Granite Bituminous Paving Co. v. Parkview Realty & Improvement Co.

NORTONI, J.

This is a suit on a special taxbill issued in accordance with the Charter provisions of the city of St. Louis, in compensation for street improvement. Plaintiff prevailed in the suit," and the court gave judgment establishing the lien of the tax-bill against the lot of defendant Nina Realty Company in the amount of $1600.23, and interest thereon.

There are several defendants-, and all of them appeal from this judgment, but the Nina Realty Company alone, as owner of the lot on which the lien is enforced, is the substantial party in interest. . The other defendants are prior owners of the property and trustees in certain deeds of trust thereon, and it will be unnecessary to set them forth here, as they are without any beneficial interest in the property and the judgment is in no sense a personal one against them. At the time the judgment was entered, the lot on which the lien of the taxbill is.sought to be established was owned by defendant Nina Realty Company, who succeeded to the title of the P'arkview Realty & Improvement Company by virtue of the foreclosure of certain deeds of trust thereon, under which the Nina Realty Company purchased.

The lot of ground involved is parcel of City Block No. 3878-, fronting 405.17 feet on Union boulevard in the city of St. Louis. Plaintiff contractor reconstructed Union boulevard adjacent thereto, in accordance with an ordinance of and under a contract with the city of St. Louis, to that end. At the time of the improvement and the issue of the taxbill there*484for, the lot was owned by the Parkview Realty & Improvement Company, a corporation, subject, however,, to two deeds of trust then outstanding thereon. The first of these deeds of trust was executed on July 1, 1902 by the Parkview Realty & Improvement Company, owner, to the Lincoln' Trust Company, trustee, to secure certain bonds. The second of such deeds of trust was executed on August 1, 1902 to the Lincoln Trust Company, trustee, to secure certain other bonds, and both of such deeds were duly recorded about the. time of their execution. While these deeds of trust .were in force and the indebtedness evinced by the bonds therein described was subsisting and unpaid, the city provided by ordinance for the reconstruction of Union boulevard. This ordinance appears to have been passed in February, 1903, and the contract for such reconstruction work was duly let thereunder to plaintiff. Plaintiff performed the work in accordance with the ordinance and contract, and on July 1, 1905 the taxbill sued on was issued to him therefor. Thereafter, on July 19, 1905', notice of the issuance of the taxbill was duly served by the city marshal on the defendant, Parkview Realty & Improvement Company, owner of the fee, but on no other defendant. As originally issued, the taxbill was payable in installments, but upon the failure of the owner of the property to pay the first installment when due, plaintiff exercised its option under the city Charter and declared all installments thereof due and payable. Under the provision of the Charter, the first installment of the taxbill became due thirty days after notice thereof was served on the owner — that is, on August 19, 1905 — and subsequent installments became due immediately, likewise, because of the owner’s failure to pay the first installment. Thereafter, on June 20,1907, and within two years from the maturity of the • thxbill, August 19, 1905, plaintiff instituted this suit, to the end of establishing and enforcing the lien there*485of against defendant Parkview Realty & Improvement Company, owner, and the trustee in the two deeds of trust, but omitted to make the beneficiaries in such deeds of trust parties thereto. Subsequently and after the expiration of more than two years from maturity of the taxbill, the property was sold at trustee’s sale under the two deeds of trust above mentioned, and the Nina Realty Company became the purchaser thereof. Such sales under the two deeds of trust were had on November 2, 1908, and it was on that day the Nina Realty Company succeeded to the title of the prior owner, Parkview Realty & Improvement Company, through its purchase at the trustee’s sale. The Nina Realty Company, -having thus become owner of the fee during the pendency of the suit, was made a party defendant thereto on November 20, 1908. By filing an amended petition on that date, plaintiff set forth the trustee’s sales and the fact that th§ Nina Realty Company had purchased the lot thereunder, made that company a defendant, and prayed that its interests as owner of the property should be subject to the lien of the taxbill in suit.

