Utah

---

 

[53-1 USTC ¶9355]Belle Faddis, Plaintiff v. Conrad Schobert, Defendant, United States of America, Intervenor, Elliott Lee Pratt, Trustee in Bankruptcy in the United States District Court, District of Utah, Intervenor

In The Third Judicial District Court of the State of Utah in and for Salt Lake County, Civil No. 95322, February 13, 1953

Lien for taxes: Validity against purchaser or pledgee.--Where taxpayers assigned the contract of sale of their tavern to creditors as security for an existing indebtedness, it was held that the creditors were not purchasers or pledgees within the meaning of Code Sec. 3672 and that the assignment, which was for a past consideration, was subject to the tax liens of the United States.

Gayle Dean Hunt and Conrad Schobert for plaintiff. C. N. Ottosen and Bryant H. Croft for the defendant.

Findings of Fact and Conclusions of Law

ELLETT, District Judge:

This case came on regularly for trial January 19, 1953 , the plaintiff Belle Faddis being present and represented by her attorney, Gayle Dean Hunt , Continental Bank Building , the defendant Conrad Schobert being present and represented by his attorney. C. N. Ottosen, Continental Bank Building, the intervenor, United States of America, being represented by Bryant H. Croft, Assistant United States Attorney for the District of Utah, and the intervenor Elliott Lee Pratt, Trustee in Bankruptcy in the matter of Conrad Holm and Dolly Holm, being present; and evidence having been introduced by and received in behalf of the respective parties, whereupon all parties rested, and the court having duly considered said evidence and the arguments of counsel, now therefore makes and enters the following findings of fact and conclusions of law:

Findings of Fact

1. That Conrad Holm, prior to the times herein mentioned, owned a tavern known as "Connie's" in Salt Lake City, Utah.

2. That plaintiff Belle Faddis and her husband, A. L. Faddis, together loaned Conrad Holm the sum of $1,000.00 on February 6, 1946; the sum of $500.00 on June 5, 1946; the sum of $500.00 on June 29, 1947; and on January 6, 1946 the said parties loaned to Dolly Holm the sum of $1,500.00; that Belle Faddis on July 27, 1947 loaned Conrad Holm the sum of $375.00; and that during the months of July, August and September, 1946, A. L. Faddis performed work for Conrad Holm in the reasonable value of $364.00, none of which amounts have been paid by Conrad Holm.

[Notice of Tax Liens Filed by Government]

3. That in October 1950 the Commissioner of Internal Revenue of the United States assessed income taxes for the year 1949 against Conrad and Dolly Holm in the sum of $402.26, together with penalties, interest and costs that accrue in addition thereto; that the assessment list on which such taxes were assessed was received in the office of the Collector of Internal Revenue for the District of Utah on November 7, 1950, that notice and demand for payment were made therefor November 13, 1950, and notice of the tax lien created thereby, covering the tax and interest up to August 27, 1951 in the total sum of $422.20, was filed on August 27, 1951 in the office of the Recorder of Salt Lake County, State of Utah.

That during 1947 and 1948 the Commissioner of Internal Revenue of the United States assessed employment and withholding income taxes against Dolly Holm in the sum of $900.08, together with penalties, interest and costs that may accrue in addition thereto; that the assessment lists on which such taxes were assessed were received in the office of the Collector of Internal Revenue for the District of Utah on various dates from August 22, 1947 to and including August 12, 1948; and that notice of the tax lien created thereby, covering the tax and interest up to August 27, 1951 in the total sum of $1,102.22 was filed on August 29, 1951, in the office of the Recorder of Salt Lake County, State of Utah.

That during 1946, 1947 and 1948 the Commissioner of Internal Revenue of the United States assessed employment and withholding income taxes against Dolly Holm and Charles Faddis in the sum of $442.85, together with penalties, interest and costs that many accrue in addition thereto; that the assessment lists on which such taxes were assessed were received in the office of the Collector of Internal Revenue for the District of Utah on various dates from November 25, 1946 to and including April 15, 1948, and that notice of the tax lien created thereby, covering the tax and interest up to August 27, 1951, in the total sum of $579.85, was filed on August 29, 1951 in the office of the Recorder of Salt Lake County, State of Utah.

