Opinion · Supreme Court of Missouri
Mangold v. Bacon
237 Mo. 496
- Type
- Opinion
- Court
- Supreme Court of Missouri
- Jurisdiction
- Missouri
- Date
- 1911-11-27
- Topic
- general
LAMM, J. Equity—the relief sought being to set aside a judgment and cancel a tax deed. Here once before, heard and submitted in Division and then in Banc, a judgment in Mangold’s favor was reversed and the cause was remanded. [Mangold v. Bacon, 229 Mo. 459.] Below he amended his bill, and, on an attempt to introduce evidence, was met by an objection that his bill as amended did not state facts sufficient to constitute a cause of action. That objection was sustained.
Citator
- Cited by
- 35 opinions
Equity—the relief sought being to set aside a judgment and cancel a tax deed.
Here once before, heard and submitted in Division and then in Banc, a judgment in Mangold’s favor was reversed and the cause was remanded. [Mangold v. Bacon, 229 Mo. 459.] Below he amended his bill, and, on an attempt to introduce evidence, was met by an objection that his bill as amended did not state facts sufficient to constitute a cause of action. That objection was sustained. Saving his exception, he refused to plead over, elected to stand and suffered judgment, viz., that his bill be dismissed and that defendant recover costs. From that judgment, he appeals.
The pith of the bill will do for our purposes, viz.:
In 1902 Mangold owned forty acres of land in Butler county (the southeast quarter of the southwest quarter of section 2, township 23, range 5). In that year he sold and conveyed to the Hogans (husband and wife) for $900 — $100 in hand and $800' evidenced by promissory notes, secured by a deed of trust on the forty — said deeds spread of record and the Hogans taking possession. In September, 1903, one Souders, collector of revenue for Butler county, brought suit as relator against Mangold, the Hogans and others in the Butler Circuit Court, returnable to the ensuing October term, to enforce the State’s lien for taxes delinquent for 1900 and 1901. Summons issued, Mangold and three other named parties were served with copies on the 19th of November. Thereafter, in that month, to stop further proceedings and to protect his equity in the forty, Mangold (living away from the county seat) wrote Souders for the amount of taxes, penalties, fees and costs. Souders, in December of that year, sent him a statement showing them to be $15. Thereat, Mangold on the 26th of that December paid Souders, as collector, in full, and Souders sent him a tax receipt and at the same time marked the tax book paid in full for those years. Thereby (so the
The bill makes a tender and offer to refund to Bacon his bid. On such premises Mangold prays the tax judgment be declared void, that the tax deed be canceled and for naught held, and for such other and further relief in the premises as to the court may seem meet and proper.
The answer admits those allegations relating to the tax suit, judgment, execution, levy, sale, and tax deed which are favorable to defendant’s title, denies all other allegations and avers that the tax judgment and deed effectually extinguished plaintiff’s title and conveyed his interest to defendant, who thereby became sole and absolute owner of the forty, leaving Mangold no estate, title or interest whatever therein.
The questions are two, viz.:
(1) Was the petition good as against an objection to the introduction of testimony?
(2) Shall we adhere to certain rulings made, when the case was here on the former appeal, in particulars hereinafter appearing, (and herein, of res judicata, as the law of the case on its second appeal).
As a foreword, it is not amiss to say that we are not dealing in this case with the vendee of a purchaser at a tax sale who may hold under a warranty deed or for full value. Neither is there a collateral attack made upon a tax deed or a tax judgment. The attack in this instance is direct and leveled at both. Neither is it necessary to plaintiff’s relief that both judgment and deed be set aside. Disposing of the deed will dis
I. Of the first qnstion raised: Was the amended bill so bad that, testimony conld not be heard? This phase of the case will be considered solely from the standpoint of Mangold v. Bacon, supra, as set forth in the majority opinion.
