Burnes Estate v. Porter

I. It seems proper, in the first place, to notice the ground upon which the court denied the application of the Ayr Lawn Company to become a party defendant in this suit. The record above quoted shows, that the trial court entertained the view that, because the plaintiff Burnes estate (a corporation) and the Ayr Lawn Company had the same persons as officers, therefore the latter corporation was estopped by the conduct of the former. Or, to be more specific, because the Burnes estate, ¡through its counsel, and at the hearing before the referee, objected to an accounting of the rents and expenditures prior to June 18, 1896 (when said Burnes estate purchased the property under the foreclosure sale) that therefore the Lawn Company was “estopped from asserting its right to the moneys expended upon and for the preservation of said land prior to said 18th day of June, 1896.”

With all deference to the trial judge we must reject -the above as a valid reason for denying the Lawn Company’s application. The record shows that ¡the Burnes estate and the Ayr Lawn Company are separate and distinct corporate entities. The same persons it seems fill offices in the two cor*72porations, but they were separately organized and the stockholders are different. The Burnes estate corporation is and has been since the institution of this suit, a party thereto (the plaintiff), it was in court and present at the hearing before the referee, while the Ayr Lawn Oompany was not. Nothing that was said or done then by the former in the investigation before the referee can be used to estop the latter. The counsel representing the Burnes estate in that inquiry can not, in any sense, be deemed the representative of the Lawn Oompany. More than that the Burnes Estate corporation, who purchased the real estate at the foreclosure sale in June, 1896, was under no. obligation for or had any interest in the rents collected or taxes paid by the lawn company prior to that sale. Such rents had been collected and such taxes paid by the lawn company, another and different corporation.

II. The case then is this: The Ayr Lawn Oompany, while in possession of the property as mortgagee of an undivided half interest and with the knowledge and consent of the executor having the unmortgaged half interest in charge, paid out in excess of the rents received about eleven hundréd dollars to remove certain tax liens and for necessary repairs on the entire property. After this the real estate was sold under the mortgage, plaintiff became the purchaser of the half interest thus sold and then brought this action for partition. The Ayr Lawn Company has intervened and asks to be admitted as a party defendant so as to charge the interest of the other defendants (and which was not covered by the mortgage) with their share of this redemption money and repairs which the mortgagee, their cotenant, paid for the common benefit.

In our opinion the lawn company presents good and substantial reasons for its claim. It appears to have such an interest in the real estate about to be partitioned as to justify its appearance 'as a party to, the proceedings. “Every person having any interest in such premises, whether in possession or otherwise, shall be made a party to such petition.” Sec. 7135, *73R. S. 1889. Again: “Any person having an interest in such premises, whether the same be present or future, vested or contingent, though not made a party in the petition, may appear and be made a party on application for that purpose,” etc. Sec. 7137.

"While the Lawn Company was holding the possession of the property under a forfeited mortgage covering .the half interest, and by and with the consent of the executor who was the righful trustee in charge of the other half interest, it undertook and did pay for the common benefit of the entire property all taxes and necessary repairs. By so doing and thus removing the incumbrance and protecting the entire property the Lawn Company became subrogated to an equitable lien against the haf interest vested in the other parties. “A tenant in common who has removed an incumbrance from the common property is entitled to contribution from his eotenants. To secure such contribution, a court of equity, acting in a suit for partition in favor of the cotenant removing the incumbrance, will enforce an equitable lien of the same character with that which is removed.” Ereeman on Cotenancy & Partition [2 Ed.], sec. 512. “The liability to contribute is the result of a general equity, founded on the equality of burthens and benefits. To establish the right of contribution, the plaintiff must show that his payment has removed a common burthen from the shoulders of himself and the defendant, and that they are each benefited by it.” Ereeman on Cotenency & Partition, sec. 322. The same authority sustains a claim for .the necessary repairs to the common property. Judge Cooley in his work on Taxation, 467 [2 Ed.], thus expresses the rule: “Each tenant in common is bound to pay on his own interest; but if one is compelled to pay upon all, he may charge the interest of his cotenant with the proportionate part which such cotenant should have paid.” To the same effect, see 2 Jones on Real Property, secs. 1854, 1855 and 1917; Eads v. Ritherford, 114 Ind. 273; Hinters v. Hinters, 114 Mo. 26. *74In the last case it was said: “Tenants in common occupy a confidential relation to each other, and because of this relation there is an implied obligation on the part of each to sustain and protect the common title. It is therefore a general rule that if a tenant in common buy up an outstanding title or incumbrance, the purchase will be deemed to have been made for the benefit of all the cotenants, the other cotenants being bound, however, to contribute their respective proportions of the consideration paid for the outstanding title or incumbrance.”

