Document: 355 U.S. 587 78 S.Ct. 442 2 L.Ed.2d 510 UNITED STATES of America, Petitioner,v.B. F. BALL CONSTRUCTION COMPANY, Inc., and United Pacific Insurance Company. No. 97. Argued Jan. 27, 1958. Decided March 3, Rehearing Denied April 14, See 356 934, 770. Mr. Alexander Prescott, Washington, D.C., for petitioner. Josh H. Groce, San Antonio, Tex., respondents. PER CURIAM. 1 The judgment is reversed. instrument involved being inchoate unperfected, the provisions § 3672(a), Revenue Act 1939, 53 Stat. 449, as amended, 882, 56 957, 26 U.S.C.A. do not apply. States v. Security Trust & Savings Bank, 340 47, 71 111, 95 L.Ed. 53; City New Britain, 347 81, 86—87, 74 367, 370—371, 98 520. claim interpleader its costs controlled by Liverpool London Globe Ins. Co., 348 215, 75 247, 99 268. Justice WHITTAKER, with whom DOUGLAS, BURTON HARLAN join, dissenting. 3 question presented whether an 'assignment' made a subcontractor to his performance-bond surety all sums become due performance subcontract, security any indebtedness or liability thereafter incurred surety, constituted 'mortgagee' those within meaning 3672(a) Internal Code amended. 4 Ball Construction Company had contracted construct housing project in Texas. On July 17, 1951, it entered into subcontract Jacobs under which latter agreed necessary painting decorating buildings, furnish labor materials required, stipulated price. terms required corporate bond, amount $229,029, guaranteeing subcontract. 21, Jacobs, induce respondent, Company, sign bond assigned collateral might sustain through nonperformance 'the payment other (subcontractor surety) (t)heretofore (t)hereafter incurred,' exceeding penalty bond. 30, 1953, balance $13,228.55 became from but, because outstanding claims materialmen against did pay debt. In May, June, September, District Director filed, proper state office, federal tax liens aggregating $17,010.85. Between December 1953 1954—thus during coexistent period assignment—Jacobs indebtedness, independent $12,971.88. 5 contending that assignment claimed priority right fund over subsequently filed liens. Government disputed asserted superior Several creditors holding unpaid furnished used performing portion both Government. Because these rival claims, instituted this action, he impleaded Government, materialmen, paid registry court abide judgment. Before conclusion trial materialmen's were satisfied. Court held that, on date mortgagee thereto was superior, R. Const. Co. 140 F.Supp. 60. Appeals, adopting opinion, affirmed. 239 F.2d 384. 6 This now reverses summarily, citing 520, 53. We believe cases are point nor way controlling. Neither them even involve either here statute conceded parties be Rather, they entirely different facts, very questions, decided upon statutes. They §§ 3670 3671 1939,1 which, pertinent part, provided: 'If person liable neglects refuses same after demand, * shall lien favor property rights belonging such person' (§ 3670) time '* assessment list received collector *.' 3671.) Whereas governing case, concede, amended,2 'Such valid mortgagee, pledgee, purchaser, creditor until notice thereof has been collector—(1) office filing authorized law State subject situated 7 controversy Britain proceeds real estate mortgage foreclosure sale exceeded mortgage. virtue annual ad valorem attached October each years 1947 water-rent accrued 1, 1947, June general mortgagor effected deposit lists Collector's various dates between 26, 1948, September 1950. Thus, some City's prior receipt Collector not. 8 there dealing mortgage, pledge contractual lien, but only dealing, said, 'statutory liens' (id., 84, 369); deciding issue their observed although created taxpayer Collector, 'Congress (had) failed expressly provide *' 85, 370) sections, statutory (to be) determined (the) principle (that) first right." Ibid. then vacated remanded case determination order asserted, accordance opinion. 9 think apparent no application also so declared. It noted contended applicable statutes provided should take precedence encumbrances subordinated antecedent mortgages, hold liens—having mortgages—were rank liens; disagreed, saying: 'There nothing language 3672((a)) show Congress intended behind specific categories interests set out therein Id., at page 88, 372. (Emphasis supplied.) As we have observed, supra, out' 'any creditor.' 10 suit California one Styliano note and, 1946, pursuant Civil Procedure, procured attachment parcel owned Styliano. While pending 10, notices office. Thereafter, 24, rendered suit, thus perfecting estate. Subsequently sold estate, liens, purchaser quiet title, lienor purchase price ordered applied, first, second, Appeal Winther Morrison, 93 Cal.App.2d 608, 209 P.2d 657. certiorari reversed, pointing declared Puissegur Yarbrough, 29 Cal.2d 409, 412, 175 830, 831—832, attaching obtains 'only potential contingent lien' rendered, meanwhile 'is inchoate—merely lis pendens perfect exists.' 50, 113. Naturally circumstances, perfected 1946 May 1947. There, 11 seems quite clear us deal controlling therefore, support Court's decision here. 12 facts record, legal effect 'mortgage,' inasmuch antedated expressed 3672(a). That section does define term hence, must assume ordinary common-law sense. Gilbert Associates, 345 361, 364, 73 701, 703, 97 1071; 52, 114 (concurring opinion). Substance, form labels, controls nature instruments. 'State creates rights.' Morgan Commissioner, 309 78, 80, 626, 60 424, 425, 426, 84 585, 1035. Texas, where questioned performed, makes Southern Surety Bering Mfg. Tex.Civ.App., 295 S.W. 337, 341; Williams Silliman, Tex. 534. Although relation state-created laws collection credits question, State's classification given weight. pages 49—50, 112—113. Here, assignments mortgages effect, accordingly, met anything countervailing coextensive remained effective throughout assignment. fact afterwards acquired affect validity Conard Atlantic Pet. 386, 448, 189, uncertainty (not fixed maximum) generally identified obligation, secured, so. recorded fraudulent conveyance statutes—thus impart constructive subsequent purchasers, mortgagees like—make difference here, it, Congress, mortgages. conveyed under, of, existing guaranteed surety's bond—as sufficiently unliquidated obligations incur I completely date, respects choate, parties; 13 For reasons, dissent would affirm Appeals. 448 U.S.C. (1952 ed.) 3671, 3670, 3671. amended 401 c. 505 1942, 619,

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