6323 - Kentucky

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Additional Information:


6323 - Alabama
6323 - Alabama2
6323 - Alaska
6323 - Alaska2
6323 - Allocation of Liens
6323 - Arizona
6323 - Arkansas
6323 - Arkansas2
6323 - Assignment of Funds p1
6323 - Assignment of Funds p2
6323 - Assignment of Funds p3
6323 - Assignment of Funds p4
6323 - Bankruptcy p1
6323 - Bona Fide Purchaser for Value p1
6323 - Bona Fide Purchaser for Value p2
6323 - Bona Fide Purchaser for Value p3
6323 - Bona Fide Purchaser for Value p4
6323 - California
6323 - California2 p1
6323 - California2 p2
6323 - Claims After Death
6323 - Clerk's Error
6323 - Colorado
6323 - Condemnation Proceedings
6323 - Conflicts of Law p1
6323 - Conflicts of Law p2
6323 - Conflicts of Law p3
6323 - Connecticut
6323 - Consideration
6323 - Constructive Trust
6323 - Contract Assignment p1
6323 - Contract Assignment p2
6323 - Conveyance by Taxpayer p1
6323 - Conveyance by Taxpayer p2
6323 - Copyright Act
6323 - Debenture Holders
6323 - Decedent
6323 - Deeds of Trust
6323 - Delaware
6323 - Disclosure of Lien
6323 - Distribution of Proceeds
6323 - District of Columbia
6323 - District of Columbia2
6323 - District Where Filed p1
6323 - District Where Filed p2
6323 - Employee's Claims
6323 - Equitable or Secret Lien
6323 - Equitable Principles
6323 - Escrow
6323 - Escrow2
6323 - Estate Claims
6323 - Estoppel p1
6323 - Estoppel p2
6323 - Extension
6323 - Fact-Finding p1
6323 - Fact-Finding p2
6323 - Fact-Finding p3
6323 - Fact-Finding p4
6323 - Fact-Finding p5
6323 - Fact-Finding p6
6323 - Fire Insurance Proceeds p1
6323 - Fire Insurance Proceeds p2
6323 - Florida
6323 - Florida2
6323 - Form of Notice
6323 - Garnishment
6323 - Georgia
6323 - Hawaii
6323 - Idaho
6323 - Illinois
6323 - Illinois2
6323 - Indiana
6323 - Indiana2
6323 - Inherited Property p1
6323 - Inherited Property p2
6323 - Interest on Mortgage
6323 - Interpleader p1
6323 - Interpleader p2
6323 - Interpleader p3
6323 - Interpleader p4
6323 - Interpleader p5
6323 - Interpleader p6
6323 - Interpleader p7
6323 - Interpleader2 p1
6323 - Interpleader2 p2
6323 - Iowa
6323 - Iowa2
6323 - Judgment Creditor p1
6323 - Judicial Sale
6323 - Jurisdiction p1
6323 - Jurisdiction p2
6323 - Jurisdiction p3
6323 - Kentucky
6323 - Kentucky2
6323 - Louisiana
6323 - Maritime Liens
6323 - Marshalling of Assets
6323 - Maryland
6323 - Maryland2
6323 - Massachusetts
6323 - Michigan p1
6323 - Michigan P2
6323 - Michigan2
6323 - Minnesota
6323 - Mississippi
6323 - Mississippi2
6323 - Missouri
6323 - Montana
6323 - Money Forfeited to State
6323 - Mortgage
6323 - Name Changed
6323 - Nebraska
6323 - New Hampshire
6323 - New Hampshire2
6323 - New Jersey
6323 - New York p1
6323 - New York p2
6323 - New York p3
6323 - New York2
6323 - North Carolina
6323 - North Carolina2
6323 - North Dakota
6323 - Tax Lien Not Filed
6323 - Notice or Knowledge of Lien p1
6323 - Notice or Knowledge of Lien p2
6323 - Notice or Knowledge of Lien p3
6323 - Obligatory Disbursement Agreement
6323 - Ohio
6323 - Ohio2
6323 - Oklahoma
6323 - Oklahoma2
6323 - Oregon
6323 - Oregon2
6323 - Partners and Partnerships
6323 - Pennsylvania p1
6323 - Pennsylvania p2
6323 - Pennsylvania2 p1
6323 - Pennsylvania2 p2
6323 - Personal Property of Another
6323 - Personality p1
6323 - Personality p2
6323 - Possessory Liens
6323 - Prior Law p1
6323 - Prior Lien of Attorney
6323 - Prior Lien of U.S. p1
6323 - Prior Lien of U.S. p2
6323 - Priority over Attachment Lien p1
6323 - Priority over Attachment Lien p2
6323 - Priority over Chattel Mortgages
6323 - Priority over Landlord's Lien
6323 - Priority Recorded Mortgage p1
6323 - Priority Recorded Mortgage p2
6323 - Priority Recorded Mortgage p3
6323 - Property Subject to Lien p1
6323 - Property Subject to Lien p2
6323 - Property Subject to Lien p3
6323 - Protection of Property
6323 - Purchaser p1
6323 - Purchaser p2
6323 - Purchaser p3
6323 - Purchaser p4
6323 - Purchaser p5
6323 - Purchaser p6
6323 - Purchaser p7
6323 - Purchasers Entitled to Notice
6323 - Receivership Expenses
6323 - Recordation of Interest p1
6323 - Recordation of Interest p2
6323 - Recordation of Interest p3
6323 - Recordation of Interest p4
6323 - Recordation of Interest p5
6323 - Refiling
6323 - Release by Other Creditors
6323 - Remanded Cases
6323 - Res Judicata p1
6323 - Res Judicata p2
6323 - Revival of Judgment
6323 - Rhode Island
6323 - Rhode Island2
6323 - Seamen
6323 - Security Interest p1
6323 - Set-Off p1
6323 - Set-Off p2
6323 - Set-Off p3
6323 - Set-Off p4
6323 - Sheriff's Clerk



