Court Opinion

ID: 8017274
Source: CourtListenerOpinion
Date Created: 2022-09-09 02:06:13.46186+00
Date Added: 2024-06-11T16:36:25.872604
License: Public Domain

DISSENTING- OPINION.
LAMM, J.
— I vote to affirm the decree, therefore dissent from the views of the majority of the court, speaking through my learned brother Graves. This because:
Mangold sues Bacon in equity to set aside a tax judgment and tax deed affecting the southeast quarter of the southwest quarter of section 2, township 23, range 5. A decree going in his favor, Bacon appeals.
The bill alleges, the proof shows and the chancellor finds, the land worth $1,000; that at a certain time Mangold (then owning it) sells to Ilcigan and wife; that the Hogans (paying $100 cash in hand) executed a deed of trust for the balance of the purchase money, $800; that both conveyances go of record; that with title in this fix, Souders, collector, sues in the name of the State to enforce a lien for back taxes for the years 1900 and 1901, aggregating $14.99 in taxes, penalties, collector’s commission and county clerk’s costs. In this tax suit the Hogans and Man-gold are parties defendant with one Cochran, oue Foster and one Pennington. The trustee in the deed of trust is “the acting sheriff of the county of Butler,” and he was not a party defendant. Why Cochran, Foster and Pennington were made parties does not appear. After lurking in the clerk’s office for over a *483year a summons is sued out in the tax suit, and, on the 19th of November, 1903, is served on all the defendants save the Hogans. Although Pennington had not a particle of interest in the real estate, as we can see, he is served with a copy of the writ and petition — the others, including Mangold, are each served with a copy of the writ only. Mangold, being the principal party in interest and living some distance away, opens correspondence with the collector instanter to ascertain the amount due. The collector, as in duty bound, sends him the amount by mail and on the 26th day of December, 1903, Mangold pays all demanded', viz., taxes, penalties, county clerk’s costs and collector’s commissions for both years in suit. These payments are duly entered as of that date on the proper tax books and records in the collector’s office and receipts issued to Mangold. In spite of such payment, and afterwards, the Hogans are summoned in the tax suit. After-wards the suit by an omnibus order is continued at the February term, 1904. Afterwards, at the June term, judgment by default goes foreclosing the State’s lien for the taxes and directing a special/, fa. After-wards, on August 29th, such execution issues. After a levy on Aug*ust 31st, the land is knocked off on the 6th of October, 1904, to Bacon, on his bid of $12.50 on said date, and a sheriff’s deed is executed, duly acknowledged on the 7th and spread of record on the 8th of the same month. Said bid, insufficient to pay any tax, is credited on the costs, as far as it goes, and falls short.
Shortly after Mangold paid the tax he takes a deed from the Hogans to himself, presumably in consideration of a release of the trust deed. The narrations of tax petition, judgment, execution and sheriff’s deed are conventional and need no further mention.
Supplementing his documentary proof, plaintiff took the stand on his own behalf, testifying that he lived at a town called Harviell in Butler county; that *484after lie paid the taxes he thought no more about the suit; did not remember whether he had been served with summons at the time of payment; understood the taxes were not paid and took up the matter in a correspondence with the collector and paid them as shown by the tax books and receipts offered in evidence; and knew nothing of the sale until all was over and then learned of it from his co-defendant, Cochran.
Cochran was put on the stand by plaintiff and testified he once owned the land, was one of the defendants in the tax suit, knew of the advertisement but paid no attention to it because Mangold had told him that he (Mangold) had paid the taxes. As he no longer owned the land, it is not clear why he had a call to interest himself.
Having refused testimony from Mangold that the land was worth $1000' at the sale, the court finally turned about and permitted Cochran to testify it was worth that sum. There is no contradiction of the value. In fact defendant introduced no oral testimony whatever, contenting himself with introducing the clerk’s minute book showing the tax suit was continued from the February to the June term, 1904.
