Beckman v. Skaggs

The Court: The mortgage sought to be foreclosed, and which was executed before the adoption of the present Constitution, contains the following covenant:

“And it is hereby agreed that it shall be lawful for said mortgagee, or his successors or assigns, to pay at maturity all taxes, liens, or other incumbrances' now subsisting or hereafter to be laid or imposed upon said lot of land and premises, and which may be in effect a charge thereupon. * * * And that the said mortgagor will, on demand, repay to the mortgagee in gold coin all sums which may have been paid by the mortgagee tó discharge any tax, assessment, or other lien on said premises, * * * and that this mortgage shall stand as security for the repayment to the mortgagee for all sums which he shall have paid for any of the purposes aforesaid.”

The defendant having failed to pay the State and county tax upon the mortgage for 1880, plaintiff paid the same, and the Court below refused to award plaintiff the sum thus paid.

In the year 1880, the mortgage, for the purposes of taxation, was an interest in the land, the tax upon which defendant had agreed to pay. (Const., art. xiii, § 4.) The covenant was that defendant should pay the tax upon the full value of the land. Under the present Constitution he is assessed only for the value of the land, less the amount of the mortgage debt. The agreement to pay the whole tax was valid when made, and so to construe the provision of the Constitution as that the agreement may not be enforced according to its terms would be to impair the obligation of the contract. (Const. U. S., art. i, § 10.)

Section 5 of Article xiii of the present State Constitution applies to contracts made after its adoption.

Cause remanded with direction to modify the decree in accordance with the views herein expressed.