Sheffield City Co. v. Tradesmen's Nat. Bank

• Decision Date: 18 December 1901
• Citation: 131 Ala. 185,32 So. 598
• Parties: SHEFFIELD CITY CO. ET AL. v. TRADESMEN'S NAT. BANK. [1]
• Court: Alabama Supreme Court

32 So. 598

131 Ala. 185

SHEFFIELD CITY CO. ET AL. v. TRADESMEN'S NAT. BANK. ^[1]

Supreme Court of Alabama

December 18, 1901

Appeal from chancery court, Colbert county; Wm. H. Simpson Chancellor.

Action by the Tradesmen's National Bank against the Sheffield City Company and others. From a judgment for plaintiff defendants appeal. Reversed.

The bill in this case was filed by the appellee, the Tradesmen's National Bank, against the appellants, the Sheffield City Company, C. B. Ashe, as receiver of the Sheffield City Company, Robert H. Wilhoyte and Thos. L Fossick, as trustees, and E. F. Enslen. The purpose of the bill and the facts of the case are sufficiently stated in the opinion.

The prayer of the bill was as follows: "That your honor will, on the hearing of this case, decree that orator has a lien on the property hereinbefore described for the moneys paid out by orator as before stated, together with the interest thereon, in accordance with the laws of Alabama in regard to property sold for taxes. That the register of this court be required to take and state an account, and ascertain and report what amount of principal and interest is due orator by reason of the payments made by orator as hereinbefore set forth. That your honor will by your decree direct that said lands be sold, or that so much thereof as may be necessary be sold, and the proceeds of said sale be applied to the payment of the amount so found to be due to orator."

On the submission of the cause on the pleadings and proof, the chancellor decreed that "complainant has a lien on the property mentioned and described in the bill, for the moneys paid out for taxes as set forth in the bill, in accordance with the laws of Alabama in respect to real estate sold for taxes, when the sale, on account of irregularities, is ineffectual to pass the legal title; and that said lien exists independent of the statutory remedy given for its enforcement, when a suit in ejectment fails, and may be enforced in a court of equity." There was then an order of reference to the register to state an account, and ascertain the amount of state, county and municipal taxes paid by the complainant, for which the lands were liable at the time of the sale mentioned in the bill, and for the payment of which they were sold, and the interest thereon and also the amount of the taxes on the lands which the complainant has paid since such sales, with interest thereon.

Upon the coming in of the report of the register ascertaining such amounts, it was in all things ratified and confirmed, and it was decreed that said lots be sold if the amount so ascertained to be due was not paid within 60 days after the enrollment of the decree. From this decree the defendants appeal, and assign the rendition thereof as error.

R. H. Wilhoyte and Joseph H. Nathan, for appellants.

Simpson & Jones and Kirk & Rather, for appellee.

HARALSON J.

The principle is generally recognized in the books, that taxes are not a lien unless expressly made so by statute.

Mr. Cooley says: "In considering this remedy by suit, it is to be kept in mind that it exists only by force of the statute. The statute must, therefore, be closely followed in the proceedings." Cooley, Tax'n, 449, 444.

Mr. Desty observes: "A tax is not a lien unless it is expressly made so by law or ordinance which imposes it. The lien on real estate for taxes has no existence, unless there be some statute creating it, and such statute must be strictly construed." Desty, Tax'n, 734; Canal Co. v. Gordon, 6 Wall. 561, 18 L.Ed. 894, 25 Am. & Eng. Enc. Law, 267; 1 Jones, Liens, § 112; 1 Pom. Eq. Jur.§ 281; End. Interp. St. 154, 434, 435.