[Taxpayer Sold His Tavern]

4. That on March 15, 1951 Conrad Holm sold said tavern to Conrad Schobert for $7,500.00; that the sum of $3,500.00 was paid at the time of sale and the balance of $4,000.00 with interest at 5% per annum was and is to be paid at the rate of $100.00 per month beginning April 15, 1951, said payments to be applied first to the payment of interest and then to the payment of principal.

[Contract of Sale Assigned to Plaintiff]

5. That on June 16, 1951 Conrad Holm and Dolly Holm, to secure the indebtedness heretofore described to Belle Faddis and A. L. Faddis, executed and delivered to Belle Faddis a $4,000.00, 5% per annum, promissory note payable in $100.00 monthly installments beginning June 15, 1951, and an assignment dated May 16, 1953, of the contract of sale of said tavern by Conrad Holm to Conrad Schobert as set forth in number 4 of these Findings of Fact; that no other consideration was given by Belle Faddis for said assignment; and that Conrad Schobert was not notified of said assignment to Belle Faddis until after February 15, 1952.

6. That on August 27, 1951 Conrad Holm and Dolly Holm executed an assignment to the United States Collector of Internal Revenue for the District of Utah of $2,114.62 from the balance due on the said contract of sale of Connie's Tavern dated March 15, 1951, and executed by and between Conrad Holm and Conrad Schobert, for the payment of taxes then due the United States in the sum of $1,745.19, together with interest in the sum of $369.43 as described in paragraph 3 of these Findings of Fact; and that notice of said assignment and a copy thereof were given to the said Conrad Schobert on August 27, 1951 by the said Collector.

[Taxpayers Adjudicated Bankrupts]

7. That Conrad Holm and Dolly Holm were adjudicated bankrupts November 5, 1951 upon application filed October 29, 1951 .

8. That on September 20, 1951 defendant Conrad Schobert was served with a garnishment in the case of Sugar et al. v. Conrad Holm in the District Court of Salt Lake County , State of Utah , and ordered by the court to retain all funds payable to Conrad Holm.

[Payments Made by Purchaser]

9. That on the said contract of sale dated March 15, 1951, executed by and between Conrad Holm to Conrad Schobert, Conrad Schobert has made the following payments to Conrad Holm: $3,500.00 on date of said contract, $100.00 on or before April 15, 1951, $100.00 on or before May 15, 1951, $100.00 on or before June 15, 1951, $100.00 on or before July 15, 1951, $100.00 on or before August 15, 1951 and $50.00 on or before September 15, 1951, and to the United States Bureau of Internal Revenue, $50.00 on or before September 15, 1951, $50.00 on or before October 15, 1951, $50.00 on or before November 15, 1951, $50.00 on or before December 15, 1951, $75.00 on or before January 15, 1952, and $75.00 on or before February 15, 1952, a total in all of $900.00 in addition to said $3,500.00 paid on date of said contract.

10. That defendant Conrad Schobert paid into court January 17, 1953 the sum of $1,500.00. That the sum of $1,300.00 only was the amount then due under said contract of sale of Connie's Tavern dated March 15, 1951 and executed by and between Conrad Holm and Conrad Schobert, for distribution among the parties hereto in accordance with the judgment of this court. That the balance of $200.00 paid into court by the said Conrad Schobert on the 17th day of January, 1953 should be returned to the said Conrad Schobert.

Conclusions of Law

1. Plaintiff Belle Faddis is entitled to costs herein in the sum of $13.20 assessed against the fund of $1,300.00 due from Conrad Schobert and paid into court January 17, 1953 by defendant Conrad Schobert, as aforesaid, but not to attorney fees.

