26 So. 2d 726 | La. | 1946
[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *224 [EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *225 [EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *226 The Oil Well Supply Company, a New Jersey corporation authorized to do business in Louisiana, obtained judgment *227 against the Red Iron Drilling Company, a Texas corporation, also authorized to do business in Louisiana, for a sum in excess of $100,000, with recognition of its mortgages and privileges on certain oil properties situated in the Parish of Caddo. The properties described in the judgment were seized and sold by the sheriff of the Parish of Caddo under a writ of fieri facias. The sheriff, however, refused to deliver the proceeds of the sale to the plaintiff, Oil Well Supply Company, because the mortgage certificate obtained from the Clerk of Court showed that certain liens and judgments in favor of the State of Louisiana were inscribed against the Red Iron Drilling Company.
The Oil Well Supply Company instituted a proceeding by rule against the sheriff and the State of Louisiana, through its proper representatives, to show cause why plaintiff in rule should not be paid the proceeds of the sale by preference and priority to the claims of the State.
The Department of Revenue, through the acting Collector of Revenue, and the State of Louisiana, through the Attorney General, answered the rule alleging that the liens and judgments in favor of the State were superior to plaintiff's liens and mortgages and praying that they be recognized as such and that the sheriff be ordered to discharge the liens and judgments of the State from the proceeds of the sale in his possession. The sheriff joined in the answer of the State and adopted it as his *228 own. The liens and judgments claimed by the State resulted from the failure of the Red Iron Drilling Company to pay certain severance taxes, power taxes and corporation franchise taxes.
After hearing the parties, the trial judge rendered a judgment making the rule absolute, decreeing plaintiff's mortgages and liens to be superior in rank to the claims of the State and directing the sheriff to pay the proceeds of the sale to plaintiff. The State of Louisiana has appealed from the judgment.
Only questions of law are involved. The facts are not disputed. The claim of the Oil Well Supply Company against the proceeds of the sale of the properties of the Red Iron Drilling Company is based on two mortgages covering the property and recorded on January 10, 1940, and May 9, 1941. The claim asserted by the State in opposition to the claim of the Oil Well Supply Company comprises six separate and distinct items. One of the items is a tax lien in favor of the State for severance taxes due for the period from August to December, 1939, which was not recognized by a judgment. The remaining five items represent judgments obtained by the State against the Red Iron Drilling Company; three for power taxes, one for severance taxes, and one for corporation franchise taxes. These judgments were rendered and recorded subsequent to the execution and recordation of the mortgages held by the Oil Well Supply Company. *229
With the exception of the judgment for the corporation franchise tax, the judgments obtained by the State against the Red Iron Drilling Company do not show that they were for taxes and none of the judgments, including the one for the corporation franchise tax, recognizes a lien or privilege in favor of the State.
In its rule to show cause, the Oil Well Supply Company embodied a plea of three years prescription based on Article 19, Section 19 of the Constitution of 1921, as amended by Act
By consent of the parties, the ad valorem taxes were paid out of the funds in possession of the sheriff and to that extent the rule against him was discharged.
In rendering his decision the trial judge assigned written reasons. He held that the lien for severance taxes due in 1939, and recorded in 1940, had prescribed under the provisions of Article 19, Section 19 of the Constitution of 1921, since no suit was filed within three years from December 31, 1939. The correctness of this holding is conceded by counsel representing the State.
The judge further held that as to the judgments in favor of the State, with the *230
exception of the judgment covering the power taxes, since in the proceedings which resulted in their rendition no lien or privilege was asserted or merged in the judgments and more than three years had elapsed since December 31st of the year in which the taxes were levied, the lien and privilege securing them had prescribed under Article 19, Section 19 of the Constitution of 1921. With reference to the judgment for the power taxes, he held that it was controlled by the provisions of Act
It is the contention of the State that the trial judge erred in his judgment for the reason that the State obtained its judgments against the Red Iron Drilling Company prior to the expiration of three years from the thirty-first day of December in the year in which the various taxes were levied and reduced to judgments under the then existing tax laws and that the judgments were not prescribed and outranked the claims of the Oil Well Supply Company; *231
that the trial judge also erred in holding that the judgments in favor of the State were by virtue of the provisions of Act
Prior to the adoption of Act
A reading of the provisions of the foregoing statutes clearly shows that the mere levying of the tax does not of itself give rise to a lien. It is only when the appropriate statement sworn to by the proper officer is recorded in the mortgage records that any lien arises or attaches. The wording of the three acts is identical — "which statement when filed for record, shall operate as a first lien, privilege and mortgage * * *." This was the ruling of the Court in the case of Hibernia Mortgage Co. v. Greco,
As a result of the failure to record the sworn statements required by law, the State has no lien securing the payment of the taxes which it claims in this proceeding, unless it has such a lien by virtue of the judgment obtained against the Red Iron Drilling Company or unless it is entitled to the preference granted by Act
Article 19, Section 19 of the Constitution of 1921, as amended by Act
Although, under the constitutional provision, tax liens, mortgages and privileges are prescribed in three years, the right to recover the taxes themselves by ordinary suit and judgment against the tax debtor remains unimpaired. Apparently that is the procedure that was followed in this case. There is no reference at all to the tax liens and privileges in the proceedings in which the judgments were obtained nor were the tax liens and privileges converted into the judgments. As a matter of fact, because of the failure in each instance to record the proper statement in the mortgage records as required by the respective statutes which levied the taxes, created the lien and granted the preference, there was no basis on which the lien and privilege could be asserted in the proceedings which gave rise to the judgments. The judgments themselves are simply personal judgments against the tax debtor in the various amounts due the State for the taxes claimed herein. As a result of their recordation in the mortgage records, they operate as judicial mortgages against all the property of the judgment debtor. *234
Since the tax liens and privileges were not asserted in the suits to recover the amount due for taxes and were not merged in the judgments rendered against the tax debtor they remain subject to the constitutional prescription of three years and are not subject to the statutory prescription of ten years as the State contends.
Answering the contention of the Oil Well Supply Company, that the State had no valid judgment recognizing its lien and privilege so far as the franchise tax was concerned because the Secretary of State had failed to record a sworn statement in the mortgage records showing the amount of taxes due as required by paragraph 1 of section 8 of Act
The State refers to the cases of Hibernia Mortgage Co. v. Greco,
The Hibernia case was finally disposed of in January, 1939, and the Bodenger case was finally disposed of in July, 1940. At *236
the regular session of the Legislature held in 1940, Act 265 was adopted. This act purported to make the law uniform with reference to all taxes, including franchise taxes, and it further attempted to nullify the effect of the decision in the Hibernia case by providing in Section 3 that the taxes, "whether sued upon or not, shall be a lien on all the property of the debtor except as against an innocent purchaser for value without notice in the usual course of business, * * *." In 1942, the Legislature passed Act 157 reenacting and amending Act
Act
Article
Liens and privileges securing taxes due the State are merely one of the remedies provided by law for enforcing their collection. There are other remedies, such as penalties, interest, attorney's fees, costs, etc. The authority to provide these remedies flows from the power of taxation vested in the Legislature and the remedies from time to time may be varied by the Legislature in order to enforce collection of taxes, and it is the remedy in force at the time the collection of the taxes is sought that governs. These legal principles are illustrated in the case of Henry v. McKay,
Since it appears that the legislative policy, as expressed in Act
The case of Price v. Ducros,
For the reasons assigned, the judgment appealed from is affirmed.
FOURNET and HAWTHORNE, JJ., take no part.