Brown v. General Laundry Service

• Court: Supreme Court of Connecticut
• Writing for the Court: Before BROWN; INGLIS
• Citation: 139 Conn. 363,94 A.2d 10
• Parties: , 53-1 USTC P 9272 BROWN v. GENERAL LAUNDRY SERVICE, Inc. et al. Supreme Court of Errors of Connecticut
• Decision Date: 30 December 1952

Page 10

94 A.2d 10 139 Conn. 363, 53-1 USTC P 9272 BROWN
v.
GENERAL LAUNDRY SERVICE, Inc. et al. Supreme Court of Errors of Connecticut. Dec. 30, 1952.

[139 Conn. 365]

Page 11

Louise Foster, of the District of Columbia bar, Sp. Asst. to the Atty. Gen., Edward J. Lonergan, Asst. U. S. Atty., Hartford, on the brief, Adrian W. Maher, U. S. Atty., Hartford, and A. F. Prescott, Sp. Asst. to the Atty. Gen., for the United States.

Harold Koplowitz, New Britain, for appellee city of New Britain.

Before [139 Conn. 363] BROWN, C. J., and JENNINGS, BALDWIN, INGLIS and O'SULLIVAN, JJ

[139 Conn. 365] INGLIS, Justice.

The question to be decided on this appeal is whether, in an action to foreclose mortgages on real property, the general liens for taxes due the United States have priority over perfected municipal liens for taxes and water rates assessed against the property in question.

The action was instituted to foreclose the first and second mortgages on real property located in New Britain and owned by the named defendant. The first mortgage was dated March 28, 1946, and the second, November 18, 1946. A judgment of foreclosure by sale was rendered on June 22, 1951. Pursuant thereto, the property was sold for $27,500. In the supplemental judgment, the court found that the property was subject to the following incumbrances: the two mortgages to the plaintiff; a judgment lien dating from August 18, 1950, in favor of the defendant Dunn; liens for taxes and water assessments due the city of New Britain, totaling $3587.71; and liens in favor of the United States for various taxes, in [139 Conn. 366] the total amount of $8475.13 plus interest. The tax liens of the city were for taxes which had become due in 1947, 1948, 1949, 1950 and 1951. The due dates of water rates for which the property was subject to liens ran from December 1, 1947, to June 1, 1951. The liens of the United States were for (1) federal insurance contributions for two quarters in 1949 and two quarters in 1950, the assessment lists of which had been received by the collector shortly after their respective due dates; (2) federal unemployment contributions for the year 1948, the assessment list of which had been received on June 26, 1950; and (3) withholding taxes, the assessment lists of which had been received at various times between April 26, 1948, and September 21, 1950. The government had given notice to the taxpayer, the named defendant, and demanded payment of the amount of the taxes. It had also, on March 19, 1951, filed notice of its tax liens in the office of the town clerk in New Britain and in the office of the clerk of the United States District Court in New Haven.

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In addition to the proceeds of the sale of the mortgaged property, a receiver of rents reported that he had collected a net amount of $571.24, so that there was available for distribution a total amount of $28,071.24. By its supplemental judgment, the court ordered distribution to the respective parties in the following amounts and the following order: to the committee and others, for the expenses of the sale, $1761.09; to the city of New Britain, $3587.71; to the plaintiff, $15,319.35; to the defendant Dunn, the judgment lienor, $2017.18; to the United States, the balance remaining--$5385.91. From this judgment the United States has appealed. It does not attack so much of the judgment as directs the satisfaction in full of the claims of the plaintiff and the [139 Conn. 367] defendant Dunn. It does contend that its claim should have been given priority over that of the city of New Britain.

The city's claim of priority is based on §§ 1853 and 758 of the General Statutes. Section 1853 reads: 'The interest of each person in each item of real estate, which shall have been legally set in his assessment list, shall be subject to a lien for that part of his taxes laid upon the valuation of such interest, as found in such list when finally completed * * *.' It goes on to provide that the lien shall exist from the first day of October or other assessment date of the municipality in the year previous to that in which the tax shall have become due 'and, during its existence, shall take precedence of all transfers and incumbrances, in any manner affecting such interest in such item, or any part of it.' Section 758, after authorizing municipalities to assess water rates against the owners of properties connected with its water system, provides that such rates or charges, if not paid when due, shall constitute a lien upon the premises served, which lien shall take precedence over all other liens or incumbrances except taxes. The word 'taxes' as here used means only those taxes which may be assessed in favor of the state or some subdivision thereof and which, under the law, are secured by specific liens upon real property. So far as state law is effective, it is clear that the liens of the city of New Britain on the property under foreclosure would take precedence over any other incumbrance on the property, irrespective of the time at which that incumbrance might have attached.

The first question, therefore, is whether the state law is effective to control the decision of this case or whether the federal government has the power [139 Conn. 368] to override, and, acting by the Congress, has overridden, the state legislation. The state of Connecticut is a sovereign state in its own right and to a certain extent is, in the exercise of sovereign power, independent of the United States. Hoxie v. New York, N. H. & H. R. Co., 82 Conn. 352, 355, 73 A. 754. The power to authorize its subdivisions to assess taxes and to provide means whereby the collection of those taxes may be secured is an exercise of the state's sover-eignty. On the other hand, the states, by ratifying the federal constitution, have delegated to the United States the power to levy and collect taxes. U.S.Const. Art. 1, § 8. Furthermore, the states have agreed, by ratifying article VI of the federal constitution, that any constitutional enactment of the Congress shall be...