Source: https://m.openjurist.org/345/us/361
Timestamp: 2020-01-26 00:53:08
Document Index: 255028572

Matched Legal Cases: ['§ 3672', '§ 3466', '§ 191', '§ 191', '§ 3672', '§ 3672', '§ 3672', 'art, 332']

345 U.S. 361 - United States v. Gilbert Associates
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 § 3672 in the usual, conventional sense of a judgment of a court of record, since all states have such courts.1 We do not think Congress had in mind the action of taxing authorities who may be acting judicially as in New Hampshire and some other states,2 where the end result is something 'in the nature of a judgment,' while in other states the taxing authorities act quasi-judicially and are considered administrative bodies.3
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 taxpayer was insolvent, the United States claims the benefit of another statute to give it priority, § 3466 of the Revised Statutes, 31 U.S.C. (1946 ed.) § 191, 31 U.S.C.A. § 191, the provisions of which are set forth in the margin.5
I cannot agree with the opinion of the Court insofar as it supposes that § 3672 of the Internal Revenue Code is to be read as requiring that certain procedures—and the same procedures—be complied with in each State before a creditor becomes the magic 'judgment creditor.' Section 3672 gives the United States priority over other creditors but not over judgment creditors. This is the rule of uniformity enacted by Congress. But it does not demand that the same procedure be followed in every State. Nor does it demand that any particular procedure be followed, that the creditor formally prosecute his claim in the courts and obtain judgment, or even that the commonlaw requirements be satisfied.
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 position 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 whether 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 § 3672. In the light of the New Hampshire decisions, see Nottingham v. Newmarket Mfg. Co., 84 N.H. 419, 151 A. 709; Jaffrey v. Smith, 76 N.H. 168, 80 A. 504; cf. Automatic Sprinkler Corp. v. Marston, 94 N.H. 375, 376, 54 A.2d 154, there is no reason for believing that the State ruling here simply applies a label and does not express the controlling law of the State unrelated to the implications of § 3672. Nothing more ought to be required.
The decisions have arrived at the conclusion that assessments are judgments for purposes of preventing collateral attacks upon them, ascertaining rights to a hearing in connection with them, or deciding under local procedure on the applicable method of collecting them. These cases, prior to the instant decision, have never actually declared that the status of a technical judgment creditor has been created. People ex rel. Harding v. Hart, 332 Ill. 467, 163 N.E. 769; Nottingham v. Newmarket Mfg. Co., 84 N.H. 419, 151 A. 709; People ex rel. Glens Falls Ins. Co. v. Ferguson, 38 N.Y. 89; Williams v. Weaver, 75 N.Y. 30; State v. Georgia Co., 112 N.C. 34, 17 S.E. 10, 19 L.R.A. 485; Union Tanning Co. v. Commonwealth, 123 Va. 610, 96 S.E. 780. But see Hibbard v. Clark, 56 N.H. 155, holding that it is not a judgment. 1 Cooley, Taxation (4th ed., 1924), 91—92, points out that assessments, though they may be enough like judgments to definitely establish a demand for taxes, are not technical judgments.