Burfiend v. Hamilton

20 Mont. 343 | Mont. | 1897

Pemberton, C. J.

Section 4049 of the Political Code is as follows : “All property held or used in any trade, occupation, or profession for which a license is required by the provisions of this chapter is liable for such license, and subject to a lien for the amount thereof, which lien has precedence of any other lien, claim or other demand. * * *”

Section 1365, Fifth Division, Comp. St. 1887, contains substantially the same provision as to the license being a lien on the property used in any trade, occupation, or profession for the carrying on of which a license is required.

Section 4044 of the Political Code authorizes the treasurer to bring suit by attachment against any person required to take out a license who fails, neglects or refuses to do so.

The answer in this case positively alleges that the property in controversy was the property of Hirschman, and was in his possession, it being used by him in his business as retail liquor dealer at the time of the levy of the attachment by the sheriff in the action by the state against him to collect the license tax which he had refused and neglected to pay. We think it appears from the complaint that the legal title to the property was in Hirschman at the time of the levy of the writ of attachment by the sheriff.

The question presented by the appeal then is, did the statutory lien on the property for the license tax take precedence over the mortgage lien of' the plaintiff ?

The statute says such “lien has precedence of any other lien, claim or other demand.” We think the legislature had the power to enact laws giving liens on such property for the purpose of securing the payment of such taxes.

Judge Cooley says the competency of such legislation is unquestionable. (Cooley, Tax’n (2d Ed.) p. 445.) It would greatly embarass the state in the collection of its revenues if it could not, by appropriate legislation, secure to itself the payment of taxes by making them a first lien on the property of the person whose duty it is to pay the same, whether the tax be a property or a license tax. No thoughtful person, we think, would contend that the state, in a case like the one before us, should be driven to the necessity of paying off mortgages on property subject to taxation, ora lien for taxes, before it could collect its revenues. Any person situated like Hirschman in this case, who wished to avoid the payment of legal taxes, would only have to execute a mortgage on the property used in his business,. in order to compel the state either to pay off the mortgage or lose the taxes due.

We cannot consent to a construction of the law that would produce such disastrous results to the state. When the mortgagees took the mortgage they rely on in this case they knew what the law was. They will not be permitted to say that they did not know that the law made the license tax due from the mortgagor a first lien on the property he was using in his business as retail liquor dealer. The law entered into the mortgage contract. (Jones, Chat. Mortg. § 474.)

The lien fixed by the statute is different from an ordinary incumbrance. (Cooley, Tax’n (2d Ed.) p. 445; Osterberg v. Union Trust Co., 93 U. S. 424.) We are clearly of the opinion that the lien for the license tax due from Hirschman took precedence on the property in controversy over the mortgage lien of the plaintiffs. The answer, if true, contains a complete defense to the action. The judgment is reversed, and the cause remanded, with directions to overrule the motion for judgment on the pleadings.

Reversed and Remanded.

Hunt and Buck, JJ., concur.