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over the phone is competent in evidence, | gages because of failure of the mortgagors why not the "reading" of a summons, when the identity of the party is found as a

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to pay the real estate taxes prior to delinquency, after which time plaintiff paid them, and immediately foreclosed because because of defective descriptions of the land of such defaults. Defendants contend that in the assessment roll, the taxes are invalid and insufficient as a basis for any foreclosure proceedings. Held, that the tax description would be void in an action wherein the tax could be assailed. Mortgage effect.

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payment of illegal tax

2. A mortgagee is authorized to act on the assumption that the tax is valid, where no actual notice is had that the assessment was defective; and, the land being subject to taxation, the payment made by the

forbids it, and the courts in actual practice mortgagee discharged the land from liahave recognized and used it.

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bility for taxation for that year, while otherwise it would have been subject to reassessment and retaxation; that the mortgagee had the right to pay taxes to preserve his security; that in an action to foreclose a mortgage because of nonpayment of such taxes by the mortgagors, equity will not allow the mortgagors, to whose benefit the payment made by the mortgagee inured, to assert the invalidity of the taxes so paid in good faith to protect its security.

A

(January 9, 1915.)

PPEAL by plaintiff from a judgment of the District Court for Walsh County dismissing an action brought to foreclose certain mortgages because of nonpayment of taxes on the mortgaged property. Reversed.

The facts are stated in the opinion.
Mr. E. Smith Petersen, for appellant:
Plaintiff had the right to pay the delin-
The reasons for the decision

Note. Right of mortgagor or owner of no interest. equity of redemption to contest valid-sufficiently appear in the quotation from ity of tax paid by mortgagee. this case in FARMERS' SECUR. BANK V. MARTIN.

The few authorities on this question which research has disclosed appear generally to support the decision in FARMERS' SECUR. BANK V. MARTIN.

In Southard v. Dorrington, 10 Neb. 119, 4 N. W. 935, the mortgagee in a foreclosure action sought to have added to the amount of the mortgage debt the sum paid by him to redeem the property from a sale for delinquent taxes. It was held that an answer was insufficient that the taxes claimed by the plaintiff to have been paid were wholly void; that the land was not assessed as required by law; that the assessor did not take the oath required by law, and in fact took no oath at all; that the apparent levy was illegal; that no tax list and duplicate were made as required by law, and no warrant was issued to the treasurer of the county to collect any taxes upon the land as required by law; also, that the lots in question were assessed in bulk with certain other lots in which the defendant had

was

And in Weinreich v. Hensley, 121 Cal. 647, 54 Pac. 254, a mortgagee on foreclosure was allowed the amount of an assessment paid by him on the property, although it was contended that the assessment illegal because not made to the owner of the land. The assessment was paid at the request of the mortgagor, and the case was decided under a statute providing that where the holder of a special lien is compelled to satisfy a prior lien for his own protection, he may enforce payment of the amount so paid by him as a part of the claim for which his own lien exists. But the decision, as indicated by the quotation in FARMERS' SECUR. BANK V. MARTIN, supports the conclusion reached in that case.

Where the mortgaged property was assessed with other property belonging to the mortgagor, and the mortgagee paid the entire amount of the tax, it not appearing what part of the tax was due on that part of the property subject to the mortgage,

quent taxes and declare the whole debt secured by the mortgage immediately due.

Gray v. Robertson, 174 Ill. 242, 51 N. E. 248; Stancliff v. Norton, 11 Kan. 218; Hodgdon v. Davis, 6 Dak. 21, 50 N. W. 478; Washburn v. Williams, 10 Colo. App. 153, 50 Pac. 223; Northwestern Mut. L. Ins. Co. v. Allis, 23 Minn. 337; Hoodless v. Reid, 112 Ill. 105, 1 N. E. 119; Fowler v. Woodward, 26 Minn. 347, 4 N. W. 231; Plummer v. Park, 62 Neb. 665, 87 N. W. 534; Nation- | al L. Ins. Co. v. Butler, 61 Neb. 449, 87 Am. St. Rep. 462, 85 N. W. 437; Condon v. Maynard, 71 Md. 601, 18 Atl. 957; Hockett v. Burns, 90 Neb. 1, 132 N. W. 718.

