162 Iowa 34 | Iowa | 1913
Lead Opinion
By written contract, entered into on the 29th day of May, 1909, plaintiff purchased from the defendant two hundred and fifty-three acres of land in Jones county, Iowa. By the terms of the agreement plaintiff paid $1,000 in cash at the time the agreement was entered into and promised to pay the further sum of $1,000 on December 1, 1909, and the remainder of the purchase price on March 1, 1910. The agreement also contained these further provisions:
The said first party agrees in consideration of the payment of the said one thousand dollars ($1,000) on December 1, 1909, to execute a warranty deed to the said premises to second party, the same to be deposited in the Citizens’ Savings Bank of Anamosa, Iowa, until the time for completion of this agreement, to wit, March 1, 1910, and agrees that upon the full payment of the balance of the purchase money on March 1, 1910, that said deed will be delivered to second party and possession of the premises surrendered to second party on March 1, 1910. In case either party fails to carry out any of the provisions of this contract he is to forfeit to the other party not in default, the sum of one thousand dollars ($1,000) as liquidated damages for said failure to carry out the contract as herein set out.
... We think it is an established rule of law in this state that, as between the parties to an executory contract for the sale of land, where the seller retains the possession, rents, and profits until the conveyance is due, the duty rests upon him to pay the accruing taxes, in the absence of any agreement by which the purchaser assumes that obligation. This principle was expressly recognized in Miller v: Corey, 15 Iowa, 166; Hunt v. Rowland, 22 Iowa, 55; Lillie v. Case, 54 Iowa, 182; Nunngesser v. Hart, 122 Iowa, 647. The last cited case seems to be directly in point. Hart had sold plaintiff a tract of land by warranty deed, and the latter brought suit for a breach of the warranty because of a tax lien which had accrued after the contract of sale and before the conveyance. It appears that the contract, as in the present case, was purely executory, and possession was not to be given until after the deed was made. Reversing the ruling of the lower court sustaining a demurrer to the petition, we held the action could be maintained, and that the seller retaining the use and possession of the property was liable for all taxes accruing before the title passed. It is, we think, the universal rule that the holder of the legal title in the actual occupancy and possession is duly bound to pay the taxes accruing during such possession, and, in the absence of some agreement to the contrary, he cannot shift the burden to the shoulders of another. Warvelle, in his work on Vendors, Section 179, says: ‘Primarily the duty of paying the same (taxes) rests upon the person who holds the legal title . . . The obligation is equally binding upon the vendee who has stipulated or agreed to pay*38 the same. A vendee, prior to the conveyance, who has not so agreed, will not be directly responsible for the tax. . . . As between the parties, all payments of taxes by the vendee are presumed to be made on behalf of the vendor. ’ The principle applied in Nunngesser v. Hart, 122 Iowa, 647, has been approved in Farber v. Purdy, 69 Mo. 601, and we find no holding to the contrary in this state or elsewhere. The enactment of Code Section 1400, fixing a date when a tax lien attaches between the seller and buyer of land, does not affect the authority of Miller v. Corey and other cases in which that decision is followed, for one who agrees to sell and convey at a future date, meanwhile remaining in possession of the property, continues to be the owner for the purposes of taxation until the contract is performed and the title passes, and it is this date to which we must look in applying the statute. According as the passing of the title takes place before or after the date named in the statute, will the duty of paying the taxes fall upon vendee or vendor. If, therefore, the contract before us contains no provision by which the appellees expressly or impliedly undertake the burden of the accruing taxes, we must hold it to have been appellant’s duty to discharge them. Counsel insist, however, that the provision in the contract by which the appellant’s deed was to warrant the title generally to the date of the contract, and thereafter only specially against her own acts, is a sufficient indication of the understanding of the parties that she was to be relieved from the payment of taxes; but this is a strained and unnatural interpretation of the language referred to. Appellees, as the holders of the contract of purchase, had an equitable right in the land which was liable to become incumbered by their acts or omissions, thus' creating real or apparent clouds or burdens upon the title; and it is not an unusual thing for vendors, in making an executory contract of sale, to fence against future annoyance and controversy by limiting the effect of their covenants in this manner. She does not undertake to warrant against her own acts down to the making of the conveyance, and if, as we hold, it was her duty to pay the taxes, in the absence of an agreement to the contrary and by her neglect and failure to perform that duty, the title has become incumbered, we see no reason why it may not be said to be, in a very just sense of the word, the result of her own act, for which she would be liable on her covenants.
As the title did not pass, and as the vendor remained in possession, it was the duty of the latter to pay the taxes. Of course this rule does not apply to a quitclaim deed, for the purchaser under such a deed simply gets what the grantor has to give; but in deeds of bargain and sale, whether with or without warranty, the rule manifestly does apply, especially where the grantor remains in possession. Sibley v. Bullis, 40 Iowa, 429; Steele v. Bank, 79 Iowa, 339.
The trial court was right in holding defendant liable, and its judgment must be, and it is, Affirmed.
Dissenting Opinion
(dissenting). — I reach the contrary conclusion. I think the rights of the parties must be ascertained from the provisions of their contract and the covenants of the deed executed in pursuance thereof. The contract called for a warranty deed to be executed and delivered in escrow on December 1, 1909. It was so executed and delivered in strict accord with the contract. In the second division of the majority opinion, it is conceded that “there has been no
The other cases cited, such as Miller v. Corey, 15 Iowa, 166, Hunt v. Rowland, 22 Iowa, 55, and Sackett v. Osborn, 26 Iowa, 146, do not sustain the majority holding. In each ease the vendee was held liable for taxes accruing while he was in possession, even though he had received no deed in pursuance of his contract. That is not the question involved here. The question here is: Is the obligation of the seller to the purchaser measured by the terms of his contract and the covenants of his deed? It is said by the majority that he is liable, not on his express covenant, but on an “implied contract due to the fact that plaintiff was compelled to pay an
Concededly plaintiff cannot recover upon the written contract or upon the covenants of the deed. I can find no previous case where recovery has been permitted to the grantee in a warranty deed except upon the covenants of such deed. The reasoning of the majority would necessarily hold the seller liable for the taxes of the current year, even though he had conveyed, or contracted to convey, the land by quitclaim deed only. If thus liable for the taxes of the current year, I see no escape from the further logical conclusion that he would be likewise liable for all delinquent taxes having accrued during his ownership. Whether the same reasoning would not logically carry us still further and hold the seller by quitclaim deed liable for mortgage and judgment liens accruing during his ownership, I will not speculate. I would reverse.