Case Information
*1 OFFliZE OF THE ATTORNEY GENERAL OF TEXAS
AUSTIN
Ii. 8hoppard
FublZc Accounts
Dear &lx'* Shoppardt
RS~: MI&hor‘%$ Ilit the &lCCCpt8IlCO by tihhe--Cqwty Tax Collector Of 8 hX~+'S‘C@OCk for t&LX- ,/- ',QS 8xvl the depoeit thereof by Colleotor &&opting *om / bank 8 Cashier~e mount consti- by the taxpayer qcoipt of your lottor of COUXit~ in Janu- the bank closed.
'It appaars that tho Tax Colleotor re- ceivod approximately t&x+Nvo per cent OC
the value of the CashUr*s checlt in dividends.
8x0~ wili please advieo tbia department whether tho Tar COllCOtOP or the t&qXayer
should bo bold liable for tho paymmt of the
t8xes ."
418 ,
non. coo. 8. Sheppard - Pago 2
UnQar the facts etafed by you, it is our opinion tho Tax Collector and his bondernon should
be held liable and not the taxpayer.
It is, of course, well settled that fhe authority of the.Tax Collector in tho matter of col-
looting taxas oxtonds only to collections made in
cash. Austin vs. Fox, 1 S. v. (2) 601; Figures vs.
State, 99 8. w. 412; Ward vs. mrion county, 62 s. w.
657, 63 s. 0. l55.
Any payment by check 01. qthorwise than by the pqynumt of money amounts meroly to an arrangcmnt
for accomdation to the taxpayer, or for comonicncc
Saks, and ia smdo at the risk Of ths parties thoroto,
8nd not of the State or county. Austin vs* FOX, 1
8. 1. (2) 601s Wang3 County VB. T. & N. 0. R. Co., 80
8. 0. 570 (i&t refused) T. W N. 0. R. Co. vs. Stat0
97 8. 1. 142. The question, thoroforo, arises whethe;
or not the transaction du&lled in your lottor consti-
tuted in legal esscncs 8 payment cash to tho Tax Col- lector by tho impayor.
In Davis vs. State, 51 8. W. (2) 703, a crim- iMl C(LS8, it is Said:
#Wo agree entirely nith the oonton- tion of counsel that no Tax Collector has
any authority to rocaivo in payment and
discharge thoroof anything but LswfuJ
money of th3 United States, aiti th8t, if
he does cccoyt any kind of property other
than lawful money in payment of taxes,
suoh aocoptanco by him of such property
will not operate to discharge or pay such
taxes - It is doubtless true that a col-
lector Of taxes nay refuse to accept 8
check or draft, in payzmt thorsof, and say
insist upon being paid in actual mney,
and until such pngnegt is made the tax08
till not, be dlscharged~ but in this case
iiin[;, the County Yroasurer, accepted in
paymnt of thu taxes a check of Rodick
drawn upon an Omaha bank. If this check
had been I\rotosted or never had beon paid
419
ilon. limo. JI . Shopparcl - PsgO 3
of course it would not have operated as 8 payrront or” the taxosi but the Treasurer obtained thO ir.onsy on this ahock from the bank on which it was drawn, and the mgmant he did so ho hold such nmnzy as Treasurer of tbo county, his official capacity, and the taxes to pay which It was given WWo from that monent paid and discharged.* The opinion citoe Hubbard vs. Auditor Gen. (&ich.) 7ti N. VI. 978, and on annotation in 44 A. L. R. p. 1234.
In tlio annotation cited Ve find the case of
Wasson vs. Lcurb (InQ.) 22 H. 3. 729, 8 L. R. A. 101. That was o cascv whore a Courzty Treasurer depositsd in n bnnlc roooipts for taxes i?uO frcm the bank, receiv- ing crw t SW Chc, amount of sucf, taxes, and sftoruards Qrtw the money out by c>ock. Xn tha course of the opln- ion it 309 ssS&~
** * **If t&3 custorwr assents to ’ such action on the gart of the be.nX by drawing chooks a&xlnst the croi?it, or in sny other way, bo rz.nifests with equal olearuoss his intoEM.w to be traatcd as 8 depositor of mOMy.’ If, by cut&al oonsent, the bank and thO ap- pellant choose to tr03t the tax reoeipts as so much cash doposit@d to the crsdit of 6hs latter, the transaction must be rogardod as aocorting to tbs intontlcn of the parties at tlzs t&3.
“The conclusion which follows from wlct hrra procoded is t3nt w?xn ths ap- pollant transforrod l&3 tax roooipts to ths bcnk, and rocoivcd cri?&it fnr thr, amount theroof, the tranarctlcn w.+s, in la@ Ofr3Ct) the sam as if be had do- posited the aniount in ccatl.* V23 033 bf3tWQOn private II" tllz tN.ll4Wii0E lndivi~uals, thO quo&ion ROUU bO easy flf solution.
Berg ~4. Foclcral l7cscqo Bank of Mnnoapolis
420
Non. Goo. II. Shopp;rrd - I3go 4
(N. D .) 213 N. IV. 963, holds that if the holdor of a
chook Is rpllling t0 aCOept Mything else, and drawee
bank is willing to &iv0 it, the drawer io not oon-
cermd, end the chock clay bo paid in e medium other
then oash. The drever's contraot is fulflllod rhon
tho check is paid. '
So, in Joffcoat vs. Zlckgraff', (S. C.) 140 s. g. 47~) it ~36 hold that e vendor, ah0 aoooptcd 8
oashlar*s cheok folloning the purchaaer@s payment of
draSt to bank, took the risk of tho chock's invalid-
ity. .
