Court Opinion

ID: 8256392
Source: CourtListenerOpinion
Date Created: 2022-10-16 15:32:05.645706+00
Date Added: 2024-06-11T16:43:00.472250
License: Public Domain

Mr. Chief Justice Smith
delivered the opinion of the court.
This bill was filed in the superior court of chancery to restrain the tax collector for Warren county from selling certain debts and claims, held and claimed by the appellant as the assignee of the Commercial and Railroad Bank of Vicksburg.
The bill charges that on the 20th of May, 1848, the defendant Steele, the said tax collector, assessed the capital stock of the said bank for the state and county taxes, and also for' a special tax, alleged to be due by said bank for each of the years 1841 to 1847 inclusive, which said taxes had not before been assessed. That by virtue of said assessment, the said Steele, on the 31st of May, 1848, gave notice that he would, on the 3d of July thereafter, sell at public sale a large number of the debts and claims which had been assigned to the appellant ; that nearly all of said claims were in suit before the date of the assessment, and that they never were in the possession of the said Steele. •
The bill further charges, that on the 25th of May, 1848, the bank, by deed, assigned to complainant, in trust for the payment of her debts, the whole of her bonds, bills, notes, and other choses in action, which he holds and claims as trustee by virtue of said assignment.
*473The bill insists that the said assessment was wholly void, because not actually made by the assessor within each of the years from 1841 to 1847 ; and also for the reason that the tax was assessed upon the nominal amount, and not upon the cash value of the capital stock of the bank.
The bill further insists, that if the assessment were valid, the debts and claims in the hands of the appellant are nevertheless not subject to sale for the payment of said taxes, for the reason that there was no actual levy made upon them by the collector, and that they were assigned to appellant before notice was given of the sale; there being no law which secures to the state a lien upon choses in action for the payment of taxes.
To the bill the defendants, Steele and the State of Mississippi, filed a general demurrer, which was sustained, and the bill was dismissed.
The said bank, also a defendant, interposed no defence; and as far as we are informed by the record, does not contest her liability to pay the taxes assessed against her, nor does she question the title of the appellant to the debts and claims assigned to him, as set forth in the bill.
Regarding the appellant, therefore, as the only party to the record who is interested in defeating a sale by the collector of. these choses, for the purpose of satisfying the taxes assessed and claimed against the bank, we are relieved from the necessity of passing upon most of the points made in the luminous and very able argument of the cause. Upon this view of the case, we shall not notice any of the questions involved in the proposition assumed and controverted by the respective counsel, that the said assessment was made by the tax collector of Warren county, in the due execution of a valid authority conferred by the statute ; and hence that the taxes demanded by virtue of such assessment are a just and valid charge against the bank, but shall confine our inquiries mainly to the question, Whether, admitting the assumed validity of this demand for the said taxes, the bonds, bills and notes, or the debts of which they are the evidences, held by the appellant, as the assignee of the bank, are subject to seizure and sale by the said collector in satisfaction of the same ?
*474Before, however, we proceed to an examination of this question, we shall notice a preliminary point made by counsel for one of the appellees, not connected with the merits of the cause.
It is contended that, as the defendant Steele had no interest in the subject of the suit, but acted in the matter merely as the officer appointed by the law to collect the taxes due to the county and state, he should not have been made a party to the bill. Hence, it is insisted that his demurrer was correctly allowed.
We do not assent to the proposition. If it were regular to raise the question of the misjoinder of parties under a general demurrer for want of equity on the face of the bill, the position 'is untenable for another reason. The county of Warren we apprehend could not have been made directly a party to the suit. At least there is no statute which authorizes the counties In this state to maintain suits, or which gives an action against them. If the counties can be regarded as quasi corporations, and as such be chargeable in actions brought directly against them, there should be means provided by the law by which the judgments therein if rendered against them could be enforced. 'These means do not exist as supplied by any express statutory provision, and it is difficult to conceive how a judgment rendered against a county in this state can be enforced. See 3 S. & M. 529, and cases cited. Assuming that Warren county could not have been sued, and conceding, as contended for, -that she was a party in interest, there seems to be no doubt of the propriety of making the tax collector a party to the bill. 'The county was beyond the reach of the appellant, and his only remedy to prevent the threatened injury was, by acting on the officer through whose agency it was about to be inflicted. Osborn v. United State's Bank, 9 Wheat. 738.
