Case ID: mich_46/html/0252-01.html
Source: Caselaw Access Project
Author: {"author": "Cooley, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Hiram Maxfield v. Seth Willey et al.
    
      Payment of taxes by mortgagee — Bidding in mortgaged property at tax sale — Tax purchase by agents.
    
    On foreclosure for non-payment of taxes as they fell due the mortgagee claimed to recover as taxes paid by himself, certain sums paid by his agent in bidding in tbe property at tax sales. Held, that such payments were not, in contemplation of law, payments of the taxes, and could not be included.
    When a fnortgagee instead of paying taxes due, purchases the land at a tax sale, the mortgager can treat the purchase as a payment and compel the cancellation of the tax certificate or deed on refunding the ampunt paid, with interest. But it cannot against his will be held a payment in his behalf.
    Neither party to a mortgage can cut off the other’s interest by bidding in the premises at a tax sale, if the other objects thereto.
    A tax purchase by an agent in his own name but with his principal’s money does not support a resulting trust in his principal’s favor.
    Appeal from Saginaw.
    Submitted June 9.
    Decided June 15.
    Bill of foreclosure. Complainant appeals.
    Affirmed.
    
      Hanchett & Stark for complainant.
    A mortgagee can pay tbe taxes and bave tbe payment added to bis claim: Page v. Webster 8 Mich. 263; Horton v. Saunders 13 Mich. 409; Paine v. Avery 21 Mich. 552; Vaughn v. Nims 36 Mich. 297; Burr v. Veeder 3 Wend. 412; Kortright v. Cady 23 Barb. 497; 1 Jones Mortg. §§ 77, 358; 2 id. §§ 1134, 1137, 1597.
    
      Camp & Brooks for defendants.
    Purchase by a mortgagee at a tax sale is not a payment of taxes on tbe mortgaged property: 1 Jones Mortgages 672; Jones v. Wells 31 Mich. 174; Williams v. Townsend 31 N. Y. 411.
   Cooley, J.

This is a foreclosure suit. The mortgage is not disputed, nor tbe amount due upon tbe debt, and tbe controversy is narrowed to a question whether complainant is entitled to recover certain sums as payments upon taxes.

Tbe mortgage was given by defendant Seth Willey: it bears date February 14, 1872, and was conditioned among other things for tbe payment by tbe mortgagor of all taxes and assessments that might bave been or might be levied or assessed upon tbe mortgaged land. It was also provided therein that in case of non-payment of tbe debt and interest, or of the taxes assessed or levied on the land “ as soon as the same have become due and payable,” the mortgagee might foreclose and sell. The bill avers that the mortgagor did not pay the taxes for the years 1872 to 1878, both inclusive, and that complainant paid the same, and then proceeds as follows:

“Your orator further shows that he paid said taxes through his agent, Jerome K. Stevens, of Saginaw City, Mich.: that said Jerome K. Stevens was his agent for looking after and attending to the payment of taxes upon said premises, and taking care of your orator’s interest in said premises under his said mortgage; that said Stevens for and in behalf of your orator, paid said taxes by bidding off said lands at the annual tax sales in October, 1875, for the taxes for the year 1872 for city taxes, and for the years 1872, 1873 and 1874 for State and county taxes, and by bidding ■off the lands at the annual tax sales in October, 1875, October, 1876, and October, 1877, October, 1878, for the State and county taxes for the years 1874, 1875, 1876 and 1877 respectively, and that he paid the city taxes upon said lands for 1873 and 1874, by purchasing leases of said lands from the city of East Saginaw upon the date aforesaid, which leases were made by said city of said lands, as delinquent for the city taxes levied thereon, in pursuance of its charter.
“Your orator further shows that his said agent made said bids and took said purchases in his own name, but for the use and benefit of your orator and for convenience merely, as your orator charges, and said Stevens so informed said defendant Willey ataoout the time of taking said bids and afterwards, and has always held the same subject to the orders of your orator, and for his protection, and your orator has been at all times willing to release and assign said certificates to said Willey, upon repayment to him of the amount paid by your oi’ator therefor and interest, and hereby offers so to do.
“Your orator further shows that all of said payments, bids and purchases were made with your orator’s money and for the protection of your orator’s said mortgage interest, ■and for no other purpose, and not to obtain an independent title or to in any way, injure or oppress said defendant Willey. That the certificates of sale upon said bids, and the leases of said city are the receipts referred to by your orator in his allegation of the payment of said taxes, and the same now produced, proved and filed in this cause are referred to for greater certainty.”

It is proved in the case tbat Stevens made tbe purchases as alleged ; tbat he was at tbe time agent for complainant and made use of complainant’s money for tbe purpose with bis assent, and tbat before purchasing be called upon defendant Willey and requested him to pay tbe taxes, which tbe latter refused to do, claiming tbat they were illegal and that he intended to contest them. It was also proved that Stevens was willing to surrender his certificates of purchase to Willey at any time.

Tbe circuit court was of opinion tbat tbe purchases by Stevens were not in contemplation of law payments of tbe taxes by complainant, and refused to include tbe sums paid, in-the decree for foreclosure. In this opinion we agree.

When tbe mortgagee, instead of making payment of tbe taxes, makes a purchase of tbe land at tax sale, either in his own name or in tbe name of any other person who has his money for tbe purpose, we have no doubt of tbe right of tbe mortgagor to have tbe purchase treated as a payment, and to compel tbe cancelment\of tbe certificate or deed on refunding the amount paid with interest. On this subject we need not repeat what was said in Connecticut Mutual Life Ins. Co. v. Bulte 15 Mich. 113. But the right to treat the purchase as a payment is tbe right of the mortgagor only, and rests upon a principle of equity tbat is necessary for bis protection. Neither party to a mortgage can be suffered, against tbe will of tbe other, to buy at a tax sale and thereby cut off tbe other’s interest. But either may bid, as a stranger to tbe title may, if tbe other makes no objection.

But in this case tbe mortgagor does not claim tbe purchase to be a payment, but repudiates it and asks no protection against it. Tbe question now is whether it shall be held against bis will to be a payment in bis interest. Tbe question, moreover, is complicated by tbe fact tbat tbe purchase was made not by complainant, but by another, and under circumstances which would have entitled tbe purchaser to retain tbe title as against complainant. Under our statute — Comp. L. § 1120 — there is no resulting trust in such a case, and Stevens at bis option would have deeded as complainant directed, or would have refused to do so. It is plain, then, that when first made the purchase constituted no payment, and if it can be deemed one at all, it must be because of the subsequent willingness to convey. This willingness might depend upon whether on investigation the tax title promised to be sustainable ; but if it existed from the first it would be unavailable to complainant, for-the party whose will was in question would in respect to the particular transaction be wholly beyond his control.

The case of Jones v. Wells 31 Mich. 170, is in point here, and is conclusive. When the mortgagee under such circumstances permits a third person to become purchaser at the tax sales he takes all risks — First, of the purchaser recognizing a resulting trust and conveying accordingly; and second, of the mortgagor being disposed to accept as a payment in his interest that which has assumed the form of a hostile purchase. The purchase cannot be forced upon the mortgagor if he chooses to leave it in the hands of the purchaser.

The decree must be affirmed with costs.

The other Justices concurred.