235 N.W. 390 | Minn. | 1931
The delinquent taxes in question, with interest, amounted to $3,622.19 as of April 27, 1929, when plaintiffs bid in the property for the full amount of their lien, including interest and costs. At the trial they claimed that had defendant's tax lien been asserted in the action in time to be confirmed by the decree they would have purchased at a correspondingly lower figure. That is, plaintiffs would have paid $3,622.19 less than they did, and for that amount would have been entitled to and could have procured against the mortgagors a deficiency judgment accordingly. But at the trial, according to the findings, the mortgagors "consented, in writing, that judgment be entered against them, in favor of plaintiff," for the precise amount for which plaintiffs claim that their bid was excessive, and plaintiffs now have the same deficiency judgment against the mortgagors that they might have procured earlier. In other words, plaintiffs are in the identical position they would have occupied had their bid been less, by the amount of defendant's tax lien, than the sum for which they purchased. There has been no redemption; so plaintiffs get title subject only to defendant's lien for taxes.
1. The original decree was opened to let in defendant on the ground of excusable inadvertence. The error, induced by erroneous advice of earlier counsel, who frankly assume the responsibility, was the assumption that defendant, having purchased the delinquent taxes, could perfect, in the ordinary, statutory method, a tax title superior to plaintiffs' mortgage, and that in no event could its rights in that respect be prejudiced in this action to foreclose that *48 mortgage. The error lay in assuming that one mortgagee can acquire a tax title to the exclusion of another. Companion to that was the equally mistaken notion that defendant's rights as holder of the tax certificate could not be cut off by the decree even though it did not assert them by answer.
The courts are not in accord (see annotation, L.R.A. 1917D, 522) but in 1898 in Norton v. Metropolitan L. Ins. Co.
The whole point is that as between mortgagees of the same property any purchase of taxes by one is considered in equity a payment merely. As Judge Cooley put it [
On the merits therefore the decision below was right in subordinating plaintiffs' title to the lien of defendant to secure reimbursement to the latter for the taxes. Plaintiffs having been fully protected, having been put in the same position they would have *49 occupied had defendant's tax lien been asserted at the outset and confirmed by the original decree, as it must have been, it is plain not only that there was no abuse of discretion but that the learned trial judge exercised an obviously sound discretion in adjusting the matter as he did.
2. Several subsidiary points are made for plaintiffs which have been considered but found hardly worthy of discussion. Among others is the claim that G. S. 1923, § 9632, as amended, 2 Mason, 1927, id. gives to a junior mortgagee, in respect to his payment of taxes, an exclusive remedy. The substance of the statute is that a junior mortgagee may pay, not only taxes or assessments upon which a penalty would otherwise accrue, but also in a proper case insurance premiums and defaulted principal or interest of a prior mortgage, and that all sums so paid shall become "a part of the debt secured by such junior mortgage." As to taxes, that statute added little, if anything, to the remedy of the junior mortgagee. It did not take away any of his equitable rights. Minneapolis Inv. Co. v. National Sec. Inv. Co.
Order affirmed.