Document: 375 U.S. 233 84 S.Ct. 318. 11 L.Ed.2d 293 Ethel MEYER, Petitioner,v.UNITED STATES. No. 61. Argued Oct. 24, 1963. Decided Dec. 16, Samuel W. Sherman, New York City, for petitioner. Joseph Kovner, Washington, D.C., respondent. Mr. Justice CLARK delivered the opinion of Court. 1 The ultimate issue in this case is applicability doctrine marshaling assets. Government urges that it be applied to effect collection its junior income tax lien on cash surrender value certain life insurance policies. senior secured by entire proceeds policies and absorbs practically all their value. are exempt from levy creditors insured under state law. 2 In 1943 deceased, Peter Meyer, pledged his a bank as collateral security loan, giving right satisfy claim out 'net policy when becomes death.' When Meyer died, company paid amount loan balance petitioner, Meyer's widow beneficiary. Commissioner claims, however, must marshaled, Government's admittedly remaining proceeds. District Court agreed, 202 F.Supp. 606, Appeals affirmed, Cir., 309 F.2d 131. We granted certiorari because importance question administration laws. 372 934, 83 882, 9 765. disagree with both courts reverse judgment. I. 3 owned four which named wife, Their face was $50,000 at death $27,285.87. He had retained usual powers such policies, namely, change beneficiaries, demand assign 1943, long before assessments suit, he assigned repayment Huntington National Bank Columbus, Ohio. given right, event death, At time $26,844.66 due loan. 4 It not disputed assessed deficiencies covering taxes years 1945 1946, $6,159.09 plus interest notice filed 1955. died December 28, 1955, petitioner executrix estate. After full suit begun against individually executrix, recovery due. Petitioner tendered sum $441.21, difference between mount bank, but claimed remainder Insurance Law, McKinney's Consol.Laws, c. § 166.* Court, summary judgment theory could satisfied portion represented funds paying bank's followed holding Second Circuit United States v. Behrens, 230 504. affirmed same basis. cannot agree. II. 5 This has held parties do dispute that: absent lien, unpaid federal beneficiary can only extent applicable law permits other insured, Stern, 357 39, 46—47, 78 1047, 1051—1052, 1126 (1958); taxpayer's 'property rights property' 3670 Internal Revenue Code 1939 measured contract enforced law, Bess, 51, 55—56, 1054, 1057—1058, 1135 an policy, where subject control section, id., 59, 1059; finally, priority liens determined principle 'first time, first right,' Britain, 347 81, 74 367, 98 L.Ed. 520 (1954). Applying results being one attaching claim. narrow whether situation assets compelled. III. 6 said '(t)he equitable (sic) rests upon creditor having two debt may not, application them demand, defeat another creditor, who resort funds.' Sowell Federal Reserve Bank, 268 449, 456 457, 45 528, 530, 69 1041 (1925). Courts Circuits have doctrine, despite liens. supra, Wintner, 200 157, aff'd 312 749 (C.A.6th Cir.). note, Behrens antedates our Stern Bess opinions well those Aquilino States, 363 509, 80 1277, 1365 (1960), Durham Lumber Co., 522, 1282, 1371 (1960). These latter cases competing subcontractors labor materials fund taxpayer general construction were controlled never although did deny petition case, 351 919, 76 709, 100 1451. Nor Congress seen fit lay down any rules reference apparently leaving problem IV. 7 considering relevance here remember bottomed contracts or l ens. founded instead equity, designed promote fair dealing justice. Its purpose prevent arbitrary action lienor destroying less security. deals property involved equitably fashioned parties. Thus, refused apply state-created homestead exemptions would destroyed, Sims McFadden, 217 Ark. 810, 23 S.W.2d 375; righs beneficiaries adversely affected, Bruns First Trust & Deposit 250 App.Div. 370, 295 N.Y.S. 412; third equal equity prejudiced, Barbin Moore, 85 N.H. 362, 159 A. 409, A.L.R. 62; 'head household' exemption involved, Westgrove Savings Dunlavy, 190 Iowa 181 N.W. 404, Pugh Whitsitt Guerry, 161 S.W. 953 (Tex.Ct.Civ.App.). likewise accepted nonapplicability where, here, See re Bailey, 8 176 F. 990, legislative superior hands bankrupt, preventing disadvantage; Robert Moody Son Century 239 374, 378, 36 111, 113, 60 336 (1915), Iowa's requirement homestead, even validly mortgaged, sold deficiency after exhausting declared available mortgagee assets; Lockwood Exchange 294, 300—301, 751, 753—754, 47 1061 (1903), waiver statutes no bankruptcy since title exempted remained bankrupt reached trustee's hands. It, therefore, seems clear considered weighing equities determine doctrine. line deference recent cases, discussed above, controls determination what included within covered attach. addition, Brosnan, 237, 1108, 1192 faced comparable involving taxes, found 'it desirable adopt governing divestiture liens, except entered field. true form part machinery * *. However, resorted use came into area complex relationships settled regulated think more harmonious tenets system consistent already done area, inject ourselves network private interests, displacing well-established procedures enforcement, superimposing new rule.' 241—242, U.S., page 1111, 1192. these cases. Indeed, permitted stand but, Holden Stratton, 198 202, 213 214, 25 656, 659, 49 1018 (1905), 'It always been Congress, legislation acts, recognize give laws.' There many examples, among incorporation made State bankrupt's domicile. 