Court Opinion

ID: 3986241
Source: CourtListenerOpinion
Date Created: 2016-07-06 10:42:22.894831+00
Date Added: 2024-06-11T07:44:02.642866
License: Public Domain

I dissent. I think that the quitclaim deed from Utah county erased the lien of the drainage district for taxes in favor of the insolvent bank. The bank is not in the same position as the former owner of the land who owed the taxes. It was the mortgagee. It certainly should have the same rights as any other person not connected with the former title. The reason that an owner who has the duty to pay taxes cannot assert that he is a new owner after purchase from the county as against lienholders or others interested in the property is because of the rule of estoppel. Any one who purchases from the county obtains in law a new title, in effect emanating from the sovereign free from liens; but a former owner who has failed to pay the taxes is estopped from asserting it as against a mortgagee or other lienholder because it was his duty to protect such mortgagee or lienholder by payment of the taxes. The court, in effect, says, you are a purchaser like any one else, and not a redemptioner, but we will not permit you to assert your new title from the county in order to defeat the rights of a mortgagee whom you agreed to protect. In estoppel will be found the solvent of such situations. The same rule applies where a junior mortgagee seeks to obtain title as against a prior mortgagee. Where there are two or more mortgagees, there is community of interest. When any of them or the owner purchases from the county, it will be considered to be in support or protection of the property which is a lien for all of the mortgagees. While there is not privity, there is a community of lienholders arising from their respective contracts with the owner. It may well be in such case that a junior or other mortgagee who bought in the title would be estopped from asserting that he did not do so to protect the property for lien purposes. *Page 109 Riley v. Bank of Commerce of Roswell, 37 N.M. 338,23 P.2d 362. Especially is this true of a cotenant. Columbia TrustCompany v. Nielson, 76 Utah 129, 287 P. 926. But in the instant case the drainage district had no lien on the property derived by contract from the owner. It was not in any sense one of community of lienholders, each under duty to protect the property for lien purposes and each by estoppel to be prevented from asserting that it had not bought in the property to save it for lien purposes or for the benefit of the entire community of lienholders who derived their liens from the owner. In this case the drainage district was in the same position as one asserting a title paramount to the mortgagor. It was under no obligation to refrain from doing any act which would dispel the lien. In fact, if it had sold for failure to pay the drainage taxes, it was in the same position in that regard as the county — it could dispel the liens of all the contract lienholders. If there are no mortgages or other liens, or others interested in the property whose interests the owner is under duty to protect, then, of course, the owner who buys the title is in exactly the same position as if a stranger had purchased it because the taxing units get their taxes and he recovers his land as a new purchaser without being subject to estoppel. The true legal view is to consider always the purchaser from the county as obtaining the new title clear of liens, but in proper cases, where necessary to do justice, invoke the principle of estoppel. The mortgagee in this case, however, was not in a position where it should be estopped. It is in the position of a stranger to the title when he purchases it from the county. It was not its duty to pay the taxes. It could have paid them to prevent the lien from being erased, but it had no duty to do so. In this case the mortgagee, who sought to obtain the land which was a security for his debt through a purchase from the county, is put in a worse position than a stranger who would buy in the land for the taxes but who had had no indebtedness against the property. The fact that the bank commissioner took a quitclaim deed from Peay and his wife, the former owners, of all their *Page 110 
right, title, and interest before buying in the title from the county, would seem to me to make no difference. By taking the quitclaim deed they simply obtained any interest or right of redemption which the Peays owned, if there was one, but they did not by the quitclaim deed succeed to the Peays' obligation and duty to pay the tax. Quitclaim deeds do not transfer obligations, but only rights, if there are any. This is not saying that the taker of a quitclaim deed may not take subject to the rights of others.
