Case Name: MINNEAPOLIS THRESHING MACHINE COMPANY, Appellant, v. ROBERTS COUNTY, Respondent
Court: South Dakota Supreme Court
Jurisdiction: South Dakota
Decision Date: 1914-10-29
Citations: 34 S.D. 498
Docket Number: 
Parties: MINNEAPOLIS THRESHING MACHINE COMPANY, Appellant, v. ROBERTS COUNTY, Respondent.
Judges: M-cCOY, J. I concur in the views expressed by WHITING, J.
Reporter: South Dakota Reports
Volume: 34
Pages: 498–510

Head Matter:
MINNEAPOLIS THRESHING MACHINE COMPANY, Appellant, v. ROBERTS COUNTY, Respondent.
(149 N. W. 163.)
1* Taxation — Prior Tien of, Over Mortgagee — Personalty Taxes— Statute.
Under Pol. Code, Sec. 2191, providing that all taxes assessed upon personalty shall he a first lien on all personalty of the person against whom personal taxes are assessed, held, that a threshing machine is subject to such lieji, not only for the taxes assessed against it, but also for other personal, poll, and dog taxes assessed against its owner, and the lien may be enforced against a chattel mortgagee whose mortgage antedated the assessment, and who had foreclosed on the machine after the lien attached.
Whiting and McCoy, J. J., dissenting.
2. Constitutional Law — Taxation of Personalty — Due Process of Taw — Statute as Contract.
Where a statute making personalty taxes a prior lien on the personalty of the owner, was in force when a chattel mortgage was given, it is aontrolling upon the parties to the mortgage, and became a part of the contract, and its enforcement did not deprive the mortgagee of his property without due process of law.
3. Taxation — Prior Tax Tien on Personalty — Constitutionality of Statute.
The Legislature has power to subject all* personalty of an owner to a lien for all personal property tax assessed against him or against his personalty, and to make such lien paramount to the lien of a chattel mortgage executed before the tax was assessed.
Whiting and McCoy, J. J., dissenting.
(Opinion filed October 29, 1914.)
Appeal from Circuit -Court, Roberts County. Hon. FRANK McNulty, Judge.
Action by the Minnesota Threshing Machine Company against Roberts County, to recover the amount of personalty taxes paid by it as mortgagee, upon certain threshing machines. From a judgment for Defendant, and from an order denying a new trial, Plaintiff appeals.
Affirmed.
P. W. Murphy, and Hozuard Babcock, for Appellant.
/. J. Batterton, and Thomas Mctni, State’s Attorney, for Respondent.
(1) Under point one of the opinion, Appellant cited:
Secs. 2042, 2057, Rev. Civ. Code; Port Huron Co-, v. Iverson, 117 N. W. 372; Advance Thresher Co. v. Beck, 128 N. W. 315, and cases there cited; State v. Newark, 42 N. J. Law, 38; Bibbins v. -Clark, 57 N. W. 884; Parsons v. Gas Light & Coke Co., 108 Ill. 380; Bridewell v. Morton, 46 Ark. 73; Binkert v. Wabash Ry. Co., 98 Ill. 205.
Respondent cited :
Sec. 2191, Pol. Code.
(2) Under point two of the opinion, Respondent cited:
Billinghurst v. Spink .Co., 5 S. D. 84.

Opinion:
ROLLEY, J.
Appellant sold threshing machinery, consisting of separators, engines, etc., to various parties in different townships in Roberts county; and, to secure the payment of the purchase price thereof, took chattel mortgages upon said machinery. Thereafter, and while the said chattel mortgages were still in force, said property, together with other personal property of the same parties, was assessed to the owners thereof, and certain personal taxes levied thereon. The said chattel mortgages were not paid, and appellant, from time to time, foreclosed the same and became the owner of the said property through foreclosure proceedings. After appellant had acquired title through such foreclosure proceedings, the sheriff of the county, by virtue of distress warrants, issued by the county treasurer, levied upon and seized said property and threatened to sell the same for the payment of said personal taxes. These warrants not only called for the collection of the personal tax that has been levied upon the mortgaged property and other property owned by the same parties, but, in certain cases, said warrants -called for the payment of school, poll, and dog taxes that had been levied against the o-wners o.f said mortgaged machines. In order to prevent such sales being made, appellant was obliged to, and did, pay all of the said various taxes, but paid the same under protest, and now brings this action— making each redemption the basis of a separate cause of action — • to recover from the county the amounts so paid by appellant. The county recovered judgment in the trial court, and plaintiff appeal's.
