199 Mo. App. 226 | Mo. Ct. App. | 1918
The appeal in this case was first submitted to this court at its October Term, 1912, and was here disposed of by the opinion of Honorable R. E. Rombauer,' special judge, which was adopted as the opinion of the court. Nortoni, J., however, dissented, in an opinion filed, and at his request the cause was certified to the Supreme Court (Granite Bituminous Paving Co. v. Parkview Realty & Improvement Co., et al., 168 Mo. App. 468, et seq 151 S. W. 479). When the cause came on for hearing in the Supreme Court, in banc, at its April Term, 1917, that court, by its majority opinion, held that inasmuch as the record of this court in the case showed that a motion for rehearing had been sustained, without a rehearing having been had, or resubmission of the cause, the judgment of this court entered therein was coram non judice and
A rehearing has now been had before us, and the issue presented has been submitted for our determination. In the dissenting opinion of Nortoni, J., written when the case was formerly here (168 Mo. App. 483, et seq.), the facts are fully and separately stated, and we quote therefrom as follows:
“This is a suit on a special tax bill issued in accordance with the charter provisions of the city of St. Louis, in compensation for street improvement. Plaintiff prevailed in the suit, and the court gave judgment establishing the lien of the tax bill against the lot of defendant Nina Realty Company in the amount of $1600.23, and interest thereon.
“There are several defendants, and all'of them appeal from this judgment, but the Nina Realty Company alone, as owner of the lot on which the lien is enforced, is the substantial party in interest. The other defendants are >prior owners of the property and trustees in certain deeds of trust thereon, and it will be unnecessary to set them forth here, as they are without any beneficial interest in the property and the judgment is in no sense a personal one against them. At the time the judgment was entered, the lot on which the lien of the tax bill is sought to be established was owned by defendant Nina Realty Company, who suceeded to the title of the Parkview Realty & Improvement Company by virtue of the foreclosure of certain deeds of trust thereon, under which the Nina Realty Company purchased.
“The lot of -ground involved is parcel of City Block No. 3878, fronting 405.17 feet on Union boulevard in the city of St. Louis. Plaintiff contractor reconstructed Union boulevard adjacent thereto, in accordance with an ordinance of and under a contract with the city of St. Louis, to that end. At the time of the'
Among other things, section 25, Art. 6, of the city charter provides the lien of any tax bill that is not entered satisfied within two years after its maturity, unless proceedings in law shall have been commenced to collect the same within that time and shall still be pending, shall be destroyed and of no effect against the land charged therewith. In view of this provision of the charter, the defendant Nina Realty Company interposed its answer to the effect that the lien of the tax bill had expired and was unenforceable against its interests in the property, for the reason that no suit had been instituted thereon within two years after maturity of the bill against the beneficiaries in the deed of trust under which it purchased. Though the Parkview Realty & Improvement Company, owner at the time, was sued within the two-year period, the case concedes that the beneficiaries in the two deeds of trust under which defendant Nina Realty Company purchased were not made parties thereto at the time. Indeed, the ¡first move made
There is but one question now in the case, which was the only question'before this court for determination when the former opinions were written; the Supreme Court in Morey Engineering Co., etc., v. St. Louis Artificial Ice Co., 242 Mo. 241, 146 S. W. 1142. having held that a special tax bill, though subsequent to a deed of trust in point of time, takes priority over the latter. The sole question for determination is whether or not the special tax. bill may be enforced against the interest of the Nina Eealty Company in the land, that company not having been made a party defendant within two years after the maturity of the bill. As to this question we have fully and carefully considered the able briefs and arguments of counsel pro and con, and have reached the conclusion that the dissenting opinion of Nortoni, J., supra, is a correct exposition of the law pertinent to the matter in hand. We therefore adopt it as follows:
“Obviously, error lies in this judgment, for it involves and affirms the idea that one’s rights may be concluded as though a valid claim existed against him