When the case was first here the bill as then framed was criticised by onr brother Graves, who spoke in the principal opinion for a. majority of his brethren after this fashion: The bill does not count on fraud in the actual sale. It charged no notice to Bacon of irregularities nor did it charge inadequacy of price except inferentially. It suggests no wrong by the purchaser. It shows the suit brought on the narrow and only theory that mere payment of the taxes prior to judgment, ipso facto, and without more, rendered the judgment void. That theory is based on the Harness case (126 Mo. 233). The Harness case is too broad in that (quoting): “There is much said in that opinion [the one in the Harness case] which has never been approved by this court from the day it was written. ’ ’ However, recognizing possible merit in Mangold’s claim, the principal opinion reversed and remanded for the very purpose of permitting an amendment expressly alleging inadequacy of consideration, fraud and notice to Bacon. Comment is further made that, if in the case, the issue of inadequacy of price was not tried out below at the first trial — this, because of certain rulings of the trial court on the admission of testimony on value. Our learned brother, summing up in that behalf, says: “On the idea that this question is in the case, the cause should be reversed and remanded to the end that such question can be tried on proper evidence.” [Pp. 475M, q. v.]
It is true that paragraph 4 waives the question as to whether there is a sufficient charge .of inadequacy of price to make that a trial issue (i. e., by assuming, arguendo, that the issue was in the case), and then goes on to dispose of it by holding that mere inadequacy of price alone will never vitiate an execution sale or set aside a sheriff’s deed — to this feature we will return later in discussing the second question. For the present it is sufficient to consider the amended petition in connection with the granted leave for amendment and in connection with our mandate reversing and remanding for another trial. To that end, attend further to the principal opinion. Paragraph 5 concedes “that facts may be alleged from which a charge of legal or actual fraud may be inferred,” and proceeds to comment on the lack of any allegations connecting Bacon therewith — his lack of knowledge of the fact that taxes had been paid prior to the judgment, upon the fact that Mangold knew and Bacon did not know of such fact, that there was no charge of Bacon’s knowledge, that the petition should allege and the proof show knowledge on his part of the facts constituting the fraud in the sale — none of which averments
It will thus be seen that in so far as the principal opinion dealt with the original bill from the standpoint of a pleading it held it amendable. Amendment was suggested and, inter alia, the cause was remanded for that very purpose. When the ease went down the bill wa,s amended so as to allege inadequacy of price grossly shocking. Further, so as to characterize the facts set forth as frauds upon the plaintiff’s rights; and further so as to allege that Bacon had actual notice and knowledge, or by the exercise of reasonable diligence would have had notice and knowledge, of all facts pleaded in the bill. We are not dealing now with the quantum of proof necessary to show notice or the quantum of proof to show such facts and surrounding circumstances as put Bacon upon inquiry, which diligently pursued would have led up to knowledge of plaintiff’s equities and therefore stand in law as equivalent to knowledge. It is not inconceivable that plaintiff may produce facts showing either actual or constructive notice to Bacon of the payment of the tax, or actual or constructive notice that plaintiff relied on an agreement with the collector ' (express or implied) to dismiss the suit, or notice of such facts as would indicate to a reasonably prudent person that there must be something radically wrong and irregular in a tax sale with personal service on a presumably well known citizen, when forty acres of his land with a clear title, valued at $1200', is put up at sheriff’s sale and knocked down under the hammer for $12.50 — a
It is stoutly argued for defendant that the amendments in nowise cured the ills of the bill from the standpoint of the majority opinion. As to this we say: True it is, the facts constituting the fraud should be set forth. A mere charge of “fraud” is a conclusion. It amounts to nothing as an averment of fact. Assuming that good doctrine, yet it does’not apply here, because : In the dissenting opinion at the. first hearing it was insisted that the facts were pleaded, and if they constituted a fraud in fact or law that the mere epithet “fraud” was not necessary. Why write horse under the apt picture of a horse? — a correct outline of the equus caballus? The principal opinion, to my mind, did not controvert that proposition, but rode off on the theory that- fraud was not the trial theory, and that the petition did not count on fraud as a ground of relief. The amendment supplied that alleged deficiency, and the pleading as it now stands sets forth the facts and charges that those facts constitute a fraud. Upon all the facts plaintiff predicates his right to relief. There are now an allegation of fraud (with a blazoning forth of the bundle of allegation of facts making up the elements of the fraud), an allegation of notice to Bacon, plus an averment of a consideration “shockingly and grossly inadequate,” viz., $12.50' for land worth $1200. It seems the
In discussing the second question, further on, we shall have something to say of the scope and legal effect of certain averments in plaintiff’s bill. For the present we hold the amended bill stated a cause of action, viewed even from the strict point of view of the majority opinion, and that plaintiff was entitled to go fully into his proofs.
