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tate of inberitance, & doctrine which was af. est left in the mortgagor would not be an interwards affirmed by Lord Mansfield, while terest in lands within the meaning of the statin Massey v. Johnson, 16 it was expressly de ute of frauds. In the case of Stall v. Jones!! clared that no agreement to convey "an the mortgagor under deed absolute in form equity of redemption would be binding un had accepted twenty dollars from the mortless in writing, because a court of equity gagee knowing that the latter tendered it in treats the equity of redemption as the land full satisfaction of such claim as the latter itself, at all events an interest in land.” might have in the premises. The court said:

(6) Mortgage by Deed Absolute in Form, "In the case of an ordinary mortgage which Defeasance by Parol or Separate Writing. under our law creates a lien and passes no The validity of a parol release is called in title, it is reasonably clear that à right to requestion most frequently where the mort deem could not be barred by a transaction of gage is in form an absolute conveyance, the this character, lying entirely in parol. But defeasance resting in parol, or in a separate

in this State a deed absolute in form although writing. Where this is the case one unac intended as a security, and in general treated quainted with the technical rules of law is not as a mortgage, passes the legal title to the likely to see the necessity for a written re mortgagee

where the legal title has lease, and it may seem unjust to allow the passed, where the mortgagee is in possession mortgagor to repudiate a parol release not and where an arrangement is entered into vitiated by unfairness on the part of the which defeats the mortgagor's right to an acmortgagee.17 We find consequently, not a counting we see no reason why it should not few cases upholding a parol release obtained bar a redemption.” In Haggerty v. Brower,20 under such circumstances, and, as generally the separate defeasance bad been surrendered happens when established rules of law are by the mortgagor. The court intimates that overridden in the apperent interests of jus such surrender would bar the right of retice these cases are surrounded with much demption standing alone, but as the land erroneous reasoning.

mortgaged was a homestead, and the homeDeed Absolute as Passing Legal Title.stead right was also involved, it was held that Thus, in order to support the conclusion that that right could not be cut off by parol rethe mortgagor's interest under a deed abso lease and surrender of the defeasance. In lute in form is not within the statute of frauds, Odell v. Montrose, 21 although the court held some of the courts have assumed that if the the parol release void as within the statute of legal title passed to the mortgagee18 the inter- frauds, yet this was on the theory that the

legal title remained in the mortgagor, not16 Martur v. Mowling, 2 Burrows, 978.

withstanding that his conveyance was abso16 1 Exchq. 253.

lute in form with a mere oral defeasance. 17 It would seem, however, that the evils from which Brinkman v. Jones22 also went upon the same the statute of frands was designed to protect might all be present in such a case. The land may have doubled or quadrupled in value since the time of the 570; Hagerty v. Brown, 75 N. W. Rep. 321. But see alleged parol release, while the temptation to perjury Harrington v. Foley (Iowa), 79 N. W. Rep. 64. would be aggravated by facts not present in ordinary

19 66 N. W. Rep. 653. cases, and which would greatly aid the perjurer in 20 75 N. W. Rep. 821. accomplishing his object. The record evidence would 21 68 N. Y. 600. indicate a perfect title in the mortgagee, while the 22 44 Wis. 498. This is a well considered case, and, fact that at the time of the alleged release the mort. although the court assumes that if the legal title bad gage debt was fully equal to, or in excess of, the value passed to the mortgagee the interest remaining in ihe of the land, would give plausibility to the story of the mortgagor might have passed by parol, it intimates perjurer.