“But it is said, thongh such be true, the present suit was instituted against the Parkview Realty & Improvement Company, owner, within the two-year period, and that will suffice to establish the lien against the derivative title of the Nina Realty Company, though the beneficiaries in the deeds of trust were not made parties; for, it is said, such beneficiaries possess nothing more, as against this plaintiff lienor, than the right to redeem therefrom. There can be no doubt that the lien of a subsequent special tax bill duly established prevails over the lien of a prior mortgage or deed of trust and becomes senior thereto. Such is the effect of the recent decision of the Supreme Court in Morey Engineering, etc., Co. v. St. Louis Artificial Ice, etc., Co., 242 Mo. 241, 146 S. W. 1142. This is undoubtedly the rule where both the owner of the land and the beneficiaries in the mortgage are made parties to the suit prior to the expiration of the lien, for, in the case last above cited, all parties in interest were before the court. See, also, to the same effect, Keating v. Craig, 73 Mo. 507, where both the owner and the mortgagee were parties.to the suit to enforce the lien of the tax bill. But though it be the rule that the lien of the subsequent tax bill becomes senior to the lien of the prior mortgage which is remitted to the position of a junior lien, when all parties in interest are before the court, it is the rule, too, that the rights of the beneficiaries in the mortgage are not concluded by the judgment unless they are made parties to the suit. For a judgment to this effect on a tax bill, see Forrey, v. Holmes, 65 Mo. App., 114. As to such beneficiaries who have been omitted from the suit to foreclose the State’s lien for taxes, the Supreme Court has, in a number of cases, affirmed that, though title passed by the execution sale, their right to redeem was still available, as will appear by reference to Stafford v. Fizer, 82 Mo. 393; Gitchell v. Kriedler, 84
“Considering the thought reflected throughout all of these authorities, it is obvious that the beneficiary in the deed of. trust or mortgage is required to be made a party to the suit, for the reason that he is an owner, within the sense of that term as employed in the charter provision and as employed in the statute with respect to general taxes levied in behalf of the state. Some of the cases put the rule expressly on the ground that the beneficiary is an owner. [See Stafford v. Fizer, 82 Mo. 393; Gitchell v. Kreidler, 84 Mo. 472.] Furthermore, the Supreme Court, in the recent case of Morey Engineering, etc., Co. v. St. Louis Artificial Ice, etc., Co., 242 Mo. 241, 146 S. W. 1142, in construing the St. Louis charter, declared the beneficiary in the deed of trust an owner within the sense of that term, to the end of raising the lien of the tax bill from the position of the junior, where it otherwise lay, to that of senior lien over a mortgage prior thereto in point of time. To the end of evincing that the charter contemplated the lien of the tax bill should prevail over the rights of a prior mortgage, the Supreme Court quoted from section 25 of the charter as follows; ‘Said tax bills shall be and become a lien upon the property charged therewith, and may be collected of the owner of the land and in the name of and by the contractor as any other claim in any court of competent jurisdiction.’. Touching the words thus quoted, the court says, ‘Construed in the light of the case last cited, this means that the tax is a lien upon the property, to be enforced by a proceeding in rem against the property. And, as ruled above, the word ‘owner’ includes incumbrances.’ If, then, the beneficiary in the deed of trust is to be regarded as an owner of the property for the purpose of postponing the lien of his prior mortgage to the lien of the subsequent tax bill, it would seem that he should be regarded as an owner in whose favor the requirement to institute suit within the two-year period, in order to preserve the liens, ob
“But it is argued that the junior lienor is never a necessary party to a proceeding for the enforcement of the senior lien and that a valid judgment may be had against the res, enforcing the lien, though the junior lienor is not a party, but subject, however, to his right to redeem. The argument is obviously sound in those cases where the lien is a continuing one and so comprehensive by the terms of the statutes as to include all interest in the land in whosoever name it may be. The eases of Stafford v. Fizer, 82 Mo. 393; Gitchell v. Kreidler, 84 Mo. 472; Allen v. McCabe, 93 Mo. 138, 6 S. W. 62, and numerous other authorities declare the rule where the lien of the State for taxes "has been enforced. In the argument advancing this proposition it is said the junior lienor, the holder of the mortgage here, at best has a lien only on the equity of redemption, or a right to redeem from the prior lien of the tax bill, and that this continues and may be availed of to the very day of sale under the tax judgment; that though defendant Nina Realty Company was not made a party until after the two years had expired, and the beneficiaries in the mortgages, to whose rights it succeeded, were never made parties at all, its right to redeem is still open and this defendant has been given its day in court with respect thereto, for it may redeem even after the judgment is affirmed and at any time before the property is sold in execution thereunder. Obviously this argument assumes a subsisting lien against the interests of the Nina Realty Company from which a redemption may be made. If the lien continued to exist as in the tax cases, and obtained upon the realty without regard to the ownership, the argument would be persuasive, indeed. But here, the lien of the