The defendants were bound to know when the taxes became due and delinquent, and the plaintiff therefore was not required to notify the defendants that the taxes were due, or that it intended to pay them, before it made the payment.

Ellwood v. Wolcott, 32 Kan. 526, 4 Pac. 1056; Washburn v. Williams, 10 Colo. App. 153, 50 Pac. 223; Hoodless v. Reid, 112 III. 105, 1 N. E. 119; Fowler v. Woodward, 26 Minn. 347, 4 N. W. 231.

The option to declare the whole debt due having once been exercised, the default becomes fixed and established, and it cannot be cured even by tender of payment after commencement of the foreclosure.

Plummer v. Park, 62 Neb. 665, 87 N. W. 534; Rosche v. Kosmowski, 61 App. Div. 23, 70 N. Y. Supp. 216; Stancliff v. Norton, 11 Kan. 218; Hockett v. Burns, 90 Neb. 1, 132 N. W. 718.

Defendents cannot make a collateral attack upon the validity of the taxes paid by the plaintiff, as a defense to the action.

the court, in holding, on writ of entry by the mortgagee, that the amount paid for taxes should be included in the conditional judgment, said: "It was the duty of the mortgagor, and those holding under him, to discharge all taxes thus assessed upon the demanded premises, while they withheld the possession from the mortgagee, and in case taxes were assessed in a manner which they deemed illegal, notice of this fact should have been given to the mortgagee, and in case payment was to be resisted he should be indemnified against loss, because it would be unreasonable to subject the mortgagee to the hazard of contesting the legality of a tax title by a suit at law, in which, if the final result should be in favor of the validity of that title, all his rights under his mortgage would be forever lost." Williams v. Hilton, 35 Me. 547, 58 Am. Dec. 729. The above was quoted with approval in Stetson v. Day, 51 Me. 434, where, however, the relation of the parties was that of life tenant and reversioner, the latter having redeemed the land from a sale for taxes which it was the tenant's duty to pay. The court said that the

Power v. Larabee, 2 N. D. 141, 49 N. W. 724; Power v. Bowdle, 3 N. D. 120, 21 L.R.A. 328, 44 Am. St. Rep. 511, 54 N. W. 404; Beggs v. Paine, 15 N. D. 444, 109 N. W. 322; Weinreich v. Hensley, 121 Cal. 647, 54 Pac. 254; Windett v. Union Mut. L. Ins. Co. 144 U. S. 581, 36 L. ed. 551, 12 Sup. Ct. Rep. 751; Southard v. Dorrington, 10 Neb. 119, 4 N. W. 935.

Defendants are estopped to question the validity of the taxes.

Beggs v. Paine, 15 N. D. 436, 109 N. W. 322; Nind v. Myers, 15 N. D. 400, 8 L.R.A. (N.S.) 157, 109 N. W. 335; Williams v. Hilton, 35 Me. 547, 58 Am. Dec. 729; Bates v. People's Sav. & L. Asso. 42 Ohio St. 673; Windett v. Union Mut. L. Ins. Co. 144 U. S. 581, 36 L. ed. 551, 12 Sup. Ct. Rep. 751; Southard v. Dorrington, 10 Neb. 119, 4 N. W. 935; Weinreich v. Hensley, 121 Cal. 647, 54 Pac. 254; American Nat. Bank v. Northwestern Mut. L. Ins. Co. 32 C. C. A. 275, 60 U. S. App. 693, 89 Fed. 615; Almy v. Hunt, 48 Ill. 45.

The taxes in question are valid taxes.

Beggs v. Paine, 15 N. D. 444, 109 N. W. 322; Nind v. Myers, 15 N. D. 403, 8 L.R.A. (N.S.) 157, 109 N. W. 335; Power v. Bowdle, 3 N. D. 120, 21 L.R.A. 328, 44 Am. St. Rep. 511, 54 N. W. 404.

Messrs. Engerud, Holt, & Frame also for appellant.

