Simpson v. Thomas, 7883.

Decision Date02 November 1959
Docket NumberNo. 7883.,7883.
Citation271 F.2d 450
PartiesRichard A. SIMPSON, United States Marshal for the Eastern District of Virginia, C. W. Glotzbach, District Director of Internal Revenue, and United States of America, Appellants, v. John L. THOMAS and Earl J. Butler, Appellees.
CourtU.S. Court of Appeals — Fourth Circuit

George F. Lynch, Attorney, Department of Justice, Washington, D. C. (Howard A. Heffron, Acting Asst. Atty. Gen., Lee A. Jackson, A. F. Prescott and Joseph Kovner, Attorneys, Department of Justice, Washington, D. C., John M. Hollis, U. S. Atty., Norfolk, Va., and Joseph S. Bambacus, Asst. U. S. Atty., Richmond, Va., on brief), for appellants.

R. R. Ryder, Richmond, Va., for appellees.

Before SOBELOFF, Chief Judge, and HAYNSWORTH and BOREMAN, Circuit Judges.

HAYNSWORTH, Circuit Judge.

Thomas and Butler seek the return to them of money taken from them, incident to a lawful arrest, to be held by the United States Marshal for safekeeping. Their position is that their funds, thus in the hands of the United States Marshal, could not be subjected to a federal tax lien and was immune from levy by the United States in aid of the collection of its taxes. The District Court found that the funds in the hands of the United States Marshal for safekeeping were immune from the lien and the levy. He ordered their return to the claimants. We disagree.

Thomas and Butler were arrested at different times for violations of the Internal Revenue laws. In each instance, the arrest was lawful. At the time of arrest, each was found to be in possession of a substantial amount of money, which was delivered to the United States Marshal for safekeeping during the incarceration of the owner. In each instance, a jeopardy assessment of taxes claimed to be due the United States on distilled spirits in the possession of the accused at the time of his arrest was regularly made. When Thomas and Butler, upon formal demand of payment of taxes claimed to be due, did not make payment, notices of the tax liens and the levy were regularly served upon the Marshal.

The Marshal responded to the demand of the District Director of Internal Revenue in the Thomas case by delivering over the money he held. In Butler's case, he still retains the money.

Thomas and Butler filed petitions, in the criminal proceedings pending against them, for an order directed to the District Director of Internal Revenue requiring him to show cause why the money should not be turned over to the petitioners. The order sought by the petitioners was signed and filed by the District Court. Thomas also filed a civil action against the District Director demanding the return of his money, while Butler filed a similar civil action against the Marshal. All of these cases were heard together. The District Court, being of the opinion that the moneys were in custodia legis and were not contraband, concluded that the claimants were entitled to be restored upon their release upon bond to all of the nonforfeitable property in their possession at the time of their arrest. He ordered the return to them of these moneys.

In reaching this conclusion, he was concerned that permitting summary collection of taxes claimed to be due in this manner could amount to an abuse of the criminal process.

Since the amount of the taxes claimed to be due from each man exceeded the amount of money held for him by the Marshal, we find no escape from the fact that the Marshal, who had notice of the lien and of the levy, could not lawfully return the money to the claimants without subjecting himself to personal liability to the United States. The tax lien, which arises under § 6321 of the Internal Revenue Code of 19541 is broad and inclusive. There are specific exemptions, but there is no exemption of the property of a federal prisoner whether it be held for him by a United States Marshal or by others.

When a tax lien attaches to property, the United States becomes in a sense a co-owner with the taxpayer of the property to the extent of the lien.2 The taxpayer then ceases to have an unconditional right to obtain or retain possession of the property. The substantive rights of the United States and of the taxpayer are in no sense dependent...

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18 cases
  • Silbert v. United States
    • United States
    • U.S. District Court — District of Maryland
    • 15 de agosto de 1968
    ...unencumbered by a lien having tax priority, the levy follows the property into the hands of whomsoever it might fall. In Simpson v. Thomas, 271 F.2d 450 (4th Cir. 1959), Chief Judge Haynsworth cited Field, supra, and Welsh, supra, with apparent approval, and observed (at There are appropria......
  • Yannicelli v. Nash
    • United States
    • U.S. District Court — District of New Jersey
    • 24 de janeiro de 1973
    ...the moment it was put back into Field's hand it would have been subject to immediate levy. Id., 263 F.2d at 763. In Simpson v. Thomas, 271 F.2d 450, 452 (4 Cir. 1959), the plaintiffs' argued that money taken from them incident to a lawful arrest, and held by the U.S. Marshal for safekeeping......
  • United Sand and Gravel Contractors, Inc. v. U.S.
    • United States
    • U.S. Court of Appeals — Fifth Circuit
    • 22 de agosto de 1980
    ...Carlo v. United States, 286 F.2d 841, 848-49 (2d Cir.), cert. denied, 366 U.S. 944, 81 S.Ct. 1672, 6 L.Ed.2d 855 (1961); Simpson v. Thomas, 271 F.2d 450 (4th Cir. 1959); Field, supra. United Sand attempts to distinguish these cases by noting that in none were rights of third parties involve......
  • Carlo v. United States
    • United States
    • U.S. Court of Appeals — Second Circuit
    • 9 de fevereiro de 1961
    ...200; Field v. United States, 5 Cir., 263 F.2d 758, certiorari denied, 1959, 360 U.S. 918, 79 S.Ct. 1436, 3 L.Ed.2d 1534; Simpson v. Thomas, 4 Cir., 1959, 271 F.2d 450. We thus leave it open to appellant, if he chooses to do so, to pursue such other remedies as may be available to him for th......
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