The opinion of the court was delivered by: DUFFY
KEVIN THOMAS DUFFY, D.J.:
Cross motions for summary judgment have been made in this case which involve neat questions of arcane tax law. The history of the matter is quite convoluted, but a brief review of the facts is necessary. Solar Petroleum Corp. is the successor to Fast Fuel Corp. which ceased operations owing moneys to various individuals. These included Gail Mantovani, the petitioner, the Commissioner of the Internal Revenue Service and the various other respondents. Some have abandoned their claims and the matter now stands as a simple interpleader action in which Solar holds a sum of money to which both the Mantovanis and the Commissioner of Internal Revenue lay claim.
/ The issue is simply which claim is entitled to a priority.
The government and the Mantovanis agree that the statement of facts in the government's memorandum gives a complete and accurate picture of the situation. These facts are as follows:
This proceeding was originally commenced in State Court by the petitioner, Gail Mantovani, to enforce a judgment in her favor against the Solar Petroleum Corporation ["Solar"] as the garnishee of the Solar Fuel Oil Corp. ["the taxpayer"].
Petitioner asserts that she obtained a judgment against the taxpayer in February, 1977, and, in August, 1978, issued an execution thereof on Solar as garnishee.
Solar admits its debt to the taxpayer and interpleaded all those alleging claims to this debt including the Commissioner of the Internal Revenue Service. The Commissioner promptly removed the action to this Court and the interpleader fund is now in the custody of this Court.
The Mantovanis assert three claims to the interpleader fund. The first is based upon a judgment Gail Mantovani obtained against the taxpayer in the amount of $9,124.68. The transcript of this judgment was filed with the Clerk of Bronx County on March 7, 1977, and delivery of the execution to the sheriff occurred on August 15, 1978. The second claim is based upon a security agreement Gail Mantovani entered into with the taxpayer on August 21, 1973, in which she acquired a security interest in a 1972 Dodge truck in the amount of $12,500. The UCC financing statement for the agreement was filed on November 22, 1974. In support of their third claim, Andrew and Gail Mantovani rely upon the taxpayer's purported assignment of all its rights to the amounts owed by Solar to the taxpayer. This assignment, dated April 28, 1977, was recorded in Bronx County on June 12, 1978.
The United States' claim is based upon assessed tax liabilities, secured by federal tax liens. On the dates set forth below, a delegate of the Secretary of the Treasury made assessments against the taxpayer and sent notices and demands for payment as follows:
Type of Assess- Assess- Date
Tax- Tax Form ment & ment (Tax, Notice
able No. of Notice & Penalties & of Lien
Period Return Demand Date Interest) Filed
June Highway tax 1/31/77 $127.93 11/16/77
1976 Form 2290
March Withholding 9/12/77 $2,164.84 11/16/77
1977 FICA Form 941
Dec. Withholding 6/6/77 $661.52 11/16/77
1976 FICA Form 941
Sept. Withholding 3/21/77 $2,494.35 5/3/77
1976 FICA Form
June Withholding 11/22/76 $2,225.92 3/8/77
1976 FICA From
March Withholding 11/22/76 $2,732.79 3/8/77
1976 FIC A Form
The Internal Revenue Service served a Notice of Levy on Solar on June 15, 1978 and on August 17, 1978 served a final demand on Solar.
Respondent Schildwachter has filed a notice of appearance which does not state the basis of its claim. As shown by the Interpleader Petition, on February 1, 1978, the taxpayer notified Solar's president that it should make the first payment of moneys due to Schildwachter and that "payment of the principal and interest have precedent over any previous instructions you may have or will receive..."
The following table summarizes the competing claims to the taxpayer's property.
DATE SUMS CLAIMED
OF AS A RESULT
OF ACTION TYPE OF ACTION PARTY INVOLVED OF ACTION
08/21/73 Security Interest G. Mantovani $12,500.00
acquired in tax-
11/22/74 Financing State- G. Mantovani
ment in truck
11/22/76 IRS assessment U.S. 2,225.92
11/22/76 IRS assessment U.S. 2,732.79
01/31/77 IRS assessment U.S. 127.93
02/08/77 Judgment against G. Mantovani 9,124.68
03/08/77 Notices of lien U.S.
filed for two
03/21/77 IRS assessment U.S. 2,494.35
04/28/77 Taxpayer's A. and G. 15,000.00
assignment of Mantovani
05/03/77 Notices of lien U.S.
filed for 3/21/77
06/06/77 IRS assessment U.S. 661.52
09/12/77 IRS assessment U.S. 2,164.84
11/16/77 Notices of lien U.S.
filed for 6/6/77,
02/01/78 Taxpayer's Schildwachter 8,827.16
06/12/78 4/28/77 assign- G. Mantovani
08/15/78 Delivery of G. Mantovani
The parties have also agreed that where there are claims upon a taxpayer's property in addition to federal tax liens, the priority of the competing claims must be resolved in accordance with federal law. Hartford Provision Co. v. Limited States, 579 F.2d 7 (2d Cir. 1978).
Section 6321 of Title 26 provides that:
If any person liable to pay any tax neglects or refuses to pay the same after demand, the amount (including any interest, additional amount, addition to tax, or assessable penalty, 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.
The common law priority rule of "the first in time, the first in right," still obtains, United States v. New Britain, 347 U.S. 81, 85 (1954), subject only to the statutory requirements set forth in 26 U.S.C. § 6323 which provides, in pertinent part:
The lien imposed by section 6321 shall not be valid as against any purchaser, holder of a security interest, mechanic's lienor, or judgment lien creditor until notice thereof which meets the requirements of ...