It' results that the trial court erred in excluding testimony and that the judgment will have to be reversed and the cause remanded for the foregoing reason, if for no other.
II. Of the second question: Shall we adhere to the doctrine of the majority opinion when Mangold »v. Bacon was first here?
If we stand by its doctrines precisely as pronounced, this case will have to be tried, when again sent down, in accord with its conclusions. It becomes
A preliminary controversy arises bespeaking settlement, viz.: Have we the judicial discretion to modify the former decision, or are issues of law foreclosed and finally settled thereby, once for all? Suppose the propositions and conclusions there pronounced do not now meet our approval, does the opinion, notwithstanding that, finally lay down the law of the case? Are our former conclusions not in the. nature of res judicata¶
For defendant it is argued that the case was soundly ruled when here first and the opinion asserts clear equitable doctrines on the facts then before the court; but that (further and at all events) whether right or wrong, the conclusions there announced became and must remain the law of this case at every subsequent step. E converso, counsel for plaintiff argues that the first opinion declared a doctrine too narrow in certain particulars and that the error is open to correction on the second appeal — all this on recognized rules of practice.
The general question now up may, therefore, logically divide itself into two, viz.:
Are we free to reconsider or reformulate any doctrine announced in the majority opinion when the case was first here?
If so, shall we reassert or modify them?
Of these questions in the above order.
(a) The general rule, nakedly and baldly put, is that legal conclusions announced on a first appeal,» whether on the general law or the law as applied to the concrete facts, not only prescribe the duty and limit the power of the trial court to strict obedience and
But there are exceptions to the rule as well recognized as the rule itself. Those exceptions evidence a flexibility adjusting the rule to needs of refined justice by the exercise of a high and discriminating judicial power. We owe a duty to enforce the exceptions as well as the rule; for exceptions prove the rule. They confirm the law; therefore expound the law. Without undertaking to state the exceptions with precision, the scope and trend of them may be arrived at by a summary review of some of the cases. Thus:
In Chambers v. Smith, 30 Mo. 156, a very strong pronouncement of the general rule in Roberts v. Cooper, 20 How. 467 (quod vide), was considered and we
Yerily, a court has a natural right to change its own mind. In Padgett v. Smith, 205 Mo. 125, it was pointed out that it was necessary to preserve unimpaired that natural right — one to be guardedly and discriminatingly used in the exercise of a high power. An appellate court is a court for the correction of errors —its own as well as others. In correcting the errors of lower courts we do not proceed on the theory we make none of our own. [Donnell v. Wright, 199 Mo. l. c. 317.] I have read somewhere an apt paraphrase by a wise judge on Lincoln’s apothegm, anent fooling all the people all the time (judge and case both gone by some lapsus memoriae), viz.: “A court may know
The exceptions to the general rule doubtless are allowed to avoid the mischief of such human infirmity.
But we have pursued the matter far. The general rule does not strictly involve res judicata, as that term is known to the law, when a cause has been reversed and remanded for a retrial with leave to amend. Such case is still in the bosom or protection of the law (In gremio legis). Strict res jtidicata is allowed a rather remarkable and prodigious potency. It is conclusive estoppel by record. It, in effect, makes of white, black; of black, white; of the crooked, straight; of the straight, crooked; that is, the very end has come without further quibble or doubt. [North St. Louis Gymnastic Society v. Hagerman, 232 Mo. 702.] I.t admits of no exceptions. It is a bar conclusive between parties and privies when the same point is again in issue. We have used the strong term, res judicata, in cases in connection with the general rule. Possibly that use of the term is a little due to poverty of our language in expressing nice shades of thought, or by way of analogy. However that be, the exceptions to the rule show the term, res judicata, in all its strictness, is an inappropriate or loose expression in that con- • nection. It would be better to say “in the nature of— res judicata.”