52 Stat. 847, U.S.C 24. includes 212—213, 1018. added exclusion taxation benefits 1954, 101(a), exception surviving spouse exclusive power appointment rule terminal interests qualify marital deduction. 2056(b) (6). 10 overlook long-established policy. absence definitive statutory contrary we therefore refuse extend situation. specific statute exempts her husband's estate marshal so will diminish rights. supra. To overturn York's beneficent and, enlarge provided 3670. do. reversed. Reversed. 12 WHITE, whom HARLAN STEWART concur, dissenting. 13 I several reasons join reversing decision Appeals. 14 1. is, course, should case. created congressional enactment. Problems interpretation problems, governed nearly principles uniform throughout various States. Determining permit assert forbid precisely circumstances. 15 very proposition Court's rest—that depends recognizes similar asserted rejected 1135, argued Jersey barred claims creditors. looked local 'sufficient requirements 3670' 'inoperative attachment favor fact 3691 distraint evidence intend further 3670.' 16 basic amplified 1365, 1371, following guidelines laid down: 17 '(A)s Terms ago, Section 'creates merely attaches consequences, federally defined, *.' 55, 1057, 1135. once attached enter province consistently determines 'property' 'rights property.' (Citing Court.) ascertaining reconciling lienors based logic sound legal principles. approach strikes proper legitimate traditional creating defining citizens, necessity revenue statutes.' 513—514, 1280, 1365. 18 Undoubtedly deceased possessed property—the policies—to force reconciliation Under solved matter sources guiding formation according prior controlling does compelling 19 2. Whatever have, find difficult accept exposition 20 166 says, protects insured. Obviously, otherwise, protected taken assignment during lifetime apparent itself,1 raised about surely collect every dollar owed Likewise, there conceded fact, over paid. 21 York, insulating acquired owner destroy latter's entirely. encumber limit beneficiary's net payment extends Kelley's Estate, 251 296 923. unsecured claim, inferior encumbrancers, good me. 22 Neither anything 412, validates definition debts Appellate Division order bank. prefers independent proceeds, suggest subordinated. Moreover, reconcile Bruns. Bruns, shares stock Upon executor insured's App llate saw nothing wrong denied they necessary pay widow's subrogated stock.2 24 Twice—in 504 (C.A.2d Cir.)—the ordered lien. neither indicate trenching established If result depend least shrouded doubt me says follow custom3 ascertainment specializes.4 Pitching guide lead remand rather than here. 3. 1943. Deficiencies 1946 May 22, June 17, 1947, respectively. Partial payments assessments, none 1946. 1951 extended until 1956 1957. submitted offer compromise 1955 year. Notice July December. grown $27,285.87 loans totaled $26,844.66. remitted facts findings circumstances see reason assuming basis forbidding amounts 26 reduced making then allowed attach own default, thereby invading Where assignment, government effectively diminishes unsound hold, does, like secure True, remainder. But arranged terms, collectible sufficient lien.5 27 marshaling, recognized Court.6 unreasonable suppose enjoyed used insulate What more, family spent payable years. Paying wholly arrangements Bess. 28 Finally, deserves protection receives today. now protect widow, announced varied be.7 shall persons discharge obligations. creates solely invite validate utilization continuing growing sole otherwise 29 funds. total creditors, claimant entirely appropriate require 30 For foregoing reasons, respectfully dissent. '1. effected person beneficiary, payable, person, assignee payee entitled avails personal representatives, trustees receivers effecting insurance.' 166. quoted footnote opinion. obviously assignees, creditor-assignees, 'When husband executed certificate August 15, 1932, revoking designation wife absolute redesignating Manufacturers Company, diminished pro tanto effect, constituted trust primary him appellant, secondary residue remain. section 52, Domestic Relations 55—a, acquire vested, irrevocable free if die without exercising reserved accordance provisions Here exercised Hence, utilizing appellant's she respect Fairview Foundry, Incorporated.' 847—848, 923—924. 526—527, 1284—1285, 1371; Propper Clark, 337 472, 486—487, 1333, 1341—1342, 93 1480. frequently dealt Law. example Fried Life Ins. 241 504; 504, cert. denied, 1451; Rowen Commissioner, 215 641. A B, though A, cut B. Buffalo 371 228, 314, 283; City 520. bar lien; paid, interest, invaded. 'The 456—457, 1041. also Merrill Jacksonville, 173 131, 138, 360, 363, 43 640; Scruggs Memphis Charleston R. 108 368, 780, 756; Creswell, 630, 641, 713; Fenwick Chapman, Pet. 461, 474, 193; Story's Equity Jurisprudence, §§ 758, 760, 853—871; Pomeroy's 396, 410; 1414. Since creditors' Would administrator beneficiary? And eneficiary partner business associate, corporation interest?

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