[Plaintiff Neither Purchaser, Nor Pledgee]

2. Plaintiff Belle Faddis, by the assignment to her of said contract for the sale of a tavern known as "Connie's", dated March 15, 1951 and executed by and between Conrad Holm and Conrad Schobert, became neither a purchaser nor a pledgee of said contract under the meaning of the provisions of Section 3672 of Title 26, USCA, but an assignee for past consideration, to-wit, to secure loans previously made by Belle Faddis and A. L. Faddis to Conrad Holm, which consideration does not constitute consideration sufficient to render plaintiff Belle Faddis a purchaser; therefore under the provisions of said Section 3672 plaintiff took said assignment subject to a lien effective November 7, 1950 in favor of the intervenor United States of America for the sum of $402.26 plus interest, that the intervenor United States of America has received the sum of $350.00 in payment thereon, and that therefore said intervenor is entitled to be paid from the $1,300.00 fund due from Conrad Schobert and heretofore paid into court by said Conrad Schobert the additional sum of $52.26, together with interest on said assessment in the sum of $29.26, or a total of $81.52, as of February 11, 1953.

[Amounts To Which Plaintiff Was Entitled]

3. Plaintiff Belle Faddis is an assignee of said contract for the sale of the tavern known as "Connie's" dated March 15, 1951, and executed by and between Conrad Holm and Conrad Schobert to the extent of the consideration theretofore given by her to Conrad Holm, to-wit the sum of $1,000.00 or one-half of the $2,000.00 loaned by plaintiff and her husband A. L. Faddis to Conrad Holm, together with interest thereon as provided by law, plus the sum of $375.00 loaned individually by Belle Faddis to Conrad Holm, together with interest thereon as provided by law, and in accordance with No. 2 of the Findings of Fact herein; that therefore plaintiff Belle Faddis is entitled to the sum of $1,000.00 and interest thereon computed to February 11, 1953 in the sum of $394.96, plus the sum of $375.00 and interest thereon computed to February 11, 1953 in the sum of $124.75 from July 27, 1947, together with costs herein in the sum of $13.20, a total of $1907.91; that said sum, together with interest at the rate of 6% per annum on the unpaid balance is to be paid from the balance of the fund of $1,300.00 due from and paid into court by defendant Conrad Schobert, as aforesaid, and from the monthly payments of $100.00 each to be paid by Conrad Schobert under the terms of the said contract commencing February 15, 1953.

[Amount To Which U. S. Was Entitled]

4. The intervenor, United States of America, is an assignee under the assignment executed August 27, 1951, by Conrad and Dolly Holm, as described in paragraph 6 of the Findings of Fact herein, of the funds due under the contract of sale of Connie's Tavern dated March 15, 1951 and heretofore described; that said United States of America is entitled to be paid from the residue of the proceeds due on said contract from Conrad Holm to Conrad Schobert after payment to plaintiff Belle Faddis is completed as provided in paragraph 3 of these Conclusions to the extent of $2,114.62, plus interest thereon at six per cent per annum from August 27, 1951, less the amount of $431.52 already paid or to be paid to the United States Bureau of Internal Revenue, as set out in paragraph 9 of the Findings of Fact herein and paragraph 2 of these Conclusions.

[Trustee in Bankruptcy Entitled to Nothing]

5. Applicant for intervention, Elliott Lee Pratt, Trustee in Bankruptcy in the matter of Conrad Holm and Dolly Holm is entitled to no part of the proceeds of the fund of $1,300.00 due from and paid into court by defendant Conrad Schobert herein, nor to the moneys hereafter to be paid by Conrad Schobert on the said contract from Conrad Holm to Conrad Schobert for sale of Connie's Tavern, dated March 15, 1951 and signed by Conrad Holm and Conrad Schobert.

6. Defendant Conrad Schobert is not obligated to pay interest on the sums of money withheld under said contract of sale of Connie's Tavern during pendency of these proceedings.

7. That Conrad Schobert is entitled to have $200.00 released to him out of the deposit paid into court by him on January 17, 1953 .

