The opinion of the court was delivered by: GALSTON
This is a petition by the debtor for review of the supplemental opinion and order of the referee in bankruptcy, entered in this proceeding on December 31, 1952. The proceeding is one under Chapter XI of the Bankruptcy Act, 11 U.S.C.A. § 701 et seq., for an arrangement.
The debtor filed its petition under Chapter XI on January 23, 1952. Its plan of arrangement was confirmed by the court on May 27, 1952, in an order reserving the question presented by this petition for review. That question arose under the following facts: In the arrangement proceeding the Director of Internal Revenue filed proofs of debt for federal taxes amounting to $ 83,108.12. On January 14 and 15, 1952, before the debtor's petition for arrangement was filed, the Director had perfected and filed notices of tax liens for $ 58,473.42. Notices of the tax liens were filed in the Clerk's Office both in the Eastern and Southern Districts of New York. They were filed also in the Register's Office in Kings, New York and Queens Counties. On January 18, 1952, certain promissory notes and trade acceptances in the debtor's favor were delivered to the Director. On the same day, the Government's lien was asserted against certain accounts receivable by the mailing of a notice of tax claim to the corporation owing the accounts receivable. The Director secured payments on these notes, trade acceptances and accounts receivable totaling $ 9,026.16.
The debtor's plan of arrangement provided that the administration expenses and priority claims be paid in full, and that unsecured creditors should receive 25% of their claims. Prior to the confirmation of the plan of arrangement, the Director of Internal Revenue and the debtor entered into a stipulation, outside the plan of arrangement, whereby the tax claim was to be allowed in full; the terms of the stipulated agreement calling for the payment of $ 10,000 in cash and the balance of the claim in monthly installments, secured by a chattel mortgage covering all of the machinery, fixtures and equipment of the debtor. The agreement stipulated to by the parties was approved by the referee and by order of the court. The terms of the agreement were incorporated into an order providing that the agreement 'be incorporated in and made part of the order confirming the plan.'
Among other costs of administering the estate, the referee charged the debtor with 1 1/2 % of the $ 83,108.12 tax claim, or $ 1,246.62, as statutory fees for the Referees' Salary Fund and for the Referees' Expense Fund. In ordering the payment of the $ 1,246.62 as fees, the referee held that the entire $ 83,108.12 tax claim should be treated as an amount payable to an unsecured creditor within the meaning of Section 40, sub. c(2) of the Bankruptcy Act, 11 U.S.C.A. § 68, sub. c. (2). The debtor objected, claiming that the tax claim could not properly be treated as an unsecured claim. Upon review, the referee decided that the $ 9,026.16 obtained by the Director in actual payments should not be charged or computed as an amount payable to an unsecured creditor under Sec. 40, sub. c. (2). Therefore, he ordered that the debtor should receive a credit and refund, but only in the sum of $ 135.39 (1 1/2 % of $ 9,026.16).
It is the debtor's contention on this petition for review that the tax claim of $ 58,473.42, for which notices of tax liens had been filed prior to filing of the petition for arrangement, should not have been classified as an unsecured debt within the meaning of Sec. 40, sub. c(2). The debtor seeks, therefore, to modify the referee's order further so as to allow a refund of $ 877.09 (1 1/2 % of $ 58,473.42) in addition to the sum of $ 135.39, as directed by the referee.
Sec. 40, sub. c(2) of the Bankruptcy Act provides, in pertinent part, as follows:
'Additional fees for the referees' salary fund and for the referees' expense fund shall be charged, in accordance with the schedules fixed by the conference (a) * * *; (b) against each case in an arrangement confirmed under Chapter XI of this Act, and be computed upon the amount to be paid to the unsecured creditors upon confirmation of the arrangement and thereafter, pursuant to the terms of the arrangement * * *.' 11 U.S.C.A. § 68, sub. c(2).
A tax claim in favor of the United States is constituted a lien upon the property of the taxpayer by virtue of Sections 3670-3672 of the Internal Revenue Code, 26 U.S.C.A. §§ 3670-3672. Section 3670 provides:
'If any person liable to pay any tax neglects or refuses to pay the same after demand, the amount (including any interest, penalty, additional amount, or addition to such tax, together with any costs that may accrue in addition thereto) shall be a lien in favor of the United States upon all property and rights to property, whether real or personal, belonging to such person.' 26 U.S.C.A. § 3670.
Section 3672 of the Code reads as follows:
'(a) Such lien shall not be valid as against any mortgagee, pledgee, purchaser, or judgment creditor until notice thereof has been filed by the collector-
'(1) Under State or Territorial laws. * * *
'(2) With clerk of district court. * * *' 26 U.S.C.A. § 3672.
The referee recognized the Government's tax claims as being 'statutory lien claims.' However, he held that the claims were not secured claims and therefore subject to the assessment and charge provided for in Section 40, sub. c(2) of the Bankruptcy Act. The referee reached his conclusion by interpreting Section 67, sub. c of the Bankruptcy Act, 11 U.S.C.A. § 107, sub. c, as affecting the status of a claim as being secured or unsecured under Section 40, sub. c(2). He concluded that since the Director's claims for taxes were not accompanied by possession of the taxpayer's property before bankruptcy, and since under Section 67, sub. c, such claims, even though considered as statutory liens, must be postponed in payment to the debts specified in clauses (1) and (2) of Section 64, sub. a of the Bankruptcy Act, 11 ...