In a finding of facts below, it appears, inter alia, that Mangold made due inquiry of the collector on --day of November, 1903, by letter as to the amount due, that the collector in reply on the--day of December, 1903, sent a statement to him showing the full amount of taxes, penalties, fees and costs for the years in suit, and that Mangold on the 26th of December, 1903, paid the amount claimed by the statement, received tax receipts therefor and the tax books were then marked “paid in full.” Further that the land was worth at the time of the sale $1000', and that the price bid by Bacon was grossly inadequate; that Man-gold relied on the payment of the said taxes as extinguishing the State’s lien and paid no further attention to the suit; that the collector, without further notice *485to Mm or the other defendants, prosecuted the suit to judgment in June following and, without the knowledge of Mangold, caused execution to issue and be levied on the land, followed by advertisement, sale and deed to Bacon for $12.50'.
On a record thus outlined, can plaintiff’s decree stand?
I. The bill attacking and the decree annulling not only the deed but the tax judgment itself, counsel insist here that the proper parties were not before the court to permit that particular form of relief. True, the tax collector, to whose use the tax suit was prosecuted, is not a party nor are Pennington, Cochran or the Hogans. But there was no timely demurrer or objection below by answer to the non-joinder of these parties. • Under such circumstances the objection is waived.. Besides that, the State was the principal party to the tax suit. It could not be made a party to the bill. The sovereign cannot be sued without statutory leave. It was proper to bring in the purchaser. [Bagley v. Furnace Co., 120 Mo. 248.]
Moreover, the point does not go to the merits. This, because Bacon and Mangold are the only persons whose rights are now held in judgment. Cochran, Pennington and the Hogans have no pecuniary interest of the value of a single groat in the subject-matter of the tax judgment or land. Neither is any right of theirs, however shadowy, in anywise affected. The State had, in fact, received its taxes and no one is authorized to say in its behalf that it asks more than one payment. In fine, the sole purpose of sustaining the judgment is to serve as a prop to Bacon’s deed, and he, in his own person, is in court to maintain that prop. One other thing is apparent, vis., if his deed fail, the mere prop to the deed serves no office to him. So far as his individual rights go, the antecedent steps leading up to the deed are merged into the deed itself for *486all practical purposes of administering justice in this case.
II. As I read this record, the main propositions to be ruled are:
Does the payment of taxes after suit brought, and before judgment, under the circumstances of this case, make the judgment void or voidable on direct attack?
Or, if not, is the bid so grossly inadequate as to (without more) avoid the sale and destroy the deed in a direct proceeding such as this? And herein of the sufficiency of the bill.
Or, if not, are there such elements of surprise, mistake or other equities involved as, taken with the inadequacy of consideration, sustain the decree setting aside the decree and deed?
Attending to them, we observe:
(a). Mangold, personally served with summons, paid up, but made no defense to the suit. A judgment followed. By that judgment, barring fraud in its concoction, the question of the taxes having been properly assessed, levied and returned delinquent, the question of tax remaining unpaid at the date of the judgment, that the State held a lien on the real estate therefor, and that such lien was foreclosed, each is transit in rem judicatam and no longer open. It is trite learning that, after the term, a judgment of a court of competent jurisdiction rendered within the lines of the pleadings, on proper service and not appealed from, cannot be set aside except on the foot of fraud in its very concoction. Its body, like Achilles’, is invulnerable except at one point. The bill in this case does not allege fraud in so many words. Fraud being a conclusion deduced from substantive facts, the better rule is that the facts constituting the fraud should be pleaded, where relief is predicated of that head. An allegation of fraud by that name, without more, is not good pleading. So, averments of fact which are not *487sufficient to constitue fraud do not state a cause of action for fraud and deceit though the epithet of “fraudulent” is attached. On the other hand, allegations of fact, which, taken together constitute fraud, also constitute a good cause of action for fraud without an allegation of fraud eo nomine.' Though, if the facts warrant the epithet, it is usual to apply the epithet. The petition in the case at bar is scanty in allegation and inartificially drawn, but there are enough facts alleged and proved to show fraud in the concoction of the judgment.
