Court Opinion

ID: 3405327
Source: CourtListenerOpinion
Date Created: 2016-07-05 19:19:41.660406+00
Date Added: 2024-06-11T12:29:48.016011
License: Public Domain

1. The provisions of the act of 1939 of the legislature (Ga. L. 1939, p. 344, Code, Ann. Supp., § 37-410), were enacted for the purpose of permitting a receiver to sell property free of liens, including tax liens in favor of the State and county.
2. Where, as here, the tax collector did not intervene and file his claim on tax collections against the fund derived from the sale of a receiver under an order of the superior court, in compliance with the act of 1939 (Code, Ann. Supp., § 37-410), which property was sold free of liens, the tax collector could not thereafter levy on the property thus sold *Page 891 
at a receiver's sale to satisfy said collections. Under the facts of this case his only remedy was to seek the payment of the amount of his tax execution out of the funds in the hands of the receiver.
        DECIDED MARCH 12, 1949. REHEARING DENIED MARCH 29, 1949.
The record here presents a claim case. It was tried upon an agreed statement of facts before a judge of the superior court without a jury. A judgment was rendered finding the property not subject to the tax fi. fa. The agreed statement of facts is as follows: "Executions for State and county (Dougherty) taxes for the years 1940, 1941, 1942, 1943, and 1944 against `Motor Sales and Service, S. R. Bolton, trading as,' were issued by Paul Jones, Tax Collector, on December 20 of the respective years, and were on June 10, 1948, levied upon one Walker Electric Lift, Serial number 2137, Model number 1003, in the possession of L. E. Staton. The executions are not recorded in the General Execution Docket of Dougherty County, Georgia. L. E. Staton had no knowledge or notice of said outstanding tax executions until the levy was made. To this levy L. E. Staton filed his affidavit claim and bond, said claim making the issue to be tried by the court.
"In October, 1942, a receivership proceeding entitled Herald Publishing Company et al. v. S. R. Bolton, trading as Motor Sales and Service, was instituted in the Superior Court of Dougherty County, Georgia. Pursuant to the prayers of the petition the court on October 13, 1942, appointed P. A. Keenan as receiver to take charge of the assets and operate the business of Motor Sales and Service, and the order so appointing the receiver provided that `said receiver is further ordered and directed to pay all taxes of the property of the defendant which shall come to his hand, and also the current expenses in the operation and maintenance of the business of the said defendant, which he is hereby authorized to continue under the further order of the court.' The receiver gave bond and entered upon his duties at a compensation of one hundred dollars per month.
"On May 12, 1945, the following bar order, entitled in the cause, was signed by the court and duly published as provided therein: `To all parties concerned and all parties claiming an interest *Page 892 
in the assets of the defendant, S. R. Bolton, trading as Motor Sales and Service, being administered in the above styled cause, or which may hereafter be administered in said cause: You are hereby required to intervene in the above and foregoing cause not later than the 21st day of July, 1945, or be forever barred from intervening in said case, or be forever barred from participating in the distribution of the assets or proceeds therefrom being administered or to be administered therein. Let a copy of this order be published in the Albany Herald twice a month for two consecutive months prior to the effective date hereof. The receiver in said cause is directed to see to the advertising in his hand as receiver.' The Tax Collector of Dougherty County, State of Georgia, was not named a party in the original petition for receiver and has never been served with a copy of the petition and process, he has not filed an intervention in said receivership, has made no appearance therein, and no formal order was passed making him a party except as he may have been made a party by reason of said bar order above mentioned.
"On My 4, 1945, the court signed an order authorizing the receiver to sell at private sale to L. E. Staton `all of the assets, fixtures, parts and other properties of . . S. R. Bolton, trading as Motor Sales and Service, except accounts and notes receivable, for the sum of nine thousand dollars.' On May 11, 1945, said receiver sold and delivered said property to the said L. E. Staton for the sum of nine thousand dollars cash, and executed and delivered to L. E. Staton a bill of sale conveying said property to L. E. Staton, reciting that said property was conveyed `free and clear of all liens and indebtedness excepting city and State and county taxes for the year 1945.' The property conveyed included the property levied upon.
