Opinion
No. 35187.
January 4, 1943.
1. LANDLORD AND TENANT.
A tenant may acquire a tax patent to demised lands when such lands have been sold to state for taxes prior to execution of lease.
2. TAXATION.
Where property subject to tax consisted of 115 acres off the north side of the northwest quarter of a specified section which land was sold to state for taxes under the description "No. 1/2 NW 1/4, Sec. 18, T. 11, R. 6; 115 acres," sale to state conveyed only 80 acres and hence tax patent issued by state also conveyed but 80 acres notwithstanding that patent described entire tract of land.
3. TAXATION.
Where land was sold to state for taxes under description which included less than entire tract on which taxes were owed and entire tract was occupied by purchaser of tax patent from state, original owners did not lose title to portion not sold to state through "laches" short of ten-year statute of limitations (Code 1930, secs. 2285-2287).
4. TAXATION.
Where owner of undivided interest in land was a minor at time of sale thereof for taxes, his rights were not prejudiced by expiration of time for redemption, and he was entitled to make due application to redeem such land so as to protect his interests.
5. TAXATION.
Where purchaser had vendor procure tax patent in first instance and had attorney examine title and knew that attorney would not certify that tax patent conveyed good title, in suit by original owners to recover possession of land the withholding from record of deed from vendor to purchaser and of purchaser's interest in trust deed given by vendor to bank to secure debt owed purchaser and bank did not free transaction from such "bad faith" as precluded reimbursement for improvements made on part of tract which tax patent purported to but did not in fact convey.
6. VENDOR AND PURCHASER.
To divest a transaction in real property of "good faith" it is necessary only that there be circumstances or knowledge calculated to create suspicion as to title or put a prudent purchaser upon inquiry.
7. TAXATION.
Purchaser of real property from one holding tax patent thereon, who at time of making such purchase had knowledge of circumstances creating suspicion as to title which tax patentee could convey, paid taxes and made improvements on such property at his own peril.
8. TAXATION.
Where minor owned undivided interest in property which was sold for taxes, minor was entitled to recover from tax patentee of such land and patentee's successors in title, proportionate part of a reasonable rental for such land against which rental, minor was chargeable with a like proportion of taxes paid thereon.
9. TAXATION.
Where purchaser knew of circumstances calculated to create suspicion as to title which tax patentee of land was able to convey sufficient to put a prudent purchaser upon inquiry and occupied such land, he was chargeable with a reasonable rental in favor of original owners upon that portion of tract which tax patent did not in fact convey.
APPEAL from chancery court of Yalobusha county, HON. L.A. SMITH, SR., Chancellor.
Kimmons Upchurch, of Water Valley, for appellants.
The 35 acre tract off of the north side of the south half of the quarter section described was never sold for taxes by the sheriff, neither was it reported as sold by the chancery clerk to the State Land Commissioner and the patent issued to Stephen Carter did not convey the title thereto.
Austin v. Sullivan, 135 Miss. 741, 100 So. 275; Dodds v. Marx, 63 Miss. 443; Cox v. Richerson, 186 Miss. 576, 191 So. 99.
Since the title at no time passed from the complainants and the ten-year statute of limitations had not elapsed, complainants were not barred from recovery by laches.
Hill v. Nash, 73 Miss. 849, 19 So. 707; Lake v. Perry, 95 Miss. 550, 49 So. 569.
We do not believe that the testimony in this case justifies the holding that there had been an abandonment of their right to the 80 acre tract described as the north half of the northwest quarter of Section 18, Township 11, Range 6 West; nor do we think the evidence sustains the theory that the complainants agreed that Stephen Carter should buy the land. In fact we fail to find any place in the record where it is claimed that Stephen Carter told the complainants or any of them that he intended to buy the land from the state.
If the complainants or any of them did agree to surrender their rights to the land there was no consideration for such an agreement and therefore it would not be binding on the complainants.
Godchaux Sugars v. Fink, 188 Miss. 531, 195 So. 318; Hattiesburg Production Credit Association v. Smith, 191 Miss. 119, 1 So.2d 768; Tiser v. McCain, 113 Miss. 776, 74 So. 660.
Nothing occurred to estop the complainants. Stephen Carter was not misled to his prejudice. It is true he paid $75 for his patent but he owed the taxes for 1933, 1934, and 1935, amounting to $47.64, and the annual rental of the place amounting to approximately $75 for each year. He lost nothing by any act of the complainants, and as we have already seen by the authorities cited the complainants were not barred by laches unless it resulted in such harm to the defendants as would operate as an estoppel.