Judgment

The above entitled case came on regularly for trial January 19, 1933, the plaintiff, Belle Faddis being present and represented by counsel, Gayle Dean Hunt, the defendant Conrad Schobert being present and represented by counsel C. N. Ottosen, the intervenor United States of America being represented by Bryant H. Croff, Assistant United States Attorney for the District of Utah and the intervenor Elliott Lee Pratt, Trustee in Bankruptcy in the matter of Conrad Holm and Dolly Holm, being present; and evidence having been introduced by and received in behalf of the respective parties, whereupon all parties rested and the court having duly considered the evidence thus submitted and the arguments of counsel and having made and entered its findings of fact and conclusions of law,

WHEREFORE, by virtue of the law, and by reason of the premises aforesaid it is ORDERED, ADJUDGED and DECREED:

1. That the plaintiff have and receive her costs in the sum of $13.20 from the $1,300.00 fund due from and deposited into court by defendant Conrad Schobert on the 17th day of January, 1953.

2. That the intervenor United States of America have and receive the sum of $81.52 from the $1,300.00 fund due from and deposited into court by the defendant Conrad Schobert on the 17th day of January, 1953.

3. That the plaintiff Belle Faddis have and receive the balance of the $1,300.00 fund due from and paid into court by the defendant Conrad Schobert on the 17th day of January, 1953, to-wit, the sum of $1,205.28 and further that plaintiff Belle Faddis have and receive from the defendant Conrad Schobert the monthly installments of $100.00 each due from Conrad Schobert upon the contract of sale of Connie's Tavern, executed March 15, 1951 by and between Conrad Schobert and Conrad Holm commencing with the installment due February 15, 1953 until the sum of $689.43 plus interest at the rate of 6% per annum from February 11, 1953 be paid.

4. That the intervenor United States of America have and receive from the defendant Conrad Schobert in monthly installments of $100.00 each of the balance of moneys due and owing upon the contract for the sale of Connie's Tavern, dated March 15, 1951 and executed by and between Conrad Holm, the seller and Conrad Schobert, as buyer, after the payment is made in full to Belle Faddis, as provided in paragraph 3 of this Judgment; such payments to continue to be paid to the United States of America until the said contract is paid in full or until the United States of America shall have received thereon the sum of $2,114.62, plus interest thereon at six per cent per annum from August 27, 1951 less the amount of $431.52 already paid to the United States Bureau of Internal Revenue.

5. That the clerk of the court is hereby directed to release and return to the defendant Conrad Schobert on the 17th day of January, 1953.

 

 

[51-2 USTC ¶9387]In the Matter of the Receivership of Capitol Cleaners & Dyers, Inc., Citizens Coal Company, Plaintiff v. Capitol Cleaners & Dyers, Inc., David Alder d/b/a David Alder Insurance Agency, G. R. Kelly, Constable of Salt Lake City Precinct, Isabelle M. LaDuke and George Beckstead, Sheriff of Salt Lake County, Defendants United States of America, Appellant v. Sharp M. Larson, Treasurer of Salt Lake County, Utah, and The Continental National Bank and Trust Company of Salt Lake City, Receiver, Respondents

In the Supreme Court of the State of Utah, No. 7571, Filed June 19, 1951

Collection of tax: Tax liens: Priority of creditors: Judgment creditors.--The language of a state statute which provides that "every tax has the effect of a judgment," merely describes the liability of the taxpayer and the method of procedure in collecting the tax. It does not have the effect of elevating a County Treasurer to the preferred position of a judgment creditor whose lien for unpaid personal property taxes is superior to unrecorded federal tax liens for delinquent income, withholding and unemployment taxes which were assessed and the assessment list filed in the office of the Collector prior to the appointment of a receiver over the property of the debtor. Only a judgment creditor in the conventional sense is protected by Code Sec. 3672, which provides, in effect, that federal tax liens shall not be valid against any "judgment creditor" until notice has been filed by the Collector in accordance with state law.

