Lion Oil & Refining Co. v. Rex Oil Co.

• Decision Date: 11 April 1938
• Docket Number: 4-5021
• Citation: 115 S.W.2d 556,195 Ark. 1021
• Parties: LION OIL & REFINING COMPANY v. REX OIL COMPANY
• Court: Arkansas Supreme Court

115 S.W.2d 556

195 Ark. 1021

LION OIL & REFINING COMPANY v. REX OIL COMPANY

4-5021

Supreme Court of Arkansas

April 11, 1938

Appeal from Jefferson Chancery Court; Harry T. Wooldridge Chancellor; affirmed.

Affirmed.

Jeff Davis and J. A. O'Connor, Jr., for appellant.

Henderson Meek & Hall and Rowell, Rowell & Dickey, for appellee.

OPINION

GRIFFIN SMITH, C. J.

June 12, 1937, appellant and appellee entered into a contract whereby appellant agreed, for a consideration of $ 18,000, to purchase real and personal property owned by appellee in Jefferson county.

Appellant, although willing to perform, concluded that liens were outstanding against a part of the real property, and that such liens impaired the title. Appellee sued for specific performance.

Although the record contains an abstract of many transactions involving title, for the purpose of this appeal it has been stipulated that the controversy to be determined is whether liens exist in favor of the state of Arkansas by virtue of proceedings adopted by the Commissioner of Revenues for collection of gasoline taxes alleged to have been due.

April 26, 1929, Rex Oil Corporation mortgaged certain Jefferson county real property to Equitable Building & Loan Association. The mortgage secured an indebtedness of $ 2,500, and was duly recorded.

December 3, 1930, David A. Gates, Commissioner of Revenues, filed with the circuit clerk and recorder of Jefferson county a certificate of indebtedness against Rex Oil Corporation for $ 19,221.06. This certificate was issued and filed under authority of § 51 of act 65 of 1929, and it was recorded as required by law. Execution was promptly issued and returned nulla bona December 15, 1930. May 29, 1931, judgment on the certificate was rendered by the Jefferson circuit court. No execution or writ of scire facias was issued on the judgment.

November 23, 1931, Equitable Building & Loan Association filed suit to foreclose its mortgage. David A. Gates as Commissioner of Revenues was made a party defendant and served with summons. March 17, 1932, there was a decree of foreclosure with default judgment in favor of the loan association for $ 2,050 and interest and cost, against Rex Oil Corporation. The decree recited that the plaintiff had a lien upon the property "prior and paramount to any right, title, claim, interest, or equity" . . . of the defendants.

At the Commissioner's sale November 9, 1932, Ellis Robbs purchased for $ 2,094.84. November 7, 1932, Robbs and wife executed their mortgage to Equitable Building & Loan Association to secure an indebtedness of $ 2,050. Appellant's answer alleges that this mortgage was given pursuant to an agreement between Robbs and the loan association that Robbs would purchase at the sale, and that no part of the purchase price was otherwise paid.

November 29, 1932, the Commissioner of Revenues filed a second certificate of indebtedness. It was for $ 11,484.96. No execution or scire facias was issued pursuant to the filing of such certificate.

February 10, 1934, Equitable Building & Loan Association assigned the Robbs mortgage to First Federal Savings & Loan Association of Little Rock. As further security Robbs and wife were required to execute an additional mortgage covering the same property. The latter mortgage, taken as renewal, remains unsatisfied.

By warranty deed of April 16, 1936, Robbs and wife conveyed the property to Rex Oil Company, "a new and different corporation from the old theretofore dissolved Rex Oil Corporation."

September 1, 1937, Rex Oil Company filed suit in Jefferson chancery court against D. L. Ford as Commissioner of Revenues, to which Ford, on behalf of the state, filed answer. A decree was rendered September 9. It recites findings of the chancery court in the case of Equitable Building & Loan Association v. Robbs, wherein it was found that the state's interests were barred. In the decree of September 9 there was a specific finding that the state's claims were barred through laches, and "through limitations in not procuring a writ of scire facias or execution to collect or preserve its judgment, if it had any judgment, and . . . the defendant, D. L. Ford, Revenue Commissioner of the state of Arkansas, his successor, and the state of Arkansas, are estopped from claiming any lien by virtue of the judgments."

Act 65 of 1929, under which the Commissioner of Revenues filed the certificates, provides that reports shall be made by manufacturers or wholesalers of gasoline. From these reports subject to verification by audit, the Commissioner determines the amount of taxes due the. state. Section 46 of the act directs that the tax, and penalty of 20 per cent., shall be collected by a civil action in the name of the state, to be brought by the Attorney General or the Commissioner of Revenues....