U.S. v. Costas

• Citation: 273 Ala. 445,142 So.2d 699
• Decision Date: 14 June 1962
• Docket Number: 6 Div. 739
• Parties: , 62-2 USTC P 9556 UNITED STATES of America, Intervenor, v. Mary F. COSTAS et al.
• Court: Supreme Court of Alabama

Page 699

142 So.2d 699

273 Ala. 445, 62-2 USTC P 9556

UNITED STATES of America, Intervenor, v. Mary F. COSTAS et al.

6 Div. 739.

Supreme Court of Alabama.

June 14, 1962.

W. L. Longshore, U. S. Atty., and R. Macy Taylor, Asst. U. S. Atty., for appellant.

Bland & Bland, Cullman, for appellee Home Improvement Co.

SIMPSON, Justice.

Mary F. Costas and A. Costas were tenants in common of the suit property, a house and lot in Cullman, Alabama. Mary F. Costas filed a bill in equity against A. Costas for a sale of the property for division, which contained the usual prayers that her solicitor be allowed a reasonable solicitor's fee from the proceeds of the sale.

The bill was later amended alleging that certain firms and individuals claimed liens for labor and materials in connection with improvements on the property, listing the names of these firms and individuals, and the amounts claimed and making them parties respondent. The bill was later amended to make the United States and the State of Alabama Parties, alleging that these last two parties claimed liens for unpaid income taxes. The bill as amended also alleged that Home Improvement Co. had a conditional sales contract on certain equipment installed in the house and that there was a prior lien for taxes in favor of the City of Cullman and Cullman County, Alabama.

The United States intervened and alleged in its petition that it had a lien already assessed and final through the Internal Revenue Service and that this lien was superior to all other liens. The State of Alabama also intervened asserting its lien.

The property was sold at private sale but did not bring enough to pay all claims. After the coming in of the register's report the trial court ordered to be first paid: A solicitor's fee to the complainant's solicitor, the other court costs, the claim of Home Improvement Co., the tax liens of the City of Cullman and Cullman County, recognizing these claims as prior to all other liens.

The decree of the court further ordered that all other liens or claims, including that of the United States, be paid pro rata from the balance of the proceeds of the sale.

The United States brings the appeal. The other respondents were served with notice of the appeal through their attorneys of record but no briefs have been filed to support the action of the trial court in ordering proration. The deduction and payment from the sale price of the property of the actual court costs, the claim of Home Improvement Co., and the claims of the City of Cullman and the County of Cullman for prior tax liens is not controverted by appellant on this appeal. Appellant does, however, contest the proration of the balance of the money among the various mechanics and materialmen, the awarding of a solicitor's fee to complainant's solicitor and allowing any proration to the State of Alabama.

The contention of appellant is that since no judgments were rendered in favor of the mechanics and materialmen and because the State's income tax assessment was made final after the date of the jeopardy assessment of the United States became final, the lien of the United States is prior to these claims. We are in accord with this insistence, but think the contest of the payment of the solicitor's fee is untenable.

Appellant in brief states the two questions to be decided:

'1. Does a tax lien in favor of the United States have a priority over a materialman's or labor lien which has not been perfected to the extent of being reduced to judgment.

2. Does the Court, in the absence of the consent of parties, have the authority to prorate the claims of lien-claimants which are mutually exclusive.'

Inasmuch as the first question is answered in the affirmative, consideration of the second question will be pretermitted.

None of the mechanics' or materialmen's liens were ever reduced to judgment when the jeopardy assessment for income taxes due the United States was made. A lien for taxes due the United States is perfected on the date of taxes are assessed. Title 26, § 6321, U.S.C.; Title 26, § 6322, U.S.C.; Title 26, § 6323(a), U.S.C.; United States v. City of New Britain, 347 U.S. 81, 74 S.Ct. 367, 98 L.Ed. 520.

The effect of a State statutory lien in relation to a Federal tax lien is a Federal question and the determination of this relationship is controlled by the United States Code and applicable decisions of the Federal courts. United States v. Security Trust & Savings Bank, 340 U.S. 47, 71 S.Ct. 111, 95 L.Ed. 53.

A lien for labor or material furnished, under Alabama law, is not perfected until every requirement of the statutes creating such lien has been complied with. Title 33 § 37 et seq., Code of Alabama, 1940; Brewton et al. v. L. F. Sessions, 264 Ala. 123, 84 So.2d 763; Gray v. McKinley, 34 Ala.App. 630, 43 So.2d 421, cert. den. 253 Ala. 199, 43 So.2d 424; Richards v. William Beach Hardware Co., 242 Ala. 535, 7 So.2d 492; Taylor v. Shaw, 256 Ala. 467, 55 So.2d 502; Sorsby, et al. v. Woodlawn Lumber Co., 202 Ala. 566, 81 So. 68; Emanuel et al. v. Underwood Coal & Supply Co., 244 Ala. 436, 14 So.2d 151; Snellings Lumber Co. v. Porter, 225 Ala. 164, 142 So. 560.

A materialman's or mechanic's lien created by Title 33, § 37 et seq., Code of Ala. 1940, remains inchoate and loses all force and vitality unless suit is brought and prosecuted to final judgment. Young & Co. v. Stoutz & Co., 74 Ala. 574; Eggleston v. Birmingham Purchasing Co., 5 Cir., 15 F.2d 529.

Such statutory lien created by Title 33, § 37 et seq., Code of Alabama, 1940, is inchoate and...