Fabian, Clendenin, Moffat & Mabey and Peter W. Billings, all of Continental Bank Building, Salt Lake City, Utah, for plaintiff. Frank E. Moss, County, Attorney and William T. Thurman, Assistant County Attorney, City and County Building, Salt Lake City, Utah, and Scott M. Matheson, United States District Attorney, Bryant H. Croft, Assistant United States District Attorney, Federal Building, Salt Lake City, Utah, for defendants.

[Facts]

WOLFE, Chief Justice:

This appeal concerns the priority of Federal and State tax liens. The proceedings were originally instituted when Citizens Coal Company, a creditor of Capitol Cleaners and Dyers, Inc., caused a receiver to be appointed for Capitol. The receiver determined from an audit of Capitol's books that the business had operated at a loss for several years, and the physical assets and good will of said corporation were sold as a going concern to the highest bidder. Proper notice was given to all creditors to present their claims in writing to the receiver. Pursuant thereto, claims were filed by appellant, United States of America for delinquent income, withholding and unemployment taxes, and respondent, County Treasurer of Salt Lake County, filed claim for unpaid personal property taxes. After deducting the expenses of the receivership and the said sale, the trial court established the following priorities:

(1) United States of America for delinquent taxes which had been assessed and which had been recorded in the office of the Salt Lake County Recorder prior to the appointment of the receiver--$4,625.56.

(2) County Treasurer of Salt Lake County for personal property taxes for 1949 and 1950--$836.63.

(3) United States of America for delinquent taxes which had been assessed prior to the receiver's appointment, but no Notice of Tax Lien had been recorded in the office of the County Recorder concerning these assessments--$1,705.22.

[Federal and State Statutes]

The appellant contends that the various taxes assessed by the Collector of Internal Revenue against Capitol became liens against the property of the taxpayer on the respective dates on which the assessment lists were received in the office of the Collector, and that it was not necessary that notice of such liens be filed in the office of the County Recorder to give such liens a priority over county taxes.

Section 3670 of the Internal Revenue Code, 26 U. S. C. A., allows a lien for Federal taxes:

"If any person liable to pay any tax neglects or refuses to pay the same after demand, the amount . . . shall be a lien in favor of the United States upon all property and rights to property whether real or personal, belonging to such person."

Section 3671, I. R. C. 26, U. S. C. A., provides:

"Unless another date is specifically fixed by law, the lien shall arise at the time the assessment list was received by the collector . . ."

The wording of Sections 3670 and 3671, supra, makes it clear that the lien attaches as of the date the assessment list is received in the Collector's office. It has been uniformly so held by the courts. Citizens State Bank of Barstow , Texas v. Vidal (10th Cir.), 114 Fed. (2d) 380 [40-2 USTC ¶9603]; Filipowicz v. Rothensies, 43 Fed. Supp. 619 [42-1 USTC ¶9300]; United States v. Record Publishing Co., 6 Fed. Supp. 194 [45-2 USTC ¶9378].

However, Section 3672, I. R. C. 26, U. S. C. A., specifies:

"Such lien shall not be valid as against any mortgagee, pledgee, purchaser, or judgment creditor until notice thereof has been filed by the collector--(1) In accordance with the law of the State . . . in which the property subject to the lien is situated. . . ."

Respondent maintains that it is a judgment creditor of the taxpayer under the Utah statutes. Section 80-10-1 of the Utah Code Annotated, 1943, provides:

"Every tax has the effect of a judgment against the person and every lien created by this title has the force and effect of an execution duly levied against all personal property of the delinquent. The judgment is not satisfied nor the lien removed until the taxes are paid or the property sold for the payment thereof." (Italics supplied.)

Section 80-10-2, states that:

"Every tax upon personal property is a lien upon the real property of the lower thereof, from and after 12 o'clock m. of the 1st day in January of each year."

