158 F. Supp. 793 | E.D. Tex. | 1958
The plaintiffs, who are husband and wife, instituted this suit seeking to quiet title to three tracts of land situated in Grayson County, Texas, owned by the plaintiffs, and which tracts of land are the same lands described in the Designation of Homestead dated October 15,
The pertinent facts are without dispute and are as hereinafter stated.
On September 14, 1948, the defendant paid Allen F. Marshall the sum of $4,276.13 as a refund of overpayment of his 1943 income tax, and on the same date paid to Marguerite Marshall the sum of $3,933.60 as a refund of overpayment of her 1943 income tax; on September 12, 1950, the defendant herein instituted Civil Action No. 576 in this Court seeking to recover from Allen F. Marshall the sum of $4,276.13 refunded to him, as aforesaid, and on said date instituted Civil Action No. 577 in this Court seeking to recover from Marguerite Marshall the sum of $3,933.60 refunded to her, as aforesaid; on December 15, 1952, in Cause No. 576 judgment was rendered in favor of the United States of America and against Allen F. Marshall for the sum of $4,276.13 refunded to him plus interest and cost, and on the same date in Cause No. 577 judgment was rendered in favor of the United States of America and against Marguerite Marshall for the $3,933.60 refunded to her plus interest and cost; on October 21, 1954, plaintiffs were adjudged bankrupt in Bankruptcy Proceedings No. 1460 in this Court; the defendant herein was listed as a judgment creditor in the Schedule of Creditors filed by the bankrupts, plaintiffs herein; the defendant herein filed claim in said bankruptcy proceedings as judgment creditor of the bankrupts by virtue of the judgments in Civil Actions Nos. 576 and 577 for the amount of said judgments, accrued interest thereon and court costs, which claim was allowed as an unsecured claim without priority; a dividend was paid by the trustee in bankruptcy to the defendant herein on its said claim; on July 22,1955, an order of discharge was entered in said bankruptcy proceedings discharging the plaintiffs herein “from all debts and claims which by the Act of Congress relating to Bankruptcy are made provable against his estate, except such debts as are, by said Act, excepted from the operation of a discharge in bankruptcy;” and thereafter the defendant herein had the judgments, above referred to, abstracted and an abstract of each judgment was filed in the office of the County Clerk of Grayson County, Texas, on October 22, 1955, with the abstract of judgment in Cause No. 576 being recorded in Volume 9, Page 146 of the Abstract of Judgment Records of Grayson County, Texas, and with the abstract of judgment in Cause No. 577 being recorded in Volume 9, Page 145 of the Abstract of Judgment Records of Grayson County, Texas.
The three tracts of land, above mentioned, constitute the homestead of plaintiffs and at all times pertinent hereto constituted said homestead.
The broad question presented is whether the judgments in favor of the United States of America and against the plaintiffs herein for Internal Revenue taxes erroneously refunded were discharged by the subsequent bankruptcy of the plaintiffs so as to free the real property of the plaintiffs described in their complaint of the judgment liens arising by virtue of said judgments. The Bankruptcy Act (11 U.S.C.A. § 35) provides, in effect, insofar as here pertinent, that a discharge in bankruptcy shall release a bankrupt from all of his provable debts, whether allowable in full or in part, except as are due as a tax levied by the United States. If plaintiffs’ discharge in the bankruptcy proceedings released plaintiffs from their debts to the defendant herein by virtue of the judgments entered in Causes Nos. 576 .and 577, the defendant has no lien on plaintiffs’ real property here involved, but if said discharge in bankruptcy did not release plaintiffs from said debts, the
The tax year here involved is 1943. There is no indication that the Commissioner of Internal Revenue ever made or attempted to make a deficiency assessment against the plaintiffs, or either of them, as to their 1943 income taxes. Absent evidence to the contrary it must be assumed that the plaintiffs timely filed by not later than March 15, 1944, their respective income tax returns for the year 1943, and at the time such income tax returns were filed the full amounts of income taxes owed by plaintiffs on their 1943 incomes as shown by their returns were paid. Even if there were additional liability on the part of the plaintiffs, or either of them, for the 1943 income tax, the Government, under the provisions of Sec. 275 of the 1939 Internal Revenue Code, 26 U.S.C.A. § 275, was barred from asserting any such additional liability against the plaintiffs, and each of them, at the time the refunds were made to plaintiffs in September, 1948.
Were the suits (Causes Nos. 576 and 577) instituted by the United States against the plaintiffs herein, the defendants therein, suits for taxes levied by the United States? I think not. When the plaintiffs paid their respective income taxes for the year 1943, such taxes as to the plaintiffs were extinguished and the subsequent refunds to the plaintiffs of a portion or all of the money paid by them as 1943 income taxes did not restore the taxes.
Judgment will be entered decreeing that the judgments in said Causes Nos. 576 and 577, above referred to, were extinguished and discharged by the order of discharge in Bankruptcy Proceedings No. 1460 in this Court, above referred to, quieting plaintiffs’ title to the lands described in plaintiffs’ complaint and denying defendant all relief sought by it herein.
This memorandum decision will constitute the findings of Fact and Conclusions of Law herein as authorized by Rule 52, Fed.Rules Civ.Proc. 28 U.S.C.A.
. Talcott v. United States, 9 Cir., 23 F. 2d 897, 901, certiorari denied 277 U.S. 604, 48 S.Ct. 601, 72 L.Ed. 1011; Kelley v. United States, 9 Cir., 30 F.2d 193; Woolner Distilling Co. v. United States, 7 Cir., 62 F.2d 228; United States v. Bartron, D.C., 35 F.2d 765, 767.
. United States v. Wurts, 303 U.S. 414, 415, 58 S.Ct. 637, 82 L.Ed. 932.
. United States v. Wurts, supra.