Protection of
Property
[41-1 USTC
¶9343]Railway Express Agency, Incorporated, a corporation,
Cross-complainant, v. Charles B. Jones, et al., Cross-defendants.
In
the District Court of the United States for the Northern District of
Illinois, Eastern Division., No. 15316., 10/11/40
Lien for taxes: Priority.--Where a lien was filed upon property of
the taxpayer for unpaid income tax, interest and penalties, and it
appeared that certain attorneys had rendered valuable services in
connection with the protection of the property and the bringing of such
property into the custody of the court for
admin
istration, it is held that there was a good tax lien against the
property and that such lien is paramount and superior to claims of all
other parties thereto, subject only to costs of
admin
istration which include the fair and reasonable value of the services
rendered by the attorneys.
Edward J.
Hess, 111 W. Monroe,
Chicago
,
Ill.
, for cross-complainant. M.L.
Igoe
,
U.S.
Attorney, Thomas V. Sullivan, 1 No.
La Salle St.
, Clement J. Wall, Jr., 111 W. Monroe, Sidley, McPherson, Austin, &
Burgess, 11 So.
La Salle St.
, and Everett Jennings,
77 W. Washington St.
, all of
Chicago
,
Ill.
, for cross-defendants.
Findings
of Fact
SULLIVAN,
D.J.:
This cause
coming on for hearing, the Court having heard the evidence and heard the
statements of respective counsel, makes the following Findings of Fact:
1. That the
subject matter of this litigation (hereinafter called the "res")
consists of the contents of thirty-six (36) shipments of money
heretofore in the possession of RAILWAY EXPRESS AGENCY, INCORPORATED,
and fully described in Paragraph 3 of the Amended Counter-claim in the
Nature of a Bill of Interpleader, and also correctly set forth in
inventory reports filed herein and made pursuant to an order of this
Court by McCOY, HOLLAND, ARNDT & SWEENEY; that said res is
now on deposit in the registry of this Court, less certain costs and
charges which have heretofore been disbursed therefrom on specific
orders of the Court.
2. That on or
about the 5th day of February, 1936, there was duly assessed by the
Commissioner of Internal Revenue of the United States, against the
defendant herein, OSCAR M. HARTZELL, as and for his income tax for the
calendar year 1934 the sum of $111,068.48 and penalty thereon in the
further sum of $27,767.12, and interest thereon in the sum of $5,936.84,
making a total of $144,772.44; that no part of said tax, penalty and
interest has been paid, except the sum of $30,073.40, leaving a balance
due, owing and unpaid to the United States in the sum of $114,699.04;
that on or about the 5th day of February, 1936, a Notice of Lien
pursuant to Section 3186 of the Revised Statutes as Amended (U.S.C.,
Title 26, Sections 1560 and 1567) upon all property rights and rights to
property belonging to said OSCAR M. HARTZELL was duly filed in the
office of the Clerk of Cook County, and that on the 21st day of
February, 1936, a Notice of Levy thereunder was duly served upon the
RAILWAY EXPRESS AGENCY, INCORPORATED, who was then in possession of said
res.
3. That the
defendant, OSCAR M. HARTZELL, possesses sufficient proprietary interest
in the res herein to make same amendable, liable and subject to
distraint for his unpaid income taxes as hereinabove set forth;
4. That EDWARD
J. HESS, GEORGE M. CRANE, FRANK E. McALLISTER, THOMAS V. SULLIVAN and
CLEMENT J. WALL, respectively, as attorneys as shown of record for all
parties hereto, except the aforesaid Collector of Internal Revenue, have
rendered valuable services in connection with the protection and
assembling of said res and the bringing thereof into the custody
of this Court for
admin
istration, and in assisting the Court to properly determine the rights
of various parties therein, and that the fair and reasonable values of
said services are properly chargeable as an
admin
istration cost of said res and should be paid accordingly, and
taxed as costs herein.
5. That
EVERETT JENNINGS, having been appointed Guardian ad Litem for the
defendant, OSCAR M. HARTZELL, has rendered valuable services herein and
is entitled to fair and reasonable compensation therefor;
6. That the
fair and reasonable values of the services rendered by the aforesaid
attorneys and by said Guardian ad Litem, are as follows:
7. That the
payment of said sums to the persons named respectively should be made
from the aforesaid res and taxed as costs herein, and that the
Attorney General of the United States and the United States Attorney for
the Northern District of Illinois have approved such payments and
consented that same should be made, as costs of the
admin
istration of said res.
Conclusions
of Law
And the Court
hereby states the following Conclusions of Law herein:
1. That it has
jurisdiction of the parties hereto and of the subject matter hereof.
2. That all
parties claiming any interest in the res being
admin
istered herein are before the court, or are in default, as shown by the
record.
3. That this
Court has exclusive jurisdiction to determine all questions of title,
possession, control and final disposition of the res herein, and
holds jurisdiction thereof to the exclusion of all other courts;
4. That the
defendant, CARTER H. HARRISON as Collector of Internal Revenue for the
First Collection District of Illinois, has a good and sufficient lien
against the res herein, for the unpaid income tax, interest and
penalties of defendant, OSCAR M. HARTZELL, and that said lien against
the res herein is paramount and superior to the claims of all
other parties thereto, subject only to costs of
admin
istration;
5. That the
equities herein are in favor of the said defendant, CARTER H. HARRISON
as Collector of Internal Revenue, and against all other defendants
herein, and that the said CARTER H. HARRISON as Collector of Internal
Revenue for the First Collection District of Illinois is entitled to the
funds constituting the res herein, less the taxed costs of
admin
istration as determined by the Court herein;
6. That the
attorneys' fees and compensation for Guardian ad Litem found to
be reasonable in the Findings of Fact are proper charges of
admin
istration to be taxed as costs herein.