that there is no good reason why a deed absolute in 18 The very questionable rule that the legal title form should be held to pass the legal title in jurisdic. passes to the mortgagee where the conveyance is ab. tions where an ordinary mortgage would not bave solute in form has been adopted in some of the States that effect. In Massachusetts, where an ordinary where a mortgage in ordinary form creates a mere mortgage passes the legal title, the court in the case lien. Gallegbar v. Giddings, 33 Neb. 222, 49 N. W. of Harrison v. Trustees, etc., 12 Mass. 456, held that Rep. 1126; Harrington v. Birdsale, 38 Neb. 176, 56 N. the surrender of the separate defeasance by the mort. W. Rep. 961; Brophy Mining Co. v. Brophy & Dale gagor vested title absolutely in the mortgagee, sug. Gold and Silver Mining Co., 15 Nev. 101; Thaxton v. gesting at the same time that this could only be ac. Roberts, 66 Ga. 704; Jay v. Welchel (Ga.), 3 S. E. Rep. complished by a formal conveyance if the mortgage 906; Richards v. Crawford, 50 Iowa, 494; Burdick v. were in the ordinary form, but no reason was given Wentworth, 42 Iowa, 440; Farley v. Goocher, 11 Iowa, 1 for such a distinction. In the later case, however, of


theory, following Odell v. Montrose. In ag either by express terms or necessary effect suming that unless the mortgagor's interest reserves to the mortgagor an equity of reinclude the legal title it is not protected by demption. In such case there may exist the statute of frauds, these courts evidently facts which may operate in equity to estop overlooked the fact that his interest had al. the mortgagor from asserting an interest in ways been regarded by the English courts as the property. The present deed however is an interest in lands within the meaning of absolute in form, and neither expressly nor the statute of frauds, although the legal title impliedly reserves any interest in the grantor. had for centuries been recognized as passing His right of redemption was created by parol under the mortgage. The interest of the agreement when the deed was first made. A beneficiary under a trust is protected by the parol agreement concerning land may be disstatute of frauds, 28 yet the legal title is in the charged by parol, and such a discharge will trustee, not in the beneficiary, and it has al constitute a valid defense to a bill to reways been understood that the statute ap

The court here seems to have misplied as well to equitable interests as to apprebended the modus operandi of an inlegal.24 The New Jersey court has squarely strument of mortgage. If the mortgagor's recognized the application of the statute of interest is created by parol what part does frauds to the interest of the mortgagor under the absolute deed play in the creation of that a deed absolute in form,25 and there is little estate? It purports on its face to convey the doubt but that its example will be ollowed entire estate to the nominal grantee. And it when the question arises de novo in other is only on the assumption that it actually States.

does what it purports to do that we can reMortgagor's Interest as Created by Parol. gard the mortgagor's interest as being cre-In the case of McMillan v. Jewett, 26 the ated by the parol defeasance. But it has Alabama court went upon the theory that never been supposed that where the defeawhere the mortgage is from an absolute deed, sance is in a separate writing it operates by the interest of the mortgagor is created by itself alone to create the mortgagor's estate. parol. The court said: "It is insisted that Nor in the case of an ordinary mortgage has the equity of redemption being an interest in it ever been supposed that the words of grant lands cannot be released or transferred ex pass the entire estate over to the mortgagee cept by an instrument in writing. This is to be severed by the words of defeasance, unquestionably the rule when the conveyance and a moiety returned to the mortgagor.

The only reasonable view is that in every Trull v. Skinner, 17 Pick. 213, it was pointed out that mortgage regardless of its form, the words of the “surrender of the defeasance did not operate by way of transfer, nor, strictly speakiog, by way of re.

grant and defeasance operate concurrently, lease working upon the estate, but as an estoppel that together they carve the mortgagee's esarising from the voluntary surrender of the legal evi. tate out of that previously held by the mortdence by which alone the claim could be supported." See also Fallis v. Conway Ios. Co., 7 Allen, 46.

gagor, leaving the residue in the latter. This 23 McLain v. McLain, 57 Iowa, 167; Richards v.

partition is the final result of every mortgage, Richards, 9 Gray (Mass.), 313; Holmes v. Holmes, 86 and what reason is there for regarding a deed N. Car. 203.

with a parol defeasance as accomplishing this 24 Brown, Stat. of Frauds, 229; Wood, Stat. of Frauds, 414; Holmes v. Holmes, 86 N. Car, 205; Raw.