The premises, considered, the sum of the matter is this: Whether- from grace or right when cogent and convincing reasons appear, such as lack of harmony with other decisions and where no injustice or hardship would flow from a change, or where by inadvertence principles of law have been incorrectly declared the first time, or mistake .of fact has been made, or - injustice to the rights of parties would be done by adhering to the first opinion, then the exceptions to the rule have play and it is our duty to re
We hold the instant case falls within the exceptions. That conclusion brings us to the second subdivision of the general question under this head, to which we pass.
(b) Of the majority opinion on the first appeal. Should we reassert or modify its doctrines'? We think they should be modified.
(1) That opinion held, in effect, there was no fraud in the concoction of the tax jugment on the facts then before the court. After consideration, the court barely missed being equally divided on that proposition. In the light of reargument and reconsideration we do not think it sound equitable doctrine. Mangold, sued for taxes, was personally served. He then had a mortgage on the land for its purchase price and before judgment held the whole record title. When sued he played the ideal role of a good citizen, bowing his neck promptly to the yoke of paying his pro rata tribute to the State. Thereby he rendered to Caesar the things that were Caesar’s. He wrote the officer charged with the duty of collecting taxes asking to be informed of what the State demanded at his hands. We have no disposition or call to coyly toy, palter, quibble or split hairs with or over the mere verbiage of his letter. That letter must be read in the light of the situation known to the officer. The situation was this: He had sued Mangold for taxes and to foreclose a lien. Mangold wanted to pay and get out of trouble. So that if he did not inquire specifically and technically for the costs in the circuit court his letter was sufficient and meant so much. It was in effect a request to the State for the amount that would discharge taxes due, the lien thereof, and put him and his land out of danger. The officer, responding for the State, notified him of the amount. That amount he paid. The officer then sent him an acquit
The State, could not be sued eo nomine. The collector to whose relation the tax suit was brought has become functus officio, Thé party who asserts rights
On the facts here before, we are now of opinion the judgment in favor of Mangold, setting aside the tax judgment, should have been affirmed. If substantially the same facts should appear at the next trial, the circuit court should set the judgment aside. This conclusion is somewhat fortified by the fact that the lien of the State was exhausted and satisfied when the taxes were paid (Thompson v. Elevator Co., 77 Mo. 520), and there was no lien left to foreclose. Looked at from the standpoint of mere costs in the circuit court, that should be dealt with on the theory that officers to whom costs are due may not control, prevent or cut behind a settlement made by the collector. (Hoover v. Railroad, 115 Mo. l. c. 81.) They have no right to foreclose a discharged lien for taxes in order to get the incidental advantage of a judgment for costs.
(2) Of inadequacy of consideration.
There is a question here not involving that of notice to Bacon of the payment of the taxes before judgment, viz.: May an inadequacy of consideration in a judicial sale, so gross as to shock the conscience, ever, without more, be sufficient ground in equity to set aside a sheriff’s deed?
The question might arise under many different conditions. To avoid obiter, what we say at this time must be taken as strictly applicable to a case like the one at bar. This case proceeds on the theory that land worth $1200, in actual possession as a farm, in tne absence of the owner and with no actual notice to him, sold under a tax sale for a sum insufficient to pay any taxes or to fully pay a pittance of costs, on a judgment on personal service — the purchaser claiming title.
That inadequacy of consideration is not treated in books on equity as a distinct head of equitable relief, but under the head of fraud, is nothing to the point. The mere name amounts to nothing. If the inadequacy is so inflamed under all the facts as to spell fraud, then we have two things, each the equivalent of the other, viz., fraud and inadequacy.
