101 P.2d 962 | Kan. | 1940
The opinion of the court was delivered by
This was an action on a note for $1,000 and to foreclose a chattel mortgage given by the defendant Albert F. Stockman to secure it on his undivided two-thirds interest in a crop of wheat then growing upon certain described leased land in Harvey county. The record presents several controversies between plaintiff and the respective defendants, or between defendants respecting liens on this crop, or priority of such liens. We think best separately to state these controversies, the judgment of the trial court thereon, and our decision.
The defendant, the United States, by H. D. Baker (W. H. Burke substituted), collector of internal revenue for the district of Kansas, in its answer denied Stockman was indebted to plaintiff, and alleged the note and mortgage sued on were without consideration, or, if any indebtedness evidenced by these instruments ever existed, the same has been paid, and by cross petition claimed a first lien upon Stockman’s share of the wheat because of a federal internal revenue tax levied against Stockman. The trial court found that plaintiff, who is the grandmother of Stockman, over a period of several years had furnished sums of money to Stockman, the amount of which far exceeded $1,000, and that she had made and kept a record of these transactions in a little book she had; that under date of October 1, 1936, Stockman signed a note, payable to plaintiff, for $1,000, and under date of May 3,1937, Stockman executed the mortgage in question, and this was recorded May 5, 1937, in the office of the register of deeds of Harvey county. In March, 1937, Stockman pleaded guilty to liquor violations in the United States district court of Kansas. In February, 1937, an assessment list was received by the collector of internal revenue for Kansas from the commissioner, assessing a liquor tax of $3,285.60 against Stockman. On April 3,1937, a notice of demand was mailed to Stockman, and on April 13 a second notice was mailed to him, neither of which was returned, and on April 23 a warrant for distraint was duly issued and served on Stockman May 10. On May 5, 1937, a notice of the tax lien was filed in the office of the clerk of the United States district court at Wichita, and on May 6,1937, a notice of the tax lien was filed in the office of the register of deeds of Harvey county, and on the same day
Under the established law of this state a debtor has a right to prefer creditors, and in doing so may pay or secure one of his creditors so long as such performance is in payment of a bona fide preexisting indebtedness. (See Brecheisen v. Clark, 103 Kan. 662, 176 Pac. 137; People’s State Bank v. Dierking, 143 Kan. 617, 56 P. 2d 85; First Nat’l Bank v. Cottingim, 145 Kan. 330, 65 P. 2d 293.) The federal statute, 26 U. S. C. A., § 1560, 1940 ed., § 3670, imposes a lien in favor of the government on the property of the taxpayer. Under 26 U. S. C. A., § 1561, 1940 ed., § 3671, the date of the lien, “unless another date is specifically fixed by law,” is the time the assessment list is received by the collector of internal revenue for the district, and by 26 U. S. C. A., § 1562, 1940 ed., § 3672, it is provided:
“Such lien shall not be valid as against any mortgagee, pledgee, purchaser, or judgment creditor until notice thereof has been filed by the collector— (1) In accordance with the law of the state or teiTitory in which the property subject to the lien is situated, whenever the state or territory has by law provided for the filing of such notice; . . .”
Our pertinent statute (G. S. 1935, 79-2605) reads:
“That notices of tax liens under the internal revenue laws of the United States, and certificates of discharge thereof, may be filed in the office of the register of deeds in any county in the state of Kansas, and when so filed shall be notice to all persons claiming an interest in the pi’operty of the person or persons against whom filed: . . .”
In United States v. Beaver Run Coal Co., 99 F. 2d 610, the federal statute above quoted is considered and applied. It is pointed out that the statute was enacted by congress to avoid the hardships re-
“Positive legislative enactments prescribing conditions essential to existence and preservation of statutory lien cannot be disregarded.
“A mortgage lien was entitled to priority over government’s tax lien upon mining properties, where tax lien notice was not filed pursuant to state law until long after mortgage had been executed and recorded. . . .
“Where United States had failed to file notice of tax lien as required by statute, court would not read into statute any limitation based upon equitable doctrine of bona fide purchasers without notice so as to give tax lien priority over lien of mortgagee which, at the time of execution of mortgage, knew that mortgagor owed taxes.” (Headnote, Iflf 2, 3, 4.)
