Pascoe, J.c.c. (temporarily assigned).
[83 NJSuper Page 179] Plaintiff seeks an order of this court directing the Camden Trust Company, Camden, New Jersey, to pay over to the Sheriff of Camden
County the sum of $3,959.41. This money is on deposit with said bank to the credit of Pilot Manufacturing Co., Inc.
A judgment was entered in the Superior Court on November 13, 1963 on behalf of the State of New Jersey against the Pilot Manufacturing Co., Inc., for nonpayment of unemployment compensation contributions. The amount of the judgment was $4,422.58 and the Sheriff of Camden County levied upon the bank account in question on December 18, 1963.
Plaintiff alleges that the bank account was a special account for the safekeeping of the contributions of both the employees of Pilot Manufacturing Co., Inc. and the company itself, arising out of R.S. 43:21-1 et seq. , the Unemployment Compensation Law. However, on April 15, 1963, June 27, 1963 and September 26, 1963 federal tax liens of $7,197.06, $5,380.81 and $2,327.91, respectively, were filed in the office of the Register of Deeds of Camden County. These liens arose out of liability for withholding and social security taxes alleged to be due for the fourth quarter of 1962 and the first and second quarters of 1963. A notice of levy and a final demand were served upon the Camden Trust Company by the Internal Revenue Service on December 23, 1963. The ultimate question before this court is whether the Federal Government has a priority over the State of New Jersey concerning the bank account in issue.
The federal lien is created by 26 U.S.C.A. , § 6321. If any person liable to pay any tax neglects or refuses to pay the same after demand, the amount shall be a lien in favor of the United States upon all property and rights to property, whether real or personal, belonging to such person. 26 U.S.C.A. § 6323 governs a situation where a judgment creditor and the Federal Government both seek to recover property from the debtor. Under that section a lien is not valid as against a judgment creditor until notice has been filed under the appropriate state procedures. New Jersey has provided for the filing of such liens in N.J.S.A. 46:16-13. Notices of federal tax liens may be filed in the office of the county recording officer of the county where the property subject to
such liens is situated. No federal tax lien shall be valid as against a judgment creditor until this notice has been filed.
The federal tax liens filed with the Register of Deeds covered all the real and personal property, tangibles and intangibles, rights to property or choses in action, as well as after-acquired property of the delinquent taxpayer. Glass City Bank v. United States , 326 U.S. 265, 66 S. Ct. 108, 90 L. Ed. 56 (1945); Edison Bank v. Mayer , 202 F. Supp. 620 (D.N.J. 1962); Beeghly v. Wilson , 152 F. Supp. 726 (D. Iowa 1957). As to what constitutes a taxpayer's property or rights to property, to which a federal lien can attach, will be determined by state law. Aquilino v. United States , 363 U.S. 509, 80 S. Ct. 1277, 4 L. Ed. 2 d 1365 (1960); United States v. Durham Lumber Co. , 363 U.S. 522, 80 S. Ct. 1282, 4 L. Ed. 2 d 1371 (1960).
None of the federal statutes involved grants priority to a general tax lien. However, the federal courts have determined that the priority of the general lien is solely a question of federal law. United States v. Acri , 348 U.S. 211, 75 S. Ct. 239, 99 L. Ed. 264 (1955); United States v. Security Trust & Sav. , 340 U.S. 47, 71 S. Ct. 111, 95 L. Ed. 53 (1950). The formula applied for priority is, "the first in time is the first in right." The lien must be perfected before it is entitled to be "first." United States v. New Britain , 347 U.S. 81, 74 S. Ct. 367, 98 L. Ed. 520 (1954). See Spade v. Salvatorian Fathers , 78 N.J. Super. 554 (Law Div. 1963); Note, 8 Utah L. Rev. 252 (1963); also Note, 46 Cornell L.Q. 624 (1961).
The State of New Jersey provides for the collection of funds for its State Unemployment Compensation Fund under the provisions of N.J.S.A. 43:21-7. Under this statute, contributions are required from both the employer and his employees, and are in the nature of taxes. In subparagraph (d)(1) of the statute each employer is required to:
"* * * withhold in trust the amount of his workers' contributions from their wages at the time such wages are paid * * *. If any employer fails to deduct the ...