Federal Land Bank of New Orleans v. Crosland

Citation29 A.L.R. 1,43 S.Ct. 385,261 U.S. 374,67 L.Ed. 703
Decision Date19 March 1923
Docket NumberNo. 428,428
PartiesFEDERAL LAND BANK OF NEW ORLEANS v. CROSLAND, Judge of Probate
CourtU.S. Supreme Court

Messrs. Wm. C. Dufour, of New Orleans, La., and W. A. Gunter, of Montgomery, Ala., for plaintiff in error.

Mr. James J. Mayfield, of Montgomery, Ala., for defendant in error.

[Argument of Counsel from pages 374-376 intentionally omitted] Mr. Justice HOLMES delivered the opinion of the Court.

This is a petition for a writ of mandamus to require the recording officer of Montgomery county, Alabama, to record a first mortgage deed on receiving the fee for recording the same, without payment of an additional sum of fifteen cents for each one hundred dollars of the principal sum secured. The General Revenue Act of the State approved September 15, 1919 (Acts Ala. 1919, p. 420), by section 361, Schedule 71, provides that no mortgage shall be received for record——

'unless the following privilege or license taxes shall have been paid upon such instrument before the same shall be offered for record, to wit: * * * Upon all instruments which shall be executed to secure an indebtedness of more than one hundred dollars there shall be paid the sum of fifteen cents for each one hundred dollars of such indebtedness, or fraction thereof, which is secured by said mortgage * * * to be paid for by the lender, and no such paper shall be received for record unless there is filed therewith a certificate that the privilege tax was paid by the lender.'

Any probate judge who shall receive a mortgage without collecting the 'recording or registration tax,' etc., is made guilty of a misdemeanor and punished.

On the other hand the Federal Farm Loan Act of July 17, 1916, c. 245, § 26, provides that first mortgages executed to Federal Land Banks shall be deemed——

'instrumentalities of the government of the United States, and as such they and the income derived therefrom shall be exempt from federal, state, municipal, and local taxation.' 39 Stat. 360, 380 (Comp. St. § 9835q).

The validity of this provision is not questioned. Smith v. Kansas City Title & Trust Co., 255 U. S. 180, 207, 212, 41 Sup. Ct. 243, 65 L. Ed. 577. Of course therefore it must prevail over any inconsistent laws of a State.

The tax was sustained by the Supreme Court of the State and the petition for mandamus was ordered to be dismissed on the ground that the payment was optional; that the Federal Land Bank was not required to put its deed on record, and that if it did it must pay whatever others were required to pay for the registration of its security. But the case is not quite so simple as that. The law of Alabama does make it practically necessary to record such deeds, because it overrides them if not recorded, in favor of any purchaser without notice. While it does so it cannot say that it leaves the Bank free to record or not. The bank has a choice it is true, but so has one who acts under duress. The Eliza Lines, 199 U. S. 119, 131, 26 Sup. Ct. 8, 50 L. Ed. 115, 4 Ann. Cas. 406.

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