United States v. Canfield, Q-53-M.
| Decision Date | 24 July 1939 |
| Docket Number | No. Q-53-M.,Q-53-M. |
| Citation | 29 F. Supp. 734 |
| Court | U.S. District Court — Southern District of California |
| Parties | UNITED STATES v. CANFIELD et al. |
Ben Harrison, U. S. Atty., Eugene Harpole and C. L. Christie, Sp. Attys., Treasury Department, and Armond Monroe Jewell, Asst. U. S. Atty., all of Los Angeles, Cal., for the United States.
Newlin & Ashburn, Allen W. Ashburn, and C. Hudson B. Cox, all of Los Angeles, Cal., for defendant Security-First Nat. Bank of Los Angeles.
Wm. W. Lovett, Jr., of Los Angeles, Cal., and Herbert S. Hazeltine, Jr., of Pasadena, Cal., for defendant Caroline C. Spalding.
Lawler, Felix & Hall and L. C. Tupper, all of Los Angeles, Cal., and Oscar Lawler and L. C. Tupper, both of Los Angeles, Cal., for defendants Florence E. Whitney and Dorothy C. Cheseldine.
Neblett, Warner & McDonald, of Los Angeles, Cal., and Allen H. McCurdy, of Los Angeles, Cal., for defendant Laura Elaine Pierce (sued as Laura Elaine Votion).
Walter H. Robinson, of Beverly Hills, Cal., for defendant Eilleen C. Himes.
We have reviewed the entire record of this action, as well as causes No. O-3-H and 7427-S.
During the time that the suit has been pending, various motions have been made and rulings entered which reflect this court's views of issues which at such times have been presented for decision. Throughout the trial many important and crucial questions of evidence have been determined, and the transcript fully discloses the opinion of the court in such matters.
We have concluded that a further detailed memorandum is unnecessary, not only because the findings of fact and conclusions of law which have been made and entered this day fully and formally decide all issues, but also because the progressively increasing penalties and interest assessable under the law against the defendant until final judgment should be avoided without unnecessary delay.
General conclusions from the entire case may be thus summarized:
It is indisputable that income taxes, interest and penalties for the calendar years 1922, 1923, 1925 and 1926 in an aggregate amount exceeding $32,750 are due, owing and unpaid from Charles O. Canfield, and that every possible effort has been made by the government to collect from the taxpayer, wholly without success, and that if the United States is unable to reach the property right of Canfield in a trust created in his father's will and of which defendant bank is trustee and enforce payment of such taxes in this suit, complete avoidance and evasion of the large tax obligation will have been achieved. We think such result should be obviated, as we believe it has been, by the application of the legal principles invoked by the United States in this action.
The government has seasonably and regularly pursued all of the requirements of applicable federal statutes for the assessment, collection, attachment of liens and enforcement of payment of the income taxes of Canfield for the years in question as to the taxpayer, and the processes invoked by the government should, and we believe do, reach all property and rights to property of Canfield in the trust of which defendant bank is trustee. Matter of Rosenberg's Will 269 N.Y. 247, 199 N.E. 206, 105 A.L.R. 1238. There is also respectable authority to the effect that issues of the legality of the assessments or the collection of the taxes of Canfield cannot be raised by the defendant bank, as it is not the taxpayer. United States v. First Capital National Bank, 1937, 8 Cir., 89 F.2d 116; United States v. American Exchange Irving Trust Co., D.C., 43 F.2d 829.
The taxpayer Canfield having failed and refused to pay and discharge the tax obligations, under Sections 1545, 1560, et seq., 26 U.S.C.A., a lien arose and attached to all property or rights to property of Canfield in the trust established for him and for his benefit by his father's will. Such lien arose by virtue of the receipt of the assessments by the Collector of Internal Revenue at the respective times which the evidence proves the assessments were in the hands of the Collector, and these liens have continued and are still effective and enforceable. The respective assessments are also, under Bull, Executor, v. United...
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