Coy v. Title Guarantee & Trust Co.

• Decision Date: 23 March 1914
• Docket Number: 3209.
• Parties: COY v. TITLE GUARANTEE & TRUST CO. et al.
• Court: U.S. District Court — District of Oregon

212 F. 520

COY v. TITLE GUARANTEE & TRUST CO. et al.

No. 3209.

United States District Court, D. Oregon.

March 23, 1914

W. C Bristol, of Portland, Or., for receiver.

Walter H. Evans, Dist. Atty., of Portland, Or., for Multnomah County.

Emmons & Webster, of Portland, Or., for petitioners.

WOLVERTON District Judge.

Two petitions in intervention have been filed in the above matter by Multnomah county, praying that the receiver be required to pay the state, county, school, and municipal taxes assessed against the Title Guarantee & Trust Company, on certain personal property, for the years 1908 to 1911, inclusive with penalties and interest.

A receiver was appointed for the Title Guarantee & Trust Company by this court on November 6, 1907, and the taxes which it is sought to have paid were assessed against the company a part of the time in its name alone and a part of the time in the name of the company, R. S. Howard, Jr. receiver. The receiver resists payment on several grounds. First, it is urged that the law has made no provision for the assessment of receivers, and, having made none, they are not taxable as such.

As it respects assessment and taxation, the statute of Oregon has made all property, whether real or personal, subject thereto. Section 3551, Lord's Oregon Laws. By section 3560 it is required that every person shall be assessed as to his personal property, whether owned by him or under his control as trustee, guardian, executor, or administrator, in the county in which he resides. Section 3563 provides that personal property of every private corporation is liable to taxation in the same manner as the personal property of a natural person, and shall be assessed in the name of such corporation, in the county where its principal place of business is, unless otherwise specially provided by law. The manner of assessment is provided by section 3593, which requires the assessor to set down on his roll, first, the names of all persons assessable in his county, and, among others, the taxable personal property owned by or to be taxed to such person. These are the principal provisions of the statute which in any way affect the present controversy, and it is clear that ample provision is made thereby for the assessment of a corporation. But it is urged that:

'We are dealing with property here represented by a court through its receiver, and there is no method of assessment provided for corporate property.'

The appointment of a receiver by a court does not destroy the entity of the corporation. It yet remains with corporate power, at least for the purpose of winding up the business of the concern, for it is corporation business always that the receiver transacts.

All property being taxable, and corporations being liable to taxation, it is inconceivable that a suit in chancery and the appointment of a receiver by operation of law withdraws the corporate property from the power of assessment and taxation. Nor was it necessary that the receiver should, eo nomine, be designated as a person subject to assessment and taxation. He is but an arm of the court in the management of the corporation property, whether it be as a going concern or in process of dissolution, and the court holds the property subject to all the burdens and limitations to which the corporation itself was subject under the law, and one of these is the liability to taxation as a natural person. I am clear that a receivership does not withdraw the corporation from that liability. As is said by Mr. Chief Justice Fuller:

'Undoubtedly property so situated (in custodia legis) is not thereby rendered exempt from the imposition of taxes by the government within whose jurisdiction the property is, and the lien for taxes is superior to all other liens whatsoever, except judicial costs, when the property is rightfully in the custody of the law. ' In re Tyler, 149 U.S. 164, 182, 13 Sup.Ct. 785, 790 (37 L.Ed. 689).

And it has been held that property in the hands of a receiver is properly assessable as the property of the corporation. Stevens v. New York & O.M.R. Co., Fed. Cas. No. 13,405.

Nor is it important to whom the assessment is made, whether to the corporation or to the receiver. It is not vital to the validity of the tax. Wiswall v. Kunz, 173 Ill. 110, 50 N.E. 184.

Under the system for tax collections within this state, a tax does not become a debt, and an action at law does not lie for its recovery. Nor is the tax upon personal property made a lien thereon, nor does any lien attach until a warrant is levied, and it may happen, as where the property of the person taxed is taken into another state or disposed of, that the tax collector will be left remediless in forcing collections. Marion County v. Woodburn Mercantile Co., 60 Or. 367, 119 P. 487, 41 L.R.A. (N.S.) 730.

But, where property remains within the jurisdiction and within the hands of the person taxed, there is no impediment to the enforcement of the payment of the personalty tax assessed against him.

It is beyond question at this date that, when a court has appointed a receiver, his possession is the possession of the court for the benefit of the parties to the suit and all concerned, and cannot be disturbed without proper leave of the court. In re Tyler, supra; Barton v. Barbour, 104 U.S. 126, 26 L.Ed. 672; Krippendorf v. Hyde, 110 U.S. 276, 4 Sup.Ct. 27, 28 L.Ed. 145.

Property so held may be said to be in equitable sequestration to answer the purposes of the receivership, and, if it is sought to enforce an equitable lien or other demand which is a rightful charge against the property, it must be done by leave and under the sanction of the court so having the possession. The levy of a tax warrant is a sequestration like the levy of an ordinary fieri facias. Hence such levy could not in any greater degree be permitted to disturb the court's possession without its explicit sanction previously procured. Ex parte Huidekoper et al. (C.C.) 55 F. 709; Oakes v. Myers (C.C.) 68 F....