253 N.W. 450 | S.D. | 1934
On June 5, 1931, a Sioux Falls corporation engaged in the business of selling electric refrigerators commonly know as Frigidaires sold and delivered a Frigidaire to one Bessler upon an agreement of conditional sale, providing that Bessler should pay the purchase price thereof in installments over a period of months and that title and ownership should remain in the vendor until full payment of the purchase price, which conditional sale contract was duly filed for record on June 25, 1931. Plaintiff herein has now succeeded to all the rights and duties of the conditional vendor. On October 26, 1932, defendant, as county treasurer of Minnehaha county, issued a distress warrant against the conditional vendee Bessler for delinquent personal property taxes duly levied and assessed against said Bessler for the years 1925 to 1931, inclusive, and delivered the same to the tax collector of Minnehaha county, who seized and took into his possession the Frigidaire above mentioned and gave notice to plaintiff and to Bessler that he would sell the same on November 9, 1932, to satisfy the delinquent taxes of Bessler above mentioned unless the same were sooner paid with interest and costs. In order to prevent the threatened sale, plaintiff, under written protest, paid said delinquent taxes and instituted the present action to recover the amount thereof pursuant to section 6826, R.C. 1919, pleading the facts fully and claiming that said Frigidaire was not subject to seizure *417 and sale for the taxes in question. Defendant demurred to the complaint upon the ground that the same did not state facts sufficient to constitute a cause of action, and from an order sustaining this demurrer plaintiff has now appealed.
Section 2191, Rev. Pol. Code 1903, reads as follows: "All taxes assessed upon personal property within this state shall be a first lien on all personal property of the person against whom personal taxes are assessed, from and after December first in each year." By section 2, c. 350, Laws 1913, the above section was amended by changing the date to "from and after January first in each year," and as so amended the section is still in force, having now become section 6759, R.C. 1919. In Minneapolis Threshing Machine Co. v. Roberts County (1914)
[1] It is quite clear that the learned trial judge sustained the demurrer below on the authority of the Massey-Harris Case, and it is on that case that respondent relies on the appeal. There is, of course, a fact difference in the two cases. It is, we think, the law, as stated in the Massey-Harris Case, that property conditionally sold and in possession of the vendee may be assessed against him in its entirety if the state sees fit to so do and the state is not obligated to take cognizance so far as concerns the matter of assessment of the division of interests in the property which the parties have undertaken to establish by the conditional sale contract. In the Massey-Harris Case the effort was to collect the delinquent personal property tax of the vendee for the single year 1930. For that year the reaper thresher had been assessed to him, and properly so, we think, as part of his personal property and included in the total valuation of his personal property but apparently not separately itemized. In the instant case the attempt was to collect delinquent personal taxes of Bessler for the years 1925 to 1931, inclusive. The Frigidaire in question was not in possession of, nor assessed or assessable to, Bessler for any one of those years. The taxes assessed against him for each of those years became liens upon all his personal property on January 1st of each succeeding year, all of such taxes thus becoming liens upon all personal property of Bessler prior to his acquisition of the Frigidaire excepting only the tax for 1931. A distinction might be argued between the two cases on the ground that in the Massey-Harris Case the valuation of the conditionally vended property was properly included in the assessment of the tax sought to be enforced and that the state could not be compelled to collect the taxes piecemeal. See Jordan v. Baggett (1927)
[2] This state is committed to the view that a chattel mortgage is a lien only and passes no title. Rosenbaum v. Foss (1893)
[3, 4] In the case of conditional sale, however, the situation is quite different. It is not a case where complete title, property, and ownership pass to the vendee and he creates a lien thereon. Legal title never passes out of the vendor until performance of the contract. It is specifically retained by him for security purposes, and his right so to do was recognized by this state by the enactment of the Uniform Conditional Sales Act (chapter 137, Laws 1919), providing by section 4 that the reservation of property in the seller after possession of the goods is delivered to the buyer should be valid as to all persons excepting only as otherwise provided in the act. Conceding that by virtue of section 6759, R.C. 1919, all personal property owned by Bessler on January 1, 1931, or thereafter acquired was subject to a first lien in favor of the state for all delinquent personal property tax of Bessler, and conceding that on January 1, 1932, a lien likewise attached to all personal property of Bessler for his delinquent personal property tax of 1931, nevertheless such lien could not attach to property rights which had always belonged to appellant, with which appellant had never parted, and which Bessler did not then own and never had owned, although he might have a contract right to obtain them. Bessler did not have on January 1, 1932, or at any time prior to the attempted levy, legal title to or complete property rights in the Frigidaire in question. By virtue of conditional sale contract he undoubtedly had rights with reference to said Frigidaire in the nature of property rights. See Williston on Sales, § 326; Bogert, Commentaries, supra, p. 31. It may very well be true that Bessler could transfer or incumber his rights (such as they actually were) *421 and that the same could be reached by his creditors, and if apt procedure was provided by statute could be applied to his taxes; but we do not think that his rights were of such nature that they could be reached by distress and sale under the provisions of section 6775, R.C. 1919. That section, as pointed out in J.I. Case Threshing Machine Co. v. Bentson, supra, contemplates the seizure of personal property of or belonging to the delinquent tax debtor. Conceding that Bessler had a right in the Frigidaire in question in the nature of a property right, nevertheless it was not the entire property in the res, and was not, we think, the sort of property right susceptible of seizure and sale in the manner and method provided by section 6775. In other words, the Frigidaire in question was not, under the circumstances here appearing, "personal property of" Bessler within the meaning of such phrase as used in section 6775. The property right of appellant in the res was not subject to seizure and sale for Bessler's taxes, and section 6775 does not provide for or contemplate seizure and sale of such partial property right as Bessler actually had, as distinguished from the whole property in the res.
The property not being subject to such seizure and sale, it follows that the complaint herein stated a cause of action, and the order sustaining the demurrer thereto is reversed. So much of the holding in Massey-Harris Co. v. Lerum (1932)
ROBERTS, P.J., and POLLEY and RUDOLPH, JJ., concur.
WARREN, J., concurs in the result.