The opinion of the court was delivered by: BYERS
Decision is required in this case brought under Tit. 28 U.S.C. § 1345, concerning the validity of the title acquired by the United States to certain real property formerly owned by a corporation to be called Ahles, pursuant to distraint and sale for non-payment of certain federal corporate income taxes.
The case was carefully pre-tried, and the order resulting therefrom should be consulted to reveal the extent to which technical matters were removed from the area of controversy. The attitude of counsel on both sides has been constructive and helpful, and the court is indebted to them for their conduct of the case, and for the concise and informing briefs they submitted after trial.
It is suggested that the pre-trial order be either annexed to the papers constituting the record, or presented as an appendix to either brief on appeal.
Since the matters in issue involve mainly arguments as to the legal consequences to be attributed to various procedural steps as established in the record, findings deemed to be appropriate will be made as part of this decision.
The real estate consists of five parcels located in Queens County, and is adequately described in the complaint, and should be similarly delineated in the judgment or decree to be entered hereon. For present purposes the said description is hereby incorporated by reference.
These were corporate income taxes for the fiscal years ended November 30, 1925 and November 30, 1926, in the respective amounts of $ 37,609.50 and $ 5,785.91. These sums were enhanced by interest charges as at April 22, 1933, when the assessment was made which formed the basis of the distraint and subsequent proceedings culminating in public sale, by $ 16,215.36 and $ 2,147.44 respectively.
The public sale at auction.
This took place on October 20, 1942, at the State Supreme Court building in Jamaica, on the court house steps.
The total price bid for the five lots here involved was $ 3,120 and the plaintiff became the purchaser. This is the showing of the certificate of sale.
Five deeds of conveyance were executed and delivered by the Collector, on June 18, 1946, after the expiration of the period for redemption specified in the Internal Revenue Code, 26 U.S.C. § 3702(b)(1).
The foregoing recital is not in dispute in the factual sense, but the legal efficacy of certain steps incident to the transition of title is challenged by the city, also the legal effect to be ascribed to the deeds of conveyance.
It will be convenient to examine such contentions in order:
1. That the date of the assessment has not been shown to have been April 22, 1933.
The importance of this date lies in the necessity which rested upon the Government to distrain within six years after the assessment came into legal existence. If a greater time was permitted to elapse, the distraint was without statutory sanction, and all that was done in pursuance thereof must be regarded as a nullity.
The city argues that the deficiency notices of December 18, 1928 and March 21, 1929, must be deemed to have constituted the assessments, and therefore the distraint of September 15, 1942, was not timely and hence the subsequent sale and deeds were without legal effect.
The language of the deficiency notices cannot be construed to assert or declare an assessment. The contrary is the necessary purport of their content.
It is unnecessary to recite the steps that were taken by the taxpayer to secure a redetermination of the taxes described in the deficiency notices, or the negotiations looking to a settlement for a less amount than was stated in those notices, since all such matters appear in the record.
There was a proceeding in the nature of an appeal conducted before the then Board of Tax Appeals which finally decided the amount of ...