Messrs. Gray & Myers, for respondents: An absolutely void tax can never be properly characterized as "due."

Tracy v. Wheeler, 15 N. D. 248, 6 L.R.A. (N.S.) 516, 107 N. W. 68; Wells County v. McHenry, 7 N. D. 246, 74 N. W. 241; Herriott v. Potter, 115 Iowa, 648, 89 N. W. 91;

relations between the parties were very similar to those between mortgagor and mortgagee.

So, in Bates v. People's Sav. & L. Asso. 42 Ohio St. 655, judgment was rendered in favor of a mortgagee on foreclosure for an amount paid by him for taxes and assessments appearing upon the tax duplicate of the county as having been duly assessed against the mortgaged property, it being held that evidence for the defendant was properly rejected tending to show that a portion of the taxes and assessments so paid were illegally assessed against the property. A statute provided that any person having a lien on real estate might pay the taxes thereon "in so far as the same are a lien upon such real estate," and that the amount so paid should operate as a lien on the property in preference to all other liens, and the money so paid might be recovered from the person liable for the tax. The court said that the record showed that the taxes and assessments appeared on the duplicate to have been regularly and legally assessed, and that the plaintiff had no knowledge or notice of any defect or

Power v. Larabee, 2 N. D. 141, 49 N. W. 724; Morrill v. Lovett, 95 Me. 165, 56 L.R.A. 634, 49 Atl. 666; Griffith v. Speaks, 111 Ky. 149, 63 S. W. 465; Barnes v. Arnold, 45 App. Div. 314, 61 N. Y. Supp. 85; Re Ray, 2 Ben. 53, Fed. Cas. No. 11,589; Scott v. Society of Russian Israelites, 59 Neb. 571, 81 N. W. 624; Clark v. Coolidge, 8 Kan. 189; Leavitt v. Bell, 55 Neb. 57, 75 N. W.

318, 121 Am. St. Rep. 105, 86 Pac 183; O'Malley v. Fricke, 104 Wis. 280, 80 N. W. 436; Aldrich v. Steen, 71 Neb. 33, 98 N. W. 445, 100 N. W. 311; Chicago, B. & Q. R. Co. v. Hitchcock County, 60 Neb. 722, 84 N. W. 97; Jewett v. Iowa Land Co. 64 Minn. 531, 58 Am. St. Rep. 555, 67 N. W. 639.

The validity of a tax may be collaterally

524; Hartsuff v. Hall, 58 Neb. 417, 78 N. impeached, and a mortgagor is not estopped to contest such validity in this class of

W. 716.

A valid assessment of land, evidenced by a record officially made, is an essential prerequisite to a valid tax, and its omission is a jurisdictional defect fatal to the tax. Sheets v. Paine, 10 N. D. 106, 86 N. W. 117; Roberts v. First Nat. Bank, 8 N. D. 504, 79 N. W. 1049; Sweigle v. Gates, 9 N. D. 538, 84 N. W. 481; Re Davis, 151 Cal. illegality in the assessment; that "the statute only gives a lien holder the right to pay taxes and thus save his security in so far as the taxes are a lien upon the real estate. Hence, the question fairly arises, Was the plaintiff bound to inquire as to the legality of the taxes beyond the appearances of the duplicate, and as to defects of which he had no knowledge or notice? This question is not free from doubt. But, inasmuch as the owner of the real estate, under like circumstances, would be justified in paying the taxes, and might afterwards, under the statute, upon discovering an illegality in the assessment, recover them back from the county without being held to the consequences of having made voluntary payment, so we think the lienor should be justified in making the payment to protect his lien, although he has no right to recover them back from the county in case of a subsequent discovery of illegality in the assessment. In the latter case, the payment by the lienor should be considered as payment by the owner, and the right to recover back would attach to the owner. Such holding does not nullify the limitation in the statute upon the right of a lienor to save his security by a payment of taxes, but leaves the same with ample scope for operation. If the owner has no knowledge of illegality in the assessment, or if he has such knowledge and does not communicate it to his mortgagee, we think the statute should be so construed as to authorize the latter to protect his lien by by making payment of the taxes appearing on the duplicate to have been regularly and legally assessed."

cases.

