Source: https://supreme.justia.com/cases/federal/us/362/404/
Timestamp: 2019-04-20 20:39:35+00:00

Document:
Acting under statutory authority to levy, distrain or seize property or rights to property belonging to a delinquent taxpayer, a District Director of Internal Revenue served notices of levy on a city demanding that it pay to him money alleged to be due from the city to a contractor for construction work. The surety on the contractor's performance and payment bonds then instituted a summary proceeding in a Federal District Court to have the levy quashed, claiming that the money was due to it, instead of to the contractor, since the surety had been compelled to complete performance of the contract when the contractor defaulted.
Held: the District Court was without jurisdiction to determine the rights of the parties in a summary proceeding. Pp. 362 U. S. 405-410.
(a) Especially when a controversy like this is begun by peremptory seizure without an initial determination of the taxpayer's liability, there is neither justification nor authority for carving out an exception to the uniform and regular civil procedure laid down by the Federal Rules, either for the benefit of the party from whom the property was seized or for any other claimant. Pp. 362 U. S. 406-408.
(b) Such a summary trial of a claim for property seized by Internal Revenue officers is not authorized by 28 U.S.C. § 2463. Pp. 362 U. S. 408-410.
claimant of property so distrained for tax delinquencies need not resort to a plenary action, but could adjudicate the controversy summarily, Ersa, Inc. v. Dudley, 234 F.2d 178, 180; Raffaele v. Granger, 196 F.2d 620; Rothensies v. Ullman, 110 F.2d 590, we granted certiorari to resolve the inter-circuit conflict. 361 U.S. 881.
like this is begun by peremptory seizure without an initial determination of the taxpayer's liability, there is neither justification nor authority for carving out an exception to the uniform and regular civil procedure laid down by the Federal Rules, either for the benefit of the party from whom the property was seized or for any other claimant.
Petitioner's argument is that this section puts property seized by revenue officers in the custody of the courts, and that it necessarily follows that a court having such custody has power to dispose of the issue of ownership summarily. We cannot agree with either contention.
necessity brought about by South Carolina's adoption of an "Ordinance of Nullification." [Footnote 8] That state ordinance authorized state officials to seize property that had been distrained or levied on by federal officers, and provided that South Carolina state courts could issue writs of replevin to take such property out of the hands of federal officials. The plain object of the 1833 Act was to counteract this state ordinance, and it therefore specifically provided that property held under United States revenue laws should not be "repleviable." This statute went on to say that property so seized should be considered as "in the custody of the law, and subject only to the orders and decrees of the courts of the United States having jurisdiction thereof." 4 Stat. 633. This law, originally passed to protect the custody of property seized by federal revenue officers against more or less summary state court action, should not now be construed as justifying summary proceedings for determining the rights of any litigant to property seized by federal officers. In placing these cases exclusively within the jurisdiction of the federal courts, Congress did not indicate any intention to relax or alter the safeguards of plenary proceedings generally applicable to property controversies in federal courts.
ancillary to a pending action or where property was held in the custody of court officers, subject to court orders and court discipline. See, e.g., Go-Bart Importing Co. v. United States, 282 U. S. 344, 282 U. S. 355. [Footnote 9] But here there is no situation kindred to that in Go-Bart. What is at issue here is an ordinary dispute over who owns the right to collect a debt -- an everyday, garden-variety controversy that regular, normal court proceedings are designed to take care of. As the District Court pointed out in its opinion, there is ample authority for petitioner to have its claim adjudicated by the Federal District Court, but that should be done in a plenary, not in a summary, proceeding.
I.R.C. of 1954, §§ 6331, 6332.
New Hampshire Fire Ins. Co. v. Scanlon, 172 F.Supp. 392. The District Court relied on two Second Circuit cases, Goldman v. American Dealers Service, 135 F.2d 398, and In re Behrens, 39 F.2d 561, holding that parties from whom property was seized could not avail themselves of summary proceedings for its recovery.
