GENERAL MOTORS ACCEPTANCE CORPORATION, A NEW YORK CORPORATION AUTHORIZED TO DO BUSINESS IN THE STATE OF FLORIDA, APPELLANT,
v.
TOM NORTON MOTOR CO. ET AL., APPELLEE
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General Motors Acceptance Corporation's pre-existing U.C.C. security interest in the debtor's personal property takes precedence over a subsequently-recorded state tax warrant for unpaid sales taxes. The court reversed the trial court's erroneous application of an ad valorem tax lien statute to sales taxes.
No. A tax warrant for sales taxes does not take precedence over a pre-existing, properly perfected U.C.C. security interest. The statutory lien priority provision applies only to ad valorem taxes, not sales taxes, and a lien for sales taxes attaches only upon recording of the warrant.
[1] A tax warrant for unpaid sales taxes does not automatically take precedence over a previously perfected and recorded UCC security interest.
[2] A lien for sales taxes attaches only upon the recording of the tax warrant, not when the taxes become delinquent.
Previewing 2 of 3 headnotes on this case. FLexlaw’s editorially structured points of law — every proposition, pinpointed — are reserved for members.
Join FLexlaw to unlock all legal intelligence“All taxes imposed pursuant to the constitution and laws of this state shall be a first lien, superior to all other liens, on any property against which the taxes have been assessed.”
The trial court's basis for holding the tax warrant superior, but the appellate court found this statute applies only to ad valorem taxes, not sales taxes.
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Join FLexlaw to unlock all legal intelligenceIn 1971, GMAC properly filed and recorded a U.C.C. Financing Statement and chattel mortgage on Tom Norton Motor Co.'s personal property. In 1974, sale…
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LETTS, Judge.
In this case the trial court held that a tax warrant issued for unpaid Florida sales taxes took precedence over a previous chattel mortgage and security interest perfected and recorded, before the sales taxes ever became due, under the Uniform Commercial Code. We reverse.
Without belaboring the facts, in 1971 General Motors Acceptance Corporation properly filed and recorded a U.C.C. Financing Statement and later a chattel mortgage on the personal property of the Tom Norton Motor Co. Thereafter, in 1974, sales taxes remained unpaid and a warrant thereon was issued, followed by a Sheriff’s Sale and a decision by the lower court that the State Department of Revenue’s lien was superior to General Motors Acceptance Corporation’s notwithstanding the fact that the latter’s lien was established long before. This conclusion was based on the following:
This superiority is established by the Statutes of the State of Florida beginning with § 197.056(1) which states: All taxes imposed pursuant to the constitution and laws of this state shall be a first lien, superior to all other liens, on any property against which the taxes have been assessed. .
This was error because, although we concede that Chapter 197 does not specifically say so, we hold that it is obviously intended to apply to ad valorem taxes on real and personal property and not to sales taxes which latter are covered by Section 212.15. This latter section states in pertinent part:
(3) All taxes collected under this chapter shall be remitted to the department. The department is empowered, and it shall be its duty, when any tax becomes delinquent or is otherwise in jeopardy under this chapter, to issue a warrant for the full amount of the tax due or estimated to be due, with the interest, penalties and cost of collection, directed to all and singular the sheriffs of the state, and mail the warrant to the clerk of the circuit court of the county where any property of the taxpayer is located. UPON RECEIPT OF THE WARRANT, THE CLERK OF THE CIRCUIT COURT SHALL RECORD IT, AND THEREUPON THE AMOUNT OF THE WARRANT SHALL BECOME A LIEN ON ANY REAL OR PERSONAL PROPERTY OF THE TAXPAYER IN THE SAME MANNER AS A RECORDED JUDGMENT, (emphasis supplied).
It is clear from the words emphasized above that no lien attaches for sales taxes until the warrant is recorded. This very court has so stated. See Jacobs v. Kirk, 223 So. 2d 795 (Fla. 4th DCA 1969). Accordingly, General Motors Acceptance Corporation has a superior lien.
The appellee relies on Coin Machine Acceptance Corporation v. Morgenstern, 232 So. 2d 423 (Fla. 3d DCA 1970), however, that case involved ád valorem taxes and is therefore inapplicable in this instance.
REVERSED AND REMANDED WITH INSTRUCTIONS TO VACATE FINAL JUDGMENT AND PROCEED IN ACCORDANCE HEREWITH.
DOWNEY, C. J., and MOORE, J., concur.
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The Am. Bank OF Merritt Island v. Con's Cycle Ctr., Inc., 466 So. 2d 255 (Fla. 5th DCA 1985)…it is not and reverse. Sales taxes are not within section 197.0151, Florida Statutes (1983), which gives priority status to unpaid ad valorem taxes by making such taxes a first lien on the assessed property. General Motors v. Tom Norton Motor Co., 366 So. 2d 131 (Fla. 4th DCA 1979). Sales taxes do not become a lien against real or personal property until a tax warrant is recorded and they become a lien on the property of the delinquent taxpayer “in the same manner as a recorded judgment.” See § 212.15(4), F…
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Dep't OF Revenue v. Potamkin Dodge, Inc., 442 So. 2d 287 (Fla. 3d DCA 1983)…ates it is the duty of the state to do so when sales taxes are delinquent or otherwise in jeopardy. No lien attaches until a warrant is filed for the taxes due. § 212.-15(4), Fla.Stat. (1981); General Motors Acceptance Corp. v. Tom Norton Motor Co., 366 So. 2d 131 (Fla. 4th DCA 1979). The Department failed to follow this procedure and perfect its lien. Cf. Sun First National Bank of Orlando v. Miller, 397 So. 2d 943 (Fla. 5th DCA 1981) (properly perfected tax lien takes priority over subsequently filed securi…
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State ex rel. Fla. Dep't OF Revenue v. Fleet Fin. & Mortg. Co., Inc., 489 So. 2d 33 (Fla. 2d DCA 1986)…h, sales tax liens are governed by the ‘first in time, first in line’ principle.” American Bank of Merritt Island v. Con’s Cycle Center, Inc., 466 So. 2d 255, 256 (Fla. 5th DCA 1985). See also General Motors Acceptance Corp. v. Tom Norton Motor Co., 366 So. 2d 131 (Fla. 4th DCA 1979). We do not subscribe to the state’s innovative arguments which appear essentially to be attempts to avoid the effect of Con’s Cycle Center, Tom Norton Motor Co., and the wording of section 212.15(4), Florida Statutes (1984), an…
Authorities Cited
- Jacobs v. Kirk, 223 So. 2d 795 (Fla. 4th DCA 1969)
- Coin Mach. Acceptance Corp. v. Morgenstern, 232 So. 2d 423 (Fla. 3d DCA 1970)