193 F. 314 | 6th Cir. | 1911
This is a proceeding supplementary to an ejectment suit. The appellee was plaintiff in the ejectment suit, and the appellant was defendant. The land in controversy is an undivided eight-twentieths of two quarter sections situated in Ontanagon county, Mich., being the northwest and southeast quarters of section 30, in township 50 N., range 39 W. Upon the first trial verdict and judgment were rendered for defendant; but the judgment below was reversed in this court and a new trial awarded, it being held here that the court below erred in not instructing the"jury to find for the plaintiff. 147 Fed. 380, 77 C. C. A. 558. Upon retrial below verdict was rendered for plaintiff Rich, with a finding as-corrected that the value of the entire land was $24,119.20, and that the improvements made on the land had not increased its value beyond the wasté
“It is settled by the decisions of the Supreme Oourt of Michigan that a proceeding for enforcing this Hen (for taxes paid) can he had only in equity; and 'on the foot of the adjudication against the tax title.’ Weimer v. Porter, 42 Mich. 569 [4 N. W. 306); Ellsworth v. Freeman, 43 Mich. 488 [5 N. W. 675]; Tillotson v. Circuit Judge, 97 Mich. 585 ]56 N. W. 945].”
The mining company was through mesne conveyances the sole owner of the northeast and southwest quarters of section 30, and of the undivided twelve-twentieths of the northwest and southeast quarters of the section; and Rich was through mesne conveyances the owner of the undivided eight-twentieths of the quarter sections last mentioned. The undivided eight-twentieths interest was formerly owned by Samuel EL. Broughton, who died intestate December 3, 1860. lie had no issue, but left surviving his widow, Sarah N. Broughton, and his father, Shebuel II. Broughton.
The main contention made by appellant in the ejectment suit was that under a statute of limitations of Michigan it acquired title to the eight-twentieths by adverse possession maintained through 15 consecutive years. 147 Fed. 383, 77 C. C. A. 558. One of the contentions now made by appellant is that, since its claim of adverse possession failed in the ejectment suit, the court cannot consistently hold that appellant’s possession obligated it as a tenant in common to pay the taxes in question; in other words, that, since the possession was not adverse within the meaning of the statute of limitations, it w'as not such possession as would imply a duty to pay taxes on the undivided interest found not to belong to appellant — at least without right of recovery over against the actual owner. This would seem impliedly to concede that, if appellant was in adverse possession of the undivided eight-twentieths interest during any portion of the time between the'death of Mrs. Broughton and the commencement of the ejectment • suit (though less than the time prescribed for acquiring-title), it was bound during such time to pay the accruing taxes. This implied concession is emphasized by the fact that appellant and its predecessors in title were all the while claiming exclusive title to the whole of the land.
“It. may be regarded as settled In this state that one in possession of land claiming it as Ills own is bound to pay the taxes imposed upon it — certainly such as are imposed and become due during such possession.”
See, also, Cole v. Cole, 57 Misc. Rep. 490, 108 N. Y. Supp. 124; Clute v. Clute, 197 N. Y. 439, 446, 90 N. E. 988, 27 L. R. A. (N. S.) 146, 134 Am. St. Rep. 891; Wistars’ Appeal, 125 Pa. 526, 534, 17 Atl. 460, 11 Am. St. Rep. 917; O’Hara v. Quinn, 20 R. I. 176, 38 Atl. 7.
For reasons that we shall state later, rye are not satisfied that appellant's predecessors in title had such possession of the land embraced in the ejectment suit or exercised such control over it between the time of the death of Mrs. Broughton and the date of the deed to appellant as fairly to bring them within the rule quoted and deducibíe from the decisions just cited. We are of opinion, however, that under the pleadings and evidence appellant itself must be treated as falling within that rule with respect to the time of its own possession. On January 17, 1899, appellant obtained a quitclaim deed (in name but containing a warranty) from Benjamin Howard Coffin, which seems to have embraced, not only the undivided eight-twentieths in question in the northwest, and southeast quarters, but the whole of section 30. Appellant, as will be seen later, thereupon entered upon each of the quarters of the section in such a way as to indicate that it claimed title to the whole. By paragraph 5 of its bill tiled in this proceeding appellant averred:
“That the said Victoria Copper Mining Company, after the said 17th day of January. 1S99, entered into the open, notorious, hostile, and continuous possession of said lands, and have improved the same by erecting buildings thereon and mining thereon and thereunder, and still continues to occupy them as though it was the owner of the whole thereof in fee simple.”