“The general taxes in favor of the State are declared by section 11385, Revised Statutes 1909, to obtain against the land ‘no matter who is the owner nor in whose name it was assessed.’ And the lien with respect to such taxes obtains accordingly there- — -that is, on every interest in the land. It is true that the owner of the land must be made a party to the tax suit for the purpose of enforcing the lien of the State, to the end of conferring the jurisdiction over the res, but the tax itself is affixed against, the land as a matter of law without regard to the owner thereof. Such is not true as to a tax bill representing special assessments as for benefits because of improvements made, for unless the improvements are made, no tax can obtain, and that such improvements were made is a fact to be proved as a basis for the lien. Special tax bills become a lien upon the property and may be collected of the owner of the land, it is true; but, to-- this end, proof is required against the interest of the owner as a condition precedent to affixing the lien upon his interest in the land. This proof, according to section 25 of the charger, may be made by the tax bill itself, which is sufficient prima - facie evidence * ‘ of the liability of the person therein named as the owner of the land charged with such bill to pay the same.’ The tax bill here involved names the Parkview Realty & Improvement Company as the owner of the land and in no way refers to the beneficiaries in the mortgages. Obviously, then, the bill itself is sufficient to evince the right of a lien, against only the Parkview Realty & Improvement Company. In the sense of the charter, as before pointed out, the beneficiaries in the mortgages are regarded as owners of the property, too, and it is essential, when others than
“That the tax bill is not prima-facie evidence of the right to the lien against a mortgagee not named therein has been expressly decided, as will appear by reference to Kansas City to the nse, etc. v. American Surety Co., 71 Mo. App. 315. Obviously the charter intends that every person interested as owner in the property sought to be subjected to the lien of the tax bill shall have a right to defend against the assertion of such ■ lien, and most assuredly the assertion of the lien should be made while the right to it continues to exist and not after it dies, for then defense would be unnecessary. From these considerations alone, it would seem that the rule which prevails as to the right of the junior incumbrancer to redeem from the general tax lien and, except for that, a judgment to which he is not a party concludes him, is without force here, for unless this lien is established by evidence aliunde the tax bill, no lien whatever obtains against the rights of such owner as the Nina Realty Company, whereas in the case of the lien for general taxes it comprehends the whole estate and every interest in the land, without regard to the matter of ownership whatever and obtains against both prior and subsequent incumbrancers at all hazards. In the ease of the special tax bill, the lien obtains against the owners and their interests in the land only by virtue of its being established against their interest in the land by proof, and not because it comprehends such interests whether or no, as a matter of law. Unless the lien is asserted within the two-year period and subsequently established, there is naught from which redemption should be made.
“It seems to me the opinion of the court in this case overlooks the fact that there is no lien here until established, and treats the matter as though there were
To the foregoing we desire merely to add the • following observations:
Though we have great respect for the views of the learned special judge, formerly a member of this court, who wrote the majority opinion when the case was previously here, it is our judgment, upon mature reflection, that that opinion fails to follow the ruling of the Supreme Court in the Morey case, supra, in holding that the word “owner,” as used in the (then) charter of the city of St. Ijouís, was to he taken as used in its restricted sense, meaning only the legal owner, and that it did not include any other person beneficially interested in the property. In the Morey case the Supreme Court appears to have distinctly held to the contrary, viz., that the word “owner” in the charter is to be taken in its broad sense, and that it includes a' cestui que trust in a deed of trust, or other holder of an incumbrance on the land. This appears more than once throughout the majority opinion in that case; and finally it is said (1. c. 259): “And, as ruled above, the word ‘owner’ includes encumbrancers.”
