Ayres v. Adair County

Adams, J. 1. TtEDEMPsohooi fmicl pur2Iaserat tax-saie. — The county, having made a contract of sale to Hornback, and retaining the legal title as security, stood virtually in the relation of mortgagee, while Horn- . ° ° ° back, the purchaser and equitable owner, stood virtually in the relation of mortgagor. The taxes were a lien upon Hornback’s interest, and paramount to every other interest or claim except that due the schoolfund. Code, §865; Jasper County v. Rodgers, 17 Iowa, 254; Lovelace v. Berryhill, 36 Iowa, 379. After the sale to the plaintiff for the taxes, the lien theretofore existing in favor of the county passed to him. This is not denied by the defendants, and could not properly be, because, if the lien did not pass, nothing passed, and it follows that all sales of land for taxes covered by a school-fund mortgage, or situated as this was, would be nugatory. The plaintiff, then, having acquired a lien as tax sale purchaser, became entitled to redeem from the school-fund claim. That right, indeed, was precisely what he purchased, and all that he purchased. So far we think that there is no controversy. [730] 2. roreclosñmdmort-01" lefendant :ies tax-saie?r at [729] We come, then, to the question as to what was the effect [730] of the foreclosure. It had, of course, the effect to extinguish the rights of all persons who were made parties to the action. The defendants insist that it had the effect to extinguish the rights of the plaintiff also, who was not a party to the action. They base their position in the first place upon the theory that a tax lien is, as they denominate it, a “legal lien,” and that the holder of such a lien may be cut off by an execution sale, though not a party to the action in which the judgment or decree was rendered. They cite and rely upon Diddy v. Risser, 55 Iowa, 699, in which Mr. Justice Day said: “The holder of a simple judgment lien never had an equitable right to redeem from a senior lieu holder after the execution of a sheriff’s deed made paramount to a sale thereunder.” But this language should be limited to the class of cases under consideration. This court held in Wright v. Howell, 35 Iowa, 288, and American Buttonhole, etc. Co. v. Burlington Mutual Loan Association, ante, p. 464, that the holder of a judgment lien has an equitable right to redeem from a senior lien enforced by an action in equity, to which theredenqptioner was not made a party. The fact, then, that a tax lien is a statutory lien, is not in our opinion material. Another position taken by the defendants in this connection is, that the interest acquired by the plaintiff as a tax sale purchaser is not a derivative interest; by which they appear to mean that it is not an interest derived from Hornback; and their legal proposition is, as we understand it, that a right of redemption from a mortgage debt, after foreclosure sale, exists only in favor of a person who has a lien upon the identical title or interest upon which the mortgage rests. They cite 5 Wait’s Actions and Defenses, 426. The learned author, discussing the right of a person to redeem from a mortgage, says: “He must have an interest derived mediately of immediately from, through, or in the right of the mortgagor, so as to constitute him the owner of a part of the mortgagor’s ori ginal equity.” In support of the defendant’s propo [731] sition that a tax sale purchaser’s interest is distinct and independent of all interest held under the original title, they cite Crum v. Cotting, 22 Iowa, 411. In oue sense, of course, it is true that a lien holder cannot redeem from a mortgage debt, unless his lien rests upon the same title that the mortgage does. The very theory of the right of redemption is that the redemptioner’s interest is subordinate to the claim redeemed from. If the redemptioner’s lien rests upon a wholly independent title, that is, upon one that can be valid only in case the mortgagor had no title, there is no ground for redemption, and no occasion for it. The rule expressed in "Wait’s Actions and Defenses contemplates a ease of this kind. The case at bar is different. A tax sale purchaser does not claim under a title that is independent in that sense. So long as he holds a lien, it has the same force and effect, so far as the question before us is concerned, that it would have if created by the voluntary act of the owner. It is á charge upon his interest, and that is the essential idea. Being a charge upon the same interest upon which, the mortgage rests it is not to be divested, we think, by any equitable proceeding to'which the tax sale purchaser is not a party. In Crum v. Cotting, above referred to, the essential fact was that the tax sale took place after the foreclosure action had been commenced. The tax sale purchaser in such case was not a necessary nor even proper party. Having acquired his interest subsequently to the commencement of the action, he was affected by the foreclosure precisely as he would have been if he had been made a party. He accordingly claimed the right to redeem through the right of a junior mortgagee who had not been made a party; but the court held that such right did not pass to the tax sale purchaser. His right to redeem was simply through his own lien, so long as he had one, but that had been extinguished through the foreclosure action commenced before he acquired his lien. In the case at bar, the foreclosure action having been commenced after the plaintiff [732] acquired his lien, we think that he should have been made a party. Not having been made a party, we think that his right to redeem has not been extinguished. Reversed.