result by a process different from that of a don v. Dodge, 40 Mich. 697; Wright v. DeGroff, 14 deed containing a written defeasance? If Mich. 164; Scott v. Busb, 26 Mich. 418, 29 Mich. 523; Purcell v. Miner, 4 Wall. 513; Dunlap v. Gibbs,

the deed operates independently of the deYerg. (Tenn.) 94; Newman v. Carroll, 3 Yerg. (Tepp.)

feasance and conveys the entire estate in the 18; Hogg v. Wilkins, 1 Grant (Pa.), 67; Whiting v. Butler, 29 Mich. 143; McEwan v. Ortman, 34 Mich. 324; Ripley v. Seligman, 88 Mich. 201; Grover v. Buck, 27 The dictum of the court that an interest in lands 84 Micb.519; Grunow v. Slater, 118 Mich. 149; Hughes which can be created by parol can likewise be dis. v. Moore, 7 Cranch (U. S.), 176; Kelly v. Stanberry, 13 charged by parol seems to be opposed to the weight Obio, 426; Smitb v. Burnham, 3 Sumn. 435; Maxwell of authority (Batting v. Maatin, 1 Camp. 317; Mal. v. Wallace, 8 Bush. Eq. 251; Simms v. Killian, 12 lett v. Brayne, 2 Camp. 103; Rowan v. Little, 11 Ired. 252; Rice v. Carter, 11 Ired. 298; Lilly v. Dun. Wend. [N. Y.] 606; Logan v. Barr, 4 Harr. (Del.] 546; bar, 62 Wis. 198; Daniels v. Barley, 43 Wis. 566; Con. Holmes v. Holmes, 85 N. Car. 205), but is supported oor v. Tippet, 57 Miss. 594.

by the opinions of several courts. Kienter v. Miller, 25 Van Keuren v. McClaughlin, 19 N. J. Eq. 187. 25 Pa. St. 481; McKinney v. Reader, 7 Watts, 123; 26 85 Ala. 476.

Strong v. Crosby, 21 Conn. 398.


first instance, then at the moment of its in served that the extent to which the showing ception it is not a mortgage but an absolute made by the answer goes is that the defenddeed, and its character at the moment of in ant purchased the timber of the life tenant ception controls. "Once a deed always a under such circumstances as would perhaps deed,” is & maxim as fully established as have estopped the complainant had the prop"once a mortgage always a mortgage.”28 erty been personalty, but it does not set up

Estoppel Against Mortgagor.But while any fraudulent concealment of facts by comthe statute of fraude nullifies a parol release plainant as to the true title. Unfortunately by the mortgagor, facts may exist which for the complainant's contention the statute would estop him from asserting the interest of frauds prevents the passing of title to which he has orally agreed to relinquish. realty by parol, and this cannot be done any Some courts have held that the mere sur more under the guise of an estoppel in the render of the defeasance operates by way of absence of fraud, and when the estoppel conestoppel to bar the right of redemption.29 sists only of an implied assent, than by showBut unless the mortgagee takes possession or ing a direct parol contract.” makes improvements or takes some similar Charlotte, Mich.

W. A. COUTTS. action in pursuance of the surrender, the better opinion seems to be that the doctrine of

TAXATION-EXEMPTIONS. estoppel, strictly speaking, is not applicable, 3

YOUNG MEN'S CHRISTIAN ASSN. OF OMAHA v. although when the mortgagor seeks relief in

DOUGLAS COUNTY. equity he may be turned out of court on the

Supreme Court of Nebraska. principle that he who seeks equity must do 1. An intention to use property occupied for busi. equity.81 If, however, relief is sought by ness purposes at some uncertain time in the future,

for purposes which will render it exempt from taxa. ejectment, matters in the nature of equitable

tion under the laws of the State, will not preclude its estoppel are not available as a defense unless being taxed under the general revenue laws, so long otherwise provided by statute.82 In Mich as occupied for such business purposes. igan, even in equitable actions facts which

