Home Owners' Loan Corporation v. Stevens

I concur. I agree that there was no valid May sale. Hence, if Peterson had obtained no quitclaim deed from the owner mortgagor, he could not be, in any event, an interested party who could "redeem" before a May sale. Peterson can stand in no better position than could his quitclaimor. Let us assume that he stands in the place of the owner — possessing by virtue of the quitclaim deed the valuable right to "redeem" up to the time of a valid May sale. In exercising his right he could not defend against the mortgagee any more than could his quitclaimor. We have said that the tax debtor who buys his formerly owned property from the county after valid May sale does so in recognition of the right of the mortgagee whose lien it was his duty to protect. Hadlock v. Benjamin Drainage District, 89 Utah 94, 53 P.2d 1156, 106 A.L.R. 876. The legal conceptions which should be invoked in recognition and support of this more ultimate principle that one cannot profit by his own failure of duty are not so important. But the ultimate principle is important. The writer has thought estoppel would produce the just result. See dissenting opinion inHadlock v. Benjamin Drainage District, supra. Certainly a mortgagee, whom I shall assume can make a "redemption" between auditor's deed and a valid May sale, would have the right to "redeem" under Section 80-10-68, R.S.U. 1933. A fortiori, an owner could not put himself in a better position as to such mortgagee by "redeeming" before a valid May sale than he could by buying from the county after a May sale. It would seem also that a grantee of the owner — Peterson — taking only the right of the owner, which has attached to it recognition of the lien of the mortgagee, could not be in a better position than the mortgagor-owner.

It would be unique, to put it mildly, after holding as did all the opinions in Hadlock v. Benjamin Drainage District, supra, that an owner by purchasing after a valid May sale could not purchase title from the county and set up that it *Page 141 was free from his mortgagee's lien, to permit him in this case to do it before valid May sale, when by statute the mortgagee also is given a right to repurchase. And it would be just as incongruous to hold that a purchaser from the owner before valid May sale, charged with notice of the mortgagee's right, gains any greater advantage than his grantor — the taxpayer — as against such mortgagee. If such could be done, owners, the day after the four-year period of redemption, could convey to some other person and the mortgagee would be out, thus defeating the law.

In consequence, I cannot see how Peterson under any conception can escape the consequence that any interest — whatever it may be — he takes from the county, will be subject to the mortgagee's claim for resort. If it is the owner's title which is redeemed, then it is redeemed in the state in which it was lost, to wit: with the lien attaching. If it is a new title from the sovereign, the principle of estoppel operates to prevent him from asserting that the mortgagee has no lien. If it is a title in the county by auditor's deed subject to an extended period of redemption or to defeasance by the fulfillment of a statutory condition subsequent, the defeasance, as the redemption, brings back title to the owner subject to the mortgage. In the last analysis we must use the functional approach where conceptions would work a monstrous result. In the case where a mortgagee (if an interested party) tenders the taxes, penalties, interest and costs after the four-year redemption period and before valid May sale it may be necessary to determine whether he "buys" or "redeems" or defeats the county's title by a condition subsequent. If he is a preferential buyer he takes free of any equity of the owner or prior lienholder. If he is a "redemptioner," title goes back to the owner with the liens attaching. In such case I see no great hardship in adopting the conception that Sec. 80-10-68, R.S.U. 1933, gives a right to "rebuy" because the mortgagee buyer would be in exactly the same position as if he had purchased the certificate of title before the four-year period of redemption and taken an auditor's *Page 142 deed. On the other hand we might conclude, as suggested by Mr. Justice McDonough, that the policy of the tax statutes was to permit to the utmost point possible a restoration of the status quo ante, when the county received the taxes. In such case we would conclude that the statute did extend the redemption period. But at this time we need not fasten on one conclusion or another. We may allow ourselves time for further guidance and thought by thus postponing that issue.

Be that as it may, where the owner "rebuys" or "redeems" or transfers to another such right, the equities are all against permitting such owner or his transferee to obtain title by a process involving a dereliction of duty. No man, who, by his failure to perform his duty to another, has set in motion legal processes which would otherwise not have ensued, should be permitted to use those processes in such a way as to turn his dereliction into a triumph over the one to whom he owed the duty. Such is the ultimate principle for which we contend. Such is the principle set out in the prevailing and dissenting opinions inHadlock v. Benjamin Drainage District, supra. And if invocation of the principle of estoppel is necessary to prevent such result, the court will invoke it. And if the owner or his transferee has this valuable right to "rebuy" or "redeem," or to defeat the county's title by condition subsequent, whichever we may call it, such right may be foreclosed by the mortgagee before valid May sale. The fact that a right to "rebuy" or "redeem" between the end of the four-year period and a valid May sale may also lie in the mortgagee, which he may separably exercise, should not prevent him from foreclosing whatever interest still remains in his debtor or which may have been transferred to his debtor's grantee who, as above stated, must be assumed in law to have taken with notice of the mortgagee's prior right to reduce the right to "rebuy" or "redeem" to possession by foreclosure. Therefore, I concur in the results reached in the prevailing opinion and in the reasoning thereof, except as to commitment on the question as to *Page 143 whether Sec. 80-10-68, R.S.U. 1933, as amended, extends the four-year period of redemption provided for by Sec. 80-10-59. As to that question I think the same results may be reached in this case by either process of reasoning and do not commit myself.