Court Opinion

ID: 7104769
Source: CourtListenerOpinion
Date Created: 2022-07-24 12:19:46.243098+00
Date Added: 2024-06-11T16:13:23.877746
License: Public Domain

UPON REHEARING.
Given, J.
I. This case was submitted at a former term, and an opinion rendered affirming the decree of the district court. In view of the nature and importance of the questions involved, a rehearing was granted, and the case has again been carefully considered. It ÍS' an action in equity to restrain the defendant, who is-treasurer of Union county, from proceeding to collect certain taxes on the personal property of one Syp, by the sale of real estate claimed to be owned by appellant. There was a decree for the defendant, and plaintiff' appeals. The case involves less than one hundred dollars, and the certificate of the trial judge shows the following facts: In June, 1886, one W. K. Syp executed, to appellant a mortgage upon certain real, estate in Union county, to secure the payment of ten thousand dollars and interest. Syp failing to pay the interest,. *738which became due January 1, 1887, at the March term, 1887, of the (district court, appellant recovered judgment against Syp for the overdue interest, and a decree of foreclosure of the mortgage. The premises were sold at foreclosure sale on the twenty-third day of April, 1887, to appellant, and a certificate of- purchase issued. On the tenth day of February, 1888, Syp conveyed his right of redemption to appellant, — the deed containing the following recitals: “ The grantors herein are to be released from personal liability for the payment of the mortgage upon the said premises, for the sum of ten thousand dollars to the grantee therein, dated J une 22, 1886. The object of this deed is to make more effectual the lien of said company against the said premises by virtue of the sheriff’s certificate of sale, which they hold against the same.” Taxes to the amount of seventy-five dollars upon the personal property of Syp were levied.for the year 1887, and entered upon the tax books against said real estate. The questions to be determined are, whether the taxes upon the personal property of Syp for the year 1887 became a lien upon the real estate, and, if so, whether such lien is superior to appellant’s lien under the mortgage foreclosure, decree and sale.
The general rule is that taxes are not a lien unless expressly made so by statute, and, when created, the lien is not to be enlarged by construction. Cooley, Taxation, 444; Jaffray v. Anderson, 66 Iowa, 719. Turning to section865 of the Code, we see that “taxes due from any person upon personal property shall be a lien upon any real property owned by such person, or to which he may acquire title.” This lien is upon the real property, not upon any particular interest in it. It is upon any real property owned by the person against whom the tax has become due. The lien attaches when the tax becomes due, which for the purposes of'this case may be taken as January 1, 1888 ; without now determining whether such taxes became due at the time of the levy, or when the books are placed in the hands of the treasurer. Castle, Trustee, v. Anderson, 69 Iowa, *739428. The statute has plainly created a lien for this fax' upon any real property owned by Syp at the time the tax became due, and our inquiry is not whether a lien should be created or enlarged, but- whether, on January 1, 1888, Mr. Syp was the owner of the real property described. The ownership was not extinct nor suspended, — it existed either in Syp or the appellant. Under the modern rule, appellant, as mortgagee, was merely the holder of a lien, which continued so long as the mortgagor had the right to extinguish it by payment. The decree and sale did not terminate that right. Under the law, the time of the sale merely determined the time when that right would be cut off. The relations of the parties to the property were not changed by the sale, except that the costs were added to the indebtedness, and the time within which Syp might extinguish the lien changed. Certainly appellant was not the owner of the property in such sense as that taxes on personal property due from him would become a lien upon the property before title was acquired, by the expiration of the right to redeem. Mortgaged property is not subject to lien for taxes on personal property due from the mortgagee, because, as mortgagee, he is not the owner, but a mere lienholder. On January 1, 1888, Syp held the legal title, subject only to the lien of the decree and sale, which he had a right to remove by payment at any timebefore April 23,1888. It is not to property held by absolute ownership that the lien attaches, but to real property owned. This real-property was owned by Syp when the taxes against him became due,' and, therefore, under the statute those taxes became a lien upon that real property. To hold otherwise would deny to the ' state a lien expressly created by statute. As this question of ownership rests entirely upon the facts as they existed January 1,1888, the deed thereafter made by Syp to appellant is immaterial.
II. Upon the question as to the superiority of these liens, it is urged that the statutes do not expressly declare the lien for taxes on personal property superior *740to other liens previously acquired. That to hold it superior is to enlarge the lien and impair real-estate securities, discourage sales on time, and, in effect, take the property of one person to pay the taxes of another. The lien is upon real estate,and not upon any particular interest therein. It is not a mere personal claim against the owner, but a charge upon the land. Garretson v. Scofield, 44 Iowa, 37. It is a general principle in our system of taxation that, when taxes are made a lien upon real estate, they become prior and superior to all mortgage or judgment liens. Were it otherwise, the state in the collection of her revenues would be placed in the attitude of a junior lienholder, and forced to redeem from prior liens, or be defeated in the collection of her taxes. The power of taxation is an incident of sovereignty, and the exercise of that power cannot be defeated by asserting superiority for the claims of individuals. The statute is silent as to any authority to redeem on behalf of the state, and the slightest reflection will show how entirely impracticable it would be to pursue such a course in the collection of taxes. The statute creates the lien against the land, and it is no enlargement of it to say that the land is held for its payment in preference to all other liens. It is sufficient answer to all that is said as to the effect that such a holding will have upon real-estate securities and transactions to say, that it is entirely within the power of those taking such securities to protect themselves. They take their securities knowing that personal-property tax may become a lien upon the property pledged, and that the state cannot be embarrassed in the collection of its revenue by being put in the position of a junior lienholder. It is a matter of common observation that mortgages are generally taken with, sufficient margin, and ample provisions, to protect the mortgagee against the consequence of liens for taxes on personal property. AYe fail to discern wherein the holding of this property liable to the personal tax of Mr. Syp is taking the property of appellant to pay Mr. Syp’s taxes. It was •not the appellant’s property at the time the lien *741attached. We cannot concur in the conclusions of the courts, as announced in Macknet v. Newark, 42 N. J. Law, 45, and Parsons v. Gaslight & Coke Co., 108 Ill. 384, cited by counsel. A careful review of the case, in the light of the additional arguments and citations, confirms us in the conclusion announced in the former opinion.