115 N.J. Eq. 189 | N.J. Ct. of Ch. | 1934
Jersey City has filed with the receiver of the defendant insolvent corporation claims for taxes and water rents.
The receiver properly concedes that the claim for personal property tax for the years 1931 to 1933, amounting to $2,461.54, is valid and entitled to preference. "An act in relation to taxes upon personal property and providing for the collection thereof" (P.L. 1896 p. 181; Comp. Stat. p. 5182), directs the receiver of a corporation, appointed by this court, to pay, out of the first moneys received by him, unpaid taxes with interest and penalties. A proviso preserves the lien of employes for wages. Expenses of administration, wages and taxes due to the state are first payable, then the personal property tax due the municipality. Spark v. La Reine Hotel Corp.,
The claim of the city includes items for taxes levied on the company's motor vehicles for 1924, 1926 and 1927. Though the automobiles were assessed separately from the *191
bulk of the company's chattels and were shown as a separate item in the tax bills, the tax thereon was a part of the general personal property tax of the company and is governed by the same rules and has the same preference. By an amendment to the Tax act (P.L. 1927 p. 790), motor vehicles were exempted from taxation under the statute. Even considering this amendment as a repealpro tanto, it did not affect liability for the automobile taxes theretofore imposed. Town of Belvidere v. Warren Railroad Co.,
Counsel for the city agrees with the receiver that taxes on the real estate are not a charge upon the funds in the hands of the receiver, and I too agree, although there are provisions in the Tax act pointing the other way, especially in sections 606 and 609. These provisions are vestiges of the method of collecting taxes that prevailed until 1854. Taxes on real estate were not a lien on the land and were enforced like personal property taxes by distraint and sale of chattels and by imprisonment of the delinquent. Paterson 404 §§ 17, 32. By P.L. 1854 p. 429, and P.L. 1863 p. 497, land taxes were made a lien on the lands and our present system of enforcement inaugurated. For many years, the law was that such taxes could be collected either by distraint or by sale of the land. Estell (State) v. Hawkens,
A tax on real estate is only a lien on the land and not a personal obligation of the landowner or a charge on its chattels. The receiver is justified in paying it only when there is an equity in the land to be preserved for the benefit of creditors. Since it is doubtful whether there is any such equity, the receiver will not be directed to pay the tax. Of course, I am speaking of taxes which accrued before the appointment of the receiver and not taxes which accrued while the receiver was using the property for the benefit of creditors. In the latter case, the receiver pays taxes as an operating expense. McKenzie v.Standard Bleachery Co.,
The last question raised has to do with $39,580 due to the city for water supplied to Turner Company. The obligation to pay water rates rests in contract, express or implied. Such a contract arises from the actual use of water by the party sought to be charged. Mayor, c., of Jersey City v. Morris Canal andBanking Co.,