The determination of the question, whether the debts and claims, advertised by the collector, are liable to be sold for the payment of the said taxes, depends upon the operation of the statutes, which secure to the state a right of prior satisfaction out .of the property of the debtor, for all unpaid taxes.
The 17th section of the statute of 1841, in regard to the *475public revenue, provides that taxes imposed by the act shall be preferred to all payments, executions, incumbrances, and liens of any description whatsoever; and that they shall be from the 1st day of March, in each and every year, a lien upon all real estate of the person assessed, within the county in which the assessment is made. The same provisions are contained in the revenue act of 1844, (sec. 38, Pamph. Acts, p. 74,) and in the Statute of 1846, sec. 40 ; Hutch. Dig. 193.
By these statutes an express lien is created as to all of the real estate of the tax debtor. If these laws also impose a lien upon personal estate, embracing debts and claims, or choses in action, of the persons assessed, the debts and claims in the possession of the appellant are liable for the payment of the taxes assessed against the bank.
There is no lien expressly given as to the personal property of the tax debtor by the statutes above quoted. If it existed at all, it must result from the priority of payment secured to the state. But a right of prior payment does not of itself constitute a lien. The distinction is an obvious one. A lien is said to be a qualified right, which, in a given case, may be exercised over the property of another. Lickbarrow v. Mason, 6 East, 20. It attaches to the subjects of property, and follows them in their transmission to others. Priority in payment is a preference in the appropriation of the proceeds of the debtor’s property. Hence if before it has attached there is a bnoá fide transfer of the property, the right will be lost. Brent v. The Bank of Washington, 10 Peters, 611.
The fifth section of the act of congress, 1797, (1 Story, Laws, 464-465,) secures to the United States priority of payment out of the estates of insolvent debtors. The effect of this act is not materially different from the statute under consideration, so far as the personal property of the persons assessed is affected by the latter.
In United States v. Fisher, 2 Cranch, 358, a case arising under the 5th section of the act of congress above mentioned, the court say, “ On this subject it is to be remarked that no lien is created by this law. No born fide transfer of property} in the ordinary course of business, is overreached. It is only *476a priority in payment, which, under different modifications, is a regulation in common use.”
In Hooe v. United States, 3 Cranch, 73, a case also arising under the 5th section of that statute, the court again say: “ In construing the statutes on this subject, it has been stated by the court, on great deliberation, that the priority to which the United States are entitled does not partake of the character of a lien on the property of public debtors.”
After mature deliberation, we adopt a similar construction in regard to the statutes under consideration, and hold that the priority secured to the state does not o¡3erate as a lien upon the personal property of the tax payer. Hence the bona fide transfer of personal property, upon a valid consideration, would not be overreached by it.
There was no manual possession taken, nor actual levy made of the debts and claims. Notice of the sale was given on the 31st of May ; and if this be regarded as equivalent to a levy, it did not occur until after the assignmentt o the appellant, which was made on the 25th of the same month. It is evident that no lien was acquired by the notice of sale, regarding it as a levy, if none existed prior to the assignment.
But assuming that a priority of payment attached by virtue of the statute of 25th February, 1848, which was not divested by the assignment, such preference of payment would not authorize a sale by the collector, of the debts and claims. He would have a right of prior payment out of the proceeds, but would acquire no title to the choses themselves. 1 Pet. 439; Brent v. The Bank of Washington, 10 Ib. 611.
Taking this view of the case, we think the demurrer should have been overruled; we therefore reverse the decree.
Yerger, J., having been engaged as counsel, gave no opinion in this case.