Nor is it anything to the strict point that courts are fond of looking sharply about and laying hold of other equitable features, however small, when present, in aid of relief. This disposition (markedly evidenced in most cases) by no means shows that inadequacy of consideration of the character discussed may not be an all-sufficient ground of relief, when none other can be laid hold of and the case cries out for relief. It merely shows the delicacy of the matter, the extreme caution with which courts deal with it and the desire to fortify the principal ground whenever the facts permit. Nor is it conclusive on the point that cases may be found that state the general rule and leave off the exception, viz., “unless the price is so inadequate as to shock the conscience.” Courts do not always take time to state modifications when stating a gen
Gninan v. Donnell, 201 Mo. 173, was a late case in Banc and was unanimously ruled. The rule was there stated in this way: “It has always been held by this court that inadequacy of price alone will not justify the setting aside of a sheriff’s sale of real estate 'under execution, unless the price is so inadequate as to shock the moral sense and outrage the conscience. 'Then courts will interfere to promote the ends of justice” — Citing cases. To the same effect are: Morriso v. Philliber, 30 Mo. l. c. 148; Hanson v. Neal, 215 Mo. l. c. 275; Cobb v. Day, 106 Mo. l. c. 300 et seq.; Walters v. Hermann, 99 Mo. 532; Knoop v. Kelsey, 121 Mo. l. c. 649; Davis v. McCann, 143 Mo. 177; Bispham’s Eq. (7 Ed.), p. 330, see. 219; 1 Story’s Eq. (13 Ed.), sec. 245, 246; 2 Pomeroy’s Eq., sec. 927; Osgood v. Franklin, 2 Johns. Ch. l. c. 24; Graffam v. Burgess, 117 U. S. l. c. 192 et seq.; Schroeder v. Young, 161 U. S. 334; Stephens v. Ozbourne, 107 Tenn. 572; Holdsworth v. Shannon, 113 Mo. l. c. 520 et seq. Rorer guardedly states the doctrine thus (Rorer on Jud. Sales (2 Ed.), sec. 549, p. 233): “If there be no fact or circumstance relied on to set a sale aside but inadequacy of price, then the inadequacy must be such as in itself to raise the presumption of fraud, or else the sale will not be disturbed. But if in addition to such inadequacy there be any appearances of unfairness, or any circumstance, accident, or occurrence in relation to the sale of a character tending to cause such, inadequacy, then the sale will be set aside; but inadequacy of price is still the main ground of disturbing the sale, for if the price were full value, or even a passable one, then the objectionable facts or circumstances could have worked no evil.”
Sec. 1095: “But although inadequacy of price will not alone be cause to set a sale aside, unless so gross as to raise a presumption of other cause, yet when inadequacy is combined with accident or appearances of fraud or unfairness, the sale will be set aside-. ’ ’
The majority opinion closed and locked a door heretofore open for use to reach relief in extreme and aggravated cases. That door should be left open— not only so, but used in this case on the facts here before, even if no other ground of relief appears. In so far as the majority opinion is in conflict herewith, it should not be followed.
We hold further that under the facts here before, the bid was so unconscionable that the judgment setting it aside should have been affirmed;' and that if substantially the sanie facts appear at the next trial, the chancellor should annul it as a cloud upon Man-gold’s title. Such a bid under such circumstances was a red “danger signal of equities behind.”
If plaintiff can show notice to Bacon of all the facts alleged in his amended bill, so .much the better. But if he fail to show notice, and the facts develop again as before, he is entitled to relief not only on the ground of inadequacy of consideration but because of such accident, surprise, hardship and unfairness as naturally account for the inadequacy. We are not saying that equity requires a bidder at a tax sale to bid full value for the land, nor are we saying
The chancellor at the next trial will proceed in accordance with this opinion.
The judgment is reversed and the cause remanded.
All concur, except Graves, J., who dissents in an opin- ' ion to be hereafter filed.