Where a tax is by statute made a lien on property, the payment of the tax, although invalid, in order to remove the apparent lien, may be regarded as a payment under compulsion (ante Sec. 217). This is exemplified, in the case of a lien on personalty, by the decision, in AEtna Ins. Co. v. The Mayor.1 The action was to recover money paid for taxes illegally imposed upon bank stock owned by the plaintiff, the statute providing that such taxes should be and remain a lien thereon from the day when the property was assessed. The New York Court of Appeals allowed a recovery, saying:
"As this tax became and remained a lien upon the plaintiff's bank stock, even after a transfer, it deprived it of an essential element of its ownership and of its right to transfer it. That being the effect of the imposition of the tax, we think it amounted to such an impounding or duress of the plaintiff's property as to render the payment so far involuntary as to authorize an action for the recovery of the money thus wrongfully received by the defendant."
11897, 153 N. Y. 331, 340; 47 N. E. 593. 382
Since, however, the assertion of an invalid lien upon personal property may not interfere with its use and enjoyment, it would seem that the owner should be required to show some special circumstances, such as an urgent necessity to sell the property or to raise money on its security, constraining him to extinguish the lien by payment instead of by the slower process of legal proceedings for its cancellation.
To the case of a tax lien on real property the same considerations apply. The existence of an apparent lien does not in itself constitute duress. But if a sale of the property is threatened, or if no means are afforded for obtaining within a reasonable time the extinguishment of the lien by legal proceedings,1 or if there are other coercive circumstances, payment should be regarded as compulsory.