IN RE MILWAUKEE CRATE & LUMBER COMPANY

• Decision Date: 28 November 1961
• Docket Number: No. 27839.,27839.
• Parties: In the Matter of MILWAUKEE CRATE & LUMBER COMPANY, Bankrupt.
• Court: U.S. District Court — Eastern District of Wisconsin

206 F. Supp. 115

In the Matter of MILWAUKEE CRATE & LUMBER COMPANY, Bankrupt.

No. 27839.

United States District Court E. D. Wisconsin.

November 28, 1961.

John Kitzke, City Atty., Milwaukee, Wis., for City of Milwaukee.

W. H. Putnam, Industrial Commission of Wis., Madison, Wis., for Ind. Commission of Wis.

TEHAN, Chief Judge.

On January 7, 1960, James E. McCarty, Referee in Bankruptcy, filed amended findings of fact, conclusions of law and an order in these proceedings determining that the United States of America had a valid and subsisting lien on property of the bankrupt sold in these proceedings, paramount to claims and alleged liens of the City of Milwaukee and of the Industrial Commission of Wisconsin, and ordering that the trustee pay the remaining funds in his hands to the United States of America. The City of Milwaukee and the Industrial Commission of Wisconsin have filed petitions for review,¹ which petitions are presently before the court. Briefs with respect thereto have been filed and oral argument was heard on October 23, 1961, and the court is now prepared to render its decision.

I.

Both the City and the Industrial Commission contend that the United States of America failed to prove any lien, because no proper assessment was ever made, no assessment list signed by the Commissioner of Internal Revenue was returned to the Collector in Milwaukee, and no notice or demand was made upon the bankrupt. They contend that since no Form 23A was sent to the Commissioner of Internal Revenue, certified by him, and returned to the Collector in this district, no assessment was made and no lien arose. No authority has been cited which we consider to support that contention. The evidence here is uncontroverted that Form 23C, the assessment certificate, was executed by the Acting Commissioner and returned to the Collector in this district. That certificate, signed by the Acting Commissioner on February 20, 1951, was received in the office of the Collector for this district on February 23, 1951. The sum totals of many assessments against the bankrupt and others were listed on that certificate. There was also introduced in evidence before the Referee that portion of Form 23A, which established that taxes owed by the bankrupt were included in the amount shown on the February 20, 1951 assessment certificate. We agree with the Referee that the Government proved the assessment against the bankrupt and the acquisition of a lien by the United States of America without showing that Form 23A was mailed by the Collector to the Commissioner and returned by the Commissioner to the Collector, by showing that the Acting Commissioner signed the Assessment Certificate which included in its total figures an assessment against the bankrupt, and that the United States of America fully complied with the applicable provisions of the Internal Revenue Code of 1939 and had a valid lien against the property of the bankrupt on February 23, 1951. We also agree that the portion of Form 23A and Form 23C, admitted in evidence before the Referee, were properly admitted under § 1732 and § 1733, Title 28 U.S.C., and that notice and demand for payment of the tax due was issued to the bankrupt as shown by Form 23A, on February 26, 1951.

II.

Both the City and the Industrial Commission also contend that the Referee erred in considering and granting a motion of the United States of America to quash their request for admission of facts. We agree with the Referee that consideration and granting of that motion did not prejudice the City or the Industrial Commission. A statement of a portion of the history of these proceedings adequately demonstrates lack of prejudice.

On April 2, 1956, the Referee entered an order in these proceedings directing the trustee to pay to the United States of America the remaining funds in his hands for application on its tax liens, after determining that the United States had a lien on the property of the bankrupt paramount to the claims and alleged liens of the City and Industrial Commission. Those parties filed petitions for review, but on May 13, 1957, before those petitions were acted upon by the court, moved to remand these proceedings to the Referee for consideration of two issues not previously before him, that is, whether the United States had complied with the provisions of the Internal Revenue Code of 1939 so as to acquire a lien, and whether any lien so acquired had been waived. This motion was granted on May 28, 1957.

On or about April 6, 1959, prior to the hearing before the Referee on the remand, the City and Industrial Commission served on the United States a request for admission of facts. Some of those requests for admission related to matters of record, uncontroverted herein, some to legal conclusions and contents of statutes and most to matters wholly without the scope of the remand, such as the validity of the liens asserted by the City and Industrial...