"In November, 1945, P. A. Keenan presented to the court a petition reciting his appointment and containing the following allegations and prayers: `Your petitioner shows that he has fully performed all of the duties as receiver and has paid all the debts of S. R. Bolton, trading as Motor Sales and Service, as shown by the interventions filed by creditors in pursuance of the order signed by your honor on the 12th day of May, 1945, requiring interested parties to intervene. Wherefore, petitioner *Page 893 
prays that he may be dismissed as receiver for S. R. Bolton, trading as Motor Sales and Service, and the sureties on his bond discharged, as the laws in such cases provide, and that an order be passed authorizing to whom the remaining funds on hand should be paid'; and the court signed the following order: `The petition of P. A. Keenan, as receiver for S. R. Bolton, trading as Motor Sales and Service, having been filed, setting forth that he has fully performed all of the duties required of him as receiver, and praying for an order of dismission as such receiver; it is therefore ordered that his prayer be and the same is hereby granted, and P. A. Keenan, receiver for S. R. Bolton, trading as Motor Sales and Service, is hereby released from all liability as such receiver, and is hereby discharged.
"It is further ordered that P. A. Keenan, receiver, pay all costs incident to the receivership from monies in his hands as receiver, and he is further ordered and directed to pay S. R. Bolton the residue of the funds remaining in his hands as receiver for S. R. Bolton, trading as Motor Sales and Service.' No further proceedings appear of record in said case. S. R. Bolton is now a resident of Dougherty County, Georgia. The tax fi. fas. in question have not been paid by anyone."
1. It will be observed that the tax fi. fas. were for taxes for the years 1941, 1942, 1943, and 1944 against Motor Sales and Service, the trade name of S. R. Bolton. It will be observed further that in October, 1942, a receivership proceeding entitled Herald Publishing Company et al. v. S. R. Bolton was instituted. The business, by order of the court, was to be conducted as a going concern until further order. Thereafter, in 1945, the personal property in the hands of the receiver was sold to the claimant for $9000, free of liens. This sale was had pursuant to an act of March 24, 1939 (Ga. L. 1939, p. 344 et seq., Code, Ann. Supp., § 37-410). The sale was had by virtue of a bar order set out above. The controlling question before us here is whether or not the bar order issued by the court pursuant to the act of 1939, under the facts of the case, is sufficient as a matter of law to preclude the tax collector from proceeding *Page 894 
against the property sold by the receiver to the claimant free of liens. It would seem that the other questions presented are minor to this main question.
(a) It is the contention of counsel for the tax collector, first, that the statute of 1939 is to be construed with Code, §§ 55-312, 92-5707, 92-5709, and 92-7701, and counsel calls our attention to Cook v. Wier, 185 Ga. 418, 421
(195 S.E. 740); Alropa Corp. v. Pomerance, 190 Ga. 1, 10
(8 S.E.2d 62); Huntsinger v. State, 200 Ga. 127 (36 S.E.2d 92), and Azar v. State, 74 Ga. App. 610, 613 (40 S.E.2d 590). There seems to be no dispute that these Code sections, all of which were enacted prior to the act of 1939, and these decisions, set forth a clear and undisputed principle of law which was applicable before the act of 1939. The only question is, are they applicable since the passage of the act of 1939?
(b) In the second place, counsel for the tax collector contends that we should, in construing the statute, keep in mind the purpose of the statute. In support of this contention, counsel cites Hirsch v. Shepherd Lumber Corp., 194 Ga. 113,115, 116 (20 S.E.2d 575), and contends that it was the purpose of the act of 1939 (Code, Ann. Supp., § 37-410) to enact a statute in the nature of limitation for all who claim an interest in the fund to require them to set up their claims in a definite time in order that the court might disperse the fund and conclude the receivership.
(c) In the third place, counsel for the tax collector contends that the act of 1939 ( § 37-410) was not intended to repeal Code §§ 55-312, 92-5707, and 92-5709. In support of this contention, counsel calls our attention to Adcock v. State, 60 Ga. App. 207
(3 S.E.2d 597); Bennett v. Lowry, 167 Ga. 347, 349
(145 S.E. 505); Atlantic Log  Export Co. v. Central of Ga.Ry. Co., 171 Ga. 175 (155 S.E. 525).
(d) The fourth contention of counsel for the tax collector is that, where a new remedy is created, the old remedies are not destroyed. In support of this contention, counsel cites the case of Cook v. Security Investment Company, 184 Ga. 544, 549
(192 S.E. 179).