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[87-1 USTC 9245] The Bank of Mt. Vernon , Plaintiff v. United States of America , Defendant

U.S. District Court, East. Dist. Ky., London, 81-53, 2/4/87

[Code Secs. 6323 and 7426 --Result unchanged by the Tax Reform Act of 1986 ]

Collection of taxes: Validity of lien: District where filed: State law: Kentucky: Civil actions by nontaxpayers: Priority of claims.--Under Kentucky law, in order to perfect a security interest by filing, financing statements must be filed in the county where the corporation's registered office is located. Accordingly, a lienholder who filed in a county other than the one in which the registered corporation office was located did not perfect its security interest in equipment prior to the IRS's filing of a tax lien against the equipment. Further, the "good faith" provision of Kentucky law, which protects a lienholder who inadvertently files financing statements in the wrong county, was inapplicable because, in the view of the court, it was irrelevant whether or not the IRS had notice of the financing statements.

William D. Gregory, P.O. Box 441 , Mt. Vernon , Ky. 40456 , for plaintiff. Louis G. DeFalaise, United States Attorney, Lexington, Ky. 40501, Rob ert L. Gordon, Department of Justice, Washington, D.C. 20530, for defendant.


SILER, Jr., Chief Judge:

The case comes before the Court on both parties' motions for summary judgment. Both parties have submitted memoranda in support of their motions for summary judgment. After considering the record in this case, the Court grants summary judgment for the defendant.


This is a suit brought pursuant to 26 U.S.C. Section 7426(a)(3) in which the Court has been asked to determine the respective priorities of the parties' liens against certain equipment of Rockcastle Steel Corporation.

The facts are not in dispute in this case. In 1977 and 1978 Plaintiff filed with the Clerk of Rockcastle County various financing statements and security agreements concerning certain equipment of Rockcastle Steel Corporation. Sometime after this period, defendant filed two notices of tax liens with the Clerk of Rockcastle County. Thereafter, defendant filed a notice of tax lien with the Clerk of Fayette County. Approximately two months later, plaintiff filed financing statements and security agreements with the Clerk of Fayette County. A more detailed sequence of the filing events is as follows:

                   Place of Filing:






 IRS-tax lien

 IRS-tax lien

                        IRS-tax lien


                        IRS-tax lien

 IRS-tax lien


On December 4, 1979 , plaintiff took possession of said equipment. By agreement of the parties, plaintiff sold the equipment on April 16, 1980 . The proceeds of that sale are now being held by plaintiff pending the determination of this action.


26 U.S.C. Section 6323(a) and (f) gives a holder of a security interest priority over a tax lien only if the security interest is perfected before the IRS has filed notice of its lien in the proper location.

The Court first must decide whether defendant properly filed notice of its tax lien. Section 6323(f)(1)(A)(ii) states that in the case of personal property, the Service must file notice of its tax lien in the office within the State -"as designated by the laws of such State, in which the property subject to the lien is situated. . . ."