Among other things, Section 25, Art. YI, of the city Charter provides the lien of any taxbill that is not entered satisfied within two years after its maturity, unless proceedings in law shall have been commenced to collect the same within that time and shall still be pending, shall be destroyed and of no effect against the land charged therewith. In view of this provision of the Charter, the defendant Nina Realty Company interposed its answer to the effect that the lien of the taxbill had expired and was unenforceable against its interests in the property, for the reason that no suit had been instituted thereon within two years after maturity of the bill against the beneficiaries in the deed of trust under which it purchased. Though the Parkview Realty & Improvement Company, owner at the time, was sued within the two-*486year period, the case concedes that the beneficiaries in the two deeds of trust under which defendant Nina Realty Company purchased were not made parties thereto at any time. Indeed, the first move made toward bringing the interests of the beneficiaries before the court was the amended petition filed on November 20, 1908, adding the Nina Realty Company, who succeeded to their rights, as a defendant, and this was long after the expiration of the two-year period prescribed in the Charter, for that period commenced to run when the taxhill matured, on August 19, 1905, and terminated August 19, 1907. Notwithstanding all of this, the court gave judgment for plaintiff, establishing and enforcing the lien of the taxhill against the lot of of ground described and the interests of both the P'arkview Realty & Improvement Company and the Nina Realty Company therein, as though it were unnecessary to include the beneficiaries in the deeds of trust in a suit for the enforcement of the taxhill within the two-year period prescribed, to charge them or their successors as owners of the property with the consequences of the lien.

Obviously, error lies in this judgment, for it involves and affirms the idea that one’s rights may be concluded as though a valid claim existed against him or his property without having his day in court until long after such claim had become extinguished of its own force. By Section 25', Art. VI of the Charter, it is provided the taxhill shall become a lien upon the property charged therein and may be collected of the owner of the land and in the name of and by the contractor, as any other claim, in any court of competent jurisdiction. From this, it appears that the lien is to be enforced against the land in the name of the owner thereof and, by subsequent provision of the same section, the lien of the taxhill, it is declared, “shall be destroyed and of no effect against the land charged therewith,” unless proceeding’s shall have *487been commenced to collect the same within two years from the maturity of the bill and still be pending. Therefore, the proceedings must be commenced on the taxbill and against the owner of the land within such two-year period in order to preserve and establish the lien, or, otherwise, it is destroyed and extinguished perforce of the very words that gave it life. The authorities are abundant and of one accord to the efoct that the suit must be instituted against the owner within the two-year period prescribed, as will appear by reference to the following cases: The case of Eyermann v. Scollay, 16 Mo. App. 498, declares and affirms the rule under the St. Louis Charter; and the following are to the same effect with respect to the Charter of Kansas City: Smith v. Barrett, 41 Mo. App. 460; Jaicks v. Sullivan, 128 Mo. 177, 30 S. W. 890; Smith v. Boese, 39 Mo. App. 15; Forrey v. Holmes, 65 Mo. App. 114; Parker-Washington v. Kemper, 143 Mo. App. 244, 128 S. W. 271. For rulings to the same effect under the St. Joseph Charter, see St. Joseph v. Baker, 86 Mo. App. 310; St. Joseph v. Baker, 113 Mo. App. 691, 88 S. W. 1122. The doctrine declared by all of the cases is, that the two-year period prescribed after which, the lien is to terminate, is not a mere statute of repose to bar actions, but is rather, a limit to the existence of the lien and, therefore, unless the suit is instituted against the owner within that time, such lien expires and it may not be revived and enforced against the interests of the owner in the land. [Smith v. Barrett, 41 Mo. App. 460.]

But, it is said, though such be true, the present suit was instituted against the Parkview Realty & Improvement Company, owner, within the two-year period, and that will suffice to establish the lien against the derivative title of the Nina Realty Company, though the beneficiaries in the deeds of trust were not made parties; for, it is said, such beneficiaries possess nothing more, as against this plaintiff lienor, *488than the right to redeem therefrom. There can be no doubt that the lien of a subsequent special taxbill duly established prevails over the lien of a prior mortgage or deed of trust and becomes senior thereto. Such is the effect of the recent decision of the Supreme Court in Morey Engineering, etc. Co. v. St. Louis Artificial Ice, etc. Co., 242 Mo. 241, 146 S. W. 1142. This is undoubtedly the rule where both the owner of the land and the beneficiaries- in the mortgage are made parties to the suit prior to the expiration of the lien, for, in the case last above cited, all parties in interest were before the court. • See, also, to the same effect, Keating v. Craig, 73 Mo. 507, where both the owner and the mortgagee were parties to the suit to enforce the lien of the taxbill. But though it be the rule that the lien of the subsequent taxbill becomes senior to the lien of the prior mortgage, which is remitted to the position of a junior lien, when all parties in interest are before the court, it is the rule, too, that the rights of the beneficiaries in the mortgage are not concluded by the judgment unless they are made parties to the suit. For a judgment to this effect on a taxbill, see Forrey v. Holmes, 65 Mo. App. 114. As to such beneficiaries who have been omitted from the suit to foreclose the State’s lien for taxes, the Supreme Court has, in a number of cases, affirmed that, though title passed by the execution sale, their right to redeem was still available, as will appear by reference to Stafford v. Fizer, 82 Mo. 393; Gitchell v. Kreidler, 84 Mo. 472; Corrigan v. Bell, 73 Mo. 53; Allen v. McCabe, 93 Mo. 138, 6 S. W. 62.

