
    Treasurer of Athens County, v. Dale, Receiver.
    
      County treasurer may have rule against receiver of railroad for taxes — Section 1097, Revised Statutes — State not inclitded in section 8417, Revised, Statutes.
    
    Under section 1097, Revised Statutes, a treasurer oí á county may have a rule against the receiver of a railroad for the payment of taxes due and unpaid. The state is not included in section 3417, Revised Statutes, and, for this reason and the superiority of its claim, is not affected thereby.
    (Decided April 25, 1899.)
    Error to the Circuit'Court of Athens county.
    Under favor of section 1097, Revised Statutes, the treasurer of Athens county, on April 13, 1898,. filed with the clerk of the court of common pleas of said county the following application:
    “The plaintiff says that on the fourteenth day of August, 1894, by the consideration of the common pleas court of Washington county, Ohio, the defendant, Theodore D. Dale, was appointed receiver for The Toledo and Ohio Central Extension Railroad Company; that said Theodore D. Dale thereupon qualified, and has ever since said date and is now such receiver for said Railroad Company; that he caused the property of said Railroad Company for the year of 1897 then in his possession as such receiver to be listed in the name of said Company for the purposes of taxation in Athens county, Ohio, for said year; that the taxes charged against said property by him for said year, stands upon the duplicate in the Treasurer’s office of Athens county, Ohio, in the name of said Railroad Company; but the said Treasurer avers that the taxes for said year are a proper charge and debt of the said Theodore D. Dale as receiver of the aforesaid Railroad Company.
    The said Treasurer says that there stands charged in the manner aforesaid, against the said Theodore D. Dale, as receiver for The Toledo and Ohio Central Extension Railroad Company upon the duplicate in his hands and upon the duplicate on which he is now engaged in collecting the taxes for the current year 1897, the sum of $1,626.84 taxes; that the same are delinquent, due and unpaid together with five per cent, penalty thereon allowed by law to said Treasurer as a compensation for collecting the same, and that the said Theodore D. Dale as such receiver is indebted to said Treasurer in the sum of $1,708.18, taxes and penalty for the year of 1897.
    Wherefore plaintiff asks that the defendant show cause why he should not pay said taxes and penalty amounting to the sum of $1,708.18, and the costs of this proceeding, and that the said rule so entered may have the force and effect of a judgment at law, and that the same may be enforced by execution issuing from this court against the said Theodore D. Dale as receiver as aforesaid, and for all other relief to which plaintiff may be entitled in equity.
    A. E. Price,
    Attorney for plaintiff.”
    The Receiver by his attorneys entered his appearance, and thereupon filed his answer which is as follows:
    “And now comes said defendant, Theodore D. Dale, Receiver of The Toledo and Ohio Central Extension Railroad Company, and for answer to the application of said plaintiff herein, and showing cause why the rule asked by plaintiff to be entered against him herein should not be made, says:
    Said Theodore D. Dale, Receiver, says that the reason, and the sole reason, why said taxes set out in said application have not been paid, is the fact that said defendant has not at any time had, and does not now have, any money, or means, or resources, with which to pay the same; that all of said taxes have at all times been admitted and recognized by defendant, and by said court of common pleas of Washington county, as valid claims against said defendant as such Receiver, and against said Railroad Company, and as having a first lien upon all the property of said Company, and upon all the property in the hands of this Receiver, prior and superior to any and all other liens thereon, and entitled to payment out of the proceeds of any sale of said property, or any part thereof, before the payment of any other claim or claims; that in and by the order of said court of common pleas of November 10, 1893, appointing Elias Summerfield, the predecessor Receiver of defendant, Receiver of said Railroad Company, said court ordered said Receiver “to run the entire line of railroad of said Railroad Company, with its branches and appurtenances, and to keep the said railroad and equipment in repair, to keep up to a proper standard of efficiency all means of transportation of said railroad;” that in the order of said court, made August 4, 1894, removing said Summerfield as said Receiver and appointing said Dale as said receiver, said court ordered that said Dale should be appointed such Receiver “with all the powers, rights and duties heretofore granted to and imposed upon the said E. Summerfield as receiver under said order of November 10,1893;” that acting under said orders, and in obedience to the instructions of said common pleas court, said E. Summerfield during his receivership and said T. D. Dale since, have run and operated the railroad of said The Toledo and Ohio Central Extension Railroad Company, and the same is still so run and operated by this defendant as such Receiver; that the first and foremost duty of said receivers, to the state of Ohio, to the general public, and to all parties concerned, has been and still is, the running and operation of said railroad as a common carrier of passengers, and goods, and all .moneys which heretofore have come, which, now may be, or which may hereafter come, into the hands of said defendant and his predecessor Receiver or of any Receiver of said Company, must be first applied to the payment of the expenses of so running and operating said railroad, which expenses must be paid in cash, as the persons to whom the debts incurred in such running and operation are due are not able to, and will not wait for their money, or extend credit, and will cease to do the work, and will cease to furnish materials and supplies, required for such running and operation, unless their claims for previous work, materials and supplies, are paid, and if the same are not paid no others could be found to do such work, or furnish such materials or supplies; that the moneys which have been received by and come into the hands of said receivers have not been sufficient to even pay the expenses of running and operating said railroad, and this defendant has been compelled to and has, under the orders of said court, borrowed large sums of money to pay said expenses of running and operation, which money so borrowed is still ■largely unpaid; that this defendant, and any Receiver, of said Company, could not have paid said taxes, and cannot now pay the same, except by ceasing to run and operate said railroad, which would not only be a violation of the duties of said receiver, but would be greatly to the injury of said Athens county, its citizens and taxpayers, who are greatly benefited bjr'the running- and operation of said railroad; that within a few weeks said court of common pleas of Washington county, will order a sale of said railroad, and of the property in the hands of this defendant as such receiver, and that such order of sale will provide, fully and effectively, for the payment in cash by any purchaser of a sufficient sum of money with which to pay, and with which there will be paid, all taxes upon the property of said railroad company and upon the property in the hands of this defendant as such Receiver, including all taxes due and payable to said plaintiff, and all taxes set out in said application; that should this court grant the order and rule prayed for by plaintiff, and the same be enforced by execution, it would require this defendant to stop the running and operation of the line of railroad of said company in the hands of this defendant as such Receiver, a large part of which railroad is in said Athens county, and serves the citizens of the same, and such stopping of operation would be a serious injury to said Athens county, and to its citizens and taxpayers, whereas, within a short time, under decree of foreclosure and sale of the property of said Railroad Company which will soon be entered by said common pleas court of Washington county, in said action in which this defendant and his predecessor Receiver were appointed, the payment of all said taxes claimed by plaintiff will be fully provided for, and will be paid plaintiff out of the proceeds of such sale, without stopping the running and operation of said railroad; that this defendant, at the present time, has no money, or means, or resources, with which to pay said taxes, but will make payments upon the same as rapidly as he can do so without stopping the operation and running of said railroad.
    Wherefore said Theodore D. Dale, Receiver as aforesaid, prays that the prayer of said application, and each and every part thereof, may be denied; that it may be adjudged by the court that this defendant has shown cause, and sufficient cause, why he should not pay said taxes; that'no rule be entered against defendant for the payment of said taxes, or any part thereof; and further that .this defendant as such Receiver may be fully protected in his rights, and that this proceeding be dismissed. Nye & Follett,
    Attorneys for T. D. Dale, Receiver.”
    On a hearing in the common pleas judgment was rendered in favor of the Treasurer, from which the Receiver appealed to the circuit court. The case was there heard upon the application and answer, the latter being taken as true. The court held that the answer showed sufficient cause why a ■ rule should not be made on the Receiver as asked, and dismissed the application. The Treasurer seeks in this proceeding to have the judgment reversed and a rule made on the receiver for the payment of the taxes.
    
