Meyer v. United States (1960)
- Docket
- 13
- Decided
- 1960-01-01
- Category
- General
Summary
Question: Can a federal tax lien attach to the net proceeds of life insurance policies paid to Peter Meyer's widow? Conclusion: No. Justice Thomas Whittaker, writing for the majority in a 6-3 decision, held that New York state law controlled the case; New York exempted the net proceeds of insurance policy cash surrenders from attaching to tax liens. There was not clear guidance in federal law on this matter, whereas New York law protected the cash surrender in question. As the priority of liens is then determined by "first in time first in right," the United States did not have a right to marshal the cash surrender to recover its tax lien because the bank's debt had priority. Justice Byron White, joined by Justices John Harlan and Potter Stewart, dissented. He argued that federal law should control the case to avoid inconsistent results in different states; once a tax lien has attached to a taxpayer's interests, federal law then determines the priority of liens. He also disputed the majority's interpretation of New York law, and did not find a clear, consistent policy of protecting the net proceeds of insurance policies' cash surrenders from creditors.