United States v. California

This case arises out of bankruptcy proceedings in which the United States petitioned for an order (1) decreeing that its tax liens against property of the bankrupt and proceeds of sale of such property were superior to the claims of the State of California for taxes, and (2) directing that California return to the receiver for payment to the United States proceeds of sale in the sum of $4,668.99. The referee denied the petition and the District Court affirmed. The United States then took this appeal.

The property involved is a liquor license issued by the State of California. Section 24049, of the California Business and Professions Code, provided at the time applicable:

Belt, the bankrupt, on May 11, 1956, was issued an on-sale general liquor license by the State of California. Prior to December 28, 1956, Belt applied to the State Department of Alcoholic Beverage Control for renewal of the license. Belt was delinquent in payment of Federal Withholding and Social Security taxes. On December 28, 1956, the United States, pursuant to a warrant of distraint, closed Belt’s business operation by seizing his property, including his liquor license certificate. On January 7, 1957, an…