Richards v. EarlsRichards v. Earls
There is little dispute as to the facts. The Himmelberger-Harrison Land and Investment Company (hereinafter referred to as the Investment Company) is the common source of title. Plaintiffs claim title as follows: (1) On August 15, 1927, the Investment Company conveyed by warranty deed to Samuel J. Ault. (2) On the same date Ault executed a deed of trust to Edward J. Bauerle as trustee for the Investment Company. This deed of trust secured the payment of a note for $5330 due ten years after date. The warranty deed was recorded September 28, 1927, and the deed of trust September 16, 1927. (3) On May 22, 1933, the sheriff of New Madrid County executed a drainage tax deed to R. P. Smith. The basis of this deed was a judgment establishing the lien of drainage taxes against the lands in question and rendered in favor of the Little River Drainage District against Samuel J. Ault, Edward J. Bauerle, trustee, and the Investment Company for delinquent drainage taxes for 1928, 1929, and 1930. The defendants in the tax suit were the record owners at the time the suit was instituted and at the time of the sale. All of said defendants were duly served with process; defendant Samuel J. Ault by publication, Edward J. Bauerle, trustee by personal service, and the Investment Company by service upon its secretary, one Clarence Hutson. No objection was raised to the form of the judgment or proceeding upon which it was based. (4) On January 21, 1935, R. P. Smith, the purchaser at the tax sale, and his wife executed a quitclaim deed to the Little River Drain-
Defendants’ claim arises as follows: On September 16, 1927, the said $5330 Ault note, secured by the deed of trust as hereinbefore referred to, was endorsed and delivered by the Investment Company to the Himmelberger-Harrison Lumber Company (hereinafter referred to as Lumber Company). The Lumber Company retained ownership until March 5, 1936. On March 5, 1936, and before the maturity of the note, the Lumber Company transferred the said note to defendant Edwards. Edwards, acted for himself and defendant Earls. They were “jointly interested.” Edwards thereafter caused the deed of trust securing the said note to be foreclosed, and on September 12, 1936, S. J. Harris, sheriff, as substitute trustee, under the said Ault deed of trust, executed and delivered a substitute trustee‘s deed to said lands to defendant Alvin T. Earls. This deed was recorded September 12, 1936.
Other facts appearing in evidence are as follows: At the time process in said suit for delinquent drainage taxes was served upon Mr. Hutson, as secretary of the Investment Company, Mr. Hutson was also secretary of the Lumber Company. The Lumber Company was then the owner and holder of said note by assignment from the Investment Company. On December 31, 1931, prior thereto, the Lumber Company had charged said note off to profit and loss. The Lumber Company, after knowledge of the institution on October 6, 1932, of said suit for delinquent drainage taxes, decided not to protect the said land.
The said drainage tax suit was instituted and prosecuted to judgment by R. P. Smith as tax attorney for the Little River Drainage District (hereinafter referred to as the district). At the sale under said drainage tax judgment he purchased the said real estate for the drainage district and at the personal direction of the secretary of the district. The records of the district, however, showed no authority given by the board of supervisors or any action taken by them with reference to said purchase, but it was the regular practice of the tax attorney to bid in all lands for drainage taxes, where there were no other bids. The tax deed, as executed by the sheriff, was made directly to Smith. The price of $25 paid for this 160 acres of land at the tax sale was not unusual or out of line for tax sales in 1933. Except for 20-12 acres, “it was wild land.” There was evidence, however, that the land should have been worth around $4 or $5 per acre and was very productive. Mr. Smith did not pay the considera-
Defendant Edwards paid the Lumber Company $100 for the $5330 Ault note on March 5, 1936. At that time the note showed total credits of $39.48, being amounts paid on interest during 1929. Before Edwards purchased the Ault note, he was entirely familiar with all transactions appearing of record with reference to this land, including the said tax proceedings. He had previously communicated with the secretary of the drainage district and had been advised that the district claimed to own this land. After the note was purchased an additional expense of $26.36 was incurred in foreclosing the deed of trust. There was evidence that the plaintiffs knew that Earls had purchased the Ault note from the Lumber Company before they obtained their deed from the drainage district.