9 Enc. Pl. & Pr. 436; Leavitt v. Bell, 55 Neb. 57, 75 N. W. 524; Hartsuff v. Hall, 58 Neb. 417, 78 N. W. 716; Atwater v. West, 28 N. J. Eq. 361; DeLeuw v. Neely, 71 Ill. 473.

The pretended tax involved herein was based upon an insufficient description of the

And to a similar effect is American Nat. Bank v. Northwestern Mut. L. Ins. Co. 32 C. C. A. 275, 60 U. S. App. 693, 89 Fed. 610, petition for writ of certiorari denied in 172 U. S. 650, 43 L. ed. 1184, 19 Sup. Ct. Rep. 883, where it was contended that a mortgagee should not, in a foreclosure proceeding, be allowed the amount paid by it to redeem the mortgaged property from a sale upon an assessment for a paving tax, it being contended that the sale of the property for the assessment was not authorized by statute.

But that a mortgagee who purchases and receives a deed to the property on foreclosure of his mortgage, and thereafter pays illegal sewer and paving assessments, will not be allowed the amount so paid, in a foreclosure suit by a junior mortgagee, who was not a party to the foreclosure of the prior mortgage, see Atwater v. West, 28 N. J. Eq. 361.

And it has been held in a suit to foreclose a mortgage that a decree awarding the plaintiff a lien for special paving and curbing taxes on the property, which he had paid, is error where he fails to show that the taxes were legally levied, the burden being upon him to establish their validity before he is entitled to a lien on account of their payment. Hartsuff v. Hall, 58 Neb. 417, 78 N. W. 716.

In Leavitt v. Bell, 55 Neb. 57, 75 N. W. 524, the court said the amount of taxes paid by a mortgagee to protect his lien on the land, "so far as they were legal," should have been included in the amount due on the mortgage.

As to right of mortgagee who has paid taxes to maintain independent action against mortgagor for reimbursement before or after foreclosure of mortgage, see note to Stone v. Tilley, 10 L.R.A. (N.S.)

See also Windett v. Union Mut. L. Ins. Co. 144 U. S. 581, 36 L. ed. 551, 12 Sup. Ct. Rep. 751, from which the court quotes in FARMERS' SECUR. BANK V. MARTIN. The alleged invalidity, however, was not in 679. the tax itself, but in the tax deed, the ground on which it was contended the deed was invalid being lack of statutory notice to the tenants of the tax sale. The mortgagee, it was held, was entitled to the sums paid by him to extinguish the tax title.

As to reimbursement of purchaser for taxes paid as condition of equitable relief against invalid tax title, see note to Holland v. Hotchkiss, L.R.A.1915C, 492. R. E. H

land in the assessment roll, and was there- "pay taxes when due,"-in other words that fore void.

Power v. Larabee, 2 N. D. 141, 49 N. W. 724; Power v. Bowdle, 3 N. D. 107, 21 L.R.A. 328, 44 Am. St. Rep. 511, 54 N. W. 404; Nind v. Myers, 15 N. D. 400, 8 L.R.A. (N.S.) 157, 109 N. W. 335; Beggs v. Paine, 15 N. D. 436, 109 N. W. 322; Wright v. Jones, 23 N. D. 191, 135 N. W. 1120.

Goss, J., delivered the opinion of the

court:

