United States v. Maniaci, 2819.

• Decision Date: 02 February 1939
• Docket Number: No. 2819.,2819.
• Parties: UNITED STATES v. MANIACI et al.
• Court: U.S. District Court — Western District of Michigan

36 F. Supp. 293

UNITED STATES v. MANIACI et al.

No. 2819.

District Court, W. D. Michigan, S. D.

February 2, 1939.

Shelby B. Schurtz, Asst. U. S. Atty., of Grand Rapids, Mich., for plaintiff.

T. Gerald McShane and Smith, Strawhecker & Wetmore, all of Grand Rapids, Mich., for defendant Wilmarth T. Shafer.

Findings of Fact.

RAYMOND, District Judge.

1. This is a suit in equity filed under section 802(a), 49 Stat. 1743, 26 U.S.C.A. Int.Rev.Acts, page 956. The bill of complaint filed under direction of the Commissioner of Internal Revenue seeks to subject Lot 56 Kirtland Second Addition to the City of Grand Rapids, Michigan, to a lien arising out of a deficiency assessment of income tax against Thomas Maniaci and to give that lien priority over the rights of defendant Wilmarth T. Shafer who is a subsequent purchaser of the property in good faith and without knowledge of the government's lien.

2. No service of process was obtained upon defendant Maniaci and the bill has been taken as confessed by him upon filing of affidavit of non-appearance pursuant to order of publication.

3. The claim of lien is based upon additional income taxes assessed for the years 1926 to 1931, inclusive, amounting in the aggregate to $8,900.36.

4. On September 20, 1934, the Collector of Internal Revenue filed with the Clerk of the United States District Court for the Western District of Michigan a notice of lien on the regular form prescribed for use of Collectors of Internal Revenue by the Treasury Department, and on the same day, delivered to the Register of Deeds of Kent County, Michigan, a like instrument. Neither of these notices contained a description of the land upon which lien is claimed.

5. The additional income taxes referred to in paragraph 3 were assessed by the Commissioner of Internal Revenue of the United States against Thomas Maniaci on October 7, 1933, and were entered upon an assessment list which was received by the Collector of Internal Revenue for the District of Michigan on October 10, 1933, and on October 11, 1933, the Collector gave notice of assessment and made demand on Thomas Maniaci for the payment of taxes, penalties and interest.

6. No part of the taxes, penalties or interest assessed against Thomas Maniaci has been paid.

7. Thomas Maniaci became the owner of the real estate described in paragraph 1 on January 23, 1924, and continued to be the owner until June 1, 1935, when the property was conveyed to third persons. On May 7, 1936, defendant Wilmarth T. Shafer purchased said property for a cash consideration of $7,500.

8. Defendant Shafer purchased the property in good faith without any actual knowledge or notice of the alleged existence of unpaid taxes or of any notice or claim of lien thereon. Said property was mortgaged on March 21, 1934, by Thomas Maniaci and wife, Josephine, for $1,261.72, and part of the purchase price paid by Wilmarth T. Shafer for said property was applied by him to the payment of said mortgage.

9. At the time of defendant Wilmarth T. Shafer's purchase of said property, there were taxes owing to the City of Grand Rapids and to the State of Michigan in the total amount of $1,110.94, which were then liens on the premises. More than $600 of said amount of taxes has been paid by defendant Wilmarth T. Shafer and the remainder of said taxes will be paid by him or will remain as a lien against the property; the total amount of all of said taxes was withheld by the said Wilmarth T. Shafer from the purchase price of said property when the said purchase price was paid by him. Since the purchase of said property, said defendant Wilmarth T. Shafer has expended the sum of $1021.60 in improvements to the buildings located on the property.

Conclusions of law.

1. Under the provisions of section 3186 of the Revised Statutes of the United States, as amended by act of May 29, 1928, section 613, 45 Stat. 875, 26 U.S.C.A. Int. Rev.Acts, page 461, it is provided that such liens shall not be valid as against any purchaser until notice thereof has been filed by the Collector in accordance with the law of the state in which the property subject to the lien is situated, whenever the state or territory has by law provided for the filing of such notice.

2. By Act No. 104 of the Public Acts of the State of Michigan for the year 1923, as amended by Act No. 13 for the year 1925 (sec. 3746 of the Compiled Laws of Michigan of 1929), the State of Michigan provided for the filing of notices of federal tax liens in the office of the Register of Deeds, pursuant to sec. 3186 of the Revised Statutes of the United States, and thereby provided that the notice of lien should set forth among other things a description of the land upon which a lien is claimed. This statute was in effect at the time of the passage of the Act of May 29, 1928, and is valid.

3. Under the law of the United States, the Collector of Internal Revenue was required, in order to make the lien valid against defendant Shafer, to include in the notice of lien filed in the office of the Register of Deeds of Kent County, Michigan, a description of the land upon which the lien was claimed.

4. Defendant Shafer purchased said premises in good faith and without notice, at a time when there had been no proper filing of the notice of lien in the office of the Register of Deeds, and the lien for said taxes is therefore not valid as to defendant Wilmarth T. Shafer.

5. Defendant Thomas Maniaci has no interest, lien or claim in the property described in the bill of complaint.

6. An order will be entered dismissing the bill of complaint.

Opinion.

The facts are sufficiently stated in the findings of fact filed herewith. The controlling issue is whether a...