Court Opinion

ID: 6640658
Source: CourtListenerOpinion
Date Created: 2022-07-20 20:45:02.201834+00
Date Added: 2024-06-11T15:59:13.719197
License: Public Domain

DONAHUE, Circuit Judge
(after stating the facts as above).  Before any right of action could possibly have accrued to the state revenue agent, under any statute of Tennessee to enforce a lien for taxes in the chancery courts of that state, the property of the Tennessee Charcoal Iron Company passed into the custody of tho United States District Court. It is admitted that it is the duty of that court, on its own motion, to order and direct its receivers to pay all the taxes due tho several taxing districts in which this properly is located. The court having possession and control of this property with jurisdiction to hear and determine all questions of taxes, liens and priorities, there would bo no reason whatever for granting leave to the revenue agent of the state to bring an independent action in a chancery court of the state of Tennessee and the refusal to do so was not error. In re Tyler, Petitioner, 149 U. S. 164, 183, 13 S. Ct. 785, 37 L. Ed. 689.
The application to bring an independent suit was properly denied on April 30, 1923, for the further reason that under the provisions of chapter 77 of the Acts of 1923, the state revenue agent has no capacity to suo nor tho right to maintain an action for the collection of delinquent taxes which was not instituted in the state courts before February 1, 1923.
The only other question presented by this appeal is whether the state revenue agent at the time his application came on to be heard, was entitled, as a matter of right, to intervene in this suit for the collection of these taxes. The receivers disclaim all interest in this controversy except that if the state revenue agent is permitted to collect these taxes there must he taxed for his personal benefit, a further penalty of 15 per cent, in addition to interest and all other penalties, which, if allowed, will greatly reduce the meager dividends the unsecured creditors may possibly receive upon their claims. That, of course, would be unfortunate, but would not be controlling, if in fact he was entitled to intervene for the protection of the taxing districts that are the beneficiaries of these taxes.
In his application for leave to intervene the state revenue agent bases his right to do so upon chapter 115 of the Public Acts of Tennessee of 1921. It is clear from the reading of this chapter that it does not, in terms, eonCer upon the state revenue agent either the authority or the right to intervene in the federal court, but, on the contrary, specifically provides that Le shall, after certain conditions have been complied with, bring action to enforce the lien for delinquent taxes in the chancery courts of the state. It is now claimed, however, that his right to intervene is predicated upon section 77 of chapter 602 of the Acts of 1907, which provides that state revenue agents “shall, by direction of the comptroller, present and obtain allowance by the court both state and federal, of all taxes, whether privileges or ad valorem, due the state from property or its proceeds in the hands of receivers under appointment of the court or otherwise in the custody of the law.”
*860For the purposes of this case it is unnecessary to determine whether this provision of section 77 of chapter 602 of the Acts of 1907 was repealed by chapter 115 of the Laws of 1921, which specifically repealed a great many sections of chapter 602 of- the Acts of 1907, and repealed generally all laws in conflict therewith and provides a comprehensive, and perhaps exclusive, plan and system for the collection of delinquent taxes. Nor is it important to determine whether the provisions of section 77, chapter 602, of the Acts of 1907, relate to all taxes, or only to state taxes which are re--quired to be paid directly to the comptroller. Under the provisions of that'section the state revenue agent has no authority to intervene, except by direction of the comptroller. The application filed in this cause fails to aver that the revenue agent has been directed by the comptroller to intervene in the present suit.
However that may be, under the provisions of chapter 77 of the Acts of 1923, passed March '31, 1923, the state revenue agent has, and at the time this order was made had, no authority to represent the state or further to prosecute any action for .the collection of delinquent taxes which was not instituted in the courts of Tennessee pri- or to February 1, 1923. An application to file an intervening petition in a pending cause in the federal court is not an action pending in' the courts of that state February 1, 1923.
For the reasons stated, the order of the District Court, from which this appeal is taken is affirmed, and cause remanded. This appeal, however, presents no question as to the amount of these taxes, interest, and penalties properly chargeable against the property in the possession and under the control of the court, and for that reason we express no opinion whatever in reference thereto.