Hart v. United States

Citation207 F.2d 813
Decision Date10 November 1953
Docket NumberNo. 14813.,14813.
PartiesHART v. UNITED STATES.
CourtU.S. Court of Appeals — Eighth Circuit

E. M. Arnold, Little Rock, Ark., for appellant.

Cecelia H. Goetz, Sp. Asst. to Atty. Gen. (H. Brian Holland, Asst. Atty. Gen., Ellis N. Slack, Sp. Asst. to Atty. Gen., James T. Gooch, U. S. Atty., and Gerland P. Patten, Asst. U. S. Atty., Little Rock, Ark., on the brief), for appellee.

Before GARDNER, Chief Judge, and WOODROUGH and COLLET, Circuit Judges.

COLLET, Circuit Judge.

This is an action by the United States to collect taxes from an individual and three corporations and to impress its lien for those taxes on the property of that individual and the corporations. All are insolvent.

Elizabeth Shoemaker, the individual referred to, owned and operated two taxicab companies, the Yellow Cab Company and the Checker Cab & Baggage Company. She also owned the Yellow Cab Building Company. Considerable rolling stock and equipment was owned by the taxicab companies. The Building Company owned certain real estate.

In 1947 an investigation was begun by the Internal Revenue Department of the tax returns filed by Mrs. Shoemaker and the two cab companies for the years 1943 through 1945. This investigation ripened into notices of deficiency assessments for 1943 through 1945, which were sent to Mrs. Shoemaker and the two cab companies in August, 1949. On October 20, 1949, Mrs. Shoemaker and the cab companies gave to Mrs. Audria Hart, Mrs. Shoemaker's sister, a promissory note for $59,900.00, secured by a chattel mortgage on all the personal property of the taxicab companies. The mortgage was recorded on November 2, 1949. At about the same time, Mrs. Shoemaker executed a pledge of her stock in the cab companies and the Yellow Cab Building Company to Mrs. Hart. On November 4, 1949, a petition was filed in the Tax Court of the United States by the taxpayers, praying for redetermination of the assessed deficiencies. June 4, 1951, the Tax Court of the United States entered judgment against Mrs. Shoemaker for $67,112.73, against the Yellow Cab Company for $81,254.33, and against the Checker Cab for $134,133.33. A notice of lien of the judgment against Mrs. Shoemaker and the Yellow Cab Company was filed July 18, 1951, in Pulaski County, Arkansas, the residence of the companies and Mrs. Shoemaker. On the same day the Deputy Collector demanded payment. On July 30, 1951, he seized the personal property of the Yellow Cab Company. The notice of lien of the judgment against the Checker Cab Company was filed on August 8, 1951.

On August 3, 1951, Mrs. Hart brought an action in the Chancery Court of Pulaski County, Arkansas, against Mrs. Shoemaker and the two cab companies on her note, and sought the foreclosure of the chattel mortgage and the pledge of the stocks securing the note. In that action it was also requested that the Chancery Court appoint a receiver. A receiver was appointed that day. He immediately took possession of the property of the Checker Cab Company. The Yellow Cab Company, having been previously seized by the Deputy Collector of Internal Revenue on July 30, 1951, was turned over to the receiver upon presentation to the Deputy Collector of the order of the Chancery Court appointing the receiver. On August 20, 1951, the United States filed a petition to intervene in the suit pending in the Chancery Court, alleging its lien was superior to that of Mrs. Hart. The petition to intervene was granted.

September 26, 1951, the United States filed an action in the United States District Court for the Eastern District of Arkansas, against Mrs. Shoemaker, Mrs. Hart, and the Yellow Cab Building Company, in which it sought to restrain a threatened increase in the capital stock of the Building Company, which would result in a deterioration in the value of the existing stock, pending determination of the interest of the United States in that stock against the claim of Mrs. Hart. The complaint prayed that the claim of the United States be declared to be "prior and paramount to the purported claim, if any, of Audria Hart in and to said stock, and that said stock be sold and the proceeds applied to the claim of the United States." September 27, 1951, the receivership action in the Chancery Court was, on the request of Mrs. Hart, extended to include not only the property of her sister, Mrs. Shoemaker, and the cab companies, but also the Yellow Cab Building Company, Inc. A receiver was appointed for the latter company, who took possession of its property.

November 2, 1951, the Acting Collector of Internal Revenue filed a notice of claim in the Chancery Court for taxes due the United States from all the defendants in the Chancery Court in the total amount of $277,115.56 for the years 1944 through 1951. The case in the Chancery Court was set for trial on March 27, 1952. The day before that case was to be tried, on March 26, 1952, the United States requested and was granted leave to withdraw its intervention in the Chancery Court action. On March 27, the state court entered a judgment in favor of Audria Hart for the amount of the promissory note, $59,900.00, and ordered the sale of the property covered by the chattel mortgage on April 30, 1952. Five days before the date of this sale, to wit, on April 25, 1952, the United States amended its complaint pending in the United States District Court by joining the cab companies as defendants, and requested that a judgment be entered against all three of the taxpayers for the amount found due by the Tax Court and to declare in such judgment that the lien of the United States for such taxes be a prior lien as of the date of the filing of the assessment lists on all the property owned by these taxpayers which was then in the possession of the Chancery Court receiver, and that its lien be declared to be prior to any right, title or interest of Audria Hart. The amended complaint further sought an injunctive order restraining the disposition of any of this property, asked for the appointment of a receiver to take charge of it, and an order of sale of the property to satisfy the Government's tax judgments. Mrs. Hart answered, denying the jurisdiction of the court, alleging that all the property involved was under the control of the state court and not subject to the control of the United States Court, and asserting that the state court had exclusive jurisdiction.

