1. Where an owner of realty enters into a written contract with another by which the former demises and leases to the latter an estate therein for fifty years, with an option to the lessee to purchase at any time within the fifty years at a stipulated price, with an obligation on the part of the lessee to purchase said property upon the terms and conditions contained in the option, whenever the lessor shall be in position to convey to the lessee an absolute, unincumbered, and indefeasible title; the lessee being placed in possession, and obligating himself to place on the property certain permanent improvements of a designated value, to pay by way of rental a certain sum per month during the full term of the lease, and all taxes that may be assessed against the premises, the lessee having the right to remove a building already on the premises, with the right of the lessee, after certain improvements have been placed thereon, to transfer and assign the lease and thereupon to be relieved of all further obligations thereunder; and where the owner of the fee does not return the property for taxation, or pay the taxes thereon, but the same is returned by the lessee, and the taxes thereon are assessed against the lessee in possession, and on default in the payment of taxes the premises are levied on and sold as the property of the lessee: Held, that the purchaser of the premises at the tax sale acquires the property divested of the owner's and lessor's title.
2. One who by inheritance succeeds to the interest of such original owner in the property will not be heard in a court of equity when seeking to cancel the deed of the purchaser at such sale, on the ground that the levy was excessive, without paying or offering to pay all unpaid taxes due on said property when the ownership thereof was in the person from whom it was inherited.
3. The rulings announced above are controlling; and without regard to various other substantial questions made by the record, it must be held that the judgment of the trial court was correct in overruling the demurrers interposed by plaintiff in error, and in sustaining the demurrer to her answer and cross-action.
Nos. 13426, 13429. OCTOBER 19, 1940. REHEARING DENIED NOVEMBER 21, DECEMBER 5, 1940.
In 1919 Mrs. Rebie Lowe Rosenkrantz, the owner of certain real estate in the City of Atlanta, Fulton County, Georgia, entered into a contract concerning it with Ben J. Massell. The writing began "Indenture of Lease," and referred to Mrs. Rosenkrantz as the lessor and to Massell as the lessee. It was signed by both parties, and contained, among other provisions, the following: The owner demised and leased the real estate there described to Massell for fifty years, and she covenanted that he should have peaceable possession
and enjoyment of the premises during the full time thereof. He agreed to pay her by way of rental $500 per month, and to pay all taxes assessed, and other governmental charges that might be assessed against the property; that he would shortly expend not less than $17,500 in erecting a building on the premises, and within a further period of a few months to expend another $7500 in erecting an additional building; that the lessee had the right to remove the building then on the premises; that the lease might be transferred by the lessee; that the lessee at his option should have the right to purchase the premises at a price of $125,000; and that at such time during the term of this lease when the lessor should be in position to convey unto the lessee an absolute, unincumbered, and indefeasible title in fee simple, the lessee was obligated and bound to purchase said premises from the lessor upon the terms and conditions contained in the foregoing option. In 1925 Massell transferred this lease to W. F. Winecoff, who held under the lease until June, 1932, when he in turn transferred it to Glynn Investment Company. Mrs. Rosenkrantz died in 1933, and the Trust Company of Georgia qualified as her executor. There was an intestacy as to her interest in this property, and it passed to her brother, W. B. Lowe, as her heir at law, and upon his death to his widow, Mrs. Alice Lowe, the plaintiff in error. Since the date of the lease neither Mrs. Rosenkrantz nor W. B. Lowe nor Mrs. Alice Lowe has ever returned the property for taxes. Winecoff and Glynn Investment Company did return it. In several years no taxes have been paid on the property. During the years that Winecoff returned it his return on a printed form was headed "W. F. Winecoff (Lessee)." The oath to this tax return was signed "W. F. Winecoff." During the years covered by the transfer to Glynn Investment Company the taxpayer's return on the printed form was headed, "Glynn Investment Company, Lessee. City return in W. F. Winecoff (Lessee)." The oath to this return was signed "W. F. Winecoff."