This opinion covers two separate appeals, having the same record and involving the same issues. Complaints are in the usual form, seeking foreclosure of commission mortgages securing a portion of interest on ten-year loans, which interest matures in yearly instalments for ten years. Nine instalments were unmatured. One has been paid. Both commission mortgages are held by plaintiff. The instalment of interest due on each mortgage prior to April, 1911, had been paid, and no payment under either mortgage would fall due until the following fall of 1911. Both mortgages contain the following stipulation: "First: But if default be made in the payment of money or the interest, or any part thereof, or in payment of taxes on said real estate when due, then the mortgagee, its successors or assigns, may declare the whole principal sum due and payable, and this mortgage may be foreclosed at once. (2) And in case of the failure of the mortgagors to pay said taxes, then the mortgagee, its successors or assigns, may pay the same, and such sum paid shall become a part of this mortgage indebtedness and draw interest at the same rate." The taxes falling due December 1, 1910, and delinquent March 1, 1911, on the two quarter sections covered by the two mortgages, had not been paid until the mortgagee, without notice to defendants, paid them on April 19, 1911, amounting to $61.62, for which the usual county treasurer's tax receipt was delivered. These actions were begun less than a week afterwards by service of summons and complaint, basing the right of foreclosure upon the default of the mortgagors in failing to pay these taxes. Mortgagee elected to and did declare the full amount of both mortgages immediately due and payable. The brief of respondents contains but two contentions: First, that the taxes were void; and, second, "that the right to accelerate time of payment of an otherwise immatured obligation, and to proceed to an immediate foreclosure of the mortgage security, can only exist by virtue of some binding contractual stipulation to that effect," and hence acceleration cannot be founded on failure to pay void taxes, under a stipulation that the mortgagors will

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mortgagors were not in default in failing to pay the void taxes, for nonpayment of which the default is claimed as the basis of the right to accelerate interest instalments not otherwise matured.

There is no conflict in the testimony. Defendant testifies that he knew his taxes were delinquent and unpaid, and, in response to inquiry as to why they were allowed to become delinquent, said: "I did not have the money the 1st of March, and I went to the bank to borrow the money to pay it, and the bank explained to me where I would be a little ahead on interest by letting it go until fall and paying the penalty on it, and I came to the conclusion it would be all right. It was not because I would not pay the taxes."

The bank referred to was not the plaintiff bank.

Assuming for the present that the taxes were valid, their payment on or before delinquency was stipulated for in the mortgage, and the right was there given the mortgagee, should the mortgagors default in their payment on or before delinquency, to declare "the whole principal sum due and payable," and to immediately foreclose. The mortgagee could also, at its election, pay said taxes and reimburse itself by using its mortgage to enforce collection of the taxes on the property by foreclosure at once or at its pleasure. Real estate taxes are due December 1, and delinquent March 1. Upon delinquency in 1911 (and prior to chapter 199, Sess. Laws 1909, becoming effective) a penalty of 3 per cent attached in addition to the tax unpaid on March 1st, and to that extent, with additional penalty accruing from time to time on and after March 1st, the mortgage security was gradually becoming impaired by nonpayment of taxes. Whether foreclosure could be instituted prior to March 1st need not be determined, but any time thereafter, in the absence of equitable reasons preventing it, defendants were in default under the terms of the mortgage, and because of which default the mortgage could be foreclosed under the power granted by the mortgage, and which power is valid and enforceable in equity. If has but recently been held (Doolittle v. Nurnberg, 27 N. D. 521, 147 N. W. 400) that it is not required that the mortgagee, before foreclosure and a declaration thereunder that the amount secured by the mortgage shall be immediately due and payable, shall give notice thereof to the mortgagor or allow him an opportunity to cure his defaults. Instead the mortgagee may declare the default without notice, the declaration by foreclosure notice being sufficient; and it follows that a court of equity in which such

a foreclosure is asked, the mortgagee having complied with the law, cannot, on that ground alone, deem the exercise of a legal right, the declaration of default without notice, any defense in itself to the exercise of the right of foreclosure. Hence, if the tax be a valid one, without any consideration of the mortgagee's right to act upon an invalid tax as constituting a cloud on the title of his security, in the absence of some defense to this foreclosure cognizable in equity, the plaintiff had a right to declare the default and to foreclose.