I think the plaintiff, when he took a quitclaim deed from the county, took the land free from drainage taxes, and that he would have so taken it regardless of whether he obtained a quitclaim deed from the Peays or not. The mere fact that out of an abundance of caution he obtained a quitclaim deed from the former owners in order to gather in any possible interest they might have left in themselves, whether before or after he obtained the deed from the county, makes no difference. The mortgagee is in the position of a stranger as far as his ability is concerned to purchase from the county land on which he had had a mortgage and which has passed to auditor's deed. Certainly, because he happens to have lost a lien which he had for an indebtedness, he should not be, because of the property passing to auditor's deed, put in any worse position than he would be if he were a mere stranger who never had that protection for a debt. If the owner and mortgagee should conspire to permit the land to go to tax deed so as to clear it of drainage tax liens, that is, if the mortgagee should not act in good faith, the principle of estoppel would apply as in the case of an owner. Many situations in the law are susceptible of abuse by wrong-minded persons, but that cannot militate against the laying down of principles which are designed to prevent inequities and injustice. The law takes care of those who pervert principles designed to protect rights by still other principles designed to circumvent the perversions.
Since writing the above, the CHIEF JUSTICE has written a concurring opinion which attempts to uphold the decision contained in that opinion on grounds which I think *Page 111 
are at least as untenable as those contained in the prevailing opinion. I am constrained to comment thereon. The chronology of events is as follows: March 15, 1927, auditor's deed to the county; August 14, 1928, quitclaim deed from the Peays to Payson Bank; July 1, 1929, deed from county to Payson Bank. The concurring opinion says:
"At the time the bank received the quitclaim deed from Utah County it was not a mortgagee of the land in question but was the owner of a defeasible equity of redemption thereof. Such equity of redemption was inferior and subject to the claims of the county and the drainage district for taxes and assessments."
In the case of Hanson v. Burris, supra, we held that a sale of land to the county for taxes clears off all liens. It even eliminates the lien for general taxes just as a sale on foreclosure of the mortgage eliminates the mortgage lien. A purchaser from the county takes his title from a new source — the county. The very basis of that decision rests on the conception that the county on auditor's deed obtained title to the property free from liens. The main opinion in this case stated that the tax liens were "merged" in the title. The concurring opinion holds that the lien was gone or "cleaned off." I prefer the latter conception, because I think it inaccurate and a misconception of the nature of a mortgage lien to speak of it as merging in a title. A title in the last analysis is simply a bundle of rights in reference to the thing to which you have title — the right to enjoy and dispose of it. A lien is simply a right to resort to the property for the collection of a debt if not paid. The latter right does not "merge" in the rights symbolized by title any more than a horse that dies in harness merges into the carriage it was pulling. The rights of lien simply disappear. They are sloughed off. The right to resort to the property no longer exists. It is cleaned off as an encumbrance against the property and not merged into the bundle of rights we call a title. It does not become part of such rights. But be that as it may, the Hanson Case was definitely founded on the conception that the owing taxpayer's title was transferred by *Page 112 
the auditor's deed to the county free of liens. The county had the title which it could convey by the so-called May sale or thereafter. The former owner had a right to redeem. All former lienholders including the drainage district also had rights to redeem. And as stated in the concurring opinion a purchaser or transferee of the owner's right of redemption would have a right to redeem. But would he not also have the right to buy outright the county's title free from any liens? It is admitted that a person who never had any relationship to the title could buy at the so-called May sale and afterward the title which the county possessed which is a title free from liens including the drainage district lien. If it should happen that such stranger to the title should have taken a quitclaim deed from the owner after the owner's title was gone, thus stepping in the owner's shoes in possessing the right of redemption (if there was in the owner a right of redemption), could it be said that such purchaser was in any worse position as far as his ability to buy the county's title free of liens was concerned than before he bought such right of redemption — that he had by such purchase put himself out of the class who could buy the county's title free of drainage district liens? I think not. He, unlike the owner, would not be estopped from asserting as against the drainage district that he bought free from liens. An owner who lost his title by tax deed may purchase from the county. He gets title from the county clear of encumbrances. He must if the property goes to the county clear of liens. Mortgage liens and other liens are not suddenly reinstated on property from which they were wiped off by auditor's sale just because the former owner purchases from the county. The reason the owner buying from the county cannot assert a clear title against his mortgagee is because of estoppel. The title is clear of the mortgage lien, but in an action to foreclose he is estopped from asserting that it is. No other theory will square with the other conceptions and legal phenomena involved. In this case there was nothing which required the principle of estoppel *Page 113 
to be invoked against the mortgagee in favor of the drainage district.
