TAXATION -- PERSONAL PROPERTY TAX -- CHARGING LIEN AGAINST REAL PROPERTY OF TAXPAYER -- PRIORITY AS AGAINST PRIOR ENCUMBRANCES, RECORDED AND UNRECORDED
(1) The county treasurer has no duty to search available records for encumbrances upon real property being charged with unpaid personal property tax so long as it is owned by the person who owes the tax.
(2) Where personal property tax is charged against real property the lien upon such property ranks in priority with other liens upon such real property in accordance with the date on which the real property was charged.
(3) A preexisting mortgage would not lose priority over such a tax lien by reason of the fact that it was unrecorded.
- - - - - - - - - - - - -
February 27, 1950
Honorable Thurman E. Ward
Goldendale, Washington Cite as: AGO 49-51 No. 226
This is in response to your letter of February 6, 1950, in which you request our opinion on several questions which may be paraphrased as follows:
1. Where a tax levied upon personal property is unpaid, and such tax is charged against a tract or lot of real property belonging to the taxpayer, must the county treasurer ascertain from a search of available records whether any prior encumbrance exists on the property before he selects and charges the personal property tax upon such real estate?
2. If there is a preexisting mortgage, does the tax lien have priority thereover after the same has been charged against the real estate under the above procedure?
[[Orig. Op. Page 2]]
3. What would be the result, under the above circumstances, where there was a preexisting mortgage which was not recorded with the county auditor?
Our conclusions may be summarized as follows:
1. The county treasurer has no duty to search available records for encumbrances upon real property being charged with unpaid personal property tax so long as it is owned by the person who owes the tax.
2. Where personal property tax is charged against real property the lien upon such property ranks in priority with other liens upon such real property in accordance with the date on which the real property was charged.
3. A preexisting mortgage would not lose priority over such a tax lien by reason of the fact that it was unrecorded.
Your question involves an interpretation of section 112, chapter 130, Laws of 1925, Ex. Sess. (Rem. Rev. Stat. 11273), which statute provides as here pertinent as follows:
"When it becomes necessary, in the opinion of the county treasurer, to charge the tax on personal property against real property, in order that such personal property tax may be collected, such county treasurer shall select for that purpose some particular tract or lots of real property owned by the person owning such personal property tax, and in his tax roll and certificate of delinquency shall designate the particular tract or lots of real property against which such personal property tax is charged, and such real property shall be chargeable therewith. * * *"
For convenience we will discuss your second question first. This office has previously ruled upon the question as to the priority of a tax lien for personal property taxes when so charged upon a specific piece of real property. In an opinion to the prosecuting attorney of Okanogan County rendered October 9, 1936, we said:
[[Orig. Op. Page 3]]
"* * * the lien created by section 112, chapter 130, (Laws of 1925, Ex. Sess.), would rank like any other lien claim against the owner and would be subject to prior mortgages."
We have reexamined the question and find ourselves in complete agreement with the previous ruling of this office. The precise question has twice been before the Supreme Court of Washington with the above result. Scandinavian-American Bank v. King County, 92 Wash. 650, 159 Pac. 786;Puget Sound Power & Light Co. v. City of Seattle, 117 Wash. 351, 201 Pac. 449.
We can see no reason why the county treasurer should be required to make a search of available records to determine if any encumbrances exist upon the piece of property which he has selected to be charged with the personal property tax. As we have said, the lien of the tax so charged will have priority strictly in accordance with the time of charge. The charge does no more than affix the lien upon the property as of that date. If the tax be not paid, and proceedings be had against the property for realization of the tax due, the county will be able to dispose of only such interest in the property as it has, the rights of senior lien holders being preserved. We might say, however, although it appears obvious, that the county treasurer must ascertain that the property selected is actually owned by the person owing the personal property tax.
Your third inquiry regards the effect of recording statutes in this particular case. Section 2, chapter 278, Laws of 1927 (Rem. Rev. Stat. 10596-2), provides that if a conveyance of real property be not recorded it shall be
"void as against any subsequent purchaser or mortgagee in good faith and for a valuable consideration from the same vendor, his heirs or devisees, of the same real property or any portion thereof whose conveyance is first duly recorded."
Recording statutes do not require filing for record to preserve the validity of the instrument, but permit filing of certain conveyances for the purpose of furnishing notice of the conveyance to a certain class of persons who later may have dealings with the same vendor or successors. Failure to file causes members of the protected class to achieve priority over holders of such unrecorded interests.
[[Orig. Op. Page 4]]
It will be noted that only a "purchaser" or "mortgagee" falls in this class. It has uniformly been held in this state that a judgment creditor is not within the protection of the recording statutes. The leading cases on this point areDawson v. McCarty, 21 Wash. 314, 57 Pac. 816, andHacker v. White, 22 Wash. 415, 60 Pac. 1114. The position of the county charging its inchoate lien for personal property taxes to a tract or lot of realty is closely analogous to that of the judgment creditor who has obtained a judgment lien on realty through action upon a prior debt or claim. The law does not protect those who merely obtain a lien upon an existing claim. On the other hand, a subsequent purchaser or mortgagee who deals with the property in good faith giving present consideration is deemed entitled to the protection of his transaction by the requirement that notice be given by filing for record. This being so, a holder of an unrecorded mortgage would not lose priority as against the county when an unpaid personal property tax is subsequently charged against the real property upon which mortgage lien has previously attached.
Very truly yours,
C. JOHN NEWLANDS
Assistant Attorney General