In Clyce v. Anderson, 49 Mo. 37, it was held that the fraud which would avoid a judgment need not be positive and actual with the intent to cheat and wrong those interested, hut it might consist in any improper act or concealment which operates as a fraud and results in loss, whatever the motive. That case has been frequently cited and steadily followed.
In Bresnehan v. Price, 57 Mo. 422, Bresnehan was overreached in this way: He agreed to an arbitration in a suit pending. The case was then continued. When the day fixed for the arbitration came he was sick and continued sick for about a week. He sent word to the other party, but there is no evidence the word was réceived. When the day came to which the case was continued, judgment was taken against him. Subsequently, he found out about the judgment, but it was then too late to appeal. Wagner, J., in deciding the ease, among other things, said: “WThen the agreement to settle the matters in dispute was made, he unquestionably supposed that the legal proceedings were at an end, and had a right so to suppose from the circumstances. . . . Nothing is better settled than that where, by mistake or fraud, a party has gained an unfair advantage in proceedings in courts of law, which must operate to make that court an instrument of injustice, courts of equity will interfere and re*488strain him from reaping the fruits of the advantage thus improperly gained.”
In Wonderly v. Lafayette County, 150 Mo. 635, the scheme shown to exist was denounced in this language: “The scheme was a fraud on the court whose jurisdiction was betrayed, and a fraud on the defendant who was tricked out of its defense.” It was ruled in that case that the cunningness which perverted the administration of justice by tricking the court into the belief that it had jurisdiction to render the judgment when in fact it had none would be. sufficient to set the judgment aside.
In Lee v. Harmon, 84 Mo. App. 157, it appeared that Harmon had sued Lee by attachment, that in undertaking to levy the writ Harmon and Lee struck a bargain. Lee conveyed him a piece of land in settlement of the balance due on their claims and counterclaims and Harmon agreed to dismiss the suit and pay the costs. This he failed to do but took judgment. Such facts in equity were adjudged sufficient to set Harmon’s judgment aside because the circuit court has been made ‘ ‘ the instrument of his injustice. ’ ’
In a late case, Howard v. Scott, 225 Mo. 685, the jurisdiction of the Federal court in bankruptcy had been betrayed by concealments and the jurisdiction of the State court was betrayed by concealing the fact that when the suit was brought the subject-matter was within the jurisdiction of the Federal court in the bankruptcy proceedings. It was ruled that the judgment was a fraud upon the jurisdiction of both courts and could not stand.
When the taxes were paid the State’s lien was exhausted and could not thereafter be foreclosed. [Thompson v. Elevator Co., 77 Mo. 520.] Those officers to whom the costs were due had no locus standi to control, thwart or prevent the settlement made by the collector. [Hoover v. Railroad, 115 Mo. l. c. 81 et seq.] We have held that where taxes were paid and *489judgment thereafter was rendered for. them, if the receipts be presented to the collector before the sale and he had entered satisfaction on the back tax books and had agreed to satisfy the judgment and to direct the tax attorney to proceed no further, if, in violation of that agreement and unknown to the owner, a sale be made, the sale is void. [Huber v. Pickier, 94 Mo. 382.] Under our former system of tax laws payment prior to sale was a complete defense. Even under our present system it has been said that payment of taxes prior to judgment is a defense to actions arising on tax deeds. [Harness v. Cravens, 126 Mo. 233; and see, arguendo, City of Aurora v. Lindsay, 146 Mo. 509; Hoge v. Hubb, 94 Mo. 502-3.] It has, however, been ruled that a tax judgment under our present tax laws stands like any other rendered on due service in a court of competent jurisdiction and that it is not subject to be ripped up by mere proof that the cause of action has been extinguished by prior payment of the taxes. This is certainly