Court Opinion

ID: 9532165
Source: CourtListenerOpinion
Date Created: 2023-08-07 04:18:44.733977+00
Date Added: 2024-06-11T13:28:41.415215
License: Public Domain

*291WADE, Justice
(concurring in the result).
Under Section 3672, I. R. C. 26 U. S. C. A., a federal tax lien is not valid
“as against any mortgager, pledgee, purchaser, or judgment creditor until notice thereof has been filed”
in accordance with the state law, and under Section 80-10-1, U. C. A. 1943,
“Every tax has the effect of a judgment against the person.”
In this state a judgment creditor with a judgment only against the person obtains no lien thereby against the personal property of the judgment debtor. Taylor Motor Co. v. Salt Lake County, 74 Utah 594, 281 P. 49; Crystal Car Line v. Tax Commission, 110 Utah 426, 174 P. 2d 984. Only personal property is here involved so Salt Lake County has no lien securing the delinquent personal property tax. If the statutory declaration that every tax has the effect of a judgment against the person makes the tax creditor a judgment creditor, we would still have to determine whether Congress intended that the provisions of Section 3672, supra, would apply to an unsecured judgment creditor’s claim. I think that Congress did not so intend and therefore I concur with the result reached in the prevailing opinion.
From the wording of Section 3672, supra, there is nothing to indicate that its provisions were intended to apply only to judgment creditors who thereby obtained a lien on the property. Ordinarily a creditor with a lien against property has a preference as against the holder of an unsecured claim, the federal tax in many respects is a highly preferred claim so it seems unusual that Congress intended to make a claim of an unsecured judgment creditor who might have but did not by attachment, garnishment or execution establish a lien against the property of the judgment debtor, superior or even equal to the federal tax lien. *292No good reason is apparent for such a result. A mortgagee, pledgee and purchaser each, either has a lien against the property or an interest therein, and a judgment creditor has a lien against the debtor's real property and may obtain a lien against the personalty of the judgment debtor by appropriate action. Without Section 8672, supra, each of the secured claimants enumerated stands to lose its lien or interest in the property on account of the federal tax lien without any notice or knowledge of its existence, but the unsecured judgment creditor could not rely on any lien to secure the payment of his claim and could not lose any right in the property on account of the federal tax lien because he never acquired such right.
If the provisions of Section 3672, supra, apply to unsecured judgment creditors as well as to secured creditors, many complications will result. An unsecured judgment creditor has no lien against the personal property of the debtor, if he can claim the benefits of Section 3672, supra, the federal tax lien as against him is not valid so as against each other both such creditors become unsecured and without any lien on the debtor’s property. Probably if no other creditors are involved their claims would be paid pro rata. However, if other unsecured creditors are involved the federal tax lien would be a preferred claim against them but as against the unsecured judgment creditor it would have no preference, or if there are secured claimants with liens or rights in the property other than those enumerated in Section 3672, supra, such claimants would be preferred over the unsecured judgment debtor but subject to the federal tax lien. Just how the property would be distributed under these situations is not apparent. In view of these facts and circumstances it seems that Congress in enacting Section 3672, supra, without expressly so stating, intended to establish the priority only as between lien claimants and did not intend it to affect unsecured creditors.
I have found no case which considers or passes on this question but the opinion of the court by Mr. Justice Minton *293in United States v. Security Trust & Savings Bank, 340 U. S. 47, 71 S. Ct. 111, 113, relied on in the prevailing opinion, which involved the priority of an attachment lien prior to judgment as against a federal tax lien, merely held that since the attachment lien was inchoate and contingent and “merely a lis pendens notice that a right to perfect a lien exists,” that it was not sufficiently specific and perfected to defeat the federal tax lien. That opinion seems to indicate that had it been “specific and perfected” even before judgment it would have been prior to such federal tax lien. On the other hand in á concurring opinion Mr. Justice Jackson points out and bases his concurrence on the fact that prior to judgment an attaching creditor whether he has a lien or not is not a judgment creditor in the conventional sense and therefore is not specifically included in the statute. The prevailing opinion in that case is based on decisions under another statute which did not contain the provision excepting to judgment creditors but only dealt with the priority of liens. State of Illinois ex rel. Gordon v. Campbell, 329 U. S. 362, 374, 67 S. Ct. 340, 346, 347, 91 L. Ed. 348. Neither of these cases considered the question of whether an unsecured creditor was included within the provisions of Section 3672, supra, or whether a tax which is declared to have the effect of a judgment makes the tax claimant a judgment creditor or not. But the prevailing opinion seems to hold that under section 3672, supra, the important thing is whether there is a specific and perfected lien. So I conclude that without any opposing lien the federal tax lien is preferred.