King v. Bender

GILBERT, Circuit Judge, after stating the case as above, delivered the opinion of the court. It is contended that O’Rourke’s redemption was invalid, for the reason that upon taking judgment as to one of his causes of action his attachment lien was merged in the judgment, and no attachment lien survived as to the other and undetermined cause of action; and that if, indeed, his attachment lien 'survived, it was not a lien “subsequent” to that upon which the property was sold, and was not, therefore, a lien such as entitled him to redeem under the provisions of the statute, which gives the right of redemption to “a •■creditor having a lien by judgment mortgage or attachment on the property sold, or on some share or part thereof subsequent to that on which the property is sold.” Code Civ. Proc. § 1234. The judgment which O’Rourke took upon the uncontroverted cause of action was a severance of his causes of action, which was permitted by the statutes of Montana (section 702, Code Civ. Proc.), which provides as follows: “Where the answer of the defendant expressly or by not denying, admits a part of the plaintiff’s claim to be just, the court upon the plaintiff’s motion may, in its discretion, order that the action be severed; that a judgment be entered for the plaintiff for the part so admitted, and if the plaintiff so elects that the action be continued with a like effect as to the subsequent proceedings as if it had been originally brought for the remainder of the claim.” We see no reason why, upon a severance thus had, the attachment lien, which was made to cover both causes of action, did not thereafter subsist as to the remaining and undetermined cause. We think it a reasonable construction of the statute which permits the severance to say that with the severance of the cause there is also a severance of the incidents which attach thereto, including a severance of the attachment lien. The severance and the proceedings thereafter had to enforce the judgment by the sale of the property had the effect in law to postpone the attachment lien of the second cause of action and the judgment lien of the first. The attachment lien, being thus postponed in the order of priority, was and remained a lien subsequent to the judgment lien. It is contended that'the evidence shows that there were fatal defects in the levy of the O’Rourke attachment. The appellant’s answer makes no issue under which such evidence is pertinent. On the contrary, it admits the attachment, but “denies that the lien of said attachment under the remaining cause of action is still in force, or is subsequent to said judgment lien, or was in force at the time of the alleged redemption.” Counsel for the appellant point also to defects in the steps taken by O’Rourke to redeem. We find none of them defects in substance, such as to affect the validity of the redemption. The right to redeem from an execution sale is statutory, it is true, but the law favors the right of redemption, 'since it tends to .accomplish the just distribution of the debtor’s property in the payment of his debts. Schuck v. Gerlach, 101 Ill. 338; Pownall v. Hall, 45 Cal. 193; Kofoed v. Gordon (Cal.) 54 Pac. 1115. It is contended that no redemption could be made from the sheriff’s -sale to the appellant without paying or tendering for his benefit the [817] sums which he had paid in buying the property at the tax sales. The statute (section 1235, Code Civ. Proc. Mont.) provides as follows: “The judgment debtor or redemptioner may redeem the property from the purchaser at any time within one year after the sale, on paying the purchaser the amount of his purchase with one per cent, per month thereon in addition up to the time of redemption, together with the amount of any assessment or taxes which the purchaser may have paid thereon after purchase, and interest on said amount, and if the purchaser be also a creditor having a prior lien to that of the redemptioner, other than the judgment under which said purchase was made, the amount of such lien with interest.” We do not think that one who has purchased property at a tax sale, and has received a tax certificate, can claim to have paid an assessment or tax thereon, within the terms of this statute, so as to entitle him to, demand the repayment of the same, with interest, on redemption from his purchase at sheriff’s sale. One who buys property at a tax sale stands in a different attitude from one who pays taxes thereon. Williams v. Townsend, 31 N. Y. 411. The appellant in this case had the option either to pay the taxes or to purchase the property at the tax sales. Instead of paying the delinquent taxes, and thus discharging the lien thereof, he elected to buy in the property at the tax sales, and thereby to continue the lien. It may be true that the appellee, if he had chosen to regard the purchases at the tax sales as payments of taxes, and on redeeming from the sheriff’s sale to the appellant had added to the redemption money the sums so paid out, would in equity have been permitted to do so; .for it seems to be well established that one incumbrancer cannot, in equity, buy a tax title to the exclusion of another incumbrancer, and one lawfully in possession of land sold upon execution may not acquire a tax title at a tax sale made during his possession, and set it up against the right of redemptioners. His relation to the title is such that, although he is not bound to pay the taxes, he may do so to protect his interest; but he cannot acquire that protection by depriving incumbrancers, of their liens. His purchase inures to the protection, and not to the deprivation, of the regular title, since the lien of the taxes is a lien upon the interest of the purchaser as well as a lien upon others interested therein. Garrettson v. Scofield, 44 Iowa, 35; Fair v. Brown, 40 Iowa, 209; Manning v. Bonard (Iowa) 54 N. W. 459; Horton v. Ingersoll, 13 Mich. 409; Insurance Co. v. Bulte, 45 Mich. 113, 7 N. W. 707. But the right to treat such a purchase as a payment of the taxes is a right which belongs only to a redemptioner, and it rests upon a principle of equity which is necessary for his protection. Kelsey v. Abbott, 13 Cal. 619; Maxfield v. Willey, 46 Mich. 252, 9 N. W. 271. Said Judge Cooley in that case, “Either may bid as a stranger to the title if the other- makes no