Counsel for the government argue that there was insufficient evidence to sustain the finding of the court that plaintiff’s note and mortgage evidenced a valid indebtedness. We have carefully examined the record and find ample competent evidence to support the judgment of the court on this point. Counsel for the government cite 26 U. S. C. A., §§ 1580 to 1584, pertaining to distraint and exemptions. This argument is beside the point. This is not a distraint proceeding, and there are no claims for exemption. The controversy here, particularly between plaintiff and the government, is the priority of liens. We think the trial court erred in holding that the government lien was prior to that of plaintiff.
Both the plaintiff and the United States government appealed from the adverse judgments pertaining to claims of some of the other defendants. These will now be considered.
George W. Wear owned the land on which the wheat was grown. He had leased this to Stockman for a stated sum, cash rent and one-third of the wheat, delivered. He claimed a balance due of $50 on the cash rent and that this was a lien on, Stockman’s share of the wheat superior to that of the plaintiff, or that of the United States. The trial court so found and adjudged. There was no error in this ruling. (G. S. 1935, 67-524; Firstenberger v. McBee, 113 Kan. 110, 213 Pac. 813; Shell v. Guthrie, 129 Kan. 632, 284 Pac. 420.)
G. E. Woodworth had a past-due chattel mortgage on Stockman’s combine harvester. The legal effect of this was that he had title to it. He agreed Stockman might use it to cut the wheat if he would pay for such use out of the wheat threshed. Stockman used the machine to cut all of the wheat but fifty-three acres, when it broke
At harvest time the defendant Stockman hauled four truck loads of the wheat into Sedgwick county, where he had his wife’s sister, Irene Knebler, drive the truck to the elevator of Edward M. Kelley, doing business as the Commerce Milling and Elevator Company, where the wheat was sold. Kelley paid $203.16 for the wheat by check to Irene Knebler, who turned it to the defendant, Marie Stockman, the wife of Albert F. Stockman. The trial court held Kelley not liable, on the ground he was an innocent purchaser and paid full value. Complaint is made of this ruling. We think it was erroneous and that the court should also have held Irene Knebler and Marie Stockman liable.
Stockman delivered 167 bushels of the wheat to Frank N. Ketzner in return for seed wheat Ketzner had furnished him. Ketzner sold this wheat to the Farmers Cooperative Elevator at Mount Hope. The court held neither of these parties was liable. Complaint is made of this ruling. We think it was erroneous. We find nothing in the record tending to show Ketzner had any lien on the wheat crop, and he cannot claim such a lien as against the plaintiff and the federal government.
The Midland Flour Milling Company received 610 bushels of Stockman’s share of the wheat. The only controversy respecting this relates to the basis of settlement. Appellants contend the settlement should be made as for a sale of the wheat at the time it was delivered to the milling company, which was about July 1, 1937, and at the price then being paid for wheat. The milling company claimed it should settle as of the date of the judgment in this action, August 31, 1939, and at the price of wheat at that time, less a storage charge as a warehouseman, at one cent per bushel per month since the wheat was received by it. The court’s judgment was in
The N. Sauer Milling Company is holding the sum of $269.40 for wheat purchased. It tendered this sum into court and asked the court to determine to whom it is due. The Buhler Milling Company bought a part of this wheat from Stockman, for which it paid $460.40. The court held the company liable. With respect to both of these items the judgment of the court was that the sum should be paid into court to apply upon the government lien. These orders should be modified so that when the sums are paid into court they should be applied first to the lien of the plaintiff, then to that of the government.
Fred Unruh purchased from Stockman some of the wheat and paid him for it the sum of $57.50. The court held he was not liable. We think this ruling erroneous and he should be required to pay this sum into court to apply upon the liens of plaintiff and of the federal government.
The mortgage to plaintiff was filed of record in the office of the register of deeds of Harvey county May 5, 1937. The notice of the tax lien of the federal government was filed of record in the same office the next day, May 6,1937. We think these liens have priority in the order of their filing dates. The filing of these liens gave notice to everyone who dealt with this wheat. We see no reason for anyone to say that he dealt with it innocently.
From what has been said the judgment of the court below should be affirmed as to the landlord’s lien and the harvesters and threshermen and in other respects reversed, with directions to enter judgment in harmony with the views expressed in this opinion. It is so ordered.