The lessee and his transferees were in possession of the property. Under a return of the nature stated above an assessment was made; and there having been a default in the payment of taxes, the taxing authorities of the City of Atlanta levied on the property, and it was sold, the city being the purchaser, they in turn deeding it to a third party, who went into possession. Subsequently, upon default
in the payment of county taxes, the county taxing authorities sold it at a tax sale. In the meantime Winecoff had placed a deed to secure debt upon his leasehold interest in the same, and executed a trust indenture to certain trustees, whose successor in trust was Wilfred G. Gehr. Mrs. Rosenkrantz having died, the Trust Company of Georgia qualified as her executor. It filed in Fulton superior court a petition asking for direction, averring that Mrs. Rosenkrantz had made a number of special bequests in her will; reciting what has been stated above with reference to this property, and that special legatees were insistent that their legacies be paid to them; and asking the direction of the court. A decree was entered, permitting that the legacies be paid, on the assumption that even if the estate of Mrs. Rosenkrantz was liable for the taxes on this property, it was of sufficient value to satisfy them. Later, Gehr as trustee filed a suit in which he sought to set aside the tax sales referred to above, one of his grounds being that of an excessive levy. His cause was decided adversely to him, and he brought it to this court, where the writ of error was dismissed. In one or the other of these cases appeared as defendants the City of Atlanta, the marshal of that city, the Fulton County tax-collector, and the intervention of the State revenue commissioner, who asked for receivership of the property. On motion Mrs. Lowe, the plaintiff in error, was made a party over her objection. She filed demurrers to various pleadings of the other parties, and in every instance her demurrer was overruled. By answer and cross-action she invoked the power of a court of equity to cancel the tax deeds, alleging that under the tax returns as made, the assessments, the execution, the sale and the deeds thereunder, nothing passed to the purchaser except the leasehold interest; and that the deeds were void for the reason that the levy was excessive. Her answer, cross-action, and amendment were dismissed on demurrer. In the meantime an order consolidating the two cases for the purposes of trial had been taken. Mrs. Lowe excepted to each of the rulings refusing to sustain her demurrers to the pleadings of her adversaries, and to the sustaining of the demurrers to her pleadings. A bill of exceptions was sued out in each case. The questions presented are identical, were argued together, and will be disposed of in one opinion.
1. The assignments of error fall into two classes, the first of which is the overruling of Mrs. Lowe's general demurrers to the intervention of Head, revenue commissioner, and to the one by Fulton County, and to the answers of the City of Atlanta, or Elder, municipal revenue collector, and of Suttles, the tax-collector of Fulton County. The second class of exceptions relates to the sustaining of demurrers to her answer and amendment. In these pleadings she asked for affirmative equitable relief. She is plaintiff in error, and therefore has the burden of showing not only error but injury. If the purchaser at the city marshal's tax sale acquired a good title to the fee, the ultimate result reached by the trial court was correct, and no injury has been done to the plaintiff in error. She attacks the sale on two grounds, the first being that only the title to the estate for years could have passed, since the executions were issued in personam against the holder of the estate for years. She relies on the line of decisions holding that where land is held by a life-tenant, and taxes are assessed against him and executions issued in personam only, a sale under levy of such executions passes only the life-estate. Stone v.Franklin, 89 Ga. 195 (3) (15 S.E. 47); Clower v.Fleming, 81 Ga. 247 (7 S.E. 278); Gross v. Taylor,81 Ga. 86 (6 S.E. 179); Roddenberry v. Simpson, 171 Ga. 715
(156 S.E. 583, 75 A.L.R. 414); Kirk v. Bray, 181 Ga. 814
(184 S.E. 733); Howell v. Lawson, 188 Ga. 164
(3 S.E.2d 79). The insistence is that the principle of these decisions should be applied to a tax sale of property in possession of a lessee having an estate for years in the property, when the execution in personam is likewise against the lessee. In the cases cited there were two estates in the same property — the life-estate and the remainder; the holders of the limited estate were sole occupants of the property taxed; the executions under which the sale took place were in personam and directed against the holder of the lesser estate; and the property was sold as the property of the latter. But the analogy goes no farther. In none of those cases
was the person against whom the tax execution issued put in possession by the holder of the other estate, nor did he derive his right to his limited estate therefrom. He entered under no covenant that he should have possession and control of the premises for any certain length of time, no obligation to pay rental, no promise to pay all taxes, no covenant to expend large sums for permanent improvements, and no contract giving him an option to purchase, with a further agreement on his part that when the holder of the other estate shall be in position to convey to him an absolute, unincumbered, and indefeasible title in fee simple, then he is obligated and bound to purchase the premises on the terms and conditions contained in the option. The contract in the instant case contains all of the features above referred to. It is true that as between the parties, under one of the express terms of the instrument, the lessee was chargeable with the payment of the taxes. The Code declares: "Life-tenants, and those who own and enjoy the property, shall be chargeable with the taxes thereon. Hence, while the public may treat property as belonging either to the maker or the holder of a bond for title when the latter is in possession, yet as between the parties the one receiving the rents or enjoying the use shall be liable for the taxes." § 92-110. This is but a codification of the rulings of this court in National Bank of Athens v.Danforth, 80 Ga. 55 (7 S.E. 546), Burns v. Lewis,86 Ga. 591, 602 (13 S.E. 123), and Wells v. Savannah,87 Ga. 397 (13 S.E. 442).