On November 13, 1935, and after R. P. Smith ceased to be attorney for the Little River Drainage District, and after the execution of his deed to the district, but before it was recorded, the said district, by R. B. Oliver III, as tax attorney, instituted a second suit for delinquent drainage taxes on this land, and for the 1930, 1932 and 1934 taxes. The suit was instituted against the same parties named as defendants in the first suit. They still appeared as the record owners of the land. After defendant Edwards acquired the Ault note, as hereinbefore referred to, Earls went into possession of the land. On March 16, 1936, Earls paid off the delinquent drainage taxes covered by this second tax suit, and said suit was dismissed. The purchase of the Ault note from the Lumber Company, and the payment of the taxes covered by the second suit, was subsequent, however, to the recording of the said tax deed to Smith and of Smith‘s deed to the drainage district, both being recorded December 3, 1935.
Appellants in their brief refer to this proceeding as one in equity. Certain amici curiae have also briefed this cause on the theory that this action is essentially one by defendants (appellants) as inferior lien holders to redeem this real estate from the grantees of purchasers at a tax sale or foreclosure of a superior lien, when they (appellants’ assignors) were not parties to the foreclosure proceeding of the superior lien and that they are not bound thereby. It becomes important therefore to determine whether this action is at law or in equity. Whether the action is one at law or in equity must be determined according to the issues tendered by the pleadings. [Rains v. Moulder, 338 Mo. 275, 90 S. W. (2d) 81, 84; Jacobs v. Waldron, 317 Mo. 1133, 1137, 298 S. W. 773, 774, citing cases. Ebbs v. Neff, 325 Mo. 1182, 1191, 30 S. W. (2d) 616, 620.] A deter-
Appellants assign error in the admission in evidence of (1) the tax deed of R. P. Smith, (2) the deed from Smith to the drainage district, and (3) the deed of the drainage district to respondents (plaintiffs below). The first deed was objected to on the following grounds: (1) that the proceedings in the tax suit were such that it failed to convey the interest under the deed of trust; (2) that the purchase at the tax sale was by the drainage district and that title was illegally and falsely taken in the name of R. P. Smith for the benefit of the district; (3) that the consideration for the tax deed was so negligible as to shock the conscience of the court. The other two deeds were objected to on the theory that the grantors therein had no title and conveyed no title and that the district had no power to
The several instruments were properly admitted in evidence. Under the issues made by the pleadings they constituted evidence of plaintiffs’ chain of title. Each deed was regular on its face and therefore prima facie admissible, as against the objections made by appellants. [
Appellants next assign error in the admission of testimony as to the actual knowledge of the Lumber Company as to the pendency of the first tax suit. The record shows that this information first appeared as follows: “Q. Mr. Hutson, was the Himmelberger-Harrison Land and Investment Company served a summons in tax suit No. 9245, entitled Little River Drainage District v. Sam J. Ault? “MR. BAYNES: That is objected to, the return is the best evidence. “THE COURT: That is true however, I will let him answer. “MR. BAYNES: Exception. “A. Yes sir; The Himmelberger-Harrison Lumber Company had actual knowledge of the fact that a tax suit had been filed on this property; it is a part of my duties as secretary of the Himmelberger-Harrison Lumber Company to make a record of the tax sales in which the company is interested.”
It is apparent that the information given in the answer was not called for by the question objected to and was merely additional information voluntarily given by the witness. No motion was made to strike out the voluntary statement of the witness. No objection or exception was saved to the answer of the witness as made. The assignment is overruled. [Cazzell v. Schofield, 319 Mo. 1169, 8 S. W. (2d) 580, 589; State ex rel. Friedman v. Purcell, 131 Mo. 312, 319, 33 S. W. 13.]
Appellants further assign error in the admission of the testimony of witness Hutson as to acts, conversation, and private transactions within the Lumber Company, concerning protection or abandonment of the lands in controversy. This assignment was abandoned by appellants. The particular testimony is not pointed out. The grounds of objection are not specified. No effort was made to show how appellant was prejudiced by the admission of the testimony. The matter is not mentioned under points and authorities or in argument, and no authorities are submitted in support of the assignment.
The final assignments of error are that the court erred (1) in finding respondents were the owners of the land, and (2) in finding that appellants were not the owners of the land in question.
Under these assignments of error appellants in their brief urge (1) estoppel, (2) invalidity of the tax deed, and (3) that appellants’ rights were not foreclosed by the tax proceeding.
Appellants contend that respondents are estopped by the acts of the drainage district to assert the validity of the tax title (1) because the district subsequent to said tax sale sued the former owners for delinquent drainage taxes and alleged in said suit that said former owners still owned said lands, and (2) because in reliance on said suit appellants bought the note from the Lumber Company and paid the taxes covered by the second suit.
