State Tax Comm'n of Utah v. Cord

Thompson, J.,

concurring:

I agree that the third claim for relief is simply an action for money claimed to be due the State of Utah and may proceed to trial on the merits as it is not barred by limitations. I also agree that the first two claims for relief were properly dismissed because neither the docketed “warrant judgment” nor the “record” of the deficiency assessment is constitutionally entitled to full faith and credit. However, I would prefer to base the decision regarding the first two claims for relief solely upon an analysis of the Utah statutory law respecting alternative methods for the collection of income taxes.

Utah recognizes two methods by which income taxes may be collected. One is by “warrant and levy,” and the other is through court action. See Utah Code Ann., § 59-14-35 (2). The warrant and levy method is a summary procedure and was attempted to be pursued here. However, it may be utilized only if the taxpayer owns real or personal property in Utah which can be seized and sold. See Utah Code Ann., §§ 59-14-59 and 59-14-60. The ownership of property in that state is *411the jurisdictional basis for that method of collection. As the Cords have no property located in Utah subject to seizure and sale, the so-called warrant judgment is wholly ineffective for any purpose. The jurisdiction required to effectuate summary collection did not exist.

Nor was the second method, a court action against Errett and Virginia Cord in Utah, available to the tax commission for the Cords were not subject to the personal jurisdiction of a Utah court. Pennoyer v. Neff, 95 U.S. 714. Utah undoubtedly recognized this and did not commence suit in that state. Instead the Commission filed suit in Nevada where the taxpayers are residents and amenable to process. For the reasons expressed in the majority opinion Nevada should entertain the suit on its merits. The deductions against income claimed by the taxpayers may, or may not, be allowable. Neither the deficiency assessment nor the warrant judgment may be considered as proof of the claimed debt. Evidence will be required to resolve the dispute within the framework of Utah income tax law.