Court Opinion

ID: 3270220
Source: CourtListenerOpinion
Date Created: 2016-07-05 16:38:39.41084+00
Date Added: 2024-06-11T15:25:23.854883
License: Public Domain

The simple facts in this case are: Appellee acquired the land involved by purchase in 1903, and each year thereafter, up to and including 1939, has paid the state and county taxes as they became due. Appellant, in 1926, at a previous foreclosure sale for improvement district taxes, acquired deed to the land, but has neither paid, nor offered to pay, any taxes on the property.
It is conceded by all that appellee, in the utmost good faith, without actual knowledge of any claim of title by appellant, not officiously and not voluntarily, has paid the taxes on this land for approximately 37 years. It is my *Page 579 
view that the learned chancellor correctly decreed that appellant was liable to appellee for the taxes paid by appellee in the amount of $593.70 for the years 1923 to 1940, inclusive, since appellant claimed ownership since 1923, and that appellee should have a lien on the land for the taxes so paid.
The majority holds that appellee is barred by the statute of limitation from recovering more than three years taxes paid by it. I cannot follow the reasoning advanced to support this view.
Let it be remembered that appellant is now in a court of equity, a court of conscience. He is, therefore, met on the very threshold with the first and primary rule of equity, and that is that he who seeks equity must do equity. In the instant case, appellee, honestly believing that it was the owner of the land in question, has paid all taxes due from 1923 to 1940 and thereby prevented forfeiture and sale to the state for the taxes due it. Clearly it seems to me that when appellee made these tax payments it was equitably subrogated to the rights and liens held by the county and state for these taxes. The lien of the state for taxes upon real property is never barred by limitations, and I think the owner of such tax lien by subrogation has the same rights that the state had, and steps into its shoes. It has long been the settled rule in this state that a mortgagee or other lien holder who, in order to protect his own interest, pays taxes assessed on the mortgaged property, will be subrogated to the state's lien for reimbursement. Ringo v. Woodruff, 43 Ark. 469. And in Stoops v. Bank of Brinkley, 146 Ark. 127,225 S.W. 593, where an attaching creditor paid taxes on the attached property and the attachment was subsequently dissolved, the court held that the creditor was entitled to be subrogated to the state's lien for taxes paid.
The majority cites no case directly in point to uphold its position. Therefore, we may look to other jurisdictions in an effort to find the equitable, sound and just rule that should be applied in circumstances such as we have here. All must agree that the equities of this case are with the appellee. *Page 580 
Appellee cites a case from the Supreme Court of Washington, that of Childs v. Smith et al., 51 Wash. 457,99 P. 304, 21 L.R.A., N.S. 263, 130 Am. St. Rep. 1100, which appears to me to be logically sound, and I think the reasoning and conclusions there announced should control here. In that case Childs attempted to foreclose a mortgage on defendant's property, among other things alleging that he had paid the general taxes for 1893 through 1903, except for two years. The lower court held the mortgage barred. On appeal the lower court was sustained as to the statute of limitation on the mortgage, but on the question of the payment of taxes by Childs the court said: "The appellant further contends that the trial court erred in refusing him an equitable lien for the taxes and assessments which he has paid. This contention should be sustained. Believing he held a valid mortgage lien not barred by the statute of limitations, the appellant in good faith paid the delinquent taxes and assessments for the purpose of protecting such lien. These payments were not voluntarily made. In Wheeler Company v. Pates,43 Wash. 247, 86 P. 625, the holder of a void tax deed claiming title paid taxes on the land subsequent to the tax foreclosure and sale. His deed was afterwards adjoined to be invalid, but this court recognized his right to an equitable lien for the subsequent taxes so paid by him, saying: `Respondent's right of recovery is not based upon any statute, but it is upon purely equitable grounds, arising from the fact that the payments made have inured to the benefit of appellants, and have accomplished for them the discharge of a duty with respect to the land which they, as the real owners, were under obligations to discharge themselves.' In Hemen v. Rinehart,45 Wash. 1, 87 P. 953, the plaintiff commenced an action to quiet his title to certain real estate as against a pretended judgment lien asserted by the defendants. In their answer the defendants pleaded facts upon which they relied to sustain the validity of their judgment lien, and also pleaded their payment of certain delinquent taxes to protect the same. Their judgment has become dormant, and it was held that they were entitled to no lien thereunder; but, in passing upon their claim to a lien for the taxes, this court said: `The first affirmative defense *Page 581 
does, however, allege the payment of $231.20 of general taxes by the appellants, which they made for the purpose of protecting their asserted lien. These payments were not voluntary, but were made in good faith. The judgment was an actual lien for the period of five years after its rendition, and the appellants have in good faith, although erroneously, believed and insisted that they have continued to hold a lien until the present time. Under the previous decisions of this court, they are entitled to an equitable lien on the land for the total amount of taxes paid by them, with interest from the several dates of payment.' See, also, Spokane v. Security Savings Society,46 Wash. 150, 89 P. 466. The payment of the general taxes by the appellant Childs has prevented the respondents' property from being sold for delinquent taxes. It nowhere appears that they at any time paid, or offered to pay, the taxes for which a lien is now claimed by the appellant. Appellant did not make a voluntary payment, nor did he intend to protect the title for the benefit of the respondents. Although mistaken, he honestly believed he held a valid mortgage lien, not barred by the statute of limitations, and made the payments for the sole purpose of protecting such supposed lien. Under these circumstances he is entitled to an equitable lien on the land to secure the taxes so paid by him under a misapprehension, and is also entitled to interest thereon from the respective dates of payment at the rate of 6 per cent. per annum. The respondents are in no position to plead the statute of limitations as against these general taxes, or the appellant's equitable lien therefor. When appellant made the payments he was equitably subrogated to the rights and liens held by the county and State. Respondents did not make the payments, and they could not successfully interpose a plea of the statute of limitations against the State or county, if they still held the tax liens and were seeking to enforce the same. Port Townsend v. Eisenbeis,28 Wash. 533, 68 P. 1045; Denman v. Steinbach,29 Wash. 179, 69 P. 751. Section 1740, Ballinger's Ann. Codes and St. Section 8678, Pierce's Code provides that taxes assessed upon real estate shall, after levy, be a lien thereon until paid. Had no payment of these general taxes been made by the appellant, and had there been no *Page 582 
tax foreclosure, the lien would still exist in favor of the county and State, and respondents' property would still be subject thereto. It would be inequitable and a manifest injustice to permit the respondents to now secure a release of their property from the lien held by the appellant by a plea of the statute of limitation. To avoid such a miscarriage of justice, the appellant should be equitably subrogated to all the rights and liens of the county and State."
It seems to me that equity, justice and fairness cry out against permitting appellant to benefit by the payment of taxes on his land by appellee, who paid in the utmost good faith, and taxes which appellant was legally bound to pay. In effect, it permits appellant to profit by his own wrong. The statute of limitation should not apply here. I think the decree should be affirmed.