Tliijj paragraph is admitted by the answer. It will be noticed that these averments and their admission were made after the ejectment suit had been concluded, and no doubt the averments were made to secure the benefit, of the statute allowing recovery for improvements made on land. 3 Comp. L. Mich. 1897, § 10,995. Appellant succeeded below in having the value of its improvements upon the land in dispute applied as an offset to the waste committed. We therefore affirm the holding of the court below as to the taxes paid by appellant from 1899 to 1907.
“Tlie Victoria Mining Company had located a mining plant on that southwest quarter of the section, but it had never been operated to any extent and had fallen into disuse, and those who had occupied there had removed to other parts. Agents of the mining company occasionally visited the place to see that the property was not being injured, and there was evidence tending to show that they engaged Walsh to look after the premises, and as compensation authorized him to pasture his cattle thereon. There were open tracts on the land, where there had been partial clearings. There was no inclosure of any part of the section or anything to prevent cattle turned on any part from going off into adjoining territory, or to prevent cattle coming in from outside and pasturing these clearings.. There was also evidence that at one timé a prospective purchaser went there and pumped the water out of the mine, and in doing this cut some timber on the section, on what parts is not clear. The mining company paid the taxes on the whole section some of the years and purchased it at tax sales or from purchasers at tax sales for other year-s.”
There is no pretense that the Coffins ever made any improvements upon any of the lands, or ever attempted to do any mining or otherwise take possession of the property, except such as might be inferred from receiving a sheriff’s deed under an execution and another under a tax sale, also paying taxes and afterwards conveying the land by deed to appellant; nor that they ever used the lands or derived benefits from them. True, they allowed a man who had an option to purchase to cut some timber, but that is covered by the finding of the jury in effect that the increment in value arising- from appellant’s improvements did not exceed the loss inflicted through waste. The most that can be said of the period of time now under consideration is that the Victoria Mining Company and the Coffins claimed ownership and attempted to preserve the status quo, rather than to exercise dominion and control in a sense to signify possession of a character calculated to advise others of a claim of exclusive title. They seemed to be “waiting for something to turn up.” Our review of the evidence satisfies us that there is a substantial difference between the acts of appellant and those of its predecessors in title, respecting the matter of possession in the two periods of time now in question. Does this difference amount to such a distinction as should prevent recovery of taxes paid directly by appellant after the date of its deed in 1899, and permit recovery for taxes paid by its predecessors after the death of Mrs. Broughton in 1881 ? If so, has appellant a right under the present record to recover taxes paid by its predecessors in title ?
We are constrained to believe that these questions must be answered in the affirmative. We shall gain a better understanding of the answer
Surely, it would hardly be claimed that Shebuel H. Broughton did not know that he was entitled under the law of Michigan to the remainder in fee upon the death of his son, or that he did not know that under the law of the state he was liable for taxes upon the undivided eight-twentieths of the land after the death of his daughter-in-law; and this must likewise be true of his successors in title. G. F. Sanborn Co. v. Alston, 153 Mich. 463, 466, 117 N. W. 625.
Judge Cooley in his work on Taxation (2d Ed.) p. 467, stated the rule as to tenants in common thus:
“Each tenant in common is bound to pay the tax on his own interest; but, if one is compelled to pay upon all, he may charge the interest of his cotenant with the proportionate part which such cotona lit should have paid.”
“His duty is limited to paying the tax on his share only; and, if the co-tenant neglect to pay for himself, what right has he to demand that those who happen to have interest with him in the land shall be excluded from the number who may take advantage of his default? The reason usually assigned for not permitting such a purchase is that the sale is based in part upon the purchaser’s own default, but it is also true that in a great proportion of such cases the parties stand to each other in confidential relations; and it may without .much violence to the facts be assumed that they do so in all cases. No doubt the rule that precludes their speculating in each other's defaults is grounded on sound policy. Still the purchaser does not lose what he pays beyond what is needful for discharging the lien upon his own interest. His cotenants must refund to him such portion as is found to be just.”
