Page:Federal Reporter, 1st Series, Volume 1.djvu/105

"DNITED BIATBS V. PACIFIO EAILBOAD. 97 ���The United States v. The Pacific Eaileoad and others. �(Circuit Court, E. D. Missouri. March 13, 1880.) �IKCOME Tax— Dhmand— Lten— TiiTE IT ATTAcnBS— Property it At- taches.— The lien of the income tax (Act July 13, 1866, 14 St. at Large, 107; Eev. St. } 3186) relates back, upon demand, to the time wlieii the tax was due, but only attaches to the property belonging to the per- son from whom the tax was due at the time when the demand for the payment of the tax was made. �Samb — Lien, How Oreated. — The assessment of auch tax by the assessor, in the mode prescribed by law, is essential to the creation of suoh lien. �In equity. Demurrer to bill. �McCraey, J. This is a bill in equity, filed by the TTnited States, to enforce a lien upon property, formerly owned by the Pacific Eailroad, for taxes amounting in the aggregage, includ- ing penalties, to something over $135,000. The tax claimed as delinquent accrued during periods of time extending from July 1, 1861, to February 28, 1871, and is the income tax, or the tax upon the receipts and profits of said company during those periods. When the tax accrued the Pacifie Eailroad was the owner of the property against which the lien is sought to be enforced, but since that time several large mortgages have been executed upon the same, and under a foreclosure of one of these the property was, on the sixth of September, 1876, sold to one James Baker, who, on the twenty-iirst day of October, 1876, conveyed the same to the Missouri Pacific Eailroad Company, the present owner. The last-named com- pany mortgaged the property November 1, 1876, to secure bonds to the amount of |4,500,000. The present owner, as well as the several lien holders, are made parties, and the prayer of the bill is for decree declaring the taxes aforesaid to be a lien on said property prior and paramount to any claim on their part, and for a foreclosure and sale. It is conceded that the tax was never assessed by any officer of the govern- ment, but it is insisted that this was not necessary, because there was an assessment by operation of law which was equally effective. The bill avers that demands were made for �vl,no.3— 7 ��� �