Napper v. Fitzpatrick

194 Mich. 175 | Mich. | 1916

Bird, J.

Defendant was the owner of the north half of the northwest quarter of section 33, in township 32 north, range 6 east. He mortgaged it to plaintiff on the 7th day of March, 1894, to secure the repayment of a loan of $1,200 running two years at 8 per cent. The mortgage was afterwards foreclosed, and the premises were bid in by the mortgagee for the amount due upon the mortgage, together with the expenses of sale. Defendant did not redeem the premises, and the equity of redemption expired on April 9, 1899. Following this plaintiff leased the premises to defendant for one year with the privilege of two, from April 13, 1899, at a yearly rental of $125. Defendant paid the first year’s rent, but refused to pay further rent, because in August, 1899, Brown and Cullen, of Flint, made claim to the premises by force of a deed from the State for the taxes of 1893. It was then learned that the premises had been sold in December, 1895, and bid off to the State, and afterward sold by the auditor general to Brown and Cullen in August, 1897. Plaintiff refused to purchase or recognize the tax deed, and a writ of assistance was applied for and granted to Brown and Cullen in the Alpena circuit court, and afterwards affirmed by this court. Brown v. Napper, 125 Mich. 117 (83 N. W. 999). In March, 1901, after his lease with plaintiff had expired, the defendant .accepted a lease from Brown and Cullen. He had possession of the premises under this lease until December, 1901, when he purchased them upon contract for $1,200. While occupying the premises under this land contract plaintiff commenced a suit in ejectment against defendant and Brown and Cullen. This suit was decided adversely to plaintiff. It was afterwards appealed to this court and affirmed. Napper v. Fitzpatrick, 139 Mich. 139 (102 N. W. 642). Afterward, and on November 26, 1912, Brown and Cullen deeded the premises to defendant, and he gave them a purchase price mortgage thereon for $881, the balance due upon his contract. In July, 1913, these proceedings were brought to have defendant’s repurchase of the premises declared a redemption of the premises and to have plaintiff’s lien reinstated thereon.

The chancellor who heard the case refused plaintiff relief on the ground that the equities of the case were not with him. Plaintiff appeals from the decree.

1. The contention of plaintiff in brief is that defendant gave him a mortgage on his premises containing a warranty of title, and also a warranty against previous incumbrances; that when the mortgage was given the taxes for 1893 were a lien thereon; that by reason of defendant’s ownership and possession of the premises the law raised a duty upon his part to pay to the State the taxes, and his mortgage contract raised a like duty to plaintiff; that defendant’s failure to discharge this duty which he owed to the State and to plaintiff resulted in a sale of the title to a stranger, and that a repurchase of that title by defendant should in equity be construed as a redemption rather than a repurchase, and thereby inure to plaintiff’s benefit. This position is based upon the general rule of law:

“That a purchase made by one whose duty it was to pay the taxes shall operate as payment only.” Cooley on Taxation (2d Ed.), 501, and cases cited.

Both counsel recognize this rule and both concede that the principle has been applied to the relation of mortgagor and mortgagee, but defendant insists that the rule does not apply in the present case, because defendant’s title was cut off by the mortgage foreclosure, and because the tax title was bought and held by a stranger, and afterwards reconveyed to defendant. There is reason in this distinction, and it is supported by the weight of authority (37 Cyc. p. 1350), but the courts of Michigan, Iowa, and West Virginia appear to have extended the inhibition to a repurchase from a stranger in whom the title matured. Dubois v. Campau, 24 Mich. 360; Sorenson v. Davis, 83 Iowa, 405 (49 N. W. 1004); Battin v. Woods, 27 W. Va. 58. And this appears to be the rule even though the mortgagor’s title has been in the meantime divested by foreclosure proceedings. Magner v. Insurance Co., 30 La. Ann. 1357.

We must conclude that, if the case were to be determined solely upon the legal question, plaintiff’s contention would have to prevail.

2. The opinion of the chancellor indicates that he reached the same conclusion on the legal question, but he refused to grant plaintiff relief because he found the merits against him and in favor of the defendant. In his opinion he does not specify the particular facts upon which he based his refusal, but an examination of the record discloses a state of facts which obviously .influenced his conclusion. The record discloses that the mortgage in question provided on its face for a usurious rate of interest. It stipulated for the payment of 8 per cent, annual interest, and placed an obligation upon the mortgagor to pay all taxes assessed on the mortgage. Furthermore, plaintiff’s own testimony tends to show that, after providing for a usurious rate of interest in the mortgage, he received defendant’s promissory note for 2 per cent, additional interest, amounting to $24, and that this note was afterwards paid. It is also shown that in April, 1896, defendant gave plaintiff another mortgage on another piece of land for two years’ interest on the principal mortgage, and included therein $33.60 in excess of the two years’ interest at 8 per cent. When plaintiff was asked about this excess he was unable to account for it.

The testimony of the parties is in conflict as to when plaintiff first learned of this tax title. We think the record fairly shows, however, that plaintiff learned of it at least a year before the writ of assistance was applied for; that he had ample opportunity to adjust it, and defendant, who was in straitened circumstances, urged him to do so, and promised him that he would repay it if he would extend the time for redemption, but plaintiff refused to pay or recognize the tax title, although at that time he had collected from defendant usurious interest in a sum larger than the amount of the original tax. Considering this manner of dealing with the defendant, together with the great lapse of time since the mortgage was given, we think complainant is not in a very good position to invoke the aid of a court of equity to reinstate his interest in the premises — an interest which he himself refused to redeem by the payment of a small sum of money which he could have paid and added to his mortgage. He was willing to gamble on the chance of the tax being declared invalid, but when he loses he invokes the aid of the court to reinstate his interest in the premises. Courts of equity will not ordinarily relieve a party from the consequences of a risk which he voluntarily assumes. McCredie v. Buxton, 31 Mich. 383. We agree with the chancellor that plaintiff’s equities are not such as to call for equitable relief.

The decree of the trial court is affirmed, with costs to the defendant.

Stone, C. J., and Kuhn, Moore, Steere, Brooke, and Person, JJ., concurred with Bird, J. Ostrander, J.

In my opinion, the complainant is entitled to relief upon the ground that equity follows the law.