Continuing after the citation of a number of decisions:
“The purchaser is trustee for the others, but they must repay their proportion of his advances.”
Full recognition was given to the rule that neither of the mortgagees owed a duty to the other or to the owner to pay the taxes; but it was said (45 Mich. 122, 7 N. W. 710):
“To"the state each one of the three may be said to owe the duty to pay the taxes; and the state will sell the interest of all if none of the three shall pay. As between themselves, the primary duty is upon the mortgagor; but, if he makes default, either of the mortgagees may pay, and one of the two must do so or the land will be sold and his lien extinguished.”
In the absence of other circumstances which would impose the duty on one of two tenants in common to pay the taxes, it is hard to see why the principle thus stated by Judge Cooley should not be applied to tenants in common. It was said of the first mortgagee in that case (45 Mich. 123, 7 N. W. 710):
“Bulte brought ejectment, without tendering any repayment of the tax or of any part thereof, but leaving the whole to be borne by the insurance company as a total loss. Is there any equity in this? Can a principle of*323 taw which purports to be an equitable principle support this suit? * * * Sometimes a party by the force of circumstances is placed in a position where another may take the profit of his losses without being under obligation to make return; but the adjustment of legal rights on equitable principles is never meant to work such a result.”
Tfie verdict in that case having been given in favor of the plaintiff in the ejectment suit, the judgment upon it was reversed because of the failure of the court below to recognize the equitable principles which are in part above set out.
In Eads v. Rutherford, 114 Ind. 273, 274, 16 N. E. 587, 588 (5 Am. St. Rep. 611), it is stated with respect to tenants in common and the right of one to require contribution from his cotenant for taxes paid by him, though nothing appears in the case touching possession;
“The general rule undoubtedly is that one tenant who has paid an incumbrance may compel contribution from his cotenants. 1 ¡Story, Eq. Jur. § 505; Freeman, Cotenancy, §§ 322. 512. This is a sound and salutary rule, and we cannot conceive why it should not apply to this case, for the taxes were a burden on the land from which it could be relieved only by payment.”
To the same effect: Smith v. Mount, 149 Mo. App. 668, 674, 129 S. W. 722; Downer’s Adm’r v. Smith, 38 Vt. 464, 467; Fallon v. Chidester, 46 Iowa, 588, 593, 26 Am. Rep. 164; Allen v. Allen, 114 Wis. 615, 630-632, 91 N. W. 218; Kites v. Church, 142 Mass. 586, 588, 8 N. E. 743; Morris v. Roseberry, 46 W. Va. 24, 29, 32 S. E. 1019; Watkins v. Eaton, 30 Me. 529, 535, 50 Am. Dec. 637.
The question comes to be whether both the presence of a tax lien and its transfer by statute are essential in a case like this. The decision in Croskery v. Busch, supra, does not seem to us to be in point,-because the person who paid the taxes there sought to be recovered was at the time a stranger in title to the land. It was of no sort of legal concern to him whether the taxes assessed against the land were paid by the owner or not, and he was held to have been a volunteer. Nor does Homestead Co. v. Valley Railroad Co., 17 Wall. 153, 166, 21 L. Ed. 622, seem to us to be applicable. There the parties were hostile contestants as to the title to certain land, and consequently bore no such relations as exist between tenants in common. The taxes in dispute were paid by one of the plaintiffs during the litigation, and it was held that the refusal or neglect of the defendants to pay the taxes (although they were ultimately found to be the owners of the title) did not authorize any of their contestants to make defendants their debtors by (17 Wall. 167, 21 L. Ed. 622)
One feature of the decision on rehearing in G. F. Sanborn Co. v. Alston, supra, 153 Mich. 464, 117 N. W. 625, has, we think, more pertinence here than has the decision in either Croskery v. Busch or Homestead Co. v. Valley Railroad. In the opinion rendered on rehearing in the case of the Sanborn Company, when determining the right of an owner of land to demand a reconveyance from the holder of a tax title, who was claiming among other things to recover payment of taxes paid by him after the date of the tax sale, the court said that such owner ought in justice and equity to be compelled to “pay those taxes which the purchaser has been compelled to pay or otherwise lose his title or lien,” and reference with apparent approval was made to rules prevailing in Arkansas and Iowa thus:
“It is also field that where a party pays the taxes in good faith, claiming title bnt having none, he is entitled to a reimbursement out-of the land.”
