CHAPTER XVIII. DEFENSES TO TAX TITLES. THE defenses to a tax title, in collateral suits affecting the title, usually arise in actions of ejectment to recover possession from the owner, or in suits in equity to remove clouds upon the title to the land, to restrain the execution of a tax deed, or delivery of a tax certificate; and where the statute allows such a proceeding in suits brought by the owner, though in possession, to test the validity of the title of the purchaser, the same matters are shown affirmatively. The defenses are of a character to avoid the title entirely. They are not mere questions of errors of judgment, or mere irregularities in the action of the tax officers, but they relate to defects in the essential steps which are necessary to give authority to sell and convey. Such defenses are assessing land as unseated which is seated; as non-resident land when the owner is a resident of the district; the failure to assess at all; assessment in the name of a person not the owner; assessing separately joint property, or jointly separate property; assessing in one mode and selling in another; failure to show no personal estate where the statute requires it; failure to give proper notice and obtain decrees and order of sale where that is required; defects in the notices of sale which invalidate it; failure to record the proceedings at the sale, where that is required; defects in the deed which make it void; failure to serve notice on the owner before the expiration of the period of redemption, where that is required. Any of these defenses may be made unless the deed is made conclusive evidence thereof, and even then may be made if the fact to be shown is jurisdictional and essential to the validity of the tax. But the questions to be treated of specially in this chapter are as to fraud in the sale, the payment of the tax before the sale, and the redemption from sale. § 123. Fraud in the Sale.-The sale is conducted as a judicial sale, and any actual fraud either in the officer or purchaser avoids the sale. But the fraud usually attending such sales is not actual, but 1 McReady v. Sexton, 29 Iowa, 356. 4 constructive fraud, where the relation which the purchaser bears to the owner is such that the law implies fraud without reference to the actual intent of the parties. The relation being established, the law conclusively presumes the fraud. The tax collector or other officer conducting the sale stands in such relation to the owner that he is not allowed to purchase at his own sale,1 nor can a deputy who has authority to sell, purchase. But where a sale was made by the register, and the land was purchased by the deputy register, when there was no such officer recognized by law, it was said he might purchase.3 The clerk at the sale made at auction may purchase, and even the county commissioners, who are authorized to bid for the county when the amount offered is less than the taxes and costs, may purchase when the land sells for a larger amount. When the amount of purchase money exceeds the taxes and costs, their official duty in reference to the land ceases. The officer conducting the sale not only cannot buy, but he cannot bid for others, nor will an agreement by him to receive only part of the purchase money—as to secure the taxes due the State, omitting those due the county and school fund-be valid. Such an agreement is illegal, and the sale void, and a subsequent act of the legislature cannot legalize it, as it would divest vested rights. 5 6 7 Combinations between a number of persons that the defendant shall be the only bidder, the others to advance their portion of the purchase money, and thus to purchase large tracts of land, to be sold again and the profits divided, or an agreement of two or more that only one should bid on a particular tract, to prevent competition, are regarded as fraudulent, and make the sale void. So if the purchaser, to prevent competition, where a number of persons were present desiring to purchase small tracts, states that the owner will redeem his land from the purchasers, and thus by preventing competition becomes the purchaser at the price of the taxes and costs, the sale is void. But where the sale is thus rendered void by acts in pais, either of the original purchaser or of the officer conducting the sale, or any matters which are not of record, and the land is sold to 1 Chandler v. Moulton, 33 Vt. 245; 14 Pick. 556; 5 Conn, 475. 