The present issue however, is not between parties who own different interests in the same property, but between the taxing authorities and the owner of the fee. We might concede that under this record the public might have assessed the taxes against either the lessee or the lessor; but that proposition does not reach the issue before us, which is, did the entire fee pass to the purchaser under a sale by virtue of a tax execution issued against one with the word "lessee" after his name, on an assessment made in the same manner, the tax deed reciting that the purchaser is to have and to hold the premises "in as full and ample a manner as the said [named] lessee or its heirs and assigns did hold and enjoy or might have held and enjoyed the same, had it not been seized and sold under the execution aforesaid," the defendant in fi. fa. not actually owning the fee, although in actual possession under the
owner of the fee, by virtue of a contract of the nature of one hereinbefore described? The problem is not solved by merely recognizing, as we do, that a leasehold interest is itself taxable. Henry Grady Hotel Co. v. Atlanta, 162 Ga. 818
(135 S.E. 68). Real Estate Loan Co. v. Union City, 177 Ga. 55
(169 S.E. 301), was a suit to enjoin a proposed sale under municipal tax fi. fas. It was there ruled that though the grantor and grantee in a security deed may agree as between themselves as to which shall be liable for the taxes upon the property conveyed, yet the complete title is nevertheless subject to taxation as a whole, and a sale made in pursuance of a proper assessment and execution would divest the interest and title of each of the parties, with the exception of the right of redemption. The security deed is not a lien, but an instrument conveying title to the vendee. Gilliard v. Johnston,161 Ga. 17 (129 S.E. 434); Richey v. First National Bank,180 Ga. 751 (80 S.E. 740), and cit. At the same time the vendor has an equitable estate in the premises conveyed. Cook v.Georgia Fertilizer Oil Co., 154 Ga. 41 (113 S.E. 145);Williams v. Foy Mfg. Co., 111 Ga. 856 (36 S.E. 927). In the instant case also there were two estates. In Real EstateLoan Co. v. Union City, supra, which dealt with a security deed, was a holding that under the circumstances there referred to one tax sale would divest the interest and title of both estates. A similar ruling was made, in the case of a bond for title, in National Bank of Athens v. Danforth, supra. The ruling in Morgan v. Burks, 90 Ga. 287 (15 S.E. 821), was that realty of which one is in possession under a contract of purchase, upon which a part of the purchase-money has been paid, is subject to sale for his taxes. The court in effect held that Morgan, being in possession, and at the time of the tax sale having made a contract to purchase, and having paid part of the purchase-money, had such an interest in the property as authorized the sheriff to sell it for his taxes, the purchaser obtaining a good title.
In Beaton v. Ware County, 171 Ga. 798 (156 S.E. 672), the taxing authorities were endeavoring to sell land for taxes, the execution being issued against one who did not hold the legal title, but who had returned the property for taxes in his own name. He merely held an executory contract of purchase, by which he had agreed to pay all the purchase-money in instalments and the taxes
thereon. He took possession and received the income from the property, returned it for taxes a number of years, but failed to pay either the taxes or the purchase-money. It was held that the land was subject to the taxes due under the return of the original purchaser. In the opinion it was said: "The obligation of the purchaser, under a stipulation in a contract by which he is to pay the taxes on the property, is in the nature of purchase-money; and the land as a whole is subject to the payment of such taxes. Under such a stipulation the vendor could enforce his claim for purchase-money and taxes against the entire interest in the land. So where the purchaser is in possession under such a contract and stipulation, and returns the entire interest in the property for taxation, the State and county can enforce its claim for taxes against the entire interest in the land. The lien of the State and county for such taxes would not be divested by the exercise by the vendor of the power of sale in the contract of purchase. The land, after the original vendor had exercised the power of sale and had purchased the same, would still be liable for the taxes in the hands of one who so purchased from the original vendor."
In State v. Hancock, 798 Ga. 799 (5 S.E. 248), a claim case, the facts were that the executions issued against Hancock for the years 1882, 1883, 1884, and 1885, were levied on a house and lot. The defendant, with the claimants as his family, had occupied the property as a home for more than twenty years. The legal title had been in the claimants since their occupancy, and they had not, either by themselves or by any one else, made any return of this or any other property. For each of those years the defendant made a return in his own name, and in each return this property was embraced. The trial court found the property not subject. This court in reversing that judgment laid down the following doctrine: "While it is true that the legal title to this house and lot was in the claimants, it is also true that it had never been returned by them for taxes in the years for which these executions were issued. They had allowed the husband and father to return it as his own. All the property, of whatever kind, in this State, unless expressly exempted by the laws thereof, or by the laws of the United States, is subject to taxation, and must pay its pro rata part of the taxes for the support of the government, in whosever hands it may be, or whoever may return the same for taxation. It is not incumbent
upon the State or county to investigate the legal title to property before assessing the same. The only duty of the tax-receiver of the State and county in regard to this matter is to see that all the property, not exempted as above set out, is returned by some one. If it is not returned by the legal owners, as in this case, but is returned by the husband and father, while in possession, the State and county are entitled to the taxes thereon; and if the taxes are not paid by the person who returns the property for taxation, nor by the legal owner thereof, the tax-collector, finding the return of the property on the receiver's digest, has a right, indeed it is his duty, to issue execution against the person who returned the same, and have it levied thereon." In Barnes v. Lewis, 98 Ga. 558
(25 S.E. 589), it was ruled as follows: "Where a trustee having the title to realty returned it for taxation for a particular year in his own name, making no other tax return for that year, and the property was afterwards sold under a tax execution issued against him individually and based upon the return indicated, and, though not so appearing on the face of the execution, the ``property tax' included therein was in fact the tax on this identical property, the purchaser at the sale, if the same was otherwise free from objection, obtained a good title as against the cestuis que trust represented by the trustee; and this is true although the poll tax of the latter was also included in the tax execution."
