In the Matter of Western States Wire Corp., Bankrupt. William A. Robertson v. Trustee in Bankruptcy

On February 22, 1970, the trustee in bankruptcy for Western States Wire Corporation (the bankrupt estate) held a public auction at which Robertson placed the successful bid of $49,500 for an undocumented vessel. On the same day, Robertson paid a deposit of $12,000 to the auctioneer. The balance was to be paid before Robertson could take possession of the boat. On March 1, 1970, Orange County assessed an annual property tax against the boat in the amount of $897.39. Thereafter, on March 4, 1970, Robertson paid the balance of $37,500 and received the keys to the boat and, on March 17, 1970, he was given the certificate of ownership. When the trustee refused the tax claim of Orange County, the referee ordered the trustee to allow the claim, but also ordered Robertson to reimburse the trustee. The district court denied Robertson’s petition for review. We reverse.

Orange County assessed the tax against the boat pursuant to California Revenue & Taxation Code § 405 which reads: “Annually, the assessor shall assess all the taxable property in his county. . to the persons owning, claiming, possessing, or controlling it on the lien date.” The lien date is set by statute as March 1.…