In Chandler v. Hanna, 73 Ala. 392, it is said: "The rule is general, of great practical importance, and has been frequently acted upon, that 'when by a statute a new right is given, and a specific remedy provided, or a new power, and also the means of executing it are provided by statute, the power can be executed and the right vindicated in no other way than that prescribed by the statute.' * * * The rule does not collide with the general rule, that the jurisdiction of a court of equity is not impaired by statutes conferring upon other tribunals jurisdiction which was exclusively equitable, unless the statutes expressly take away the equitable jurisdiction; nor with the other well-settled rule, 'that if a statute gives a remedy in the affirmative, without a negative, express or implied, for a matter which was actionable at the common law, the party may sue at the common law as well as upon the statute; for this does not take away the common-law remedy.' * * * In the cases to which these rules are applied, the right existed and its enforcement lay within the jurisdiction of either the court of equity or the common-law courts. * * * But when the right is solely and exclusively of legislative creation, when it does not derive existence from the common law, or from the principles prevailing in courts of equity, jurisdiction of it may be limited to particular tribunals, and specific, peculiar remedies provided for its enforcement. The jurisdiction and the remedy being bounded by the statute, can be pursued and exercised only before the tribunals and in the mode the statute provides. Other tribunals cannot exercise the jurisdiction without enlarging the operation of the statute." So it was held in that case, that the lien of a mechanic and material man was a new right, created by statute for which a specific remedy was provided by action at law, and in the absence of special cause for equitable interposition, a court of equity could not assume jurisdiction of its enforcement. Walker v. Daimwood, 80 Ala. 245; Corrugating Co. v. Thacher, 87 Ala. 458, 465, 6 So. 366; Phillips v. Ash's Heirs, 63 Ala. 414; Wimberly v. Mayberry, 94 Ala. 255, 10 So. 157, 14 L. R. A. 305; Janney v. Buell, 55 Ala. 408.

The facts of the case to which the foregoing principles are applicable, are undisputed, and as stated by the complainant's counsel, and as appear in the transcript, are, that on the 29th September, 1894, the defendant, the Sheffield City Company, executed a deed of trust of all its property to Wilhoyte and Fossick for the benefit of creditors; that before said deed was made, in June, 1894, the complainant, Tradesmen's National Bank, bought said property, 287 town lots in Sheffield, at a tax sale for state and county taxes, received a certificate of purchase, and afterwards, a deed to the property from the probate judge. Afterwards, in July, 1894, the same property was sold by the city of Sheffield for municipal taxes and bought in by the complainant bank. A deed was accordingly made to it, and the property has been assessed ever since to complainant, and the taxes paid by it and by no one else.

In May, 1898, in the case of Enslen against the defendant company and one Harris, C. B. Ashe was appointed receiver of all the assets of the defendant company, and is now acting as such receiver, and he is not nor are said trustees taking any steps to redeem said property, and there are no assets of said corporation out of which said taxes so paid by complainant can be paid, except out of the said lots included in said tax sales. It was not averred that complainant ever went into possession of said property. It is averred that E. F. Enslen claims to have a lien on said property by virtue of a judgment rendered against the defendant company, in the circuit court of Colbert county, on the 11th April, 1895, based on a claim which was due before the execution of said deed of trust.

The bill further alleges, that by reason of certain irregularities, said tax sales were ineffectual to pass the legal title (but not because the taxes were not due) and prays for the enforcement of the lien which the statutes of Alabama give to complainant for the payment of the money paid out for taxes on said property.

It is contended by the defendants that, whether said sales were void or not, complainant has no right to invoke the aid of a court of equity to enforce any lien for the recovery of sums paid out in taxes to the state, county and city on said property since said sale in 1893.

Section 459 of the Code of 1886 (Code 1896, § 3921) provided, that from and after the 1st of January of each year, the state shall have a prior lien upon each and every piece or parcel of property, real or personal, for the payment of taxes which may be assessed against the owner, or upon such property, during that year for the use of the state, and in favor of the county for taxes during the year, in like manner, for the use of the county. Section 3921 of the Code of 1896, is to the same effect, except that the lien is from the 1st of October, instead of from 1st of January of each year.

Sections 597 of the Code of 1886 and 4078 of the Code of 1896, provide that "when the sale of any land sold for the payment of taxes is, for any cause, ineffectual to pass the title to the purchaser, except in cases in which such sales are in this title [chapter in the section of Code of 1896] expressly declared to be invalid, such sale shall operate as an assignment to the purchaser of the...