United States v. Galvin, Civ. 61-C-244.

• Decision Date: 31 October 1961
• Docket Number: Civ. 61-C-244.
• Citation: 199 F. Supp. 4
• Parties: UNITED STATES of America, Plaintiff, v. Nathan GALVIN, Lillian Galvin, Irving M. Galvin, Eileen Galvin, Elaine G. Kleinberg, Fulton Savings Bank, Isidor Frank, Dime Savings Bank and Metropolitan Life Insurance Company, Defendants.
• Court: U.S. District Court — Eastern District of New York

199 F. Supp. 4

UNITED STATES of America, Plaintiff, v. Nathan GALVIN, Lillian Galvin, Irving M. Galvin, Eileen Galvin, Elaine G. Kleinberg, Fulton Savings Bank, Isidor Frank, Dime Savings Bank and Metropolitan Life Insurance Company, Defendants.

Civ. 61-C-244.

United States District Court E. D. New York.

October 31, 1961.

Joseph P. Hoey, U. S. Atty., Brooklyn, N. Y., by Peter H. Ruvolo, Asst. U. S. Atty., Brooklyn, N. Y., for the motion.

Turk & Walzer, by Carl Turk, New York City, in opposition.

RAYFIEL, District Judge.

The Government has commenced this action to enforce its tax liens on two parcels of real property and on a policy of life insurance, and makes this motion for partial summary judgment enforcing its tax liens against one of said parcels.

The real property in question is located at 2133 East 29th Street, Brooklyn, New York, within this District. It had been owned by the defendant Lillian Galvin from June 29, 1945 until June 5, 1956 when she transferred title thereto to her son, the defendant Irving M. Galvin, who, it is conceded, paid her no or a merely nominal cash consideration therefor. He acquired the property subject to a first mortgage held by the Fulton Savings Bank of Kings County in the face amount of $8,000, which had been reduced to approximately $7,600, a second mortgage to Isidor Frank in the sum of $5,000, and a third mortgage to Philip and Rose Cohen in the sum of $7,500. On June 4, 1957 Irving M. Galvin conveyed the property to his wife, Eileen Galvin, likewise for either no or a nominal cash consideration.

On March 15, 1951, the defendant Lillian Galvin, the original owner of the premises in question, filed an income tax return for the year 1950. On January 27, 1954 the said defendant and the Commissioner of Internal Revenue entered into an agreement whereby the time for assessing her income tax liability for 1950 was extended to June 30, 1955. On June 15, 1955 the Commissioner of Internal Revenue served notice of a deficiency of $20,925.92 in tax and $13,820.65 in penalties in her income tax for 1950. On September 12, 1955, the said defendant filed a petition with the Tax Court for redetermination of the said deficiency and on June 12, 1956 the Tax Court entered an order dismissing the petition on the ground that it was not filed within the ninety day period required by Section 6213(a) of the Internal Revenue Code of 1954. The defendant then appealed to the Court of Appeals for the Second Circuit which, on December 3, 1956, affirmed the order of the Tax Court. The tax, penalties and interest were assessed at $40,907.79 on April 23, 1956, and on June 11, 1956 the taxpayer was given notice of the assessment with demand for payment thereof. It is conceded that no part of the said assessment has been paid by the defendant Lillian Galvin.

The Government contends that when the taxpayer, Lillian Galvin, turned the property over to her son on June 5, 1956, and when he transferred it to his wife on June 4, 1957, each received the property subject to the tax lien. It concedes that the notice of the tax lien was not filed until August 1, 1956, almost two months after the conveyance of title by the said taxpayer to her son, but it points out that while Section 6323(a) of the Internal Revenue Code of 1954 provides that a federal tax lien "shall not be valid as against any mortgagee, pledgee, purchaser, or judgment creditor until notice thereof has been filed by the Secretary or his delegate", the son was none of these, and hence took the property subject to the lien.

The defendants Irving M. Galvin and Eileen Galvin, the taxpayer's son and daughter-in-law, ask for leave to amend their answers to allege that the transfers to them were based on valuable considerations. They allege that they took the property...