United States v. Speers
382 U.S. 266 (1965)

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U.S. Supreme Court

United States v. Speers, 382 U.S. 266 (1965)

United States v. Speers

No. 17

Argued October 20, 1965

Decided December 13, 1965

382 U.S. 266

Syllabus

Federal taxes were assessed against a company, but, despite demand, were not paid. No notice was filed of the lien which ensued under § 6321 of the Internal Revenue Code of 1954. Thereafter, the company filed a petition in bankruptcy. The trustee treated the Government as an unsecured claimant whose lien was invalid as to him, basing his position on § 70c of the Bankruptcy Act and § 6323 of the Internal Revenue Code. Section 70c vests a trustee as of the bankruptcy date with all the rights of "a creditor then holding a lien" on a bankrupt's assets by "legal . . . proceedings"; §6323 permits a "judgment creditor" to prevail over an unrecorded federal tax lien. The trustee's position was upheld by the referee, District Court, and Court of Appeals.

Held: A bankruptcy trustee has the status of a statutory "judgment creditor," and, as such, prevails over an unrecorded federal tax lien. Pp. 382 U. S. 269-278.

(a) The language in United States v. Gilbert Associates,345 U. S. 361, that the term "judgment creditor" in the predecessor of § 6323 referred to a holder of a judgment of a court of record, must be read in context, and does not govern the rights conferred by Congress upon a trustee in bankruptcy. Pp. 382 U. S. 269-271.

(b) The language and legislative history of § 70c and § 6323 reflect a congressional purpose to confer all the rights of a judgment creditor upon the trustee in bankruptcy, including the right to avoid an unrecorded federal tax lien. Pp. 382 U. S. 271-275.

(c) That failure to accord the Government priority for its unrecorded lien may benefit other claimants in a bankruptcy proceeding by improving their relative positions as creditors (a result which the Government can avoid by promptly filing notice of the lien) is a matter of congressional policy. Pp. 382 U. S. 275-277.

(d) The provision in § 67b of the Bankruptcy Act that a statutory lien, including a federal tax lien, not perfected until after bankruptcy may nevertheless be valid as against the trustee does not preclude construing § 6323 to include the trustee, since the

Page 382 U. S. 267

purpose of § 67b insofar as tax claims are concerned is to protect them from § 60, which allows the trustee to set aside preferential transfers made within four months of bankruptcy. Pp. 382 U. S. 277-278.

335 F. 2d 311, affirmed.

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