true in a collateral attack. [Jones v. Driskill, 94 Mo. 190; Gibbs v. Southern, 116 Mo. 204; Hill v. Sherwood, 96 Mo. 125.] And Division One has held in a suit to quiet title under section 650', where a direct attack was made on a tax deed for the reason the taxes were paid prior to judgment, that fact could not be shown to defeat the title of an innocent purchaser at the tax sale. [Evarts v. Lumber and Mining Co., 193 Mo. 433; Wood v. Smith, 193 Mo. 489.] But the facts in judgment in the line of cases just cited differ from the facts here. In those cases payment was made before the suit. In this case payment was after suit. Here the collector, having sued in the name of the State, in the name of the State received payment. Does such a case as that not stand on a different foot than where, through inadvertence, the taxes, though paid, were not marked paid and afterwards suit was brought? In the latter case the taxpayer has notice of the mistake in the books and *490that he must defend a tax suit. In the case at bar he does defend by paying at the only place where payment can be made, viz., to the bonded officer who alone can receive taxes. When such officer.in the name of the State collects all he demands and receipts for it, marks the taxes on the books as paid and' leaves the citizen go without more, is there not an implied term read into that arrangement to the effect .that the citizen need pay no more attention to the lawsuit? That the collector will look after it? I think so. Must a citizen hire an attorney in such pickle and defend in court? The King can do no wrong. What a King cannot do, the State cannot do. And when the collector conceals that state of things from the court and takes a judgment in dishonor of the State is it not an extrinsic and collateral matter constituting a fraud upon the court regardless of the motives of the collector ?
If Bacon had knowledge of the payment of the taxes clearly he would not be an innocent purchaser and the judgment and tax deed would not protect him. [Murphy v. Smith, 86 Mo. 333; Hampton v. McClanahan, 143 Mo. 501.] Now in this case, while there is no proof that Bacon knew the taxes were paid, yet we do not think him an innocent purchaser and this because of the inadequacy of consideration, and other facts to be presently mentioned.
(b). The yoke of taxation being onerous and the taxing power proceeding in invitum (willy nilly and against the grain) courts, as the cases show, while holding that taxes are the very life blood of the State, have not been slow to seek out ways of protecting the citizen against tax sales where there is present the double yoke of enforcing two payments, provided such protection can be given without breaking the tender vessels of the law bull-in-the-china-shop fashion.
(e). Inadequacy of consideration. The law on that question adjusts itself to meet the varying phases of litigation, each case calling for its own degree of *491proof. For example, the question might arise on specific performance, or on a motion to set aside a judicial sale, or on objection to the approval of a re- ■ port of sale, or on a contract executed or executory between parties sui juris who dealt with each other at arm’s length and agreed on a consideration, or on a contract where one of the parties was unlettered and ignorant, or where a fiduciary relation existed, or where a gift was involved, or where the title was bad, and so on. This case involves the question of inadequacy of consideration in a judicial sale and deed following, when the title is clear and the judgment defendant is under no disability. The pleadings and decree fairly involving that question, it has received consideration at the hands of learned counsel on both sides —the one contending the consideration is so grossly inadequate as to shock the conscience and avoid the sale and deed; the other that inadequacy of consideration is no ground for equitable relief. It is said the issue is not properly raised on the pleadings, but we do not read them that way. It is said such was not plaintiff’s theory below. But the court’s finding shows it was a trial theory and as the bill alleged facts showing inadequacy, such finding is responsive thereto. That is sufficient.
