Document: 363 U.S. 522 80 S.Ct. 1282 4 L.Ed.2d 1371 UNITED STATES of America, Petitioner,v.DURHAM LUMBER COMPANY, and George H. Carter, Jr. No. 23. Argued Oct. 19, 1959. Decided June 20, 1960. Mr. Howard A. Heffron, Washington, D.C., for petitioner. Arthur Vann, Durham, N.C., respondents. Chief Justice WARREN delivered the opinion Court. 1 This case involves competing claims Federal Government certain subcontractors to a sum money owed taxpayers under general construction contract. 2 The taxpayers, Michael & Embree, were contractors doing business at North Carolina. Early in 1954, they agreed construct buildings persons herein referred as 'owners.' work was completed on July 15, but because owners disputed amount due contract, payment delayed. 3 In completing work, had utilized services materials numerous subcontractors, most whom not been compensated. respondents are two such who January February 1955, gave notice their respective against taxpayers. On 18, adjudicated bankrupts. At that time, there an unpaid balance $5,250 from After extensive negotiations between owners, trustee bankruptcy, it would absolve themselves further liability by paying trustee, could thereafter assert same rights have asserted owners. arrangement approved both Superior Court Durham County, Carolina, federal bankruptcy court. 5 Another claimant deposited with Government, which August 13, November 22, assessed uncollected withholding unemployment insurance taxes. By virtue Sections 63211 63222 Internal Revenue Code 26 U.S.C.A §§ 6321, 6322, tax lien attached all 'property property' belonging time assessments made. contended owing contract property attached. 6 referee attempting resolve fund if parties before state court, decided its superior those District Middle Carolina disagreed, held entitled satisfy lien. appeal, Appeals Fourth Circuit affirmed, 257 F.2d 570. We granted certiorari. 359 905, 79 582, 571. 7 affirming judgment Court, stated nature extent contractors' rights, attached, must be ascertained law. court then undertook analysis relevant statutes3 cases. It found law provides follows: Subcontractors paid contractor direct, independent cause action owner any first used subcontractors' has notice. Moreover, insure will receive outstanding claims, statute, N.C.Gen.Stat.1950, § 44—8, requires contractor, receiving payment, furnish statement sums fails supply required statement, he is guilty misdemeanor. 44—12. Finally, evidence direct 44—9, should pay after subcontractor's claim, nevertheless liable subcontractor received. 8 Based upon these considerations, that, law, did interest face amount, such, Specifically, said 'except claim exceeds aggregate no right subject seizure lien.' Id., page 574. Therefore, concluded since possessed merely residue fund, Government's interests defined can recover only 'so much price remain deducted sufficient subcontractors.' 575. 9 correct asserting taxpayers' Aquilino v. United States, 509, 1277, 1285;4 States Bess, 357 51, 55, 78 1054, 1057; cf. Morgan Commissioner, 309 78, 82, 60 424, 426, 84 L.Ed. 585. suggested courts never specifically described created statutes involved this case, Appeals' interpretation probably incorrect. However, where '(t)he precise issue * one (state) courts,' '(i)n dealing issues enter into judgments courts, we hesitant overrule decisions skilled particular states unless conclusions shown unreasonable.' Propper Clark, 337 472, 486—487, 69 1333, 1341—1342, 93 1480. Since closer than are, cannot say court's characterization clearly erroneous or unreasonable,5 affirmed. 10 Affirmed. Section 6321. Lien taxes: 'If person neglects refuses demand, (including interest, additional addition tax, assessable penalty, together costs may accrue thereto) shall favor property, whether real personal, person.' 6322. Period lien: 'Unless another date fixed imposed section 6321 arise assessment made continue until so satisfied becomes unenforceable reason lapse time.' 44—6 points up distinction drew Aquilino. facts here show how simply begs question suggest principle lien-priority cases somehow subverted evaded recognizing what constitutes taxpayer's place show, too, does promote clarity substitute, rule main feature seems inquiry consequences different fact is. regard equivalent contractor's owner, overlooking interpreted Appeals, indicates claim. If equate something not, more appropriate, terms similarity, usual mechanic's owner's being improved—which course taken contractor. lack precision content proposed definition property. See also Fidelity Deposit Co. Md. New York City Housing Auth., Cir., 241 142, cited approval 1057, 1135. Sims 108, 114, 641, 645, 667; Ragan Merchants Transfer Warehouse Co., 530, 534, 1233, 1235, 1520; Estate Spiegel 335 701, 707—708, 301, 303—304, 330.

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