2. Statutes providing for exemption of property

from taxation when used for purposes therein menwould estop a party from asserting title to

tioned, being an exception to the general rule of tax. personalty will have no such effect with re ation, and in derogation of the equal rigbts of all, are spect to realty. In Huyck v. Bailey, 83 the

to be strictly construed. complainant, the owner of a reversionary in

3. The Young Men's Christian Association of

Omaha, being organized and incorporated for educaterest in land had acquiesced in the sale of tional, charitable, and religious work, owned certain timber by the life tenant to the defendant, real estate, upon which was erected a building used and afterwards filed a bill to restrain the lat

by it for the purpose of carrying forward the object

of its organization, except the first floor thereof, ter from cutting the timber. Injunction was which was rented for business purposes, the rents granted. The court said: “It will be ob being applied to the work of the association. Held,

that the portion of the property occupied for business

purposes was not used exclusively for educational, 28 Note to Chase's Case, 17 Am. Dec. 804; Dougbty cbaritable, and religious work, and therefore not ex. v. Miller, 5 Dick. (N. J.) 529; Friok v. Adams, 9 empt from taxation, under the general revenue laws Stew. (N. J.) 485; McMillan v. Bissel, 63 Mich. 72. of the State.

29 Trull v, Skinner, 17 Pick. 213. See also McMillan HOLCOMB, J.: A petition was filed for the V. Jewett, 83 Ala. 476; Stall v. Jones, 66 N. W. Rep.

purpose of obtaining an order of injunction to re653.

strain the appellees, the county of Douglas and 30 Odell v. Montrose, 68 N. Y. 500; Hays v. Living. ston, 34 Mich. 394.

the county treasurer thereof, from collecting cer81 Green v. Butler, 26 Cal. 595; Watson v. Edwards,

tain taxes alleged to have been illegally assessed 105 Cal. 70.

against the appellant's property situated in 32 In Mirbigan this rule is still adhered to very Omaha, Douglas county, and consisting of a city closely (Buel v. Irwin, 24 Micb. 145; Ryders v. lot and a building erected thereon. In the petiFlanders, 30 Mich. 336; Harriet v. Kinney, 44 Mich. tion it is alleged that the appellant is a duly-or457; Geiges v. Greiner, 68 Mich. 153; Whiting v. But.

ganized corporation, under and by virtue of the . ler, 29 Mich. 122; Mich. Land Co. v. Thoney, 89 Mich.

laws of the State, maintained and existing for 226, 50 N. W. Rep. 845; Paldi v. Paldi, 95 Mich. 410),

school, religious, and charitable purposes, and but has been changed in England and in the Code States. Bliss, Code Pld. 347. The reason for the dis

that the property which is attempted to be astinction between legal and equitable defenses is

sessed is exempt under the constitution and laws pointed out by Judge Cooley in Hays v. Livingston,

of the State. It is to be conceded at the outset, 34 Mich. 894 5.

as it is admitted by the demurrer to the petition 83 100 Mich. 226.