Davis v. Butler, 128 Miss. 847, 91 So. 279; Day v. McCandless, 167 Miss. 832, 142 So. 486; Yazoo Lumber Co. v. Clark, 95 Miss. 244, 48 So. 516.
Stephen Carter has never surrendered possession of the land.
Love v. Law, 57 Miss. 596; Johnson v. Langston, 179 Miss. 622, 176 So. 531; 35 C.J. 1239-1241.
Stephen Carter being in possession as tenant of two of the complainants by contract he was a tenant at sufferance of the other two complainants and could not purchase the land from the state. This is true even though the sale for taxes was made before the beginning of his tenancy.
Lyebrook v. Hall, 73 Miss. 509, 19 So. 348; Johnson v. Langston, supra; Simpson v. Ricketts, 185 Miss. 280, 186 So. 318.
If Stephen Carter could not buy the land, Carson Hughes with full knowledge of the facts as shown by the testimony could not purchase from him.
Johnson v. Langston, supra; 35 C.J. 1239, par. 586.
The statute of limitations does not apply in this case because complainants were in possession by their tenant, Stephen Carter.
Russell Inv. Corporation v. Russell, 182 Miss. 385, 182 So. 102; White v. Noblin, 183 Miss. 92, 183 So. 914; Bruce Co. v. Smallwood, 188 Miss. 771, 196 So. 227.
It is not necessary for Henry White to redeem the 80 acre tract which was sold by the sheriff because the purchase by Stephen Carter of the title of the state operated as a redemption.
Lyebrook v. Hall, supra; Vaughan v. McCool, 186 Miss. 549, 191 So. 286; Code of 1930, Sec. 6044.
Since Stephen Carter and Carson Hughes could not acquire title the patent from the state operated merely as a redemption and the complainants had a right to recover for the use and occupation, or the rental value, of the land, the taxes paid by them being credited on this rental value. No improvements were placed by either defendants on the 30 acre tract.
We do not believe that Carson Hughes can claim as a credit on the rental value of the 35 acre tract the value of the improvements placed there by him, if any, because he had full knowledge of the facts and that he had no title to this 35 acre tract and he cannot claim that the improvements were placed on this 35 acre tract in good faith believing that he had the title and the only credit he can claim on the rental value is the taxes paid by him.
Looking at the case as a whole we believe the complainants are entitled to a decree declaring them to be the owners of the entire 115 acres and that they should recover of the defendants for the use and occupation of this land for the years 1936 to the year 1942, inclusive, subject to a credit only for the taxes paid by these defendants or either of them.
Stone Stone, of Coffeeville, for appellees.
The chancellor's decision against the adult complainants was based on the overwhelming weight of the testimony.
The chancellor very properly dismissed the bill of the adults and held that Henry White, the minor, could redeem his 5/16 interest. The court set up an elaborate scheme of redemption upon referring it to a master for the purpose of settling rent values and improvement values, all of which was objected to as the law has set up the scheme for redemption and it is only the minutest fraction of cases that are excepted from its provision and the exceptions do not cover this case.
Code of 1930, Sec. 3264, as amended by Laws of 1932.
Bill was filed by Henry, Louis and Willie Johnson and Henry White against Stephen Carter and Carson Hughes for possession of the following lands in Yalobusha County: 115 acres off the north side of the northwest 1/4 of section 18, township 11, range 6 west. The bill alleged and the testimony disclosed title out of the United States and into the complainants who acquired by inheritance interests as follows: Henry Johnson 1/16, and the other complainants 5/16 each. The claim against which attack was made was founded upon a tax patent to Carter, the subsequent title to which passed by deed from him to Hughes.
In July, 1931, this land is alleged to have been sold to the state for taxes for the year 1930 under the description: "No. 1/2 NW 1/4, Sec. 18, T. 11, R. 6; 115 acres." In January, 1933, a lease was executed by Louis and Willie Johnson to Carter for three years to "One hundred fifteen acres more or less known as part of the Jeff Jones place belonging to parties of the second part," the lessors. The consideration was the erecting of certain improvements and the payment of taxes thereon during the tenure of the lease. It is conceded that these are the lands now in suit. In July, 1935, during the term of the lease, the tax sale was duly reported to the state. In February, 1935, Carter procured tax patent from the state, which described the land as "Pt. NW 1/4 North side (containing 115 acres) of Section Eighteen (18) Town. Eleven (11) Range Six (6) East, County of Yalobusha." In April, 1936, Carter executed deed to Hughes to "Part of northwest quarter, north side, containing 115 acres," etc. Suit was brought in April, 1940.