(e) The fifth contention of counsel for the tax collector is to the effect that to deprive a lienholder of his lien he must be made *Page 895 
a party to the litigation, and if he resides in the State, there must be personal service; or if he resides beyond the limits of the State, he must be served by publication. To sustain this contention, counsel for the State cites MacLaughlin v.Taylor, 115 Ga. 671 (42 S.E. 30); Denny v. BroadwayNational Bank, 118 Ga. 221 (44 S.E. 982); Hewell v.Smith, 175 Ga. 879 (166 S.E. 664); also Anderson v.Burson, 172 Ga. 448 (157 S.E. 632).
(f) In the sixth contention, counsel for the tax collector states that, where judicial sales divest the liens from the property and attach the same to the fund received from the sale of the property, this does not apply to tax liens. In support of this contention, counsel cites the case of State RevenueCommissioner v. Rich, 49 Ga. App. 271, 272 (175 S.E. 394). This decision was rendered prior to the passage of the act of 1939.
(g) The seventh contention of counsel for the tax collector is that our courts have repeatedly held that tax liens can not be divested by sale under any other processes. In support of this contention, counsel cites the Code, § 92-5709, and Empire CottonOil Company v. Park, 147 Ga. 618 (95 S.E. 216); alsoStokes v. State, 46 Ga. 412 (12 Am. R. 588). These decisions were rendered prior to the passage of the act of 1939.
(h) In contention eight, counsel for the tax collector urges that the provisions of the act of 1939 (Code, Ann. Supp., § 37-410) do not apply to the State or county in view of the provisions of the Code, § 102-109.
These are all of the statutes and authorities which the attorney for the tax collector relies on for a reversal of the decision of the court below. We do not deem it necessary to quote from these Code sections or decisions. They all seem to be sound principles of law, but not applicable under the facts of this case. The remainder of the brief of counsel for the tax collector is devoted to an effort to show that the act of 1939 in question and the decisions thereunder are not germane and applicable to the issues in the instant case. Counsel for the tax collector quotes extensively from the statutes and from the decisions above cited. We have not done so because anyone interested may read the sections and the decisions, since we have set out verbatim the agreed statement of facts. We might say here that there was *Page 896 
some defect in the law or else the legislature would not have engaged itself in an effort to cure such evil as then existed. All of the statutes quoted and the decisions in the main pertaining to the main issue were enacted and rendered before the passage of the act of 1939. It is elementary that, in construing the statute and the intent of the legislature, the old law evils and the remedies under the new law must be kept in consideration. Prior to the act of 1939, there was existing a pernicious evil, first, that a receiver could not with any security sell property free of liens, and the estate represented under these circumstances and order of the court could not, at a public sale, sell property for its true value free of liens. No purchaser knew prior to the act of 1939 whether or not such purchaser would purchase property free of liens. In our opinion, this evil prompted the passage of the act of 1939. No one would want to buy property not knowing what liens were against it and whether or not the receiver was an officer of the court. In the second place, prior to the act of 1939, the receiver himself could not be sure of selling property free of liens under the law as it then existed. Therefore, to remedy these two evils, we think that it was the intention of the legislature in passing the act of 1939 to correct them.
2. Under the facts of the instant case, a receiver was appointed in 1942. The tax execution was for the years 1941, 1942, 1943, and 1944. There is no contention here that the provisions of the act of 1939 (Code, Ann. Supp., § 37-410) were not complied with, and the claimant purchased the property free of any liens and without any knowledge that the taxes had not been paid. The tax collector did not intervene. He did not claim any of the funds. The receiver sold the property free of liens to the claimant. He received therefor $9000. After paying all of the claims of which he had knowledge, by order of the court, the receiver turned over the operation to the claimant. From this record the tax collector knew, or should have known, that his tax had not been paid for the years 1941, 1942, 1943, and 1944. The taxes which accrued after the appointment of the receiver were court expense. The law does not provide that tax executions be placed on the general execution docket except where third persons purchase them. The bar order passed by the court, and the advertisement *Page 897 
pursuant thereto, placed the tax collector, so far as the taxes were concerned, as any other lienholder. This is clearly set forth, to our minds, in the case of Suttles v. J. B. WithersCigar Co., 194 Ga. 617 (22 S.E.2d 129), and Joel v.Joel, 201 Ga. 520 (40 S.E.2d 541). To hold otherwise would seem to us to nullify the intention of the legislature in passing the act of 1939. The contentions of the tax collector that, since he did not intervene in compliance with the bar order and the advertisement thereunder, he was not deprived of the right to levy on the property in question, is, we think, untenable.
The court did not err in finding the property not subject.
Judgment affirmed. MacIntyre, P. J., and Townsend, J.,concur.
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