Case Information
*1 OFFICE OF THE ATTORNEY GENERAL OF TEXAS
AUSTIN
GERALD C. MANN ATTORNEY GENERAL
September 16, 1942
Honorable George H. Sheppard Comptroller of Publie Accounts Austin, Texas
Dear Sir:
Opinion No. 0-6836 Re: Procedure for bollestion of delinquent ad valofem taxes where taxpayer has made assignment for bese- fit of creditors.
The facts presented by your letter of September 11, 1942 are as follows:
A furniture dealer who owes state and county ad valorem taxes has made an assignment of his merchandise for the besefit of his creditors. The property has been sold by the assignee to a third party who is now operating the furniture store. The taxes remain unpaid.
You request the opinion of this department advising you of the proper procedure to be taken by the tax collector in the collection of such taxes.
Article 7269, R.C.S., 1925, reads as follows:
"It all cases where a taxpayer makes an assignment of his property for the payment of his debts, or where his property is levied upon by creditors by writs of attachments or otherwise, or where the estate of a decedent is or becomes insolvent, and the taxes assessed against such person or property, or against any of his estate remain unpaid in part or in whole, the amount of such unpaid taxes shall be a first 11en.
*2 Honevble George H. Shepperd, Page 2 upon all such property; provided, that when taxes are due by an estate of a deceased person, the 11en herein provided for shall be subject to the allowances to widows and minors, funeral expenses, and expenses of lest sickness. Tuoh unpaid taxes shall be paid by the assignee, when said property has been seked by the sheriff, out of the proceeds of sale: in case such property has been seized under attachment or other writ, and by the administrator or other legal representative of deeedents; and, if said taxes shall not be paid, all said property may be levied on by the tax sci- leator and sold for such taxes in whomsoever's hands it may be found." That Article makes it the duty of the assignee, under the fact situation here presented, to pay such taxes, and fur- ther provides that in the event that some are not paid "all such property may be levied on by the tax collector, and sold for such taxes in whomsoever's hands it may be found". Tuoh Article fixes a 11en on all the property of the assignor for the benefit of creditors, to secure the payment of unpaid taxes. Zaehary v. City of Uvalde, 42 S. W. (2d) 417. In the case of "tate v. Jordon, 60 S.W. 1008, the Court, in discussing this statute, made this statement: "The effect of the article was to give the State a 11en upon all the property of an estate or individual (under the circumstances named in the article), so that all the property should be under a preference 11en for all the taxes due by the individual or estate, without reference to the particular property against which it was assessed." The first expression of our courts on the effect of this article was that of the Court of Civil Appeals in the case of People's National Bank v. City of Ennix, 50 S.W. 632, from which we quote: "Article 5175a (now Art. 7269) creates a 11en upon the personal property of the taxpayer when the con- ditions named therein exist." (Parenthesis ours).
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Nonorable George H. Sheppard, Page 3
Every elenent nereessary to meke the provisians of Arliele 7269 operative ia present in the feet situation under consideration. Under the authorities above oited we think the asalgnse ia obligated to pay the unpaid atate and oounty tezen on the property assigned. We are further of the opiaion that a lien oxists on aald property to aecure the payment of aueh texes, and that aald property may be levied upon and aold for aueh texes by the tex collector, if it ean be identified in the hends of the asalgues's purchaser, should the asignee fell to pay said texes.
An appropriate procedure for the tex collector would be first to make demand of the asalgue for payment of the texes, and in the event of his fallure to pay same, to proseed to make aueh texes from said property, either by seizure and sale or by suit for recovery of the texes and foreclosure of the tex lien.
Trusting that we have fully anewered your inquiry, we are