      A. E. Brice, for plaintiff in error.
    
      Nye <& Follett, for defendant in error.
   By the Court.

The court is of the opinion that the Treasurer, on the facts stated in his application, had a right to a rule on the Receiver for the payment of the taxes and penalty as prayed for; and that the answer does not show a sufficient reason for denying it.

The averments of the answer at most only show that it is not convenient for the Receiver to pay the taxes, and run and operate the road — it would require greater economy in expenditures, not that it would be absolutely impossible to operate the road, and do so. The right of the state to the receipt of its taxes is paramount to that of all others; without the protection of the state and its laws, the road could not be run and operated, and the property would be of little, if any value; so that it is apparently of as much importance to the road, that the taxes due the state, on which all rights of property depend, should be paid without delay, as that wages, salaries and other expenses of running and operating it, should be paid. It is the duty of the receiver of the property of a railroad to pay all taxes levied upon it, as much as to purchase and pay for ties or anything else needed in its operation. He has the right to take credit for their payment in his account, and no creditor can complain. The state is not included in section 3417, Revised Statutes, and for this reason, and the fact of the superiority of its claim, is not affected thereby.

The averment that there would be a decree for the sale of the road in a few weeks in the common pleas of Washington county, and the taxes ordered paid, is immaterial. There is no certainty in the fact averred. The receiver has no control of the making of a decree. It may or may not be sold as averred. And the fact, admitted at the argument, that no sale has been made, and that the matter is still in litigation, illustrates the immateriality of the averment. The right of the state to receive the taxes due it cannot he indefinitely postponed in this way!

Judgment reversed and rule entered for the Treasurer.  