Looking to Kentucky law, KRS 382.480(1) sets forth that such notices must be filed "in the office of the county clerk of each county within which the property subject to the lien is located." Both parties agree that at the time defendant filed its notice of tax lien, the equipment was located in Rockcastle County . Thus, since the United States filed its notices in Rockcastle County where the equipment was located, the defendant has filed notice of its lien in the proper place.

Next, the Court must decide whether plaintiff obtained a properly perfected security interest before the defendant filed notice of its lien in Rockcastle County .

26 U.S.C. Section 6323(h)(1) provides that one becomes a holder of a security interest when his interest "has become protected under local law against a subsequent judgment lien arising out of an unsecured obligation.

The Court finds National Cash Register Co. v. K.W.C., Inc., 432 F.Supp. 82 (E.D. Ky. 1977), controlling. Under Kentucky law, in order to perfect a security interest by filing, financing statements must generally be filed against Kentucky residents "in the office of the county court clerk in the county of the debtor's residence." KRS 355.9-401(1)(c). In National Cash Register, this Court held that under Kentucky law, a Kentucky corporation's "residence," for purpose of the filing provisions of the state's Uniform Commercial Code, is the location of the corporation's registered office.

Pursuant to KRS 271A.270 and 271A.275, a corporation designates its initial registered office in the Articles of Incorporation which it files with the Secretary of State. Any changes to that designation must be made in a statement submitted to the Secretary of State pursuant to KRS 271A.065.

Rockcastle Steel Corporation designated in its Articles of Incorporation its registered office to be in Lexington , Fayette County , Kentucky . No change was ever made regarding this designation at any time material to this suit. Therefore, the only way plaintiff could have perfected its security interest under KRS 344.9-401(1)(c) was by filing its financing statements in Fayette County .

The Court finds that plaintiff's filings in Rockcastle County had no effect under KRS 355.9-401(1)(c). Further, since plaintiff did not file in Fayette County until after defendant had filed notice of its liens in Rockcastle County, plaintiff cannot defeat defendant's valid liens according to 26 U.S.C. Section 6323(a) .

Plaintiff has advanced several other arguments in its motion for summary judgment setting forth why it feels its security interest was perfected before the defendant's liens were filed.

Plaintiff first argues that the so-called "good-faith filing" provision of KRS 355.9-401(2) applies. It states:

A filing which is made in good faith in an improper place or not in all of the places required by this section is nevertheless effective with regard to any collateral as to which the filing complied with the requirements of this article and is also effective with regard to collateral covered by the financing statement against any person who has knowledge of the contents of such financing statement.

The first portion of this statute is inapplicable to the facts in this case, and the second portion is also inapplicable as it is irrelevant whether the government had "knowledge" of the contents of the financing statements. This is because the government does not rely on any notice in determining whether to become a creditor in a tax lien situation and creating and filing notice of a tax lien. Borg-Warner Acceptance Corp. v. First National Bank of Prestonburg [79-1 USTC 9208 ], 577 S.W.2d 29 (Ky. Ct. App. 1979).

Plaintiff further relies on KRS 355.9-401(1)(b). However, plaintiff has not established under Kentucky law that the goods are fixtures for purposes of this statutory section.

Last, plaintiff relies upon KRS 355.9-305. However, while plaintiff argues persuasively, even if plaintiff were perfected in accordance with this section, said perfection would have occurred after defendant's tax liens were filed since under KRS 355.9-305, perfection dates "from the time possession is taken without relation back. . . ."


Thus, for the reasons stated above, summary judgment is granted for defendants.


In accordance with the memorandum of even date, it is hereby


1. Plaintiff's motion for summary judgment be and is denied.

2. Defendant's motion for summary judgment be and is granted.


In accordance with the Order of even date, it is hereby

ORDERED AND ADJUDGED that defendant be and is granted judgment against the plaintiff and that within twenty (20) days of the date of this Order, the plaintiff shall close out Account No. 5454-4 at the Bank of Mt. Vernon, styled "United States, Internal Revenue Service and BMV Escrow and DMV Escrow Agent," and shall tender to the United States the entire proceeds of the Account, consisting of the principal sum of $92,994.42 deposited in said account on July 18, 1980, as well as all interest which has been earned in said Account from July 18, 1980, until the date the Account is closed, and the plaintiff shall pay the costs of this action.



[64-2 USTC 9692]Perry Siler et al. v. Middlesboro-Lafollette Bus Line, Inc.

