United States v. Atlantic Municipal Corp., No. 14785.

CourtUnited States Courts of Appeals. United States Court of Appeals (5th Circuit)
Writing for the CourtHUTCHESON, , and HOLMES and BORAH, Circuit
Citation212 F.2d 709
PartiesUNITED STATES v. ATLANTIC MUNICIPAL CORP.
Decision Date11 May 1954
Docket NumberNo. 14785.

212 F.2d 709 (1954)

UNITED STATES
v.
ATLANTIC MUNICIPAL CORP.

No. 14785.

United States Court of Appeals, Fifth Circuit.

May 11, 1954.


H. Brian Holland, Asst. Atty. Gen., Ellis N. Slack, Sp. Asst. Atty. Gen., Washington, D. C., James L. Guilmartin, U. S. Atty., Tampa, Fla., Alonzo W. Watson, Jr., Sp. Asst. Atty. Gen., A. F. Prescott, Joseph F. Goetten, Sp. Assts. to the Atty. Gen., for appellant.

O. B. McEwan, Orlando, Fla., Wilson Sanders, Sanders, McEwan & Berson, Wm. McHardy Berson, Orlando, Fla., of counsel for appellee.

Before HUTCHESON, Chief Judge, and HOLMES and BORAH, Circuit Judges.

HUTCHESON, Chief Judge.

This is another of the many cases involving (1) conflicting claims to priority of liens1 and (a) Specific and Perfected Liens v. Federal Priority in Receiverships,2 which have lately engaged the attention

212 F.2d 710
of this court and the Supreme Court

Submitted on an agreed statement of facts,3 this case presents a single question for decision. As appellee correctly states it in its brief, this question is: Whether the District Court erred in holding that, on distribution of the proceeds of all property of an insolvent taxpayer corporation, the holder of a tax lien certificate issued by the County of Orange, Florida, for 1949 ad valorem taxes which became a lien on the taxpayer's real property on January 1, 1949, is entitled to priority as against an income and excess profits tax claim of the United States which became a lien on May 31, 1949 and was duly filed in the Public Records of Orange County, Florida, on June 1, 1949.

Appellant, invoking both the Federal Tax Lien Statute, 26 U.S.C. §§ 3670-3672 and the Federal Priority Statute, R.S. § 3466, 31 U.S.C.A. § 191, insists: (1) that lien for lien, the tax lien of the United States primes that of the appellee, and requires priority in payment, and (2) that if this is not so, the debtor being insolvent, Section 3466 accords priority in payment to debts due the United States for taxes.

On its part, as a conclusive answer to appellant's first claim, appellee points: to the showing in the agreed statement of facts that its claim is supported by a specific and perfected lien which primes, that is, is prior in time to, the tax lien of the United States; and to the law as most recently declared in United States v. City of New Britain, 347 U.S. at page 85, 74 S.Ct. at page 370:

"* * * We believe that priority of these statutory liens is determined
212 F.2d 711
by another principle of law, namely, `the first in time is the first in right.\' As stated by Chief Justice Marshall in Rankin v. Scott, supra 12 Wheat. 177, 6 L.Ed. 592:
"`The principle is believed to be universal, that a prior lien gives a prior claim, which is entitled to prior satisfaction out of the subject it binds, unless the lien be intrinsically defective, or be displaced by some act of the party holding it, which shall postpone him in a Court of law or equity to a subsequent claimant.\' 12 Wheat., at page 179, 6 L.Ed. 592. This principle is widely accepted and applied, in the absence of legislation to the contrary. 33 Am.Jur., Liens, § 33; 53 C.J.S., Liens, § 10b. We think that Congress had this cardinal rule in mind when it enacted § 3670, a schedule of priority not being set forth therein. Thus, the priority of each statutory lien contested here must depend on the time it attached to the property in question and became choate.
"The United States in claiming priority for all its liens relies heavily on two recent cases from this Court, United States v. Security Trust & Savings Bank, supra, and United States v. Gilbert Associates, 345 U.S. 361, 73 S.Ct. 701 97 L.Ed. 1071. We do not think they are inconsistent with our decision in this case."

As an equally conclusive answer to appellant's second claim, based on Sec. 3466, the debt priority statute, appellee, citing the cases and the Yale Law Review Article cited in note 2, supra, invokes the established rule, expressed by way of dicta and applied at least negatively with complete uniformity, that this statute has no application to a valid specific and perfected, a fully choate lien.

