United States v. Saslavsky

• Decision Date: 01 October 1957
• Citation: 160 F. Supp. 883
• Parties: UNITED STATES of America, Judgment-Creditor, v. Morris SASLAVSKY, alias Edward Morris, Judgment-Debtor.
• Court: U.S. District Court — Southern District of New York

160 F. Supp. 883

UNITED STATES of America, Judgment-Creditor, v. Morris SASLAVSKY, alias Edward Morris, Judgment-Debtor.

United States District Court S. D. New York.

October 1, 1957.

Paul W. Williams, U. S. Atty., Robert J. Ward, Asst. U. S. Atty., New York City, for the United States.

Harper & Matthews, New York City, Harold Harper, and Vincent P. Uihlein, New York City, of counsel, for judgment debtor.

CASHIN, District Judge.

This is a motion by the Government, as judgment-creditor, for a turn-over order in accordance with New York Civil Practice Act, § 794, directed to Harper & Matthews, as third parties.

The judgment-debtor failed to make returns or pay income taxes for the years 1922 through 1929. On November 7, 1936, the Commissioner of Internal Revenue assessed the taxes due from the judgment-debtor and forwarded the assessment list to the Collector of Internal Revenue for the Third District, in which District the judgment-debtor then resided. Although no direct evidence was presented that the assessment list was ever forwarded to the Collector, it is found that such action was taken, since the complaint in the action pleads notice and demand for payment pursuant to the assessment on November 9, 1936. It will be presumed that the Collector, acting in his official capacity in making the demand, had in his possession the assessment list upon which the demand was based. United States v. Ettelson, 7 Cir., 1947, 159 F.2d 193, 195-196. The instant suit was brought on April 5, 1939 and default judgment entered on July 22, 1939. The judgment was not filed or docketed in any of the offices of the State of New York duly qualified to accept such filing or docketing.

In 1944, the third party firm was retained by the judgment-debtor to attempt to compromise the judgment in the instant suit as well as a judgment obtained by the State of New York for delinquent taxes owing to that sovereignty. In order to obtain funds to be offered in compromise, the third parties instituted suit for an accounting against a former partner of the judgment-debtor and obtained a settlement in said suit of $24,000. After remunerating themselves for their fee and disbursements in obtaining the judgment, pursuant to an attorneys' charging lien, the third parties, on behalf of the judgment-debtor, offered the balance of the fund pro rata to the state and federal governments in compromise of their respective judgments for delinquent taxes. The State accepted the offer but the Government, after protracted negotiations, rejected it.

On January 7, 1957, the Government obtained an order for the examination of the third parties in supplementary proceedings. In lieu of examination the Government accepted a letter from the third parties stating that the funds sought herein, in the amount of $14,771.94, were being held by them for the account of the judgment-debtor. The present application for a turn-over order was thereafter made. The third parties assert an attorneys' retaining lien for the services rendered in effecting the compromise of the State tax claim and attempting to effect compromise of the Federal tax claim. The Government, the third parties and the judgment-debtor have agreed that, in the event it is determined that the third parties possess a lien superior to any rights of the Government, the Court may determine the amount of the lien.

The lien which the Government asserts herein was created by Section 613 of the Revenue Act of 1928 (now §§ 6321, 6322, 6323, of Title 26 U.S.C.A.). The receipt by the Collector of the assessment list gave rise to a lien in favor...