Kentucky Circuit Court, Bell Circuit Court, Civil Action No. 3482-14, 4/30/64

[1954 Code Sec. 6323]

Tax liens: Priority: State law.--The state court set the following order of priority with respect to claims against a fund paid to the court by the insurer of a bus which had been owned by a debtor taxpayer and had been destroyed by fire: (1) state and county ad valorem taxes for the franchise to operate the bus, (2) state unemployment insurance taxes, (3) federal income tax lien to the extent it was perfected prior to an attachment lien of a creditor holding a personal note of the debtor, and (4) the attachment lien of the note holder.

Hubert F. White, 116 S. 24th St. , Middlesboro , Ky. , for plaintiff. Glenn W. Denham, American Ass'n Bldg., Middlesboro , Ky. , Smith & Gillis, 109 S. Main, Middlesboro , Ky. , for defendant.


[Nature of Action]


This action having been tried by the Court without a jury upon the pleadings, briefs of the parties hereto, and including the entire record herein, and the Court finds the following facts from said record:

1. That the plaintiff, Perry H. Siler, maintained this action seeking judgment on a personal note in the sum of $2,863.35 with interest from the defendant, Middlesboro LaFollette Bus Line, Inc. and named Hartford Accident and Indemnity Company as garnishee.

2. That said garnishee answered and stated that it had paid to the Clerk of the Bell Circuit Court all money owed the said defendant.

3. That the sum of money available for distribution herein is $3,459.24.

4. That subsequent to the filing of this action, the United States of America ; Commonwealth of Kentucky , ex rel James V. Marcum, Commissioner of Revenue; Commonwealth of Kentucky ex rel Division of Unemployment Insurance, and Bell County , Kentucky each intervened for the purpose of asserting their respective claims against the defendant, Middlesboro-LaFollette Bus Line, Inc.

[Ad Valorem Taxes]

5. That the claims of both Commonwealth of Kentucky ex rel James V. Marcum, Commissioner of Revenue, and Bell County, Kentucky are for ad valorem taxes and pursuant to KRS 134.420 have priority over any other obligation or liability for which the property is liable; that said fund paid in Court by the garnishee was for a bus that was destroyed by fire and the said ad valorem taxes were for the franchise to operate this bus as well as others.

[Unemployment Insurance Taxes]

6. That the claim of Commonwealth of Kentucky, Division of Unemployment Insurance has priority over any and all obligations or liabilities for which the property is liable and of equal rank as that of the County and Revenue Department from the date notice of lien was filed in the County Court Clerk's office pursuant to KRS 134.420 and KRS 341.310.

[Federal Income Taxes]

7. That the United States of America has a lien as a result of its claims inferior to the Commonwealth of Kentucky, ex rel James V. Marcum, Commissioner of Revenue, Bell County, Kentucky, and Commonwealth of Kentucky, ex rel Division of Unemployment Insurance, but superior to the attachment lien of Perry H. Siler to the extent that said individual liens were perfected prior to said attachment.

[Order of Priority]

Wherefore as a matter of law the Court concludes, and it is so ordered and adjudged, that the parties recover their respective claims in full to the extent of the fund in the hands of the Bell Circuit Clerk pursuant to the following numerical priorities:

FIRST Commonwealth of Kentucky ex rel James V. Marcum, Commissioner of Revenue and Bell County , Kentucky have lien of equal rank.

SECOND Commonwealth of Kentucky ex rel Division of Unemployment Insurance.

THIRD The United States of America to the extent that its liens were perfected prior to the attachment lien created by garnishment herein.

FOURTH Perry H. Siler attachment lien herein.

It is the further judgment of the Court that all court costs be deducted from the fund held by the Clerk before the payment of any claim, and this action shall remain on the docket subject to further orders of this Court in paying specific claims in accordance with the priorities herein.

This the 30th day of April, 1964.



[58-1 USTC 9187] United States of America , Plaintiff v. Sandusky J. Bates, et al., Defendants

U. S. District Court, East. Dist. Ky., Frankfort Div., No. 143, 158 FSupp 32, 12/18/57

[1954 Code Secs. 6322 and 6323--similar to 1939 Code Secs. 3671 and 3672]

Lien for taxes: Priority.--Taxpayer recovered $11,000 fire insurance proceeds on a claim, and the amount was deposited with the court for determination of priority of liens for $1,200 attorney fees in connection with the recovery and for unpaid federal taxes in an amount in excess of $11,000. Under Kentucky R. S. 30.200, the attorney's lien was perfected as against the insurance recovery when the funds were paid into the court. In the absence of showing of filing of the tax lien notice and proof of assessment of the tax before perfection of the attorney's lien, the lien for services is superior to the tax lien. After payment of the $1,200 to the attorney, the remainder of the fund should be applied to the tax claim.

