Brown v. Atlanta National Building & Loan Ass'n , 46 Fla. 492 ( 1903 )

Maxwell, J.

(after stating the facts). — The question presented by this record is that of the right of a complainant in filing a bill for foreclosure of mortgage,' to join as a party defendant thereto one holding adversely to both mortgagor and mortgagee under a claim of paramount title. The advantage of such a course to the complainant, if permissible, is obvious, as it enables him in one litigation to remove all obstacles to the enforcement of his debt, and to expose the mortgaged property for sale freed from the cloud of an adverse claim of title. To the adverse claimant the practice is objectionable as entangling him in a contest between mortgagor and mortgagee with which he has no concern, and as depriving him when in adverse possession of the premises as is claimed here, of his right of trial at law and by jury.

The general rule undoubtedly is that the proper scope of a foreclosure suit is merely to enforce the mortgage lien against the title or interests of the mortgagor and those claiming under him, and the great weight of authority sustains the view that without special features of equitable . nature to authorize such action, one claiming adversely to both mortgagor and mortgagee by paramount title can not be joined as a defendant to the suit. “A court of equity is not an appropriate tribunal, nor is a foreclosure suit a suitable proceeding, for the trial of claims to the legal title which are hostile and paramount to the interests and rights and titles of both mortgagor and mortgagee.” Summers v. Bromley, 28 Mich. 125; Dial v. Reynolds, 96 U. S. 340; Banning v. Bradford, 21 Minn. 308; 68 Amer. St. Rep. 354, note, where the subject is exhaustively discussed and authorities collected; 9 Ency. PL & Pr., 353.

Courts have, it is true, been more liberal in relaxing this rule where the adverse claim rested upon a tax title than in other cases, and some courts of high authority permit the joinder as defendant in a foreclosure suit of one claiming under a tax sale subsequent to the mortgage. Randle, Adm’r. v. Boyd, 73 Ala. 282; Lyon v. Powell, 78 Ala. 351; Wilson v. Jamison, 36 Minn. 59, 29 N. W. Rep. 887. And where the tax assessment and sale, as in some States, is only of the equity of redemption, the purchaser at such sale is of course a proper party defendant. But where, as with us, the tax title is one in fee, extinguishing all prior interests, liens and incumbrances the better rule is that it is subject to the general principle that the validity of claims of paramount title can not properly be litigated in foreclosure suits. Odell v. Wilson, 63 Cal. 159 ; Roberts v. Wood, 38 Wis. 60; Gage v. Perry, 93 Ill. 176; Bozarth v. Landers, 113 Ill. 181; Straka v. Lander, 60 Wis. 115, 18 N. W. Rep. 641; Williams v. Cooper, 124 Cal. 666, 57 Pac. Rep. 577; Oliphant v. Burns, 146 N. Y. 218, 40 N. E. Rep. 980; Cromwell v. MacLean, 123 N. Y. 474, 25 N. E. Rep. 932.

In the case of McKeown v. Collins, 38 Fla. 276, 21 South. Rep. 103, the holder of a tax title to the mortgaged premises was made a party to the bill for foreclosure for the purpose of having his tax title annulled, but he held also a sheriff’s deed to a part of the premises based on a judgment against the mortgagor obtained subsequent to the execution of the mortgage, and he was for that reason a proper party defendant to the suit. He raised no objection to the litigation of this tax title in the same cause, and the decree rendered therein was of course valid and binding. Hefner v. Northwestern Mut. Life Ins. Co., 123 U. S. 747, 8 Sup. Ct. Rep. 337. But the case is of no authority as to the correctness of such joinder of actions.

Exceptions to the general rule exist where a charge is made of fraud or collusion between the mortgagor and the purchaser at tax sale, or where the purchaser is charged to have occupied a relation to the mortgagee which estops him from claiming adversely under the tax title. Both the rule and the exceptions have been recognized by this court. Gorton v. Paine, 18 Fla. 117; Brown v. Marzyck, 19 Fla. 840. See, also, Mendenhall v. Hall, 134 U. S. 559, 10 Sup. Ct. Rep. 616.

Under the latter of these exceptions the appellee endeavors to bring this case, contending that at the time of his acquisition of the tax deed to the mortgaged premises the defendant J. N. Brown was the tenant of complainant and as such estopped from acquiring a tax title adverse to it, within the rule announced by this court in Gorton v. Paine, supra, and Petty v. Mays, 19 Fla. 652. The principle of those cases, however, applies only where duty or good faith on the part of the purchaser demands that his purchase be treated as a mere payment of the taxes on the land, rather than as the acquisition of an adverse title thereto. But not every tenant is charged with the duty of paying taxes on the leased premises, or is estopped from acquiring an adverse tax title thereto. 2 Blackwell on Tax Titles, *400; Black on Tax Titles, sec. 288; Blakeley v. Bestor, 13 Ill. 708; Bettison v. Budd, 17 Ark. 546; Waggener v. McLaughlin, 33 Ark. 195. In this lease as set out in the pleadings we find nothing to remove the case from the principle of these decisions. But beyond that, Brown had acquired his tax certificate to the premises before he became the tenant of complainant, and had notified it of his purchase, and of his intention to secure a deed if the land was not redeemed. This purchase had vested in him, if the sale was valid, contract rights which even the State by legislation could not take from him (Hull v. State, 29 Fla. 79, 11 South. Rep. 97), and at a time when he was undoubtedly free to acquire such right. Nothing in his subsequent tenancy necessitated a surrender of this already existing right.

There is no suggestion in the pleadings that Brown unlawfully held-over after the expiration of his tenancy and refused to surrender the premises. The allegation of the bill is that he fully executed the terms of the tenancy, and the answer alleges that he had been in adverse possession under the tax deed for some months prior to his conveyance of the lands to Leora J. Brown in May, 1898. It does not appear, therefore, that he' or his grantee are as tenants holding over estopped from claiming adversely to the complainant.

The decree of the court below, in so far as it decrees relief against the appellants, will be reversed with directions that the bill as to them be dismissed, without prejudice to such further action at law or in equity as the complainant may elect to institute against them.

Carter, P. J. and Cockrell, J., concur. Taylor, C. J., and St-iackleeord, J., concur in the opinion. Hocker, J., being disqualified, took no part in its consideration.