Estoppel was not an issue in this cause. The issues in a lawsuit are made up by the pleadings. [Kleinlein v. Foskin, 321 Mo. 887, 13 S. W. (2d) 648, 654; Moore v. Dawson, 220 Mo. App. 791, 277 S. W. 58, 61; Frank v. Myers (Mo. App.), 109 S. W. (2d) 54, 57.] Estoppel is an affirmative defense to be pleaded and proven, unless such facts appear from plaintiffs’ case. [State ex rel. School District v. Haid, 328 Mo. 729, 41 S. W. (2d) 806, 809; Ambruster v. Ambruster, 326 Mo. 51, 31 S. W. (2d) 28, 35, 38; Grafeman Dairy Co. v. Bank, 315 Mo. 849, 870, 288 S. W. 359, 363, 368; Missouri Cattle Loan Co. v. Insurance Co., 330 Mo. 988, 52 S. W. (2d) 1, 11.]
Appellants contend that evidence sufficient to create an estoppel came in without objection. We think the evidence was insufficient for that purpose. The evidence in this case discloses that at the time the delinquent taxes covered by the second tax suit were paid on March 16, 1936, the tax deed to Smith, and the quitclaim deed from Smith to the district, had been of record since December 3, 1935. Before Edwards bought the note, or Earls paid the taxes, Edwards had contacted the secretary of the drainage district and had been advised that the district owned the real estate and would sell it. Edwards was present when Earls paid off the taxes covered by this second tax suit. Edwards admitted that he did not know of the filing of the second tax suit (filed November 13, 1935) at the time he purchased the note on March 5, 1936, but he did know of the tax sale and the deeds thereunder. It is therefore apparent that appellants did not rely on the statements in the second tax suit when they paid the taxes. We are of the opinion that the pleadings are not sufficient to raise an issue of estoppel and the evidence fails to establish the necessary elements of estoppel. [Blodgett v. Perry, 97 Mo. 263, 10 S. W. 891; 892; Rosencranz v. Swofford Bros. Dry Goods Co., 175 Mo. 518, 75 S. W. 445; Waugh v. Williams, 342 Mo. 903, 119 S. W. (2d) 223, 226; Rhoads v. Rhoads, 342 Mo. 934, 119 S. W. 247, 252; Burke v. Adams, 80 Mo. 504, 50 Am. Rep. 510; State ex rel. Richards v. Fidelity & Casualty Co. (Mo. App.), 82 S. W. (2d) 123, 128.]
Appellants next urge that the execution sale under the tax judgment and the deed thereunder was invalid and the district acquired no title because the statute which alone gave the district power to buy at tax sales was not strictly complied with. Appellants contend that the deed was void and not merely voidable, and the several conveyances passed no title.
All terms and provisions of the drainage act are to be broadly and liberally construed. [
Appellants finally contend that the first tax suit failed to foreclose the rights of the Lumber Company since the Lumber Company, as assignees and owners of the Ault note secured by the said deed of trust, was not a party defendant in said tax sale proceeding; and that appellants, as subsequent assignees of the note, and as purchasers under the foreclosure of the deed of trust, are not affected by the sale for taxes. Appellants insist that the sale transferred only the rights of the parties named as defendants in the tax suit.
However, if a lien holder is not made a party to a proceeding to foreclose a superior tax lien and not otherwise bound by the foreclosing proceeding, his remedy is by a proceeding in equity to redeem. No such issue is raised by the pleadings.
We have seen that this action is one at law and that the answer of appellants did not state facts showing any equitable rights in appellants. Appellants did not claim an equitable right of redemption in the property, but the legal title thereto. There was no prayer for redemption or for affirmative equitable relief. No direct assault was made upon any deed or proceeding. The sole issue presented by the pleadings was as to which party had the better legal title. The motion for a new trial alleges no error in not allowing appellants to redeem. It states that the court erred in deciding this cause in favor
The question, therefore, is: Did respondents, who hold under the purchaser at the tax sale, acquire a better legal title than appellants who purchased at the foreclosure of the deed of trust? By
It is therefore immaterial to any issues in this case whether a subsequent and “unknown assignee” and owner of a note is bound by a tax judgment against the payee of the note named in the deed of trust where suit is instituted subsequent to the transfer of the note, since no issue as to the right of the assignee to redeem is presented. Respondents have the better legal title. Finding no error in the record the judgment is affirmed. Hyde and Bradley, CC., concur.
PER CURIAM:—The foregoing opinion by DALTON, C., is adopted as the opinion of the court. All the judges concur.