I have serious doubts whether the bank at the time it took a quitclaim deed from the Peays in 1928 obtained a right of redemption because the owner's right had ceased. Comp. Laws Utah 1917, § 6024, in force in 1928 provides that a redemption may be accomplished any time within four years after the sale. After that time the right ceased. Laws Utah 1921, chap. 140, provided that "the board of county commissioners may, at any time after the period of redemption has expired and before the sale as herein provided [the May sale], permit a redemption from any sale where the property has been sold to the county." Note will be taken that it was only permissive and that the statute recognized that the period of redemption had expired. In the 1933 Revision, section 80-10-68, it is provided that the county commissioners "shall, at any time after the period of redemption has expired and before the sale as herein provided, permit a redemption from any sale where the property has been sold to the county." Here again is recognized the conception that the period of redemption has expired, but it is made obligatory on the county commissioners to permit the owner to save his property as long as it still lies within the power of the commissioners. But in 1928 the right of redemption had expired. For these reasons I think the concurring opinion in error when it states that the owner in 1928 still had an equity of redemption. Consequently the bank obtained no right of redemption from the owner. The transaction between the bank and the county in 1929 was therefore a transaction of sale and purchase and not one of redemption regardless of the recitals of the quitclaim deed from the county to the bank. Furthermore, for the reasons above stated and as given in Mr. Justice FOLLAND'S dissenting opinion, the mortgagee, even if he had a right of redemption after the four-year period, must be considered as exercising not the right of redemption but the fuller right to purchase.
The concurring opinion speaks of the duty of the bank to *Page 114 
pay taxes in place of the Peays, who it says no longer had the duty after quitclaiming to the bank. I am not ready to subscribe to the principle that an owner shifts his liability for taxes by conveying his property. Moreover, section 80-10-1, R.S. Utah 1933, provides that "every tax has the effect of a judgment against the person." Thus there is foundation for the conception that it is a personal obligation as well as a charge against property. But it is not necessary at this time to decide whether a tax assessed is a debt of the owner personally, measured in amount by the value of his assessed property and a lien thereon, or whether it is merely a charge against that property. The true view is that the inability of an owner to claim a title through the county as against his former mortgagee does not depend at all on his duty to the county to pay taxes. The county, in effect, has received its taxes when it receives the property by auditor's deed. The reason why the owner cannot assert a tax title free of the lien of his mortgages against such mortgagee is because it would be unfair to permit it. He contracted to pay the taxes and in respect to the mortgagee he has the duty to do so — a contractual duty. He cannot by a round-about way profit by his failure to perform that duty. The law will treat his purchase as if it were subject to the mortgage because he is estopped from asserting as against the mortgagee that it is not so subject to the mortgage. But while the owner has this contractual duty toward the mortgagee to protect the lien of said mortgagee, the mortgagee has neither a contractual nor other duty to pay the drainage district taxes. There is nothing more inequitable about permitting the mortgagee to purchase from the county free of all liens than there is in permitting a stranger never before in any way connected with the title to do so. In fact, it is equitable to permit the mortgagee to do so, for he has lost his lien by the sale to the county.
The opinion under consideration states:
"All parties who have an interest in the lands are equally obligated to pay drainage taxes." *Page 115 
I cannot agree that a mortgagee has an interest in the land in that sense. To my mind the citation from Mr. Cooley's work on taxation does not bear out the statement that a mortgagee has such an interest as to be under the same obligation as the owner to pay drainage district taxes. The mortgagee has a right to resort to the land mortgaged as a resource for the payment of his debt in case it is not paid when due, but that is a right to subject it to sale for payment of his debt but not an interest in the land. Moreover, as stated above, by auditor's deed to the county he no longer had even such a right or, if you please, such an interest. Therefore, even under the reasoning of that opinion he was not a person with an interest who was "equally obligated to pay drainage taxes."
I am presenting my views in respect of the opinion of the CHIEF JUSTICE because I desire to have it known that as far as I am concerned the statements made therein are not foreclosed from further inquiry as to their validity whenever they may arise in future cases.