For obvious reasons courts write with extreme caution on this head. To illustrate: Let us suppose that a title, unincumbered and free from defects, to one thousand acres of land worth $25 per acre, pass under a sale for one cent an acre without the knowledge or consent of the judgment defendant, and that ■ thereupon the judgment defendant goes into equity for relief against the purchaser for that reason alone —will the chancellor hear him? We think no carefully guarded formulation of the law will deny relief in the flagrant instance put. On the other hand it would be folly to rule that a purchaser at a judicial sale would have to pay anything like full value before he could *492sustain his deed. And we should by no means rule that a purchaser at a tax sale acquires a voidable or a 'void title by bidding merely the taxes and costs, or (under exceptional circumstances) even less. It must be borne in mind that the prime object of tax sales is to collect taxes. A tax sale that misses taxes is a non sequitur. The State is vitally interested in such collection and the purchaser who bids the taxes due performs the duty of the citizen refusing to pay. In this case, however, the citizen had in' fact paid the taxes. So, too, if we assume the taxes were adjudged unpaid and that, after judgment, the question of payment being no longer open, the taxes must be taken as due, then the case proceeds on the theory that this particular defendant paid none. His bid fell short of the costs and, peradventure, the whole proceeding may result merely in learned counsel for defendant saving their Bacon. Witness: plaintiff stands to lose his land; the State stands to lose its taxes; but Bacon stands to win a thousand dollar farm. (Behold, the judicial mountain labored and brought forth a ridiculous mouse! Even as in the days of Horace and Phaedrus we are told other mountains did.) No public policy we know of is subserved by sustaining such tax sale as that. It may be said there is no precedent for such ruling. Be it so. But if there be none it is time to make one.
Inadequacy of consideration has been held not a distinct head of equitable relief. In many cases the doctrine is so formulated. But that is a generalization with exceptions in a pinch. Speaking to the point, Lord High Chancellor Thttklow says (Gwynne v. Heaton, 1 Brown’s Chan. Rep. l. c. 7, Perkins’ Ed.): “To set aside a conveyance, there must be an inequality so strong, gross, and manifest, that it must be impossible to state it to a man of common sense, without producing an exclamation at the inequality of it.” That dictum, unsatisfactory and general as it is (for *493the learned chancellor deferred to the authority of other cases establishing a rule of property and spoke of the principle as “loose”), has been quite generally accepted as the measure of the equitable rule granting relief on inadequacy of consideration. It was quoted with approval by Ewing, J., in Morriso v. Philliber, 30 Mo. l. c. 148; by Pomeroy (2 Pom. Eq. Jur. [3 Ed.], note to sec. 927); by Bispham (Bisp. Eq. [7 Ed.], p. 330, sec. 219). The cases are indeed rare where mere inadequacy of consideration has avoided a deed. But as I read the law courts of equity refuse to renounce the right to avoid such deed for inadequacy of consideration so palpably and manifestly gross as to shock the conscience. When the conscience of the chancellor is shocked, his ear opens and his arm stretches forth. It may be admitted that chancellors (hesitating and doubting) have shown marked industry and ingenuity in being swift to lay hold of small circumstances and minor equities to supplement inadequacy of consideration. But that inadequacy of consideration of the extreme character indicated may in some ca,ses be a distinct ground of equitable relief, where no other can be laid hold of, I think is sound and wholesome doctrine. [Morriso v. Philliber, supra; Hanson v. Neal, 215 Mo. l. c. 275; Guinan v. Donnell, 201 Mo. l. c. 202; Cobb v. Day, 106 Mo. l. c. 300 et seq.; Walters v. Hermann, 99 Mo. 532; Knoop v. Kelsey, 121 Mo. l. c. 649; Davis v. McCann, 143 Mo. 177; Bispham’s Eq., supra, p. 330; 1 Story’s Eq. (13 Ed.), sec. 245, 246; Pomeroy’s Eq., sec. 927, supra; Osgood v. Franklin, 2 Johns. Chan. l. c. 24; Graffam v. Burgess, 117 U. S. l. c. 192 et seq.; Schroeder v. Young, 161 U. S. 334; Stephens v. Ozbourne, 107 Tenn. 572; Holdsworth v. Shannon, 113 Mo. l. c. 520 et seq.]
That the inadequacy of consideration upon which relief is grounded must be so gross as to indicate fraud, as generally held, is but another way of stating the rule put by Thurlow in the Gwynne case. This is *494so because a thing equivalent to, or demonstrating, fraud, as, for instance, utter unconscionableness in a bid at a judicial sale, may be to all intents and pur-' poses fraud itself. (See authorities, supra.) That inadequacy of consideration is treated under the head of fraud in standard works of equity and well-considered cases, but illustrates a natural disposition to classify and to gently crowd every cause of action under one or the other head of the classification adopted.