which was filed, and under which the question

was decided, that the object and purposes of the templated by the constitutional and statutory appellant corporation are such as to exempt the provisions quoted. In the case of Academy v. property used exclusively by it for the purposes Irey, 51 Neb. 755, 71 N. W. Rep. 752, it is held of its organization from taxation under the laws that, in order to be exempt from laxation, the of the State. The controversy as to its property property must be used directly, immediately and being taxable, notwithstanding the exemption exclusively for the purposes mentioned in the referred to, arises, and becomes apparent, from provisions referred to. It cannot, we think, the following allegations in the second paragraph under the allegations of the petition, be successof the petition. After describing the lot of land fully contended that, because of an intention to owned by it, it is said “that on this lot this plaint use the property at some time in the future diiff constructed, about the year 1887, and has ever rectly by the association for offices, etc., such insince been maintaining, a large four-story stone tention is a direct and immediate use for such building, which building bas always been used property. As has been aptly said by Mr. Justice for said purposes of said Young Men's Christian Brewer, in Washburn College v. Commissioners Association. The first floor of said building the of Shawnee Co., 8 Kan. 344: “An intention to plaintiff is now leasing temporarily for business occupy is not equivalent to occupation-does not purposes; the rents thereof, as well as all the in tend to prove it. The pleadings recognize the come from all sources, being used exclusively in difference, for they admit the failure while they maintaining the educational, religious, and cbar- allege the intention to occupy. An occupation itable work of the plaintiff. It is the purpose which is to bethough here it is only wbich may and intention of the plaintiff to use the first floor be-is no present use. Nor is ownership evidence for offices, gymnasium, baths, etc.; but, owing to of use. Full possession and perfect title are conits restricted income, it is compelled, for the sistent with total failure to use. This is too plain present, to rent the same, and apply the rents to to need either argument or illustration. If the the running expenses of the institution, until its framers of the constitution had intended to exincome from other sources and voluntary dona empt all property belonging to literary and tions will pay the expenses of maintenance for charitable institutions from taxation, the lanthe purposes aforesaid.” Whether the assess guage employed would have been very different. ment of taxes sought to be restrained is against They would have used the simple, ordinary lanthe entire property, or only the portion thereof guage for expressing such intention. The fact rented for business purposes, is not disclosed by that they ignored 'ownership, and made 'use' the petition. It is alleged that there was levied the test of exemption, shows clearly that they and assessed against the plaintiff, and against recognized the essential distinction between tbe the said lot of ground, the taxes for the years two, and established the latter, rather than the 1892, 1893, 1895 and 1896.

former, as the basis of exemption." In First The demurrer to the petition raises but one Christian Church of Beatrice v. City of Beatrice, question, and that is whether or not, under the 39 Neb. 432, 58 N. W. Rep. 166, it is held that constitution and laws of the State, the plaintiff's the possession and ownership of a lot which is property, or the portion thereof rented for busi rented, the rent derived therefrom being set ness purposes, is wholly and altogether exempt apart to constitute a building fund for the purfrom taxation. It is provided by sec. 2, art. pose of erecting a church edifice thereon, which 9, of the constitution, that "the property of the society bad resolved to build, was not a use the State * shall be exempt from tax of the property such as would exempt it from tax. ation, and such other property as may be used ation under the provisions of the law referred to. exclusively for school, religious

It would therefore seem that an intention to use, and charitable purposes, may be exempted from at some indefinite time in the future, the rented taxation, but such exemption shall be only by portion of the property exclusively for the purgeneral law." By sec. 2, ch. 77, of the revenue poses for wbich the society is organized, cannot laws it is provided : “The following property control in the determination of the legal effect of shall be exempt from taxation in this State: * * * the present uses of the property as alleged in the Such other property as may be used exclusively petition.

for school, religious, cemetery and The controversy is thus narrowed to the one charitable purposes.” While there is an allega- | question of whether the renting of the first floor tion that the plaintiff intends to use the rooms of the building for business purposes, when the now rented for business purposes for offices, income or rental is devoted to the objects of the gymnasium, and other purposes proper and association, is an exclusive use of the property necessary for carrying out the objects of its or for religious and charitable purposes, within the ganization, we do not think such allegation can meaning of the law. In arriving at a conclusion materially affect the decision of the case as to the with respect to the matter, we are to bear in mind present situation and uses to which the property tbat, the exemption claimed being an exception is put as disclosed by the petition. An intention to the general rule of taxation, and in derogation to use it for such purposes in the future, which of the equal rights of all, the statute is to be would doubtless, when so used, exempt it from strictly construed. This does not mean that there taxation, is not a present exclusive use, as con should not be a liberal construction of the lan