Applying then the doctrine of these authorities to the case in hand, it would seem clear that if the Ayr Lawn Company — ■ while it held title and possession of the mortgaged half of the property wherein the defendants at the same time held the other half — paid off and discharged certain tax liens on the entire property, and paid for the repairs necessary to preserve the property, then said lawn company should have the right to charge with its proper portion the undivided half interest of the defendants, which received a benefit from such payments. When said incumbrances and charges were so paid off by the lawn company, it and the defendants owning the other half interest in the property covered by the Lawn Company’s mortgage, were tenants in common, and there was then an implied obligation resting on said defendants to reimburse their cotenant for such sums of money as said cotenant paid for their benefit.

III. But it is insisted that by the foreclosure' of the Lawn Company’s mortgage in June, 1896, and the sale of the property thereunder, the said Lawn Company lost its lien for money paid on account of the tax liens, etc. The basis of this contention is, that even where the mortgagee shall have paid taxes and removed incumbrances from the mortgaged property, the money so paid becomes merged into and forms a part of the mortgage debt, and that as the foreclosure and sale operates to extinguish the mortgage lien so is the lien for such payment of incumbrances extinguished — that the mort*75gage debt proper and such incidental claims are one and the same inseparable demand. The authorities relied on by de-* fendants’ counsel are to this effect, that while the mortgagee has the right to pay incumbrances, taxes and the like which threaten his security and to hold the same as an enforcible lien the same as the mortgage debt, yet such incidental liens continue only during the life of the mortgage — that when the mortgage becomes extinct by foreclosure or otherwise the said liens for taxes or other incumbrances likewise expire. This is the full scope of the authorities relied on by defendants’ counsel. See Hitchcock v. Merrick, 18 Wis. 357; Johnson v. Payne, 11 Neb. 269; Horrigan v. Wellmuth, 77 Mo. 542.

If now the case in hand involved simply a claim by the mortgagee against the mortgagor then the above law would find application, for it would be said that the lien for the mortgage debt and the lien for taxes paid by the mortgagee to protect the mortgage security were one and inseparable, and that the satisfaction of foreclosure of one had extinguished the other — that the mortgagee would not be allowed to split up his cause of action, etc. But that is not this case when we consider the rights of the Lawn Company as against the defendants who never gave any mortgage on their undivided half of the property, and who were tenants in common with the Lawn Company while it held the possession and paid taxes on the entire property. By payment of these incumbrances on the entire property, the lawn company, as mortgagee, became entitled to add the one-half of the sums so paid to the mortgage debt to collect this one-half from the proceeds of the foreclosure sale of the one-half. But as to the amounts paid for the benefit of the owners of the other one-half (whose interest was not mortgaged) the claim for reimbursement rests on a different basis, to wit: That of one tenant, in common against his cotenant. This, too, was a claim or lien disconnected from the mortgage lien. The Ayr Lawn Company could not claim as against the mortgagor and as a part of its *76mortgage lien anything it had paid for the relief and benefit of the one-half owned by these defendants ^ and which was unmortgaged. “If the mortgagee of an undivided half interest pay the whole tax levied upon the premises in order to preserve the lien, he can only charge against the mortgagor one-half of the amount so paid.” 2 Jones on Mortg. [4 Ed.], sec. 1134. But clearly the amount paid on the other half not covered by the mortgage is a charge against said other half.

In our opinion then, the record shows that the Ayr Lawn Company has an interest in the real estate about to be divided, and it ought to be allowed to come into the case as a party so that such interest can be protected. And so holding, the judgment must be reversed and cause remanded to be proceeded with as herein indicated.