The validity of this tax is squarely before the court, and it must be determined whether it is void because based upon an invalid assessment. The assessment for 1910 is identical as to each tract of land. The description is as follows, viz.:

Cleveland township, county of Walsh, North Dakota. Name of owner, Florence B. Martin; description N. W. 4, Sec. 1, Twp. 155, Rng. 57.

sessments in Iowa & D. Land Co. v. Barnes County, 6 N. D. 601-603, 72 N. W. 1019, citing and following the two Power Cases. The holding is reaffirmed as to 1890 and 1894 assessments in Sheets v. Paine, 10 N. D. 103, 86 N. W. 118, and again in Lee v. Crawford, 10 N. D. 482, SS N. W. 97, as to 1888 taxes; State Finance Co. v. Beck, 15 N. D. 374, 109 N. W. 357, as to assessment for 1891; State Finance Cc. v. Mulberger, 16 N. D. 214, 125 Am. St. Rep. 650, 112 N. W. 986, for tax of 1895; State Finance Co. v. Bowdle, 16 N. D. 193, 112 N. W. 76, for taxes for 1892-1896; and State Finance Co. v. Trimble, 16 N. D. 199, 112 N. W. 984, for taxes of 1895 and 1896. To make the list of similar taxation cases complete we cite Beggs v. Paine, 15 N. D. 436, 109 N. W. 322; Hodgson v. State Finance Co. 19 N. D. 139, 122 N W. 336; Grand Forks County v. Frederick, 16 N. D. 118, 125 Am. St. Rep. 621, 112 N. W. 839; and Wright v. Jones, 23 N. D. 191, 135 N. W. 1120.

Our conclusion filed before rehearing was had in this case was to the effect that chapter 126, Sess. Laws, 1897, § 1600, Rev. Codes 1905, and § 2215, Comp. Laws 1913, operated to relieve recent assessments from the rule of property announced in Power v. Bowdle and the earlier cases decided on assessments prior to those for 1897. This was upon the supposition that this portion of chapter 126 of the Sess. Laws 1897 was new legislation. Instead this statutory provision was earlier in force as § 94 of chapter 132, Sess. Laws 1890, and in force from March, 1890, until repealed by the taking effect, January 1, 1896, of Rev. Codes 1895, and during which period the rule of property had been reaffirmed as to 1890-94 assessments in Sheets v. Paine, 10 N. D. 103, 86 N. W. 117, and State Finance Co. v. Mulberger, 16 N. D. 214, 125 Am. St. Rep. 650, 112 N. W. 986, as to assessments of 1895. As this statute was in force during that period, these assessments cannot be distin

The trial court in its findings found: "That said printed description is insufficient to identify the northwest quarter of section 1, township 155, range 57, as the property described," relying upon Power v. Larabee, 2 N. D. 141, 49 N. W. 724, and Power v. Bowdle, 3 N. D. 120, 21 L.R.A. 328, 44 Am. St. Rep. 511, 54 N. W. 404, and the many decisions of this court upon descriptions in assessments and taxation matters. The time has come when the rule must be followed under present statutes and concerning recent assessments, or a different rule announced as to taxes and assessments of 1897 and subsequent years, including those in question. A brief résumé of the holdings of this court on descriptions by abbreviations is now in order. In the initial case (Power v. Larabee, supra,) the description was similar to the one before us, except that the figure intended to qualify the abbreviation for the quarter section was on the line instead of above it, and was with reference to assessments for 1886-1888. The assess-guished and validated unless the rule of ment was held to be invalid as an indefinite description upon which no valid tax could be based. The attitude of the early court is clearly apparent from a casual examination of early tax cases, and that decision but reflected such attitude. A year later the court was further committed along the same line in Power v. Bowdle, 3 N. D. 107, 21 L.R.A. 328, 44 Am. St. Rep. 511, 54 N. W. 404. A glance at page 113 of the third volume of our State Official Reports shows the description there given to be identical with the one before us so far as the placing of the figure to the upper right of the abbreviation of the description is concerned. The same description is again held void five years later with reference to the 1887 as

property in question be overruled. The assessment must be held to be one which, under direct attack by a party in a situation to assail it, would be held void.

But appellant urges that, plaintiff, as mortgagee of defendants, having paid what it supposed to be a valid tax under the belief that it was a lien or cloud upon the title of its security, and when such property was legally subject to taxation, and which tax thereon is not shown to be inequitable, and where plaintiff was authorized by its mortgage contract to pay taxes and declare default for the nonpayment of same, plaintiff was placed in a position where, after such payment and exercise of power of default under the mortgage, the mortgagors

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