In the instant case it is argued that only the interest of the lessee could have passed under the tax sale, because the returns showed that they were made by Winecoff as lessee, and that the fi. fas. were issued against Winecoff, lessee. As a matter of fact the record does not show that the returns were made by Winecoff "as lessee." The return is headed, "W. F. Winecoff (Lessee)." The word "Lessee" appears nowhere else in the return; nor does it appear in the oath thereto, which was signed, "W. F. Winecoff." But in this connection, we quote from the opinion in the Barnes case, supra, to wit: "Here the title to the property sold under the fi. fa. was in the trustee, and the only irregularity was that the process was issued against him individually. Under the doctrine of the Hancock case, supra, this was not fatal to the validity of the sale, because, in point of fact, the execution was actually issued — at least in part — for the tax on the identical land which was sold under the execution." Basing the decision squarely upon State v. Hancock, and Barnes v. Lewis, it was held, in Dawson v.Dawson, 106 Ga. 45 (32 S.E. 29): "Where property has been duly sold under a tax fi. fa. against one who returned the property for taxes and who was in possession thereof, such sale is not invalid because the property did not belong to the defendant in fi. fa. but to his minor children, nor because the fi. fa. included taxes upon other property that did not belong to the minors." None of the decisions just cited are on all fours with the facts of the instant case; but we are of the opinion that a proper application of the principles underlying them must lead to the conclusion that the attack on the tax sale, based on the grounds above stated, is unsound.
2. The plaintiff in error, in an amendment to her answer and cross-action, makes the further point that the levy of the fi. fa. was void, for that it was excessive. The court struck this on demurrer. The allegations as to the excessive levy must be considered with admissions and other allegations in the pleadings. Mrs. Lowe was in a court of equity. She was seeking affirmative equitable relief, to wit, that the several tax deeds and executions be canceled as clouds on her title, as well as that the fee-simple title be decreed to be vested in her. The subject-matter of the action is realty, the fee in which she claims by her inheritance through her deceased husband, who in turn received it as heir at law from Mrs. Rosenkrantz. She admits that neither she, nor her husband, nor Mrs. Rosenkrantz ever returned the property for taxation, or ever paid any taxes on it since Mrs. Rosenkrantz placed her lessee in possession of it. Several years taxes are due. Without offering to pay any taxes, she asks a court of equity to set aside certain tax deeds, on the ground that the levies were excessive. It has several times been decided by this court that one seeking relief from excessive tax levies, but admitting either expressly or by necessary implication that he owes part of the tax covered by such executions, must pay or offer to pay the amount of the taxes admitted to be due, in order to obtain the relief sought. Elder
v. Home Building Loan Association, 185 Ga. 258
(194 S.E. 745), and cit. It has also been held that this rule applies to those seeking relief from excessive levies by municipal authorities. Mayor c. of Savannah v. Fawcett, 186 Ga. 132,140 (197 S.E. 253), and cit. It is true that the plaintiff in error protests that no taxes are due on the property; but we have ruled otherwise. Nor does it matter that
her interest in the property was acquired after the taxes accrued. She is privy in estate with her who at that time did own the fee, and inherited it clothed with the burdens as well as the benefits. See Cooper v. Peevy, 185 Ga. 805, 808
(196 S.E. 705). It is property on which taxes are due; and before she will be heard to attack the sale on account of an excessive levy, and ask that the deeds be canceled as clouds on her title, she must herself do equity, and give effect to all the equitable rights in the other parties respecting the subject-matter of the suit. Code, § 37-104. It would be inequitable to grant her prayers. This result is unaffected by the fact that as to some of the delinquent taxes the property was sold and bought in by both the city and the county.
Many other law questions were raised and argued, but the rulings stated above necessitate a judgment of affirmance.
Judgments affirmed. All the Justices concur, except