New Hampshire Fire Ins. Co. v. Scanlon, 267 F.2d 941.
"The main characteristic differences between a summary proceeding and a plenary suit are: the former is based upon petition, and proceeds without formal pleadings; the latter proceeds upon formal pleadings. In the former, the necessary parties are cited in by order to show cause; in the latter, formal summons brings in the parties other than the plaintiff. In the former, short time notice of hearing is fixed by the court; in the latter, time for pleading and hearing is fixed by statute or by rule of court. In the former, the hearing is quite generally upon affidavits; in the latter, examination of witnesses is the usual method. In the former, the hearing is sometimes ex parte; in the latter, a full hearing is had."
See, e.g., United States v. Casino, 286 F. 976; Clarke v. City of Evansville, 75 Ind.App. 500, 505, 131 N.E. 82, 84, ("No cause can be tried summarily (otherwise than in due course), except perhaps cases of contempt of court; for our Code, as well as the common law, is a stranger to such a mode of trial"); Billings Hotel Co. v. City of Enid, 53 Okl. 1, 5, 154 P. 557, 558. Cf. Western & Atlantic R. Co. v. Atlanta, 113 Ga. 537, 38 S.E. 996; State ex rel. Timothy v. Howse, 134 Tenn. 67, 183 S.W. 510.
For examples of such authorization, see § 67, subs. a(4), and f(4) of the Bankruptcy Act, 11 U.S.C. § 107, subs. a(4), and f(4). See also § 2, sub. a(7), 11 U.S.C. § 11, sub. a(7); Thompson v. Magnolia, 309 U. S. 478, 309 U. S. 481; Harris v. Avery Brundage Co., 305 U. S. 160, 305 U. S. 162-164.
"It is clear that the owner of property unlawfully seized has, without statute, no summary remedy for a return of his property. . . . He may have trespass or, if there be no statute to the contrary, replevin; but, just as in our law no public officer has any official protection, so no individual has exceptional remedies for abuse of power by such officers. We know no 'administrative law' like that of the Civilians."
See also, for example, United States v. Gowen, 40 F.2d 593, 598; Weinstein v. Attorney General, 271 F. 673; United States v. Farrington, 17 F.Supp. 702; In re Allen, 1 F.2d 1020; Sims v. Stuart, 291 F. 707; Lewis v. McCarthy, 274 F. 496; United States v. Hee, 219 F. 1019; In re Chin K. Shue, 199 F. 282. Cf. Taubel-Scott-Kitzmiller Co. v. Fox, 264 U. S. 426, 264 U. S. 431; Applybe v. United States, 32 F.2d 873, opinion denying rehearing, 33 F.2d 897. And see the Second Circuit cases cited in note 2 supra.
"An Ordinance, To Nullify certain Acts of the Congress of the United States, Purporting to be Laws, laying Duties and Imposts on the Importation of Foreign Commodities."
1 Statutes at Large of South Carolina 329 ff.
See also Cogen v. United States, 278 U. S. 221, 278 U. S. 225 (motion procedure upheld as ancillary to criminal action); Weeks v. United States, 232 U. S. 383, 232 U. S. 398 (property, allegedly unlawfully seized, in possession of an "officer[s] of the court"); United States v. McHie, 194 F. 894, 898 (property seized under purported authority of the court's own process, a search warrant).
Those cases that have required the Government to bring a plenary action in forfeiture proceedings promptly after seizing property, on pain of an order to abandon the seizure and return the property, are plainly inapplicable here. See, e.g., Goldman v. American Dealers Service, 135 F.2d 398; Church v. Goodnough, 14 F.2d 432. In all these cases, stemming from a dictum in Slocum v. Mayberry, 2 Wheat. 1, 15 U. S. 9-10, the threat of summary order was invoked under the equitable powers of the courts, not to adjudicate claims to the property, but to compel the Government to bring an ordinary civil action, the only proceeding authorized in those cases, without unreasonable delay.

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