On the same day, April 25, 1952, the United States filed a separate action in the United States District Court, in which Mrs. Hart, Mrs. Shoemaker, and H. S. Nixon, the commissioner appointed by the Chancery Court to conduct the foreclosure sale on April 30, 1952, were made defendants. The complaint prayed that a temporary restraining order be issued, restraining these defendants from selling the stock of the corporations and any other property ordered sold by the Chancery Court in its decree of March 27, 1952, pending the final determination of the action of the United States then pending against Mrs. Hart, Mrs. Shoemaker, and the corporations, in the United States District Court. This separate action for a temporary injunction was later consolidated with the original action. A preliminary injunction was issued by the United States District Court on September 30, 1952; the sale advertised for April 30 and the proceedings in the state court came to a halt pending the determination of the actions in the United States Court. Upon trial of the consolidated actions, the United States District Court found that the notes and chattel mortgages were executed at a time when the makers of those instruments were insolvent and were made for the fraudulent purpose of defeating the Government's tax claims. The judgment went further than merely establishing the priority of the Government's lien against the lien claimed by Mrs. Hart and enjoined the further administration of the taxpayers' property by or at the direction of the state court. The present appeal is from that judgment and challenges it upon the following grounds:

(1) That the United States, having asked leave to intervene in the Chancery Court, is estopped from thereafter withdrawing from that court and instituting an independent proceeding in the United States Court for the purpose of establishing priority of its lien;

(2) That the United States Court did not have jurisdiction of the separate action of the United States because of the pendency of the action in the state court and the possession by the state court of the taxpayers' property in the state court proceeding;

(3) That the findings of fact of the trial court to the effect that the note and mortgages were fraudulent as to the United States and made for the purpose of defeating the claim of the United States were clearly erroneous and not supported by substantial evidence; and

(4) That "The court did not take into consideration certain undisputed facts, which fixed the rights of the parties."

The facts were all stipulated except upon the question of whether the notes, chattel mortgages and assignments of the stock were ineffectual to create a lien in favor of Mrs. Hart superior to the lien for taxes of the United States.

Appellant relies on Pufahl v. Estate of Parks, 299 U.S. 217, 57 S.Ct. 151, 81 L.Ed. 133, and Department of Financial Institutions v. Mercantile-Commerce Bank & Trust Co., 7 Cir., 92 F.2d 639, to support her claim of estoppel. Neither of those cases is controlling on the facts. In the Pufahl case the receiver of a national bank litigated the question of whether an assessment made against a deceased stockholder in the bank had to be filed in the Probate Court of Illinois within the period provided by the state statute, to a final conclusion in the Illinois courts. Certiorari was granted by the United States Supreme Court "to resolve a conflict respecting the construction of relevant federal statutes." 299 U.S. 217, 57 S.Ct. 154. In the course of the opinion the Supreme Court stated...

To continue reading

Request your trial
7 cases
  • U.S. v. Beauchamp, Case No. 07-211 S.
    • United States
    • United States District Courts. 1st Circuit. United States District Courts. 1st Circuit. District of Rhode Island
    • 4 May 2009
    ...that the IRS was even a creditor or anticipated creditor at that time or anytime before its assessment in 2004. See Hart v. United States, 207 F.2d 813, 816 (8th Cir. 1953) (mortgage executed by then-insolvent taxpayer was fraudulent when made for the purpose of defeating the Government's t......
  • Leonardo v. Leonardo, 14006.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (District of Columbia)
    • 9 January 1958
    ...required. Cf. United States v. Shoemaker, D.C.E.D.Ark., 110 F.Supp. 898, modified as to other points sub nom. Hart v. United States, 8 Cir., 1953, 207 F.2d 813. Inadequacy of consideration is a badge of fraud. Granger v. Granger, 1941, 296 Mich. 357, 296 N.W. 288; Harris v. Shaw, 1954, 224 ......
  • Smith v. United States, 13309.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (6th Circuit)
    • 30 May 1958
    ...for appellant Betty Smith. Cf. Coe v. Armour Fertilizer Works, 1915, 237 U.S. 413, 424, 35 S.Ct. 625, 59 L.Ed. 1027; Hart v. United States, 8 Cir., 1953, 207 F.2d 813, certiorari denied 1954, 347 U.S. 919, 74 S.Ct. 519, 98 L.Ed. Appellee's petition for rehearing is denied. ...
  • United States v. Estate of Slate, Civ. A. No. 68-H-203.
    • United States
    • United States District Courts. 5th Circuit. United States District Courts. 5th Circuit. Southern District of Texas
    • 30 September 1969
    ...rejected, plaintiff filed this suit in federal district court rather than in the state district court. In the case of Hart v. United States, 207 F.2d 813 (8th Cir. 1953), the United States brought suit to collect taxes from insolvent defendants. Previously it had intervened in a mortgage fo......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT