The argument of the defendant suggests that the plaintiff must await the institution of an action by him, a civil action in which the rights of the plaintiff and the Taxpayer may be adjudicated. The adoption of this argument as sound would leave the plaintiff either without a remedy or with a remedy wholly inadequate. It would be an injustice to leave the plaintiff in her dilemma while awaiting the initiation of some proceeding by the defendant. An example of the injustice that can result is found in this case. The levy was made in August of 1948 and, as far as we know, the defendant has taken no further action to enforce his rights under the levy.
It is the further argument of the defendant that the present action, if sustained, will nullify 'the government's right to pursue its remedy under Section 3710(b) of the Internal Revenue Code, 26 U.S.C.A. § 3710(b).' We cannot agree with this contention. This section imposes upon a third party in possession of any property of a taxpayer, a personal liability for failure or refusal to surrender it upon demand. This remedy is still available; in fact, if an appropriate action is commenced by the defendant at this time, it may be consolidated with the present action to the end that all claims may be adjudicated at one time.
Lack of Jurisdiction in the Court
The argument advanced by the defendant in support of this ground is predicated on Section 3653(a) of the Internal Revenue Code, 26 U.S.C.A. § 3653(a), which provides: 'no suit for the purpose of restraining * * * the collection of any tax shall be maintained in any court.' It has been held that this statute has no application except to suits by taxpayers. Rothensies v. Ullman, 3 Cir., 110 F.2d 590, 592; Tomlinson v. Smith, 7 Cir., 128 F.2d 808, 811; Jones v. Kemp, 10 Cir., 144 F.2d 478, 480; Glenn v. American Surety Co., 6 Cir., 160 F.2d 977, 981; Stuart v. Chinese Chamber of Commerce of Phoenix, 9 Cir., 168 F.2d 709, 712, and National Iron Bank v. Manning, D.C., 76 F.Supp. 841, 843. This is not a suit by a taxpayer to enjoin the collection of a tax; this is a suit by a third party to relieve her property of a levy which she alleges was illegally made. The statute does not deprive the courts of jurisdiction of such suits. Ibid.
The levy placed the property 'in the custody of the law, * * * subject only to the orders and decrees of the courts of the United States having jurisdiction' under Section 2463 of Title 28 U.S.C.A. See also Rothensies v. Ullman, 3 Cir., 110 F.2d 590, 592. It appears that the only remedy available to a third party whose property is in the custody of the law under a levy made under authority of the revenue laws is an action to dissolve the levy. The remedy available to the taxpayer under the revenue laws cannot be invoked by a third party for whom no provision is made. An innocent third party cannot be expected to pay the tax for which he is obviously not liable and then maintain an action for its refund. See Stuart v. Chinese Chamber of Commerce of Phoenix, supra, 168 F.2d at page 712.
Availability of an Adequate Remedy at Law
This ground rests solely on the following argument: 'If suit to restrain the Collector had been brought by the Fidelity Union Trust Company it would not lie because its defense to an action for the penalty provided by Section 3710(b) is an adequate remedy at law.' This argument is not sound. The availability of a legal defense cannot be regarded as an adequate and complete remedy at law. See American Life Insurance Co. v. Stewart, 300 U.S. 203, 57 S. Ct. 377, 81 L. Ed. 605, 111 A.L.R. 1268. A remedy at law is complete and adequate, within the meaning of the generally accepted principle embodied in the federal statute, only if its efficiency is equal to that of the remedy available in a court of equity. A remedy available only by way of defense in an action at law by one's adversary is lacking in 'equality in efficiency' and 'equality in certainty.' Ibid.
Question Not Raised
The action appears to be one which can be maintained by the plaintiff, as the beneficiary of the trust estate, only if the Trustee has improperly refused or neglected to bring an appropriate action. The complaint fails to allege such refusal or neglect by the Trustee. This ground was not urged either at the hearing or in the briefs, and we are reluctant to decide the issue which it raises without granting the parties an opportunity to be heard. It is possible that the defect, if any, may be corrected by either the amendment of the pleadings, if the facts warrant, or the proper joinder of the Trustee.
The motion to dismiss the complaint will be denied for the reasons herein stated. The plaintiff will prepare an appropriate order and submit it to the Court upon notice to the defendant.
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