In each instance involved in this case, the appellant's mortgage was in force and of record before the tax involved had been levied or become a lien, and it is claimed by appellant that, because of this fact, its lien took precedence over the lien of the tax, but that, in any event, the mortgaged property could not be burdened with the taxes that had been levied on other property owned by the same parties, nor with the school, poll, nor dog tax of the owner of the mortgaged property.
The statute under which the treasurer and sheriff were proceeding reads as follows:
"All taxes assessed upon personal property within this state shall be a first lien on all personal property of the person against whom personal taxes are assessed, from and after January first in each year." Section 2191, Pol. Code.
This statute is too plain to require construction. It is clear that the legislative intent was to make all personal taxes assessed against a party a paramount lien upon all personal property owned by such tax debtor. The result of this is to burden each and every article of personal property belonging to such tax debtor with all of the ¡personal taxes levied against him until the same has, in some manner, been discharged; and, this lien, having once attached to such personal property, would necessarily follow each article thereof in its transmission to others.
This section of the statute was in effect when appellant's mortgages were executed, and is therefore controlling upon the parties to such mortgage. It became a part of the contract, and such mortgages must be treated as though the said section had been incorporated therein. The power of the Legislature to make personal taxes a paramount lien on the property of the tax debtor cannot be seriously questioned at this day. Statutes giving- tax liens priority over' all other liens and incumbrances are not in contravention of any constitutional prohibition. In re Prince (D. C.) 131 Fed. 546; Cent. Trust Co. v. Third Ave. R. Co., 186 Fed. 291, 110 C. C. A. 1; Bridewell v. Morton, 46 Ark. 73; Cal. L. & T. Co. v. Weis, 118 Cal. 489, 50 Pac. 697; Albany Brewing Co. v. Meriden, 48 Conn. 243; Geren v. Gruber, 26 La. Ann. 694; Hopper v. Malleson, 16 N. J. Eq. 386; Morrow v. Dows; 28 N. J. Eq. 459; Pub. School v. Trenton, 30 N. J. Eq. 667; Howell v. Essex County, 32 N. J. Eq. 672; Lydecker v. Palisade Land Co., 33 N. J. Eq. 415; Snyder v. Mogart, 5 Pa. Dist. Ct. 148; and in Mutual Benefit L. Ins. Co. v. Siefken, 1 Neb. (Unof.) 860, 96 N. W. 603, the court said:
"And every piece of real estate, as well as personal property, in the state, should contribute its share towards the support of the state, county, and municipality where situated. Any one taking a mortgage, or securing a lien of any other character upon property, must take it with knowledge that such property is bound to pay its proportionate share of the taxes necessary to the maintenance of the government, and must understand that the obligation .to contribute to the support of the government is something that attaches to the property itself, and that must, in the very nature of things, be superior to the lien he is about to take. For this reason it is no injustice to make the lien for taxes superior to all other liens."
It is essential, in order that the state may collect its revenue- and carry on the public business, to make such a tax a paramount lien; and, in justice to property owners and taxpayers generally, such tax ought to be a paramount lien, and 'the same ought to be enforced. The power of the Legislature to levy taxes is almost unlimited. They are often levied in disregard of personal rights, atad individual rights ought not to stand in the way of their collection.
It is laid down as a general rule in 37 Cyc. 1143, that it is competent for the Legislature to make, and in many states they have made, taxes a paramount lien on the property of the taxpayer, the "consequence being that the lien for taxes takes precedence of every other lien or claim upon the property of whatever kind, however created, and whether attaching before or after the assessment of the taxes," citing cases from many states in support thereof.
Because of the dissimilarity of the statutes in this and other states, Advance Thresher Co. v. Beck, 21 N. D. 55, 128 N. W. 315, Ann. Cas. 1913B, 517, and Anderson v. State, 23 Miss. 439, relied upon by appellant, are not in point. The Mississippi statute involved reads as follows:
"Taxes imposed by this act shall be preferred to all payments, executions, incumbrances and liens of any description whatsoever. "
This does not purport to create a paramount lien nor, in fact, a lien at all; and therefore no lien would attach to personal property until it had been levied upon or, in some manner, reduced to subjection.