objection.” The appellant, in buying the property at the tax sale's, elected to occupy the relation of purchaser, with all the rights incident to that relation. He cannot now complain if the appellee, in redeeming, exercised his option, and accepted the situation as he found it, and as the appellant had made it, and regarded the purchases at the tax sales not as payments, but as the initiation of an adverse title, and, [818] instead of including the taxes in the redemption money which he tendered to the 'sheriff, he redeemed, as the record shows he did, from the tax sales in the manner prescribed by law for such redemption. At the time when he redeemed from the sheriff’s sale he could have had no assurance that the tax certificates still remained in the appellant. For aught he knew, they might have been transferred to another. By pursuing the course marked out by the statute, he followed strictly the law of redemption, and deprived the appellant of no substantial right. Nor can it be said that the tax certificates created in favor of the appellant a lien upon the property prior to that of the redemptioner, and which the latter was required to pay or tender, under the last clause of the statutory provision above quoted. That clause refers to a purchaser who is also a “creditor having a prior lien,” and it contemplates that the purchaser must be a creditor of the judgment debtor. The appellant, while he may be said to have procured a lien upon the property through the tax certificates, which had the effect to assign to him the lien which the state had held for the unpaid taxes, was still, as to said purchases at tax sales, in no sense of the word a creditor of the delinquent taxpayer. The corporation owed him no debt on that account. He could not have compelled it to repay him the money he paid. On the contrary, the debt which the .corporation owed for taxes was paid by the sale of its property. It is contended that the court erred in refusing to permit the appellant to file a supplemental answer. The appellant, after having filed his answer, .asked leave to file a supplemental answer, which he presented, and in which he set forth in substance that in January, 1899, in the district court of the state of Montana for Silver Bow county, a proceeding was begun by the appellant, in the name of the state, against the sheriff of that county, for a writ of mandamus to compel the sheriff to execute to the appellant a deed to the premises in controversy; that on January 17, 1899, the sheriff answered, admitting the sale to the appellant, but alleging that O’Rourke and the appellant had made redemptions from said sale, and that the sheriff had refused to make a deed to the appellant on that account; that upon the hearing upon the application for mandamus the appellee appeared as one of the real parties in interest, and in the protection of his own interest openly took part in and controlled the proceedings, and resisted the appellant’s application for a writ of mandate in the protection of his own interest, all óf which the appellant knew; that upon a determination of the proceedings upon its merits the court awarded the mandamus as prayed for; that one of the real parties to the proceedings was John F. Forbis, who, at the time of the hearing had made a pretended redemption from fhe appellee, and from whom the latter claims under an assignment of all the rights of said Forbis; that the refusal of the sheriff to issue a deed to the appellant was made before the pretended redemption, but all the subsequent steps taken by the sheriff in the premises “were for the benefit of said Forbis as much as for the appellee and said O’Rourke, and were carried on with his permission and'by his authority, after notice to him by said sheriff, all of which has always been known [819] to complainant”; that an appeal from the order of said court was taken to the supreme court of the state of Montana by the sheriff, which appeal was dismissed by that court for want of prosecution on January 22, 1900. The judgment was not sought to be pleaded as a bar to the present suit, but as an estoppel upon the issue raised by the appellee’s redemption. Conceding the law to be that a judgment is res judicata as to one who, although he was not a party to the record, for the protection of his interest has openly taken part in the case, and conducted the trial thereof, to the knowledge of the opposite party, the supplemental answer so tendered, and which attempts to show that the appellee is estopped by the judgment in the mandamus proceedings, is insufficient for that purpose. At the time when the trial was had and the decision was rendered in the mandamus proceedings the property had been redeemed from the appellee’s redemption by John F. Forbis, and the rights which the latter acquired had not yet been assigned to the appellee. The most that is said in the supplemental answer of the relation of Forbis to the case is that the steps taken by the sheriff were for his benefit, and were carried on with his permission and by his authority, to the knowledge of the opposite party. These facts so averred must be construed in connection with the averment elsewhere made in the supplemental answer that the appellee, and not Forbis, “controlled the proceedings”; and they fall short of showing any active participation by Forbis in the defense. ■ It is not alleged that he in any way identified himself with the defense, or employed counsel, or contributed to the expense thereof, or was even present in court. All that is alleged is that what was done by the sheriff in defending the action, which was controlled by the appellee, was that it was done with the permission of Forbis. The allegation that it was done under his authority does not add to or enlarge the averment that it was done with his permission. Such an allegation was insufficient to bring the case within the rule as it has been defined by all the decided cases. The supplemental answer, therefore, pleaded no estoppel as to Forbis. He was not bound by the judgment, not having had his day in court. The appellee, when he obtained his assignment from Forbis, was not estopped to avail himself of any of the defenses which the latter could have made to the present suit. We find no error in any of the rulings of the circuit court. The decree will be affirmed.