Opinion
No. 7427.
Decided December 6, 1939. Rehearing overruled March 6, 1940.
Liens — Superior Claims.
The lien of the State on assets of a distributor of motor fuel for taxes thereon is preferred and superior to liens of creditors, including liens of the United States for gasoline tax.
Error to the Court of Civil Appeals for the Eleventh District, in an appeal from Eastland County.
Suit by Elizabeth A. Lowman joined by her husband against Alexander A. Walton and the Walton Refining Company to recover on a certain promissory note in the sum of $4,000.00 payable in eight installments of $500.00 each, and for foreclosure of a chattel mortgage, which was given as surety for said note, on the property of the said Walton Refining Company located at Cisco, Texas. It was alleged that the said Walton was insolvent and had no property and plaintiffs asked that a receiver be appointed to take charge of the property of the refining company, which was done. Numerous interventions were filed, including claims by the State of Texas and the United States for gasoline and for other excise taxes and for a foreclosure of their liens therefor. The trial court rendered judgment against the refining company but also held that the liens of the mortgage holders was superior to the lien of the State of Texas and the United States, and this judgment was affirmed by the Court of Civil Appeals, 115 S.W.2d 794. The State of Texas has brought error to the Supreme Court.
Judgments of both courts reversed and cause remanded to the trial court for further proceedings.
William McCraw, former Attorney General, Gerald C. Mann, Attorney General and Pat M. Neff, Jr., Assistant Attorney General, for plaintiff in error.
F.D. Wright, of Cisco, Coombes Andrews, of Stamford, for defendants in error.
This case originated in the District Court of Eastland County. It involves the construction of Section 7 of Article 7065a of the Revised Civil Statutes of Texas. The trial court held that those who held liens against the property involved had preference liens over those of the United States and the State of Texas for the taxes due on said property. The Court of Civil Appeals affirmed the judgment of the trial court. 115 S.W.2d 794.
This case involves the same questions presented in the case of State v. B.J. Wynne et al, the opinion of the Court of Civil Appeals being reported in 113 S.W.2d 325. The two cases were heard together.
We have this day handed down our opinion in the case of State of Texas v. B.J. Wynne et al, reported in (this volume, page 455) 133 S.W.2d 951, and the judgments of the trial court and Court of Civil Appeals in this case are reversed for the reasons given in the foregoing opinion, and this cause is remanded to the trial court for further proceedings in conformity with said opinion.
Opinion delivered December 6, 1939.
Rehearing overruled March 6, 1940.