Walker v. Nogales Building & Loan Ass'n

• Decision Date: 07 July 1925
• Docket Number: Civil 2360
• Parties: LUCILLE WALKER, Treasurer and Ex-officio Tax Collector of Santa Cruz County, Arizona, Appellant, v. NOGALES BUILDING AND LOAN ASSOCIATION, a Corporation, Appellee
• Court: Arizona Supreme Court

237 P. 1094

28 Ariz. 484

LUCILLE WALKER, Treasurer and Ex-officio Tax Collector of Santa Cruz County, Arizona, Appellant, v. NOGALES BUILDING AND LOAN ASSOCIATION, a Corporation, Appellee

Civil No. 2360

Supreme Court of Arizona

July 7, 1925

APPEAL from a judgment of the Superior Court of the County of Santa Cruz. M. Marsteller, Judge. Judgment affirmed.

Mr. W A. O'Conner, County Attorney, and Mr. E. R. Thurman, for Appellant.

Messrs Duffy & Robins, for Appellee.

OPINION

McALISTER, C. J.

This case is before the court on an agreed statement of facts which, in substance, follows: Griffith Jenkins and Jane Jenkins were the owners of three lots in the city of Nogales Arizona, and on February 6, 1919, they mortgaged them to the Nogales Building & Loan Association. The title remained in them until 1923, when the mortgage was foreclosed and the lots purchased by the mortgagee at the foreclosure sale; the deed therefor being executed and delivered by the sheriff within the proper time thereafter. State, county, city, and other taxes levied on this property for the years 1920, 1921, 1922, and 1923 were unpaid and on June 2, 1923, the purchaser tendered these to the county treasurer. Including the fees, interest, penalties, and costs they amounted to $987.61. That officer, however, refused to accept this sum, but demanded $744.92 additional because the records disclosed that Griffith Jenkins and Jane Jenkins owed that sum on their personal property for the years 1920, 1921, 1922, and 1923.

The purchaser thereupon filed its complaint, praying that a writ of mandamus issue commanding Lucille Walker, treasurer and ex-officio tax collector of Santa Cruz county, Arizona, to accept the sum of $987.61 in full payment of the taxes against said real estate for the years 1920, 1921, 1922, and 1923, and to issue it a receipt therefor. The alternative writ issued, and the defendant answered, alleging that, in addition to the lien on the said real estate for the taxes thereon, there was also on it a lien for the personal property taxes of Griffith Jenkins and Jane Jenkins for the years 1920, 1921, 1922, and 1923 amounting to $744.92, and that said lien, though later in time, was prior to the lien of the plaintiff's mortgage. After the hearing, the court entered judgment for the plaintiff upon the ground that the lien upon the land for the personal property taxes assessed against Griffith Jenkins and Jane Jenkins was subject, junior, and inferior to plaintiff's mortgage lien on the same property, and that, by purchasing said land at the mortgage forclosure sale, and the issuance to it within the proper time thereafter of a sheriff's deed, the plaintiff acquired the land free and clear of all personal property tax liens. From this judgment the defendant appeals.

The only question presented by the record, and raised by the four assignments, is whether the statutes of this state create a lien on real property for personal property taxes prior and superior to an existing mortgage lien on the same property. Appellant contends that they do, and appellee admits that a lien on real property or personal property taxes is given by the statute, but claims that it is not prior and superior to one already in existence. In arriving at their respective conclusions, both parties rely principally upon paragraph 4845, Revised Statutes of 1913 (Civ. Code), reading as follows:

"4845. Every tax levied under the provisions or authority of this act upon any real or personal property is hereby made a lien upon the property assessed, which lien shall attach on the first Monday in January in each year and shall not be satisfied or removed until such taxes, penalty, charges, and interest are all paid, or the property has absolutely vested in a purchaser under a sale for taxes. Said lien shall be prior and superior to all other liens and incumbrances upon the said property."

There are other sections making one class of property liable for the taxes on another; for instance, the last sentence of paragraph 4847 of the Civil Code of 1913 provides that--

"Each individual item of property contained in an assessment shall be held liable for the taxes on all items of personal property in the same assessment."

And paragraph 4902 provides that the taxes assessed upon personal property shall be a lien upon the real property of the person assessed, while paragraph 4903 says that personal property shall be liable for taxes levied on real property, and real property shall be liable for taxes levied upon personal property. But in none of these is it provided that the lien created thereby shall be prior and superior to all other liens and encumbrances upon the same property, and it is not claimed by either party that a lien thus created, even including a tax lien, has such preference, unless the statute gives it; the general rule being that such priority does not exist. "It is competent," however, according to 37 Cyc. 1143, "for the Legislature to make taxes a paramount lien on the property of the taxpayer, and this has been done in many states; the consequence being that the lien for taxes takes precedence of every other lien or claim upon the property of whatsoever kind, however created, and whether attaching before or after the assessment of the taxes. But this preference does not belong to the tax lien unless it is so declared by statute, and a law for example, which merely enacts that taxes shall be a lien on real property, does not make them a first lien." See 26 R.C.L. 389; 27 Am. & Eng. Ency. of Law, 2d ed., 741; 37 Cyc. 1145; Miller v. Anderson, 1 S.D. 539, 11 L.R.A. 317; 47 N.W. 957; Cooley on Taxation, 444.

The lien created by paragraph 4845, however, is by the provisions thereof made prior and superior to all other liens and encumbrances on the same property, and if, by the term "property assessed," as used in that section, the legislature meant to include every item of property listed in the assessment of any taxpayer, regardless of its character a lien on real estate for a personal property tax undoubtedly has priority over the lien of a mortgage on the same property, though it has already attached. But if by this term is meant that the tax levied upon the real property assessed is made a lien on that property only, and the tax levied on the personal property assessed is made a lien on that property only, one could not under this section justify the conclusion that a lien superior to all others exists on real property for a personal property tax, for no lien for taxes except that created by this section is given a preference; the others being governed...