We find ourselves in full agreement with both of appellee's contentions. Of its first contention, that its lien is superior to the lien of the United States, it is sufficient to say that: in the City of New Britain case the Supreme Court, reconciling its opinions dealing with, and clarifying the law...

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19 practice notes
  • United States v. Saidman, No. 12623.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (District of Columbia)
    • March 1, 1956
    ...is divested out of the debtor, and cannot be made liable to the United States." In United States v. Atlantic Municipal Corp., 1954, 212 F.2d 709, we find that the Fifth Circuit, in interpreting § 3466 of the Revised Statutes, and relying on United States v. City of New Britain, referred to ......
  • United States v. Lebanon Woolen Mills Corporation, Civ. A. No. 2287.
    • United States
    • United States District Courts. 1st Circuit. United States District Courts. 1st Circuit. District of New Hampshire
    • July 9, 1964
    ...cert. denied, City of Dallas, Texas v. Tubbs, 355 U.S. 868, 78 S.Ct. 118, 2 L.Ed.2d 75 (1957); United States v. Atlantic Municipal Corp., 212 F.2d 709 (5th Cir. 1954). The rationale of these cases appears to be that to the extent that the taxpayer has conveyed, mortgaged, or in any other wa......
  • Aetna Casualty and Surety Co. v. Sherwood Distilling Co., Civ. No. 11956.
    • United States
    • United States District Courts. 4th Circuit. United States District Court (Maryland)
    • July 5, 1967
    ...specific liens, when the property has not been taken out of the possession of the debtor. Cf. United States v. Atlantic Municipal Corp., 212 F.2d 709, 71117 (5 Cir., 1954), with dicta in United States v. Vermont, 377 U.S. 351, 357, but see f. n. 8, 84 S.Ct. 1267, 12 L.Ed.2d 370 (1964). See ......
  • U.S. v. State, No. 17001
    • United States
    • United States State Supreme Court of South Carolina
    • May 12, 1955
    ...specific and perfected at the time the receiver was appointed. It was so held in United States v. Atlantic Municipal Corporation, 5 Cir., 212 F.2d 709, 711. The Court there said: 'This statute applies only as against unsecured debts, that is, debts not secured by a specific and perfected li......
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19 cases
  • United States v. Saidman, No. 12623.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (District of Columbia)
    • March 1, 1956
    ...is divested out of the debtor, and cannot be made liable to the United States." In United States v. Atlantic Municipal Corp., 1954, 212 F.2d 709, we find that the Fifth Circuit, in interpreting § 3466 of the Revised Statutes, and relying on United States v. City of New Britain, referred to ......
  • United States v. Lebanon Woolen Mills Corporation, Civ. A. No. 2287.
    • United States
    • United States District Courts. 1st Circuit. United States District Courts. 1st Circuit. District of New Hampshire
    • July 9, 1964
    ...cert. denied, City of Dallas, Texas v. Tubbs, 355 U.S. 868, 78 S.Ct. 118, 2 L.Ed.2d 75 (1957); United States v. Atlantic Municipal Corp., 212 F.2d 709 (5th Cir. 1954). The rationale of these cases appears to be that to the extent that the taxpayer has conveyed, mortgaged, or in any other wa......
  • Aetna Casualty and Surety Co. v. Sherwood Distilling Co., Civ. No. 11956.
    • United States
    • United States District Courts. 4th Circuit. United States District Court (Maryland)
    • July 5, 1967
    ...specific liens, when the property has not been taken out of the possession of the debtor. Cf. United States v. Atlantic Municipal Corp., 212 F.2d 709, 71117 (5 Cir., 1954), with dicta in United States v. Vermont, 377 U.S. 351, 357, but see f. n. 8, 84 S.Ct. 1267, 12 L.Ed.2d 370 (1964). See ......
  • U.S. v. State, No. 17001
    • United States
    • United States State Supreme Court of South Carolina
    • May 12, 1955
    ...specific and perfected at the time the receiver was appointed. It was so held in United States v. Atlantic Municipal Corporation, 5 Cir., 212 F.2d 709, 711. The Court there said: 'This statute applies only as against unsecured debts, that is, debts not secured by a specific and perfected li......
  • Request a trial to view additional results

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