Appellant contends that the County had no lien upon the personal property of Capitol because Sections 8-10-1 & 2, U. C. A. 1943 only provide for a lien upon real property. Taylor Motor Car Co. v. Salt Lake County , 74 Utah 594, 281 Pac. 49. In the instant case Capitol Cleaners & Dyers, Inc., was a lessee of its premises, so there was no real property to which the lien could attach, but want of ownership of real property does not prevent a creditor from becoming a judgment creditor.

[Judgment Creditor Under Federal Statute]

Whether our statutory provision that, "every tax has the effect of a judgment," qualifies the County as a judgment creditor within the meaning of that word as used in Section 3672 of the Internal Revenue Code is a Federal question. United States v. Security Trust & Savings Bank, 340 U. S. 47, 71 S. Ct. 111 (Nov. 1950) [50-2 USTC ¶9492]. In that case a creditor procured an attachment upon real estate, but before he obtained and recorded the judgment, the United States filed notice of federal tax liens. The Supreme Court held that the federal tax liens were superior to the prior attachment lien because the Supreme Court of California had described the attachment lien under its Code of Civil Procedure as a contingent inchoate lien. The United States Supreme Court stated that, "The effect of a lien in relation to a provision of Federal law for the collection of debts owing the United States is always a Federal question . . . [But] if the state court itself describes the lien as inchoate, this classification is 'practically conclusive'."

In Crystal Car Line v. State Tax Commission, 110 Utah 426, 174 P. 2d 984, we declared that the provision of Section 80-10-1, U. C. A. 1943, which provides that every tax has the effect of a judgment, "indicated that every tax should be collected by the same means, in the same manner and within the same time as a judgment, unless otherwise expressly provided." Chapter 10 of Title 80 provides for collection of taxes against personal property, by a summary proceeding through seizure and sale of the personal property of the delinquent taxpayer. Mr. Justice Wolfe in his concurring opinion states:

"A tax obligation which is given the effect of a judgment is not a judgment as that term is used. It cannot be sued on in another state. The effect of a judgment is that it is a final determination of amount and notice of the obligation imposed and that it is a lien against the judgment debtor's real estate in the county where docketed."

[Priority of Creditors]

We believe the language, "every tax has the effect of a judgment," describes the liability of the taxpayer and the method of procedure in collecting the tax rather than characterizes the County as a judgment creditor. In United States v. Security Trust and Savings Bank, supra, the attaching creditor did not become a judgment creditor until the court pronounced judgment. In his concurring opinion, Mr. Justice Jackson reviews the history of Sections 3670-3672, 26 U. S. C. A. and points out how mortgagees, purchasers, judgment creditors and pledgees were excepted from the priority of assessed but unrecorded federal tax liens. He states "The history of this tax lien statute indicates that only a judgment creditor in the conventional sense is protected." Accordingly, we hold that the state statute does not elevate the County to the preferred position of a judgment creditor whose lien is superior to unrecorded federal tax liens. The case is reversed with directions to accord the United States of America priority in payment of its tax lien in the total sum of $6,330.78 instead of $4,625.56. Under the above principle, appellant is not entitled to priority concerning the sum of $645.72 which was assessed after the County Treasurer seized the property of Capitol Cleaners & Dyers, Inc. for sale on its tax claim. Costs awarded to appellant.

We concur: LATIMER, Justice, MCDONOUGH, Justice, CROCKETT, Justice.

WADE, Justice (concurring in the result):

Under Section 3672, I. R. C. 26 U. S. C. A., a federal tax lien is not valid "as against any mortgagee, pledgee, purchaser, or judgment creditor until notice thereof has been filed" in accordance with the state law, and under Section 80-10-1, U. C. A. 1943, "every tax has the effect of a judgment against the person." In this state a judgment creditor with a judgment only against the person obtains no lien thereby against the personal property of the judgment debtor. Taylor Motor Co. v. Salt Lake County, 74 Utah 594, 281 P. 49; Crystal Car Line v. Tax Commission, 110 Utah 426, 174 P. 2d 984. Only personal property is here involved so Salt Lake County has no lien securing the delinquent personal property tax. If the statutory declaration that every tax has the effect of a judgment against the person makes the tax creditor a judgment creditor, we would still have to determine whether Congress intended that the provisions of Section 3672, supra, would apply to an unsecured judgment creditor's claim. I think that Congress did not so intend and therefore I concur with the result reached in the prevailing opinion.