It is a hornbook proposition that under given conditions courts treat inadequacy of consideration as a badge of fraud when they are in its pursuit; and when a thousand-dollar .farm is levied upon by the State for the sole purpose of paying taxes against it and passes to a stranger at a tax sale for a bagatelle too small to even pay a few dollars costs, leaving the sovereign State to whose use the taxes were levied, the lien enforced and. the sale made “to hold the sack” (if we may use a snipe-hunting simile), what is it, if not an arrant fraud — a trick on the State and a trick on the landowner? In common honesty, looking to the good sense of the thing, what innocence can be in such a purchaser? Does he not hold a tainted title subject to be set aside either at the instance of the State whose revenues are defrauded or at the instance of the landowner whose property was taken by solemn mummery? Now, what is equity to do with such a situation? Is its arm too short to reach it or too weak to deal with it? Will a court search it out, find it, see its iniquity, and then (O! most lame and impotent conclusion!) leave it be, refuse to meddle with it? Give no remedy? If such be the law, then, I submit, the law writes itself down, as Dogberry wanted to be, vis. — but no matter about that. The all-in-all of the law is to provide a remedy for wrongs when found, not to weakly turn its face to the wall. Otherwise, our faith in the law is vain. I know of no *495authority or reasoning leading up to sneh absurd conclusion unless it be the droll reasoning of the immortal street lecture on official duties delivered by said Dog-berry, four hundred years gone, to the police of Messina. "What says the learned reporter anent this lecture in the form of suggestion, question and answer? We copy to illustrate the let-alone theory, vis-.
Dogberry. . . . This is your charge; you shall comprehend all vagrom men; you are to bid any man stand, in the prince’s name.
2 Watch. How if a’ will not stand?
Dogberry. Why, then, take no note of him, but let him go; and presently call the rest of the watch together, and thank God you are rid of a knave.
Verges. If he will not stand when he is bidden, he is none of the prince’s subjects.
Dogberry. True, and they are to meddle with none but the prince’s subjects. . . . Well, you are to call at all the ale-houses, and bid those that are drunk get them to bed.
Watch. How if they will not?
Dogberry. Why, then, let them alone till they are sober; if they make you not then the better answer, you may say they are not the men you took them for.
Watch. Well, sir.
Dogberry. If you meet a thief, you may suspect him, by virtue of your office, to be no true man; and, for such kind of men, the less you meddle or make with them, why, the more is for your honesty.
Watch. If we know him to be a thief, shall we not lay hands on him?
Dogberry. Truly, by your office, you may; but I think they that touch pitch will be defiled; the most peaceable way for. you, if you do take a thief, is to let him show himself what he is, and steal out of your company. . . . This is the end of the charge: — you, constable, are to present the prince’s own person; if you meet the prince in the night, you may stay him.
Verges. Nay, by’r lady, that I think a’ cannot.
Dogberry. Hive shillings to one on’t, with any man that knows the statutes, he may stay him: marry, not without the prince be willing; for, indeed, the watch ought to offend no man; and it is an offense to stay a man against his will. {Vide, Much Ado About Nothing — Act 3, Sc. 3).
If there was no other way out of it, we should toe the mark and hold that the inadequacy of consideration in this case was so gross and manifest as to shock *496the moral sense, turn right and wrong topsy turvy, make mere opera bouffe of justice, and avoid tbe deed so long as title stands in tbe purchaser at the sale. If there was an innocent subvendee other questions would arise.
(c). But fortunately the case need not stand alone on spch foot. There are other equities which, taken with the inadequacy of the bid, make a clear case .for plaintiff. For example, the fact that no tax was paid by the bid, that plaintiff paid the tax after suit, was lulled to sleep by -the conduct of the collector, that when the collector went on despite the payment no actual notice was given him of the intention to go on or of the judgment, execution, or intended sale, so that he might protect himself, all of which (involving duties due from those officers having the honor of the sovereign state in keeping) operated by way of surprise and mistake and support the decree.
The decree should be affirmed.
Valliant and Woodson, JJ., concur in these views.