Stickney, Treas. v. Isaac , 24 Ohio App. 527 ( 1926 )

This cause comes into this court on appeal from the court of common pleas, and involves the question of the priority of the liens of certain mortgages over the lien of a liquor traffic assessment under Sections 6071, 6212-31, and 6212-33, General Code. There was previous litigation, now ended, which involved the validity of the assessment. After the assessment was certified to the auditor of Williams county, Ohio, May 29, 1922, and charged against lots Nos. 260, 261, and 262, Edgerton Trevitt's addition to the city of Bryan, George Isaac brought suit to enjoin the collection of the assessment, and, after trial of the case in the court of common pleas, it was appealed to the Court of Appeals, which court enjoined the collection of assessments against lots 260 and 261, but held the assessment to be a valid lien upon lot No. 262.

In the instant case the plaintiff seeks to enforce the lien growing out of the assessment, and the defendant Henry Rosen claims a lien upon the premises under and by virtue of three mortgages recorded prior to May 29, 1922, two of which cover the three lots in question, and the other of which covers lot No. 262 only. For many years it was the settled law in Ohio that upon the judicial sale of real property, which was incumbered by the lien of a liquor tax assessment and the liens of mortgages, the former was entitled to priority over the latter, in the distribution of the proceeds of the sale. Pioneer Trust Co. v. Stich, 71 Ohio St. 459,73 N.E. 520; Brannan, Treas., v. Schartzer, 4 Ohio App. 356. This principle was approved in the opinion of the court in the case ofEvans v. Mannix, Treas., 90 Ohio St. 355, 107 N.E. 763.

Twice, recently, Section 6212-33, General Code, has been amended by the General Assembly. The first amendment was passed February 2, 1921, and is found in 109 Ohio Laws, 8, and the second, passed on April 5, 1923, is found in 110 Ohio Laws, 75. The first amendment referred to does not cover the question of the priority between the lien of a liquor traffic assessment and that of a mortgage, while the second amendment does. Section 6212-33, as amended the second time referred to, contains the following provision:

"Provided, also, that, in all cases where a mortgage exists oris taken on such real property, as aforesaid, for a valuable consideration, in good faith, and without knowledge or assent on the part of the mortgagee thereunder, at the time of the execution of said mortgage that said real property had been or was being used for the illegal traffic in intoxicating liquors, the lien of such mortgage shall, to the extent of the actual principal or balance of money, including interest, secured thereby, be prior and paramount to the lien of the assessment so attaching and operating upon said property, as herein set forth."

The claim is made that, as the lien of the assessment attached to the property prior to the time of the passage of the second amendment, it is necessary to determine whether it is applicable to an assessment previously made. Section 26, General Code, provides as follows:

"Whenever a statute is repealed or amended, such repeal or amendment shall in no manner affect pending actions, prosecutions, or proceedings, civil or criminal, and when the repeal or amendment relates to the remedy, it shall not affect pending actions, prosecutions, or proceedings, unless so expressed, nor shall any repeal or amendment affect causes ofsuch action, prosecution, or proceeding, existing at the time ofsuch amendment or repeal, unless otherwise expressly provided inthe amending or repealing act."

The right to enforce the lien arising out of the assessment was a cause of action existing at the time of the second amendment of Section 6212-33, within the meaning of the provisions of Section 26, General Code, and, as there is no language in the amending act which expressly provides that it shall apply to existing causes of action, its enactment did not change the order of priority as between the assessment lien and that of the mortgages.

There is another reason why the portion of Section 6212-33 does not apply in the instant case. The language employed is made applicable in all cases where a mortgage exists or is taken on such real property, and clearly refers to a mortgage which exists at the time the assessment is made, and not to one which existed at the time the section was amended.

The good faith of two mortgages which were acquired by Rosen, through Warren and Ellis, is not now questioned. While the good faith of the remaining mortgage is questioned, we find that it is only questioned by the plaintiff, and that the only reason that plaintiff questions it is that the defendant Rosen claims that it is prior to the tax lien. In view of the fact that we hold that the assessment lien is prior to all mortgage liens, and the parties to the disputed mortgage do not themselves question it, and especially in view of the fact that we are of the opinion that the mortgage is good as between the parties, we find that all the mortgages are a valid lien upon the premises covered by them.

As the tax lien only covers lot No. 262, and two of the mortgages cover additional lots, the tax lien must be satisfied first out of the proceeds of the sale of lot 262, and any funds remaining after the satisfaction of that lien may be applied in satisfaction of the mortgage liens.

Judgment accordingly.

RICHARDS and YOUNG, JJ., concur.