Linn County v. Steele
| Decision Date | 15 June 1937 |
| Docket Number | 43936. |
| Citation | 273 N.W. 920,223 Iowa 864 |
| Parties | LINN COUNTY v. STEELE. |
| Court | Iowa Supreme Court |
Appeal from District Court, Linn County; H. C. Ring, Judge.
The legal question involved in this appeal arose out of a controversy submitted to the district court by an agreed statement of facts under the provisions of chapter 547 of the 1935 Code of Iowa (section 12686 et seq.); the matter submitted for determination of the court being whether the tax lien created by Code, §§ 7205 and 7206, was paramount and superior to the lien of the seller of certain property sold in bulk under a conditional sale contract, whereby the title did not pass to the purchaser until the property was paid for, the lien under the contract being prior in point of time to the tax liens created by the statute. After the taxes were levied against the property which was listed in the name of the purchaser, the seller repossessed the property under the terms of her contract. The district court held that the repossessor took the property free from the tax liens provided by said statutes. The county appeals.
Reversed and remanded.
Statutes providing that taxes upon stocks of goods and fixtures shall continue a lien thereon when sold in bulk, and that taxes on buildings assessed as personalty shall remain a lien until paid, were intended to make such liens superior to all others, and hence owner's lien on fixtures and building under conditional sale contract, though prior in point of time to statutory tax liens, was inferior thereto. Code 1935 §§ 7205, 7206.
G. K Thompson, Co. Atty., and E. A. Fordyce, Asst. Co. Atty., both of Cedar Rapids, for appellant.
J. U Yessler, of Cedar Rapids, for appellee.
Edith Steele, the appellee, was the owner of a certain building used as a restaurant, and of the fixtures contained in said building. This building was located on real estate owned by a third party. On the 24th day of July, 1933, appellee sold to H. W. Duncan said building and fixtures contained therein under a conditional sale contract which reserved in the seller the title, ownership, and right of possession of said property until the purchase price was fully paid. Duncan having failed to make payment in accordance with the terms of the contract, the appellee on August 30, 1935, repossessed the property. In the meantime, taxes had been separately levied against the building and against the fixtures therein for the years 1934 and 1935, and remained unpaid. The property was listed and assessed in the name of H. W. Duncan as owner of the property. It is the contention of appellee that since her lien under the contract was prior in point of time to the tax liens, she took said property free from said liens. On the other hand, it is contended by the appellant Linn County, Iowa, that under section 7205 the county had a lien against the fixtures, and under section 7206 had a lien against the building, and that such liens were prior and superior to the conditional sale contract lien. The amount involved was not large, but the question was deemed of sufficient importance to warrant the trial court in granting a certificate under the provisions of section 12833 of the Code 1935, permitting the appellant to perfect its appeal to this court. The question in the form presented has never been directly passed upon by this court.
The provisions of Code, §§ 7202, 7205, and 7206 prior to the Code of 1924 were contained in one section, being section 1400 of the Supplement to the Code of Iowa 1913, chapter 337, Acts of the 37th General Assembly, pertinent parts of which are as follows: In the 1935 Code of Iowa, these provisions of the former section 1400 now appear as follows:
" 7202. Lien of taxes on real estate. Taxes upon real estate shall be a lien thereon against all persons except the state. * * *
7205. Lien follows certain personal property. Taxes upon stocks of goods or merchandise, fixtures and furniture in hotels, restaurants, rooming houses, billiard halls, moving picture shows and theatres, shall be a lien thereon and shall continue a lien thereon when sold in bulk, and may be collected from the owner, purchaser, or vendee, and such owner, purchaser or vendee of any such goods, merchandise, furniture, or fixtures shall be personally liable for all taxes thereon.
7206. Lien follows building assessed as personalty. In all cases where buildings are assessed as personal property, the taxes shall be and remain a lien on said buildings from the date of levy until paid."
Appellee does not contend that the appellant did not have a lien on said property, but it is her claim that appellant's lien is inferior to hers for the reason that her lien attached first in point of time, and since she has taken over the property by enforcing her lien, she holds it free and clear of said tax liens, and she relies principally upon the following cases: Bibbins v. Clark & Co., 90 Iowa, 230, 57 N.W. 884, 59 N.W. 290, 29 L.R.A. 278; Bibbins v. Polk County, 100 Iowa, 493, 69 N.W. 1007; In re Assignment of Cutler & Horgen, 213 Iowa, 983, 234 N.W. 238, 238 N.W. 80, 81; and especially the following statement found in the latter case: " There can be no question that the Legislature had the right to make taxes a paramount lien by so declaring by statute, but, in the absence of such declaration, taxes declared to be a lien are not a first lien." Citing Bibbins v. Clark & Co., supra. In the Bibbins v. Clark & Co. Case, the court had under consideration that provision of the statute which makes taxes upon personal property a lien upon real estate owned by the taxpayer. In the Cutler & Horgen Case, supra, it is not clear what tax was under consideration. We will have more to say concerning this case further along in this opinion.
First, let us take note of a well-recognized principle of law that taxes are not a lien upon the property assessed, or other property of the taxpayer unless expressly made so by statute, and this lien cannot be enlarged by judicial construction. Jaffray & Co. v. Anderson, 66 Iowa, 718, 719, 24 N.W. 527; Bibbins v. Clark & Co., supra; Frankel v. Blank, 205 Iowa, 1, 213 N.W. 597.Whether this statutory tax lien is paramount to other liens upon the property depends upon whether the Legislature intended it to be such, and this intent must be ascertained from the express language of the statute or by necessary implication. This is undoubtedly the correct rule as announced by the great weight of authority. See generally, on this question of priority, 61 C.J. § 1176, p. 925, and cases cited. There is nothing in the opinion in the case of Bibbins v. Clark & Co., supra, relied upon by appellee, that holds to the contrary.
It is not necessary that the statute contain the words " first lien" or " paramount lien" in order to establish priority. If this were true, then the lien of the tax on real estate under section 7202, Code 1935, could not be held prior to other liens, for said section contains no such express terms. In the case of New England Loan & Trust Co. v. Young, 81 Iowa, 732, 39 N.W. 116, 46 N.W. 1103, 1104, 10 L.R.A. 478, this court said: This statement was repudiated and the case of New England Loan & Trust Co. v. Young overruled in so far as it held that taxes assessed against personal property become a lien upon real estate prior and superior to existing liens thereon (see Bibbins v. Clark & Co., 90 Iowa, 230, 57 N.W. 884, 885, 59 N.W. 290, 29 L.R.A. 278), but as applied to the tax upon the res, the real estate itself, it has never been repudiated or denied, and is still a correct rule of law and the law of this state. The tax upon real estate is not considered a mere personal claim against the owner, but is a charge or lien against the land. The same rule was announced by the United States Supreme Court in the case of Osterberg v. Union Trust Company of New York, 93 U.S. 424, 428, 23 L.Ed. 964, in the following language:
It is the contention of appellant that since the Legislature made the tax upon stocks of merchandise, fixtures, etc., and upon buildings assessed as...
To continue reading
Request your trial