The rule of the Sanborn Co. Case was applied in favor of a stranger in title, except as a holder of a tax title. In the present case a tenant in common in fact averted a sale of the land for taxes by paying them, and, in effect, avoided the imposition of an incumbrance upon the other cotenants’ interest. True, the Sanborn suit was brought on the equity side of the court to quiet title and to secure an injunction; but, after all, appellee is insisting upon enforcing a judgment for the value of the land and in the same breath defending against contribution for taxes, the payment of which preserved the very title upon which his judgment is founded. Adopting the language of Judge Cooley in Connecticut Mut. L. Ins. Co. v. Bulte, before cited (45 Mich. 123, 7 N. W. 710), “Can a principle of law which purports to be an equitable principle” support such a defense?
The Legislature of the state, at the time it repealed the act of 1869, before pointed out, enacted a law providing that:
“Taxes tfius assessed sfiall become at once a debt to tfie township from tlie persons to whom they are assessed, and tfie amounts assessed on any real property sfiall, on tfie first day of December, become a lien on sucfi real property, and the lien for sucfi amounts, and for all interest and charges thereon, shall continue until payment thereof.” Sess. Acts 1882, p. 16, § 26; 1 How. Ann. Stat. p. 1273.
This provision seems to have been preserved throughout the period we are now considering. 1 Comp. L. Mich. 1897, p. 1209, § 3863. It is objected, however, that payment of the taxes operated simply to extinguish the lien. Is this true in respect of interests held in common? The taxes paid by appellant’s predecessors in title were until paid both a debt to the township and a lien on the land. If appellant’s predecessors had suffered the land to be sold for taxes, they could not have purchased it and obtained a tax deed and title without subjecting themselves to the charge that the cause of the default in payment was as much theirs as it was that of their cotenants. Any title they might have so obtained would consequently have inured to the
“The taxes paid by the defendants upon the part of the property owned by Allen gave them a lien upon it, as against him. 17 A. & E. Enc. 686. Big-gar, when he bought from Allen, received only a quitclaim deed. He therefore stood in the shoes of the grantor. lie acquired no higher right than Allen had had, and took the property charged with this lien. There is no showing that, when these taxes accrued or were paid, the defendants had ousted their cotenants, or were in the receipt of any income from the property. We therefore think the court erred in not allowing the defendants credit for the taxes they had paid in excess of their due proportion.”
In Fiacre v. Chapman, 32 N. J. Fq. 463, 465, it was contended by a first mortgagee that payment by a second mortgagee of taxes assessed against the land operated to discharge the lien; but it was held:
“If it be conceded that the lien was discharged by the payments, that will not deprive Mr. Mitchell of his right of reimbursement for the payments out of the property in advance of the lien of the complainant’s mortgage.”
That case was cited with approval in Noeker v. Howry, 119 Mich. 626, 629, 78 N. W. 669. See, also, Reed v. Reed, 122 Mich. 77, 80 N. W. 996, 80 Am. St. Rep. 541.
These cases are suggestive of a class of familiar decisions relating to the mutual rights and duties of tenants in common, which we think may now be profitably considered. We allude to decisions which lay down the principle that, where an estate is incumbered by a lien and is held in common, one tenant in common who has removed the incumbrance is entitled to án equitable lien upon the interests of his cotenants of the same character as that of the lien removed. Why is not that principle applicable here? True, a tax lien is not created by contract; but the duty to discharge it is quite as incumbent upon one tenant in common as upon another. When one of them discharges the whole duty by paying ail the taxes, he is obviously in part discharging a duty of his cotenants. Where one acting upon the belief that he is the sole owner of given land and in ignorance of the existence of a tenancy in common therein pays all the taxes assessed against it, can it be said that he is not in truth rightfully discharging in part the duty of his cotenants? He is certainly less open to the charge of being a volunteer where he pays the taxes in ignorance than where he does so with knowledge of the fact of a tenancy in common. It would therefore seem to be a more salutary rule, in cases where no conclusive presumption arises touching receipt of benefits as before stated, to encourage the payment of taxes by allowing contribution
Thus, in Wilton v. Tazwell, 86 Ill. 29, 31, it appeared that one tenant in common had paid $1,500 for the release of a dower and homestead interest in the land. Respecting a claim for contribution, it was objected that a dower and homestead were not such incumbrances on the premises as one tenant in common might remove and also compel contribution, for the reason that the release of the widow .conveyed no interest but simply extinguished her claim. This contention was denied; and, as a result of the court’s treatment of the question in its opinion and its view of decisions cited in its support, it was said:
“Thus it is seen that in this class of cases a cotenant may have a burden or liability imposed upon him without his consent. Nor can he, by refusing to aid in the payment of taxes, or removing an incumbrance or acquiring an outstanding title’ that endangers their title, escape liability. So of money necessarily expended to preserve the property and keep it in repair.”