- Considering the thought reflected throughout all of these authorities, it is obvious that the beneficiary in the deed of trust or mortgage is required to be made a party to the suit, for the reason that he is an owner, within the sense of that term as employed in the Charter provision and as employed in the statute *489with, respect to general taxes levied in behalf of the State. Some of the cases put the rule expressly on the ground that the beneficiary is an owner. [See Stafford v. Fizer, 82 Mo. 393; Gitchell v. Kreidler, 84 Mo. 472.] Furthermore, the' Supreme Court, in the recent case of Morey Engineering, etc. Co. v. St. Louis Artificial Ice, etc. Co., 242 Mo. 241, 146 S. W. 1142, in construing the St. Louis Charter, declared the beneficiary in the deed of trust an owner within the sense of that term, to the end of raising the lien of the taxbill from the position of the junior, where it otherwise lay, to that of senior lien over a mortgage prior thereto in point of time.' To the end of evincing that the Charter' contemplated the lien of the taxbill should prevail over the rights of a prior mortgage, the Supreme Court quoted from section 25' of the Charter as'follows: “Said taxbills shall be and become a lien upon the property charged therewith, and may be collected of the owner of the land and in the name of and by the contractor as any other claim in any court of competent jurisdiction.” Touching the words thus quoted, the court says, “Construed in the light of the case last cited, this means that the tax is a lien upon the property, to be enforced by a proceeding in rem against the property. And, as ruled above, the word ‘owner’ includes incumbrancers.” If, then, the beneficiary in the deed of trust is to be regarded as an owner of the property for the purpose of postponing the lien of his prior mortgage to the lien of the subsequent taxbill, it would seem that he should be regarded as an owner in whose favor the requirement to institute suit within the two-year period, in order to preserve the lien, obtains. On a like question the Kansas City Court of Appeals, under the Charter of that city, declared that, unless the beneficiary in the mortgage was made a party to the suit within the two-year period, the lien as to his interests *490amounted to naught, or, in other words, had expired. [See Forrey v. Holmes, 65 Mo. App. 114.]

But it is argued that the junior lienor is never a necessary party to a proceeding for the enforcement of the senior lien and that a valid judgment may be had against the res, enforcing the lien, though the junior lienor is not a party, but subject, however, to his right to redeem. The argument is obviously sound in those cases where the lien is a continuing one and so comprehensive by the terms of the statutes as to include all interest in the land in whosoever name it may be. The cases of Stafford v. Fizer, 82 Mo. 393; Gitchell v. Kreidler, 84 Mo. 472; Allen v. McCabe, 93 Mo. 138, 6 S. W. 62, and numerous other authorities declare the rule where the lien of the State for taxes has been enforced. In the argument advancing this proposition it is said the junior lienor, the holder of the mortgage here, at best has a lien only on the equity of redemption, or a right to redeem from the prior lien of the taxbill, and that this continues and may be availed of to the very day of sale under the tax judgment; that though .defendant Nina Realty Company was not made a party until after the two years had expired, and the beneficiaries in the mortgages, to whose rights it succeeded, were never made parties at all, its right to redeem is still open and this defendant lias been given its day in court with respect thereto, for it may redeem even after the judgment is affirmed and at any time before the property is sold in execution thereunder. Obviously this argument assumes a subsisting lien against the interests of the Nina Realty Company from which a redemption may be made. If the lien continued to exist as in the tax cases, and obtained upon the realty without regard to the ownership, the argument would be persuasive, indeed. But here, the lien of the taxbill expired before it was ever asserted, as the Charter requires, against the beneficiaries in the mortgages, or *491the Nina Realty Company, which succeeded to their rights, and, furthermore, the lien of the taxbill does not obtain against the land without regard to the ownership.