Again, in Ltorris vs. Clove (N. C .) 14g S. E. 253, It vns held that a bolder of 8 check may pFseent
it porsonallg end is ontitlod to cash. If ho proaonts it through the Federal Roserve Uank, or tho Express
Coqxmy, or the postoffico, utier a statuto which nl- lows pegrmont by check, ho talc06 tho risk that the dreft issued by the dragon bank will not be 8;oottL. The check itself Is paid vhcn the dravoo chergos it agtinaf the
drawer* 8 aooount .
Litchficld VB . Reid, Sheriff, (N . C .) 141 8 .E. 543, a tax case, says!
l * * at The check vaa issued on Jan- uary 3, 1925; It was present&d for pay-
ment on or boforo January 13, 1926 8 when
the check was acoeptod for paynrent by the
drevee bunk it vas ohergod to the eooount
of the drawor, aml subsequently returned
to blm stsmped or perforated, 'Paid, Them is no ovidmoo tonding
l&25. 08 what disposition we8 made by the dreweo bank of the amount charged to its
dopoaitor, the drnwor of the aheok, on
acoount of tho samno. Upon the facts
shown by tho ovidmoe, piaintirf has no
concern 3s to such ~disposltion. The jury
dght have found from the evidonae that
t,ho procoods of the check were peid to
the holdor cf the cheek, who prsssntod it
for payment, nnl who had the right, i.f he
chose to exercise l,t, to demand money for
said chaok. m * ** -
lion. Geo.Il. sbeppard - Page 8
Palmer, Ta Collector vs. Siarrlson @a.) 242 8. E. 228, another tax oaee, rtoldsr
flThe oolloctlng bank was the agent of tho tax collectors and, while *taxes mast b$ paid in gold or silver, or in the bills of euoh banks 08 pay specie p~onxptly' (Civil Code 1910, 8 1013), yet the effect or the traneaotion in the in- stant case was to pay the taxes in law- ful money ; and the court did not orr in ovorrull~~ the demrrer to the petition 'and in granting the Injunction. Soo Stith Roofing Co. v. Utchell, 117 Ge. 772, 45 S. E. 47, 97 Am. St. Rap. 217; Pollek vb llall-Herin CO., 137 Ge. 23, 72 S. SO 415, 36 L. B. A. (S.S.) 131 Comer v'. DIP four, 66 Ga. 378, 22 S. If. 643, 30 L.R.A. 300, 61 Am. St. hop. 89.' Flually it Is said in C. H. hey Corporetion VS. willi-, City Treasurer, (Wch.) 238 N. 51. 216:
*YEhcn tble cheek was deposited to the credit of the defendant and Charged to-that 0r tho fuel ;u;d eupply Compaq, the ~mney repreeontod by it ves, in legal effect, paid to him by the fuel cornpang. The burden of shoving that ho was thereafter juettfied in repaying it to the bank was llpon him. nFi?lile tho stntuto (1 Cmnp. Law6 1929, 1 339) provides that a oheok tendered for the payxcont of a tax shall not operate es mch, unless 'it shall bo pald on preeonte- tam,* tbie caook see paid when it was da- posited by the treeeuroc ati credited to his account and charged to the account of tho fuel aud euyply oom~uy~ there bolng then in <hi.3 account a sum sufficient for the paymnt thereof. No claim is or could be mdc that the check aam fraudulently ls- au&, or that any mistake was nade by an m- ploy00 of the bank in the debiting or crodit- ing of it..
hon. Gee. h. Sheppard - Page 6
The rule is, of course, more rigid where a Tax Collector is invOlvod, nevertheless, wc think the facts stated by you as surrounding this transaction show in loge1 essence a pagmont moetine, the require- ment of cash payment by the taxpayer to the Collector.
While the Collector did not physically re- ceive cash, it was his own fault, and ho oonstruotive- ly rooeivsd it, because he accepted tho bank cashior*s check in lieu thoroof, cuusing the taxpayer's chock to be paid an;f her account accordingly charged. The situa- tion wao precisely as tbough the bank had paid to the Collector tha cash and the Co&loctor had lmmodiately purchased the cashier *s check therewith.
This real nature Of the transaotion has been rooognlzed by the Collector , for It appears ho filed his claim as Collootor with the Banking Comnissionor in charge of tic: failed bank, and has actually received dividends on his claim to the extent stated by you. Un- doubtedly, the State's rights in tho nutter of collcot- in; tax% arz paramount to the taxpayer's right to make conventional payment through check, but yet the humble taxpayer has some rights that should be protected, es- pecially Nhore, as here, the State is secured by the Tax Collector's bond, the very purpose of which is to indemnify tbo State against loss for tho Collector*s failure to account for collections coming Into his hands.
The opinion of this department written by Judge F. 0. hlcIiinsey, of date January 16, 1932, aa- drossed to you, is clearly distinguishable in this, there the Collector put the taxpayer's check (drawn on an out-of-town bank) in his county seat bank for oollection through the usual banking channels, and the clrevez bank failed before the Check was cleared.
The Collector, unlike the instant case, never prcsent- ed the check to tho~drewee bank, and never voluntarily surrendered it for payment and cancellation, and ncvor voluntarily accepted a cashier's check cr other medium rhatsoovcr lieu of Cash in ivqvent.
Yoii aro therefore respectfully a::visc:2 that in our opinicli the Tax Collector and not the taxpayer *7 I ,I
Ron. 480. 4~. smeppara * Pqp T aa herotofon &at@.
muld be liable,
APPJOVEI3OV 19, 1940
ATTORNEY GEKZRAS 0' Tx‘;iAs