Expressions of this principle in different forms as applied to a variety of conditions and facts are found in many reported decisions, but they all tend to the same result. In Hurley v. Hurley, 148 Mass. 444, 19 N. E. 545, 2 L. R. A. 172, land held in common and sold for nonpayment of taxes was redeemed by one of the tenants in common ; and, although he failed in some respects to observe the mode prescribed by statute of the state giving the paying tenant in common a lien on the interests of his cotenants, it was held, the present Mr. Justice Holmes announcing the opinion, that since the taxes were legally paid, the one paying them was “entitled to have the lien kept alive for his benefit until the petitioner (for partition) shall have paid his share. Until that time, the petitioner has no right to the possession of any part of the land, in equity or at law.”
In Titsworth v. Stout, 49 Ill. 78, 80, 95 Am. Dec. 577, it is held in respect of removal of an incumbrance upon a common estate by one tenant in common that a right of contribution results, and that a court of equity will enforce a lien of the same character as that of the lien removed. This is said to be a “familiar principle.” To the same effect: Moon v. Jennings, 119 Ind. 130, 135, 20 N. E. 748, 21 N. E. 471, 12 Am. St. Rep. 383; McLaughlin v. Estate of Curts, 27 Wis. 644; Oliver v. Montgomery, 42 Iowa, 36; McClintock v. Fontaine (C. C.) 119 Fed. 448. Even where a second mortgagee pays off a first mortgage without taking' a formal assignment, he will be treated in equity as an assignee, and as entitled to resort to all suitable remedies to enforce payment. Mattison v. Marks, 31 Mich. 421, 422, 18 Am. Rep. 197.
We are therefore of the opinion that the decree of the court below must be modified by the allowance of a set-off against the judgment entered in the ejectment suit, to the extent of the taxes paid upon appellee’s interest between the years 1881 and 1899. This cause has been in litigation upon one question or another for about seven years, and it ought, if practicable, to be brought to a close. While the evidence as to the sums paid and their proper apportionment is not entirely satisfactory, still we think it reasonably sufficient to enable us to dispose of the case. There is evidence tending to show what taxes were paid in those years. We include 1881 and exclude 1899. According to our understanding the total sum so paid on the eight-twentieths was $345.91. Upon this sum interest will be allowed from the dates of the several payments to the date of the judgment in the ejectment suit at the legal rates prevailing from time to time within that period. This modification is made on these conditions: (1) That Rich shall have the privilege to withdraw his execution and also his election to abandon the eight-twentieths interest in the land and take instead a judgment of possession upon filing in the cause his election to do so and paying into the court below for the use of appellant a sum of money equal to the amount of the set-off and interest allowed; and (2) that the Victoria Copper Mining Company shall consent that Rich shall have such privilege.
To the end that further proceedings, not inconsistent with this opinion, may be had in the court below, the decree is reversed and the cause remanded, with costs of this appeal; but in case Rich shall, within 30 days from the day of the filing of this opinion, file in this court his written consent that the judgment obtained in the ejectment suit be reduced to the extent stated in this opinion, then the decree below as so modified shall be considered and treated as affirmed by this court, excepting that the award of costs to Rich in this cause in the court below shall be set aside and neither party shall recover costs in that court, and appellant shall recover the costs of this appeal.