[Intent of Federal Statute]

From the wording of Section 3672, supra, there is nothing to indicate that its provisions were intended to apply only to judgment creditors who thereby obtained a lien on the property. Ordinarily a creditor with a lien against property has a preference as against the holder of an unsecured claim, the federal tax in many respects is a highly preferred claim so it seems unusual that Congress intended to make a claim of an unsecured judgment creditor who might have but did not by attachment, garnishment or execution establish a lien against the property of the judgment debtor, superior or even equal to the federal tax lien. No good reason is apparent for such a result. A mortgagee, pledgee and purchaser each, either has a lien against the property or an interest therein, and a judgment creditor has a lien against the debtor's real property and may obtain a lien against the personality of the judgment debtor by appropriate action. Without Section 3672, supra, each of the secured claimants enumerated stands to lose its lien or interest in the property on account of the federal tax lien without any notice or knowledge of its existence, but the unsecured judgment creditor could not rely on any lien to secure the payment of his claim and could not lose any right in the property on account of the federal tax lien because he never acquired such right.

[Lien of County Treasurer Not Perfected]

If the provisions of Section 3672, supra, apply to unsecured judgment creditors as well as to secured creditors, many complications will result. An unsecured judgment creditor has no lien against the personal property of the debtor, if he can claim the benefits of Section 3672, supra, the federal tax lien as against him is not valid so as against each other both such creditors become unsecured and without any lien on the debtor's property. Probably if no other creditors are involved their claims would be paid pro rata. However, if other unsecured creditors are involved the federal tax lien would be a preferred claim against them but as against the unsecured judgment creditor it would have no preference, or if there are secured claimants with liens or rights in the property other than those enumerated in Section 3672, supra, such claimants would be preferred over the unsecured judgment debtor but subject to the federal tax lien. Just how the property would be distributed under these situations is not apparent. In view of these facts and circumstances it seems that Congress in enacting Section 3672, supra, without expressly so stating, intended to establish the priority only as between lien claimants and did not intend it to affect unsecured creditors.

I have found no case which considers or passes on this question but the opinion of the court by Mr. Justice Minton in United States v. Security Trust and Savings Bank, 340 U. S. 47, 71 S. Ct. 111, -- L. Ed. -- [50-2 USTC ¶9492]; relied on in the prevailing opinion, which involved the priority of an attachment lien prior to judgment as against a federal tax lien, merely held that since the attachment lien was inchoate and contingent and "merely a lis pendens notice that a right to perfect a lien exists," that it was not sufficiently specific and perfected to defeat the federal tax lien. That opinion seems to indicate that had it been "specific and perfected" even before judgment it would have been prior to such federal tax lien. On the other hand in a concurring opinion Mr. Justice Jackson points out and bases his concurrence on the fact that prior to judgment an attaching creditor whether he has a lien or not is not a judgment creditor in the conventional sence and herefore is not specifically included in the statute. The prevailing opinion in that case is based on decisions under another statute which did not contain the provision excepting to judgment creditors but only dealt with the priority of liens. State of Illinois ex rel. Gordon v. Campbell, 329 U. S. 374, 67 S. Ct. 347, 91 L. Ed. 348. Neither of these cases considered the question of whether an unsecured creditor was included within the provisions of Section 3672, supra, or whether a tax which is declared to have the effect of a judgment makes the tax claimant a judgment creditor or not. But the prevailing opinion seems to hold that under section 3672, supra, the important thing is whether there is a specific and perfected lien. So I conclude that without any opposing lien the federal tax lien is preferred.