United States v. Elliott

• Citation: 209 F. Supp. 374
• Decision Date: 03 October 1962
• Docket Number: Civ. A. No. 7509.
• Parties: UNITED STATES of America, Plaintiff, v. Howard ELLIOTT and The Board of County Commissioners of the County of Routt, State of Colorado, Defendants.
• Court: U.S. District Court — District of Colorado

209 F. Supp. 374

UNITED STATES of America, Plaintiff, v. Howard ELLIOTT and The Board of County Commissioners of the County of Routt, State of Colorado, Defendants.

Civ. A. No. 7509.

United States District Court D. Colorado.

October 3, 1962.

Lawrence M. Henry, U. S. Atty. for District of Colorado, James A. Clark, Asst. U. S. Atty. for District of Colorado, Denver, Colo., John C. Banks, Regional Atty., Robert L. Johnston, Attorney, Office of General Counsel, U. S. Department of Agriculture, Denver, Colo., of counsel, for plaintiff.

Charles K. Cranston, Steamboat Springs, Colo., for defendant Board of County Com'rs of Routt County, Colorado.

DOYLE, District Judge

The complaint seeks the recovery of $203.69 from defendant Howard Elliott, who holds this sum of money as a stake-holder as between the plaintiff and the County Commissioners of Routt County, Colorado.

Elliott was the clerk at a sale of personal property on which the United States held chattel mortgages. The County Commissioners of Routt County have asserted a claim to the sum which is being held, claiming it by virtue of the county's personal property tax lien against the property which was sold. The facts have been stipulated.

From the stipulation it appears that on October 15, 1959, there was a sale of property subject to the chattel mortgages. The ad valorem personal property taxes had been duly assessed and levied by the appropriate county commissioners of Routt County for the years 1957, 1958 and 1959 on the property which was sold. The liens of the chattel mortgage had taken hold prior to the tax liens provided by statute. The chattel mortgages were executed in connection with loans made through the Farmers Home Administration. It is also stipulated that the demand for payment of the personal property taxes claimed by the defendant Board of County Commissioners of Routt County, was made by the taxing officials prior to the distribution of proceeds.

The question for decision is whether a party who holds a recorded chattel mortgage prior in time to a personal property tax lien is entitled to preference with respect to funds realized from the liquidation of the mortgaged property as against a county which holds a personal property tax lien granted by state law.

The contention of the United States is that a tax lien is not superior to an antecedent encumbrance unless the legislature has granted priority to the tax lien and has done so in clear, unambiguous terms; the applicable statute has not, so the argument goes, granted any such preferential right.

The Board of County Commissioners maintains that the tax lien takes priority regardless of whether the legislature has specifically provided for such priority.

The statute which is here pertinent, C.R.S.1953, 137-9-12(1) provides:

"All taxes levied or assessed upon personal property of any kind whatsoever shall be and remain a perpetual lien upon the property so levied upon, until the whole amount of such tax is paid; * * *."

The counterpart statutory provision pertaining to taxes levied upon real estate, C.R.S.1953, 137-1-3, in fact grants a priority. It uses the word "perpetual" as does 137-9-12, but it further declares: "and such liens shall have priority over all other liens." Thus, the Colorado General Assembly has expressed intent to grant a priority in respect to real estate tax liens and has not granted such priority in connection with personal property tax liens.

Other decisions of the Colorado Supreme Court refused to recognize the priority of a tax lien in the absence of express statutory language declaring the priority: See People v. Denver, 85 Colo. 61, 273 P. 883; City Real Estate, Inc. v. Sullivan, 116 Colo. 169, 180 P.2d 504; Gifford v. Calloway, 8 Colo.App. 359, 46 P. 626; City and County of Denver v. Armstrong, 105 Colo. 290, 97 P.2d 448.

In People v. Denver, supra, ...