2 Taylor v. Stringer, 1 Gratt. 158; Yancey v. Hopkins, 1 Munf. 419, 437. 'Moulton v. Waring, 18 B. Mon. 72. 4 Wills v. Jackson, 47 N. H. 235; Fox v. Cash, 1 Jones (11 Penn. St.) 206; Lorrain v. Smith, 37 Iowa, 67. 5 Cuttle v. Brockaway, 8 Casey, 45; 12 Harris, 145. Everett v. Bebee, 37 Iowa, 452. Conway v. Cable, 37 Ill. 82. Dudley v. Little, 2 Ham. 504; Kerwer v. Allen, 31 Iowa, 578; Easton v. Mawkenny, 37 Iowa, 601. In the latter case each was to bid off a tract as his turn came. 'Slater v. Maxwell, 6 Wall. 268. another, who purchases in good faith, without notice of the facts constituting the fraud, such a purchaser is protected from the fraud of his grantor.1 3 Whenever a party holds such a relation to the land or its owner, whether by express contract, or implication of the law arising on such relations, that it is his duty to pay the taxes, he cannot allow the land to be sold for the taxes and become the purchaser, and thus defeat the title of the owner; he cannot build up a title on his own neglect of duty. Tenants in common are privies in estate, and as it is the duty of each to pay the taxes on the whole tract, one cannot purchase so as to defeat his cotenant. His purchase is but a payment of the tax, which inures to the benefit of all the tenants. Nor can, he purchase after partition, if the tax for which the land was sold was assessed before the partition, or purchase indirectly from the original purchaser by an arrangement with him. has been extended to a case where several persons owned distinct parcels of the same tract, and the tract was assessed as a whole to all the owners. Some of the owners paid their taxes on the parcels owned, and others did not, and those who did not pay, were not allowed to purchase at a sale of the whole tract; they were in default and could not obtain title by their own neglect. But where land owned by tenants in common is sold, and bought by a stranger, and and the period of redemption expires, and the title is matured, all trust relations between cotenants having ceased, the rule ceases, and a cotenant may then purchase from the stranger.' The principle A tenant in possession under a covenant to pay all the taxes cannot purchase, nor can a vendee in possession under a contract for sale, by which he was to pay the taxes, purchase at a sale thereof for non-payment of taxes." Mere possession of the land when the tax for which it is sold is assessed, does not prevent the party from purchasing, but if the party 'Van Shaack v. Robbins, 36 Iowa, 201; Sibley v. Bullis, 40 Iowa, 479. 2 Blackwood v. Van Vliet, 30 Mich. 118; explaining Lacey v. Davis, 4 Mich. 152. 3 Willard v. Stroug, 14 Vt. 532; Butler v. Porter, 13 Mich. 292; State ex rel. Roe v. Williston, 20 Wis. 228; Downer v. Smith, 38 Vt. 464; Chickering v. Faille, 38 Ill. 342; McConnel v. Konepel, 46 Ill. 519. 6 Maul v. Rider, 51 Penn. St. 377. Cooley v. Waterman, 16 Mich. 366. 5 Lloyd v. Lynde, 28 Penn. St. 419. Reinboth v. Zerbe Run Imp. Co. 29 Penn. St. 139; and see Frentz v. Klotsch, 28 Wis. 312. Sheppardson v. Elmore, 19 Wis. 424. His assignee stands in the same relation. Bertram v. Cook, 32 Mich. 518. 'Oliver v. Croswell, 42 Ill. 41; Bailey v. Doolittle, 24 Ill. 577; Voris v. Thomas, 12 Ill. 442. in possession claims title to the land, or some interest therein, he cannot purchase.1 Where a person is in possession under a contract to purchase, and the land is listed to him, he is within the rule; or if there be no contract, yet if under the tax laws of the State the land is assessed to him, by reason either of occupancy or ownership, so that it becomes his duty to pay, he is within the rule, and cannot buy. Such a person cannot buy a tax certificate, and the onus will be on his assignee to show that he purchased bona fide, and without notice of the relation of his assignor, and it is even doubted if that be sufficient." The party in possession at time of assessment of the tax is not necessarily precluded from buying. It is open to him to show that he was in possession under such a contract, or under such circumstances as made it the duty of another to pay the taxes." He must be chargeable with the tax by reason of possession, title or contract, and it must have been his duty to pay the tax, or the relations between himself and the owner must have been such as to render it inequitable for him to purchase. And in a State where there is no authority to collect the taxes from a tenant, and he is under no