The contention of complainants that Carter as their tenant had no right to acquire the oustanding tax title cannot be sustained. A tenant may acquire a tax patent from the state to the demised lands when such lands had been sold to the state prior to the lease. Walker v. Harrison, 75 Miss. 665, 23 So. 392. Certain exceptions to the rule are invoked against its application here but we find the contentions without merit. In applying this principle, we are met at once with the fact that the lands sold for taxes were only the north half of the northwest quarter of section 18, which, the court found, contained only 80 acres. The patent to Carter likewise must be construed to contain only such acreage. While this discrepancy was detected by the learned chancellor and corrected in a second written opinion, the decree fails to take it into account. We are compelled to hold therefore that the defendants may claim through such tax sale and patent only the north half of the quarter section, or 80 acres.
The additional tract of 35 acres adjoining the above lands was not so sold and patented and defendants have no valid claim as against complainants to same. Title to such lands may not be held to have been lost to appellants through any doctrine of laches short of the ten-year statute of limitations, Code 1930, Secs. 2285-87. Hill v. Nash, 73 Miss. 849, 19 So. 707; Lake v. Perry, 95 Miss. 550, 49 So. 569; Cox v. American Freehold Land Mortgage Company, 88 Miss. 88, 40 So. 739; Houston v. Nat'l Mut. B. L. Ass'n, 80 Miss. 31, 31 So. 540, 92 Am. St. Rep. 565.
The complainant Henry White was a minor at the time of the tax sale. His rights therefore are not prejudiced and due application may be made by him to redeem the lands so as to protect his undivided interest therein. We do not understand that the decree affects his right so to do. This disposes of the case as to the property rights of the respective parties, on both direct and cross-appeal. The direct appeal is taken from an interlocutory decree adjudging such rights, and the adjustment of the respective accounts for taxes, mesne profits, and improvements has been referred to a master to be stated in accordance with the adjudication upon appeal.
Since we hold that, as to the 35 acre tract lying south of the north half of the said northwest quarter, the appellees acquired no title, the matter of tax redemption thereof is not involved. The question of the taxes and improvements thereon is affected by the principle now to be discussed. Shortly after the tax patent was procured by Carter, the appellee Hughes consulted an attorney, R.F. Kimmons, with a view to examination of the title to said tract. On March 2, 1935, and prior to the execution of the deed from Carter to Hughes, the said attorney gave to the latter a written opinion on the state of the title, which, in addition to a disclosure that one of the owners thereof was a minor and that there were other record irregularities, stated "From the present state of the record I am unable to say that the patent issued by the state to Stephen Carter would give him a good title." On the date upon which Carter executed the deed to Hughes, he executed also a deed of trust to the Bank of Oakland to secure an indebtedness to it and Hughes. This bank wrote to the same attorney the following month enclosing a copy of the written opinion above referred to and requesting "a plain-concrete statement" whether the title was good with or without specific exceptions. To this the attorney replied: "I regret I can not comply with your request, but the facts relating to the land described in my letter of March 2d 1935, as disclosed by the record are such that I would not be willing to certify that the title to this land is good as suggested in your letter. I went as far as I could in my letter to Mr. Hughes. In fact the record title to this land is very defective, and I do not think it proper for me to make a statement in regard to this title based on the statements of witnesses without giving the source of my information, especially when the statements are from people that I do not know and not even under oath." We are unable to agree with the learned chancellor that this information when viewed in the light of the knowledge of Hughes regarding the circumstances under which the patent was procured (which was done at Hughes' request), the withholding from the record of the deed from Carter, as well as the interest of Hughes in the transactions with the bank, support a contention that improvements and other expenses on this tract are free from that mala fides which precludes reimbursement. To devest the transaction of good faith, it is necessary only that there be circumstances or knowledge which are calculated to create suspicion as to the title or to put a prudent purchaser upon inquiry. Brown v. Womack, 181 Miss. 66, 178 So. 785. Expenses as to taxes and improvements were incurred thereon at his peril.
The cause is therefore reversed and remanded with directions to the trial court through its master or otherwise to ascertain and award to the appellant Henry White his proportionate part of a reasonable rental thereon against which he is to be charged with his like proportion of the taxes paid thereon in the meantime.
As to the 35 acre tract, since appellee Hughes acquired no title thereto, and for the reasons above stated, he is to be charged with a reasonable rental thereon in favor of all the complainants, without credit for taxes or improvements thereon. In the event it is disclosed that there is no separate assessment of the two tracts due account will be taken thereof.
Reversed and remanded.