We may also remark that what was said in the former majority opinion of this court herein, respecting the difficulties attendant upon’ the enforcement of a special tax bill if the word “owner” in the charter is to be taken other than in its restricted sense, supra, appears to wholly fail to reckon with the fact that our statute, section 1776, Revised Statutes 1909, makes express
We are much strengthened in our view of the case, supra, by the recent decision of our Supreme Court in Riverside Lumber Co. v. Schafer, 251. Mo. 539, 158 S. W. 340, decided while the case now before us was pending in the Supreme Court on certification as stated above. That was a suit to enjoin the sale of real property under “a school fund mortgage.” The plaintiff therein, the Riverside Lumber Company, had filed a mechanic’s lien against the property, and since the lien dated from the commencement of the work on the building, or the furnishing of the materials therefor, which was prior to the execution and recording of the mortgage, the former was entitled to priority in law over the latter. The plaintiff, however, had failed to make the mortgagee a party to the suit to establish the mechanic’s lien, within ninety days from the filing of the lien account. It was held that by the failure to make the mortgagee a party within ninety days the priority of the mechanic’s lien over the school mortgage was lost; and that the judgment establishing the lien in no wise affected the interest of the mortgage. In the course of the opinion the learned author thereof said:
“And it has also been held that if the owner of the property, for any reason, is not made a party to the suit, within said ninety days, no lien can be established against his interest therein. That being true, then by parity of reasoning, I am unable to see how it can be logically said that the interest of any other person in the property can be tried and adjudicated, if the suit is not begun against him within said ninety days. I can see no reason for differentiating the interest of the landowner and that of the mortgagee in proceedings to enforce mechanic’s liens against the property in which both are interested...” [See Riverside Lumber Co. v. Schafer, supra, l. c. 551, 552].
It is argued that the Riverside Lumber Company case does not here apply, for the reason that it was
It is true that as to mechanic’s liens the statute provides that all parties interested in the property may be made parties “but such as are not made parties shall not be bound by any such proceedings;” but this is the effect of the provisions of the charter of the city of St. Louis then in force (See Perkinson v. Meredith, 158 Mo. 457, l. c. 464, 59 S. W. 1099), and is merely in accord with the fundamental principle that the interest of one in land cannot be divested by a proceeding of which he has neither actual nor constructive notice.
And there are pointed reasons, we think, why a cestui que trust in a deed of trust should be made-a party, within the time which by law constitutes the
“Any dispute touching the amount of the claim, the date of its origin or the time to which the lien relates, is thus to be conclusively settled while the facts are still fresh and the witnesses are available. Now it cannot be doubted that it is often quite as important to an incumbrancer, who is a stranger to the transactions upon which the claim of the lien is based, to have the benefit of this protection, as to the owner himself, who is in a better position to know the facts and to-preserve the evidence thereof. . . .
“The ,argument that the limitation does not apply to a mortgage, because the validity and amount of mechanic’s lien may be established in a suit between the claimant and the owner of the property alone, and that the only issue in which the mortgagee is interested, namely, the date or relative dignity of the lien, may be tried out in a subsequent suit to redeem in so far as it has any fórce at all, rests upon an erroneous assumption, which is that the mortgagee has no right to question the amount or validity of the claim of lien. These are issues which the incumbrancer, equally with the owner, may raise, and for that purpose the mortgagee is entitled to his day in court. If, for instance, a lien were asserted for the value of materials which
This reasoning, we think, is equally applicable to the situation presented by the record before us.
From the views expressed above it follows that the interest of the cestui que trustent, who were never made parties remained unaffected by the proceeding herein. That interest has now passed to the Nina Realty Company, which corporation has acquired the fee simple title to the land through the foreclosure of the deed of trust. That defendant was not made a party to the suit until more than two years after the maturity of the tax bill, and hence the land in its hands is not chargeable with the lien thereof.
The judgment must accordingly be reversed, and it is so ordered,