guage used in order to carry out the expressed occupancy of other portions for purely secular intention of the fundamental lawmakers and the purposes, and thus subject the property SO legislature, but, rather, that the property which used to the general law of taxation. This has is claimed to be exempt must come clearly within been repeatedly held in other jurisdictions, where the provisions granting such exemption. As is laws exempting from taxation property used for said by many eminent authorities, the exemptions charitable, religious and educational purposes are granted on the hypothesis that the association have been under consideration, and it occurs to or organization is of benefit to society, that it us that the mere fact of proximity cannot vary promotes the social and moral welfare, and, to the rule. Whether it be portions of the same some extent, is bearing burdens that would oth property, or separate and distinct parcels, it is erwise be imposed upon the public, to be met by governed by the same rule of construction. Our general taxation, and that from these considera law is broad and comprehensive, and provides tions the exemption is granted. There is, in this that all property exclusively used for the purcase, no question as to the organization which poses mentioned is exempt, negativing the idea claims the exemption being one serving such that property not so used is entitled 10 such beneficial purpose, and entitled to the privileges favor. In Stahl v. Association, supra, where the granted, in so far as its property is used exclu. language under which the exemption was claimed sively for such purposes. It is not whether it is is very similar to that in the present instance, it entitled to any exemption, but wbether the prop is said, at page 519, 54 Kan., and page 797, 38 erty claimed to be exempt is exclusively used for Pac. Rep., by Horton, C. J.: "This constructhe purposes of its organization. In determining tion omits to give sufficient force to the following this, we are to adhere to a strict rule of construc language of section 6, viz. : 'for the exclusive tion of the language used granting the exemp. purposes of religion or education.' The property tion. Cincinnati College v. State, 19 Ohio, 110; exempt from taxation must not only bave been Stabl v. Association, 54 Kan. 542, 38 Pac. Rep. received, beld, or appropriated by or for the as796; State v. Board of Assessors, 35 La. Ann. 668. sociation, but it must be received, beld, or ap

It is argued that, the appellant being in the propriated for the exclusive purposes of religion actual possession and use of the property taxed or education,' except the ground for a cemetery. for the legitimate purposes of its charter, and Therefore, giving the provisions in the statute renting two rooms temporarily, applying the creating the exemption a strict construction, tbe rents to the charitable purposes of the organiza charter must be interpreted to mean that tbe real tion, the property is within the protection of the or personal property of the association must be statute exempting it from taxation, notwith- received, held, or appropriated for the exclusive standing the temporary renting of the rooms on purposes of religion or education only,' not for the first floor for business purposes. To hold lease, investment or profit. When its real estate that property rented for business purposes is ex is rented to a tenant, or its funds invested in other empt when the rentals or income therefrom are property for profit, or loaned at interest, the used exclusively for religious, charitable, or edu property thus rented or invested or loaned will be cational purposes, is extending the operation of liable to taxation, as much as any other property the law further than is warranted by the lan that is rented or invested or loaned, no matter in guage used. Tbere is a clear and well defined whose hands it might be.” In Cincionati College distinction between the use of property and the v. State, supra, it is beld: “The property of use of the income derived therefrom. As was literary and scientific societies is only exempt said in First Christian Church of Beatrice v. City from taxation when used exclusively for literary of Beatrice, supra: "It might be that these rents and scientific purposes. If used for other purwould be exempt under the provisions of the poses it is liable to taxatlon, although the proconstitution and the statute to which allusion ceeds are in future to be applied for the promohas been made; for it might be contended with tion of literature and science.” Says Caldwell, much plausibility that the money derived from J.: “It would, we think, be rather a forced conrenis is property to be used exclusively for relig- struction of language to say that this building, ous purposes.". There may be an exclusive use with its eight stores, its merchants' exchange, of the income, and not of the property from and its other rooms used for miscellaneous purwhich such income is derived. Webster defines poses, is used exclusively for literary and scien"exclusive" as “possessed and enjoyed to the ex- tific purposes.

But when any society, clusion of others; debarred from participation or no matter of what kind, whether scientific, litenjoyment;" and "exclusively” is defined, in a erary, or religious, enters the common business manner to exclude; as enjoying a privilege ex of life, and uses property for the purpose of acclusively.” If the property be used by appellant cumulating money, the government should, and exclusively for purposes of its own organization, we think the statute does, treat it in the same way this would exclude the idea of others using it for persons are dealt with who are using property in an entirely different or secular purpose. The a similar manner, and engaged in the same busifact that appellant is in the exclusive use of a ness. Government cannot discriminate between portion of the property for the legitimate pur

the uses which different societies or individuals poses of its organization does not preclude the will make of the proceeds of their business, and

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