The North Dakota statute is as follows: "The right of the state in each and every county thereof to enforce the collection of personal property laxes shall take and have precedence of any and all liens on or against the personal property of a tax debtor; provided, that any person holding a lien on personal property of any tax debtor may demand and require the property of the tax debtor not covered by a lien to be first exhausted in the payment of such taxes."
Under this law, which is designated as vague and uncertain by the Supreme Court of that state, it was held that, as against an incumbrancer, personal property could only be charged with the taxes levied upon the identical property involved or other property in the same class, the court saying-:
"This appears to us to be a reasonable construction of this somewhat vague statute, and such construction obviates- the constitutional objections urged by appellant's counsel against the same. It is -concededly proper for the Legislature to provide that taxes assessed against each class of personal property should have priority over all other liens thereon. This is in harmony with the law relating to real estate taxes. But, as before stated, it would be grossly unjust, if not in excess of legislative power, to give to the tax lien for taxes on one class of property priority over all other liens on property of another and entirely distinct class. In the absence of a statute clearly disclosing such intent, we are unwilling to attribute such a purpose to the Legislature." Advance Thresher Co. v. Beck, supra.
Just why the court should have drawn the line at taxes assessed against other property of the same class does not appear. Certainly no such distinction could be made under our law, for it was clearly the intent of our Legislature to make the taxes on one article or class of personal property a lien upon other articles and classes of personal property belonging to the same person. In so doing, the Legislature was acting within its constitutional powers. Nor are we willing to concede that it is "grossly unjust" to burden one article or class of personal property with taxes levied against another; and, if it were unjust, the remedy must come from the Legislature, and not from the court.
In Minnesota, the statute covering this subject reads as follows:
"The taxes assessed upon personal property shall be a lien upon the personal property of the person assessed from: and after the tax books are received by the county treasurer."
This statute is different from ours, in that it does not say that "all" personal taxes shall be a "first" lien on "all" personal property, as ours does. Yet the Circuit 'Court of Appeals, in a case from Minnesota where this statute was involved, held that the:
"Inference should be that the lien was intended by the Legislature to be superior to- all liens, prior or subsequent, claimed by individuals, and that nothing should be allowed to overcome this inference but a plain expression of a different purpose found in the statute itself." State v. Central Trust Co., 36 C. C. A. 214, 94 Fed. 244.
Our statute leaves nothing to inference, but, in terms, makes the tax lien superior to all others, and it is our conclusion that the lien for personal taxes is superior to appellant's mortgage lien, not only on the particular property upon which the tax was levied, but upon other personal property owned by the person against whom the tax was lévied. A similar conclusion is reached in Michigan, under a statute somewhat similar to ours (Crawford v. Koch, 169 Mich. 372, 135 N. W. 339), and, for analogous cases, see Mills v. Thurston County, 16 Wash. 378, 47 Pac. 759; Burfiend v. Hamilton, 20 Mont. 343, 51 Pac. 161; Reynolds v. Fisher, 43 Neb. 172, 61 N. W. 695; Reynolds v. McMillan, 43 Neb. 183, 61 N. W. 699; Bridewell v. Morton, 46 Ark. 73; Morey v. City of Duluth, 75 Minn. 221, 77 N. W. 829; Porter v. Yakima County, 77 Wash. 299, 137 Pac. 466.
It is argued by appellant that, if the statute under consideration is given the construction contended for by respondent, it will burden personal property with secret liens to an extent to be abhorred; that it will act as a restraint upon the free exchange and alienation of personal property and render it unsafe to deal in personal property; that it will violate contract obligations' and result in the taking of property without due process of law. While the latter objection might be good in regard to contracts that were made prior to the enactment of the statute, it is without force when applied to> contracts entered into since its enactment. The results complained of are presumed to have been in contemplation of the parties when the contract was made. If the statute is obnoxious because it acts as a restraint upon the free exchange or alienation of personal property, or renders it unsafe to deal in such property, then it should be repealed or amended, but this relief must be sought from the Legislature and not from the court.
Other alleged errors are assigned and presented in the brief of appellant, but the facts contained in the record are not sufficient to enable us to say whether the court erred or not, and therefore we are unable to review the same.
The judgment and order appealed from are affirmed.