Wright v. Standard Engineering Corp.

California Court of Appeal Oct 24, 1972 No. Civ. No. 39623Published

Before: Cole

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Holding. The court held that the State Board of Equalization's tax lien took priority over the plaintiff's judgment claim because the state recorded its tax certificate before the plaintiff's judgment lien arose, and the appointment of a receiver did not divest the debtor of its interest in the property or prevent the state's lien from attaching.

Issues

Whether the appointment of a receiver deprives a debtor of its interest in property such that the state cannot assert a tax lien against it.
Whether the state's recorded tax certificate holds priority over a subsequent judgment lien.
Whether the plaintiff's prior attachment efforts created a lien on the specific assets held by the receiver.

Disposition. affirmed

Quotations verified verbatim against the opinion

“It would be a strained interpretation of Revenue and Taxation Code sections 6756 and 6757 to hold, that the receiver’s appointment somehow deprived Standard of its interest in its property to such an extent that the state could never have a claim against it.”

“when respondent recorded the certificate of delinquency it acquired a lien which entitled it to a priority also under section 6757 since plaintiff’s judgment lien did not come into existence until a later date.”

Opinion

COLE, J.* This appeal presents a narrow question concerning priority of claims between plaintiff-appellant Martha H. Wright on the one hand and respondent State Board of Equalization on the other hand.

The common debtor was Standard Engineering Corporation. In February of 1965 plaintiff sued Standard on a note and. two days later caused a writ of attachment to be levied on the funds of Standard in the possession of First Western Bank in Los Angeles and upon, all of the assets of Standard at its Los Angeles County place of business.

Thereupon, Standard, another defendant in the action below not involved in this appeal, and plaintiff stipulated to the appointment of a receiver “. . . as an alternative to the attachment proceedings in effect,” the receiver to take charge of all of the assets of Standard, wherever they were situated. An appropriate court order appointing a receiver was issued.

On June 9, 1965, respondent recorded, a certificate in Los Angeles County with respect to unpaid sales and use taxes of Standard. In August of 1965, plaintiff secured judgment against Standard.

In June of 1966, respondent obtained a warrant levying upon the account of Standard in Los Angeles and pursuant to that warrant received $507.82 from the sheriff.

The final account and report of the receiver showed that the principal receivership asset consisted of a dealer’s reserve account which Standard had had with a thrift and. loan company in an amount in excess of $10,000. The receiver did not commence to come into the possession of [247]these sums until 1969 and thereafter, receiving the final payment in May of 1971.

The respondent and plaintiff stipulated that the state had tax claims against Standard in the sum of $2,462.47 with interest thereon; that the plaintiff had a judgment claim against Standard in the sum of $33,196.23 with interest thereon; that the $507.82 previously received by the state should be treated in the same manner as the larger sum. claimed by the state and that the court should determine the priority between plaintiff and the State Board of Equalization.

Following hearing and reconsideration, the court ordered that the clerk deliver to respondent the amount claimed by it, and further ruled that the state should retain the $507.82 already secured by it.

Wright v. Standard Engineering Corp.

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