COLLECTOR OF REVENUE, ETC. v. Ford Motor Co.

• Decision Date: 13 December 1946
• Docket Number: No. 12855.,12855.
• Parties: COLLECTOR OF REVENUE WITHIN AND FOR THE CITY OF ST. LOUIS, MO. v. FORD MOTOR CO.
• Court: U.S. Court of Appeals — Eighth Circuit

158 F.2d 354 (1946)

COLLECTOR OF REVENUE WITHIN AND FOR THE CITY OF ST. LOUIS, MO. v. FORD MOTOR CO.

No. 12855.

Circuit Court of Appeals, Eighth Circuit.

December 13, 1946.

Charles J. Dolan, of St. Louis, Mo. (James A. Waechter, Eugene M. Guise and J. G. Guise, Jr., all of St. Louis, Mo., on the brief), for appellant.

Elmer E. Hilpert, of St. Louis, Mo. (McDonald, Bartlett & Muldoon and Daniel Bartlett, all of St. Louis, Mo., on the brief), for appellee.

Before GARDNER, SANBORN and WOODROUGH, Circuit Judges.

GARDNER, Circuit Judge.

This is an appeal from a judgment in a condemnation proceeding which disallowed in part the claim of the Collector of Revenue for the City of St. Louis, Missouri, for general taxes against the condemned property.

The petition in the condemnation proceeding in which appellee, Ford Motor Company, and appellant, Collector, were both named as defendants, was filed May 23, 1942, and the United States which was condemning the land took possession on that date. On October 24, 1942, the Secretary of War filed a declaration of taking, estimating $395,000 to be the just compensation for the property taken and all interest therein, and deposited that amount with the registry of the court for the use and benefit of the persons entitled thereto. A judgment was then entered vesting title to the property in the United States and divesting the owner, Ford Motor Company, and all other persons interested, of their title and interest in the property. On November 2, 1942, the Ford Motor Company filed an application for the payment to it of the entire sum of $395,000 so deposited in court, alleging that at and before the taking, it was the owner in fee of the property. The court entered an order directing that $379,200 be paid the Ford Motor Company and that $15,800 be retained in the registry of the court subject to its further order upon a final determination as to whether the award should be paid to the Ford Motor Company, or whether the Collector should be paid for his claim for taxes out of said fund.

On November 12, 1942, the Ford Motor Company filed in court an application for payment to it of the balance of the award, whereupon the Collector of Revenue for St. Louis filed his claim for real estate taxes for the year 1942, alleging that such taxes, exclusive of interest, penalties and costs, amounted to $11,291.35. At the hearing on the claim the Collector made proof establishing the amount of the tax lien. The trial court held that the Collector was entitled only to a proportionate share of the 1942 taxes calculated on a basis of possession by the Ford Motor Company until May 23, 1942. On this basis the Collector was allowed $4,419.14 for taxes for 1942, and the balance of the retained fund was ordered paid to the Ford Motor Company.

On this appeal the Collector contends that the court was without power to prorate the general real estate taxes for 1942 against the property condemned, and that the Collector was entitled to the full amount of the taxes assessed and levied for that year. There are no disputed questions of fact. It is conceded that the tax lien attached to the property condemned prior to the time of the filing of the petition in condemnation and prior to the time the United States took possession of said land.

When the United States appropriated the land in question under the power of eminent domain, the lien for taxes could not thereafter be specifically enforced against the property taken, but the effect of the condemnation proceeding was to transfer the lien from the land to the award in the registry of the court. Washington Water Power Co. v. United States, 9 Cir., 135 F.2d 541; United States v. 150.29 Acres of Land in Milwaukee County, 7 Cir., 135 F. 2d 878.

The trial court in prorating the award was of the view that the question of the legality of such apportionment of taxes which constituted a lien upon real property had not been determined by the appellate courts of Missouri. Having reached this conclusion, the court expressed the view that upon general equitable principles, as well as upon the authority of Title 40 U.S. C.A. § 258a, it had the right to apportion the taxes. In so doing the court followed its own decision in United States v. Certain Land in the City of St. Louis, D.C.Mo., 29 F.Supp. 92, a case in which the facts were very similar to the facts in the instant case. Observing that in the cited case there had been no appeal but the decision had been accepted by all the interested parties, the court was of the view that it could not consistently hold contrary to its own opinion in the case referred to. In this connection it should be observed that since the decision in United States v. Certain Land in the City of St. Louis, supra, a number of courts have had occasion to consider this question, and although the opinion in D.C.Mo., 29 F. Supp. 92 was urged, the courts declined to follow the rule there stated and it seems to stand alone. United States v. Certain Parcels of Land in Philadelphia, 3 Cir., 130 F. 2d 782; United States v. 150.29 Acres of Land in Milwaukee County, 7 Cir., 135 F. 2d 878; People of Puerto Rico v. Palo Seco Fruit Co., 1 Cir., 136 F.2d 886; United States v. Certain Parcels of Land in City of San Diego, D.C.Cal., 44 F.Supp. 936; United States v. Certain Lands in City of Eau Claire, D.C.Wis., 49 F.Supp. 225. See also and compare, Helvering v. Missouri State Life Ins. Co., 8 Cir., 78 F.2d 778; Merchants Bank Bldg. Co. v. Helvering, 8 Cir., 84 F.2d 478; Lifson v. Commissioner of Internal Revenue, 8 Cir., 98 F.2d 508; United States v. Consolidated Elevator Co., 8 Cir., 141 F.2d 791; Magruder v. Supplee, 316 U.S. 394, 62 S.Ct. 1162, 86 L.Ed. 1555.

We think the court erred in holding that in the absence of some state law to the contrary, the lien for taxes might be split or apportioned. The rule is that absent some state law to the contrary, such lien must be paid in its entirety. The court's decision was therefore not based upon any affirmative local law or decision of the State of Missouri, but rather upon the theory that there were neither statutes nor decisions applicable to the situation. The court applied what it deemed to be the general law and invoked the authority vested in the court by Title 40 U.S.C.A. § 258a, which provides in part that, "The court shall have power to make such orders in respect of encumbrances, liens, rents, taxes, assessments, insurance, and other charges, if any, as shall be just and equitable." This statute does not purport to give power to a Federal court to fix the amount of taxes due when the proper authorities of the state have made that decision through the administrative machinery adopted by the state for that purpose; in fact, Congress has no power to enact a state taxing measure. Thompson v. State of Louisiana, 8 Cir., 98 F.2d 108. The power granted and the duty imposed by this statute to do equity are manifestly intended to empower the court to do justice among rival conflicting claimants. It does not empower the court to invalidate in part a valid entire tax lien. United States v. Certain Parcels of Land in Philadelphia, supra. The local law must, of course, be consulted to determine when the lien attached, and, if the lien has attached, as in the instant case...