UNITED STATES v. GILBERT ASSOCIATES, INC.
No. 440
Supreme Court of the United States
Argued March 11, 1953.—Decided April 6, 1953.
345 U.S. 361
No appearance for respondent.
This case involves the question of whether the Town of Walpole, New Hampshire, or the Federal Government has the prior right to a fund in the hands of a state court receiver of the respondent-taxpayer, an insolvent corporation. The Supreme Court of New Hampshire held the Town was entitled to priority, 97 N. H. 411, 90 A. 2d 499, and we granted certiorari, 344 U. S. 911.
The claims of bоth arise from tax liens. The Town‘s lien grew out of an assessment of an ad valorem tax upon certain machinery of Gilbert Associates, Inc., the respondent, for the years 1947 and 1948 in the amounts of $612.95 and $690.85, rеspectively. The corporation was thereafter declared insolvent, and a temporary receiver was appointed August 12, 1949, and made permanent January 30, 1950. The Town‘s taxes werе assessed April 1, 1947, and April 1, 1948. On September 25, 1948, the Town sold the taxpayer‘s property at a tax sale to pay the taxes accrued for the year 1947. On September 24, 1949, the Town sold the same property at a tax sale for taxes accrued for the year 1948. The record does not disclose the nature of these tax-sale proceedings. We are informed that the Town bid in the prоperty at its own sales. At least, the Town never took possession of the property, which was later sold by the receiver, creating the fund involved here. The Federal Government‘s lien was for employment, withholding, and income taxes that became due between 1943 and June 30, 1948, in the sum of $3,171.97. Notice of this lien was filed in the office of the Clerk of the United States District Court for the District of New Hampshire on August 6, 1948.
Under
Was the Town a judgment creditor within the meaning of
“It is settled by our decisions that the assessment of a tax is in the nature of a judgment, enforced by a warrant instead of an execution. Boody v. Watson, 64 N. H. 162, 167; Jaffrey v. Smith, 76 N. H. 168, 171; Nottingham v. Company, 84 N. H. 419. See also, Automatic Sprinkler Corp. v. Marston, 94 N. H. 375.” 97 N. H. 411, 414, 90 A. 2d 499, 502.
We wоuld not question or presume to say what the nature and effect of a tax proceeding is in New Hampshire. The state is free to give its own interpretation for the purpose of its own internal administration. United States v. Waddill Co., 323 U. S. 353. See also Howard v. Commissioners of Louisville Sinking Fund, 344 U. S. 624.
The Supreme Court of New Hampshire freely concedes, however, as it must, that the meaning of a federal statute is for this Court to decide. United States v. Security Trust & Savings Bank, 340 U. S. 47. Congress enacted
A cardinal principle of Congress in its tax scheme is uniformity, as far as may be. Therefore, a “judgment creditor” should have the same application in all the states. In this instance, we think Congress used the words “judgment creditor” in
While the Town was not a judgment creditor, it was the holder of a general lien on all the taxpayer‘s property. So was the United States a general lienholder on all the taxpayer‘s property.4 But since the taxpayеr was insolvent, the United States claims the benefit of another statute to give it priority, § 3466 of the Revised Statutes,
As is usual in cases like this, the Town asserts that its lien is a perfected and specific lien which is imрliedly excepted from this statute. This Court has never actually held that there is such an exception. Once again, we find it unnecessary to meet this issue because the lien asserted here doеs not raise the question.
The judgment of the Supreme Court of New Hampshire is
Reversed.
MR. JUSTICE FRANKFURTER, whom MR. JUSTICE REED joins, dissenting.
I cannot agree with the opinion of the Court insofar as it supposes that
Of course, the State courts cannot by the wand of a label wave away the requirement, which I agree is a matter for federal interpretation, that a creditor be a “judgment creditor.” But federal law does not insist on anything more than that the creditor be in the same pоsition as a creditor who holds a judgment “in the usual, conventional sense.” Federal law refers to State law, as it does in the closely comparable bankruptcy provisions, to determine whеther action taken by a taxing authority of New Hampshire has substantially the same effect as would be given the judgment of a court of record, that is, whether the Town stands—along with creditors who have obtained judgment from a court of record—on a higher footing than those who have yet to establish their claims in court. If the assessment here has, as the New Hampshire Supreme Court informs us, the normal attributes of a judgment, I see no way of escaping the conclusion that the Town is a judgment creditor within the meaning of
In view of the Court‘s reluctance not only today but for almost a century and a half to decide the issues that may arise under § 3466 of the Revised Statutes, I do not think I ought to embarrass later consideration by the Court of these issues by speaking on them at this time.