The general taxes in favor of the State are declared by section 11385, Revised Statutes 1909, to obtain against the land “no matter who is the owner nor in whose name it was assessed.” And the lien with respect to such taxes obtains accordingly there —that is, on every interest in the land. It is true that the owner of the land must be made a party to the tax suit for the purpose of enforcing the lien of the' State, to the end .of conferring the jurisdiction over the res, but the tax itself is affixed against the land as a matter of law without regard to the owner thereof. Such is not true as to á taxbill representing special assessments as for benefits because of improvements made, for unless the improvements are made, no tax can obtain, and that such improvements were made is a fact to be proved as a basis for the lien. Special taxbills become a lien upon the property and may be collected of the owner of the land, it is true;' but, to this end, proof is required against the interest of the owner as a condition precedent to affixing the lien upon his interest in the land. This proof, according to section 25 of the Charter, may be made by the taxbill itself, which is sufficient prima facie evidence ‘ ‘ of the liability of the person therein named as the owner of the land charged with such bill'to pay the same.” The taxbill here involved names the Parkview Realty & Improvement Company as the owner of the land and in no way refers to the beneficiaries in the mortgages. Obviously, then, the bill itself is sufficient to evince the right of a lien against only the P'arkview Realty & Improvement Company. In the sense of the Charter, as before pointed out, the beneficiaries in the mort-' gages are regarded as owners of the property, too, and it is essential, when others than those named in *492the taxbill appear to be owners, that proof aliunde the bill be made, in order to affect the rights of snch owners not named therein. [See Farrell v. Rammelkamp, 64 Mo. App. 425; McCormick v. Clopton, 150 Mo. App. 129, 130 S. W. 122.]

That the taxbill is not prima facie evidence of the right to the lien against a mortgagee not named therein has been expressly decided, as will appear by reference to Kansas City to the use, etc. v. American Surety Co., 71 Mo. App. 315. Obviously the Charter intends that every person interested as owner in the property sought to be subjected to the lien of the tax-bill shall have a right to defend against the assertion of such lien, and most assuredly the assertion of the lien should be made while the right to it continues to exist and not after it dies, for. then defense would be unnecessary: From these considerations alone, it would seem that the rule which prevails as to the right of the junior incumbrancer to redeem from the general tax lien and, except for that, a judgment to which he is not a party concludes him, is without force here, for unless this lien is established by evidence aliunde the taxbill, no lien whatever obtains ag-ainst the rights of such owner as the Nina Realty Company, whereas in the case of the lien for general taxes it comprehends the whole estate and every interest in the land, without regard to the matter of ownership whatever, and obtains against both prior and subsequent incumbrancers at all hazards. In the case of the special taxbill, the lien obtains against the owners and their interests in the land only by virtue of its being established against their interest in the land by proof, and not because it comprehends such interests whether or no, as a matter of law. Unless the lien is asserted within the two-year period and subsequently established, there is naught from which redemption should be made.

*493It seems to me the opinion of the court in this case overlooks the fact' that there is no lien here until established, and treats the matter as though there were a subsisting lien as in the case of general taxes or in the case of a mortgage, both of which liens obtain without any proof whatever. In this cause, instead of there being a lien upon the land, there exists only a right to establish a lien which attaches provided competent proof is made against the owner within two years. If the mortgagee is an owner, as declared in Morey Engineering & Construction Co. v. St. Louis Artificial Ice Rink Co., 242 Mo. 241, 146 S. W. 1142, then such mortgagee should be sued within the two years limitation prescribed by the Charter in favor of an owner.

For the reasons given above, I respectfully dissent. I deem the judgment of the court to be in conflict with that of the Supreme Court in the case last cited, in that it denies to the mortgagee the right of an owner to be sued within two years, as prescribed by the Charter. Furthermore, the judgment of the court in this case is in conflict with the judgment of the Kansas City Court of Appeals in the case of Forrey v. Holmes et al., 65 Mo. App. 114, which is directly in point to the effect that unless the mortgagee is sued within two years the right to establish a lien against his interests expires.

Because I deem the judgment to be in conflict with that given in the two cases last above cited, I request that the cause be.certified to the Supreme Court foi final determination.