contract to pay them, when the tax is a charge or lien on the land itself, without regard to the fact of its being occupied or unoccupied, there is no duty to pay resting on him, and he may buy. The sale, in such case, not only extinguishes the landlord's title, but also cuts off the lease." A tenant for life cannot purchase and hold as against the remainderman, nor can he allow it to be sold for taxes, and take an assignment from the purchaser, because it was his duty to pay the taxes.9 But it seems that a widow may purchase where land which is sold for taxes was assessed before dower was assigned her in it, as there was no duty resting on her to pay before the assignment of dower." A mortgagor in possession, or under a covenant to pay the taxes, cannot purchase,10 and the grantee of the mortgagor is in no better condition, for he purchases only the equity of redemption, and stands 1 McMinn v. Whelan, 27 Cal. 300; Lacey v. Davis, 4 Mich. 152. The latter case is explained in 30 Mich. 118. 2 Glancy v. Elliott, 14 Ill. 456. 3 Douglass v. Dangerfield, 10 Ohio, 152; Chambers v. Wilson, 2 Watts, 495; Ballance v. Forsythe 13 How. 25; Chouteau v. Jones, 11 l. 322; Wilkes v. Elliott, 5 Cranch C. C. 611; Piatt v. St. Clair's Heirs, 6 Ohio, 93; Swift v. Agnes, 33 Wis. 228. 4 Barrett v. Welsh, 22 Wis. 175. 5 * Blakeley v. Bestor, 13 Ill. 708. Blackwood v. Van Vliet, 30 Mich. 118; Coxe ». Gibson, 3 Casey, 160. 1 Bettison v. Budd, 17 Ark. 541; Ferguson v. Etter, 21 Ark. 160. 8 Varney v. Stevens, 22 Maine, 331; Higgins v. Crosby, 40 Ill. 261; Willard v. Blunt, J1 Ired. 624. Beason v. Yancey, 1 Dev. Eq. 77. 10 Fuller v. Hodgden, 25 Maine, 243; Frye v. Bank of Illinois, 11 Ill. 367; Coombs v. Warren, 34 Maine, 89; Fair v. Brown, 40 Ill. 209. 3 in the shoes of the mortgagor. The land is primarily liable for the tax, and where there are two mortgages, and the first mortgage is foreclosed without notice to the second mortgagee, he is entitled to redeem, and the purchase at a tax sale does not destroy that right. Where there are two adjoining tracts, one mortgaged and the other not, it is the duty of the mortgagor in listing to separate them; but if he does not, and the whole is offered for sale, the mortgagee may pay the tax, and include it in his mortgage debt. So a person who holds the legal title as security for a debt may pay the tax and include it as money advanced, but he cannot purchase a tax certificate so as to entitle him to the twenty-five per cent. to be paid to purchasers when the owner redeems. The relation which he holds to the owner does not allow him to acquire the rights of a purchaser. But where there is a sale under the foreclosure of a mortgage, the purchaser buying what purports to be the whole tract, but which, in fact, conveys only a part, and takes possession of the whole tract, claiming it under his purchase, his possession of the part not conveyed is adverse to the owner, and he may strengthen his title by purchasing a tax title. So a grantee in a deed from one who had no valid title, not having acquired possession, may purchase a tax certificate to aid his title." A mortgagee in possession, and taking rents and profits, should pay the taxes, and he may include such payment as part of his mortgage debt, but he cannot purchase if he allows it to be sold for taxes. Where the mortgagor is in possession, and covenants to pay taxes, and the mortgagee has by covenant the privilege of paying the taxes and adding the amount to the mortgage debt, it is said there is no obligation on the mortgagee to pay the taxes; he has the privilege but not the duty. Such a mortgagee may purchase at a tax sale, but the purchase does not extinguish the lien for taxes, and the mortgagor is entitled to redeem from the tax sale; it is not a payment by one legally liable to pay which discharges the tax. Whether the purchase would be prevented by mere relation of mortgagor and mortgagee, where the mortgagee is under no contract to pay the taxes, and there is no obligation to pay them by reason of the mortgagee being in possession and receiving the rents and profits, is a matter which may well be doubted. The principle running through the cases in this section 1 Avery v. Judd, 21 Wis. 262; Smith v. Lewis, 21 Wis. 350. Anson v. Anson, 20 Iowa, 55. Fiske v. Burnett, 30 Wis. 102. Sturdevant v. Mather, 20 Wis. 576. 3 Williams v. Hilton, 35 Maine, 547. Brown v. Simmons, 44 N. H. 475: Moore v. Titman, 44 Ill. 367. |