, on the contrary, that the amount of the said assessment was paid, in pursuance of a purchase at auction of a term in said premises, by reason whereof the payment of the said assessment does not form a just and equitable charge, to be reimbursed out-of the proceeds of the sale of the mortgaged-premises:

Thereupon, it is ordered, adjudged and decreed, that So much Of the decree of his Honor the Chancellor, as directs any money to be paid out of the proceeds of the sale of the mortgaged premises, for the satisfaction and reimbursement of the amount of the said assessment, be reversed ; and that the decree, in other respects, be affirmed; -and that the-proceedings be remitted, fcc.