Henry J. Cook, United States Attorney, John M. Kelley, Assistant United States Attorney, Lexington, Ky., for plaintiff. Samders & Redwine, Pikeville , Ky. , for defendant J. E. Sanders. Funk, Chancellor & Marshall, Frankfort, Ky., Ogden, Galphin & Abell, Marion E. Taylor Building, Louisville, Ky., for defendant.


FORD, District Judge:

Upon the record, this case is submitted for judgment disposing of certain funds now in the Registry of the Court which were derived from satisfaction of a judgment determining liabilities under fire insurance policies issued to the defendant Sandusky J. Bates (hereinafter referred to as Sam J. Bates), and which were in effect upon a building owned by him when it was destroyed by fire in the fall of 1951.

[Lien for Taxes]

Plaintiff seeks judgment for the payment of its alleged liens out of the funds relying upon the following allegations:

"Plaintiff has liens for its unpaid taxes in amounts exceeding $11,000 on a fund of $11,000, representing the proceeds from the settlement of a fire insurance claim by defendant Sandusky J. Bates against the nine defendant insurance companies.

* * *

"The plaintiff's aforesaid liens are prior and superior in right to any right, title or interest of any of the defendants to said fund, except that upon information and belief the defendants Chat Chancellor, Sarah Chancellor and Thomas F. Marshall, partners doing business as Funk, Chancellor and Marshall, have an attorneys' charging lien thereon in the amount of $4,515.84, which is prior and superior to plaintiff's liens."

[Attorney Fees]

The defendant J. E. Sanders filed his Answer denying priority or superiority of plaintiff's liens and asserting a lien pursuant to K. R. S. 30.200 in the sum of $1200 for services rendered as attorney for Sam J. Bates in connection with the recovery of the funds here involved.

Findings of Fact

1. By contract with the property owner Sam J. Bates, the defendant J. E. Sanders served as his attorney and rendered substantial service in connection with the preparation of his case. His original contract called for a fee in a sum equal to 331/3% of the amount recovered, but by subsequent agreement with his client he agreed to accept the sum of $1200 for his services. Other counsel associated with him in the case performed the principal amount of the work involved in the litigation.

2. In support of plaintiff's claim, there is no showing whatever by pleading or proof as to the time the assessments for the alleged delinquent taxes were made or as to when alleged liens on account thereof arose, as provided by 28 USCA 6322 (formerly 28 USCA 3671), nor is there any showing that notices thereof were filed as required by 28 USCA 6323 (formerly 28 USCA 3672).

3. There is no showing by pleading or proof that the property owner Sam J. Bates was or is insolvent within the meaning of 31 USCA 191.

Conclusions of Law

1. This Court has jurisdiction of the parties and of the subject matter of this action. 28 USCA 1396.

2. Upon the payment into Court of the funds here involved, in satisfaction of the judgment in favor of Sam J. Bates, the attorney's lien in favor of the defendant J. E. Sanders was perfected as against the amount recovered "in the sense that there is nothing more to be done to have a choate lien--when the identity of the lienor, the property subject to the lien, and the amount of the lien are established." U. S. v. New Britain , 347 U. S. 81, 84 [54-1 USTC 9191].

3. "The statute creating the federal liens here involved, I. R. C. 3670 (now 28 USCA 6321) does not in terms confer priority upon them." U. S. v. New Britain, supra, pp. 84-85.

4. The absence of both pleading and proof, in support of plaintiff's claim of priority showing that the alleged taxes were assessed and the liens arose pursuant to 28 USCA 6322 at a time prior to the perfection of the lien of the defendant J. E. Sanders renders plaintiff's alleged liens merely general liens under 28 USCA 6321 (formerly 28 USCA 3670), and thus precludes adjudging to them a position of priority under the rule that "the first in time is the first in right". U. S. v. New Britain, supra, p. 87.

5. In the absence of any allegations or proof that the property owner Sam J. Bates is or was insolvent, the record fails to show the plaintiff entitled to the priority provided in 31 USCA 191.

For the reasons indicated, the plaintiff's claim that its tax liens set out in the Complaint are prior or superior to the attorney's charging lien in favor of the defendant J. E. Sanders should be denied, and the claim of the defendant J. E. Sanders that his lien for services to Sam J. Bates herein referred to is superior to the alleged claim of the plaintiff should be granted.

The remainder of the fund now in the hands of the Court, after the payment of the claim of J. E. Sanders, should be applied to the tax claim of the Government sicne there is no dispute in the record in respect to the Government's right to have such remainder so applied.

Let judgment be submitted for entry in conformity herewith.


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