
64 S.E.2d 167 (1951)
233 N.C. 333
BISHOP
v.
BLACK et al.
No. 164.
Supreme Court of North Carolina.
March 21, 1951.
*169 Thomas A. Uzzell, Jr., U. S. Atty., Asheville, and James B. Craven, Jr., Asst. U. S. Atty., Morganton, for appellant.
A. J. Redden, Hendersonville, for appellee, Ossie Bishop.
O. B. Crowell, Hendersonville, for appellee, State Trust Co.
Paul K. Barnwell, Hendersonville, for appellee, Ben Israel.
DENNY, Justice.
The appellees move to dismiss the appeal for that the appellant failed to serve a statement of case on appeal pursuant to the order entered by his Honor on 13 December, 1950, and for the further reason that no notice was given the appellees or their attorneys of the hearing when the court adjudged that the record proper should constitute the case on appeal.
The correctness of the judgment entered below is the only question posed for decision, and that is presented by the exception noted.
When an error relied on by the appellant is presented by the record proper, no case on appeal is required. Russos v. Bailey, 228 N.C. 783, 47 S.E.2d 22. This cause was heard below on the report of the Receiver, therefore it was unnecessary to serve a case on appeal. Reece v. Reece, 231 N.C. 321, 56 S.E.2d 641; Privette v. Allen, 227 N.C. 164, 41 S.E.2d 364; North Carolina Bessemer Co. v. Piedmont Hardware Co., 171 N.C. 728, 88 S.E. 867; Board of Commissioners v. Scales, 171 N.C. 523, 88 S.E. 868. The motion to dismiss is denied.
The appellant excepts and assigns as error the signing of the judgment entered below in that it directs the disbursement of the remaining assets in the hands of the *170 Receiver in a manner contrary to the law governing priority of payments among creditors, and for the further reason that his Honor had no jurisdiction to reverse the findings of the Receiver in the absence of appropriate exceptions to his report.
In the case of National Surety Corp. v. Sharpe, 232 N.C. 98, 59 S.E.2d 593, 596, Ervin, J., speaking for the Court, sets out in a very comprehensive manner the duties of a receiver. It is pointed out that "The receiver must pass upon the validity and priority of the claims presented to him, and allow or disallow them or any part thereof, and notify the claimants of his determination. * * * G.S. § 55-152 * * * When this is done, `any interested person' may except to the reported finding of the receiver as to the claim, and contest such finding in the original receivership action without any leave from the court provided he files his exceptions in apt time. * * * G.S. § 55-152."
No exception having been taken to the report of the Receiver, this appeal turns upon whether the United States is entitled to priority of payment on the findings of the Receiver.
The Congress of the United States in 1797 enacted a statute conferring upon the government a right of priority in payment out of the assets of an insolvent debtor of all claims due the United States. There has been no substantial change in this statute in the meantime, which is now R.S. § 3466, 31 U.S.C.A. § 191, the pertinent part of which reads as follows: "Whenever any person indebted to the United States is insolvent, or whenever the estate of any deceased debtor, in the hands of the executors or administrators, is insufficient to pay all the debts due from the deceased, the debts due to the United States shall be first satisfied".
"It is well settled that the priority statute does not create a lien upon the debtor's property in favor of the United States, but merely confers upon the government a right of priority in payment out of that property in the hands of the debtor's assignees or other representatives, under the conditions specified in the statute." 28 Am.Jur., Insolvency, § 73, p. 819. Bramwell v. United States Fidelity & G. Co., 269 U.S. 483, 46 S.Ct. 176, 70 L. Ed. 368; United States v. Emory, 314 U.S. 423, 62 S.Ct. 317, 86 L.Ed. 315; 44 C.J.S., Insolvency, § 14(b), p. 374.
The priority of the United States, under the provisions of the above statute, attaches upon the appointment of a voluntary or involuntary receiver, People of State of Ill. ex rel. Gordon v. Campbell, 329 U.S. 362, 67 S.Ct. 340, 91 L.Ed. 348, or upon the date of debtor's assignment for the benefit of creditors, United States v. Waddill, Holland & Flinn, 323 U.S. 353, 65 S.Ct. 304, 89 L.Ed. 294; United States v. State of Texas, 314 U.S. 480, 62 S.Ct. 350, 86 L.Ed. 356; Price v. United States, 269 U.S. 492, 46 S.Ct. 180, 70 L.Ed. 373; In re Mitchell's Restaurant, Del.Ch., 67 A. 2d 64; Spokane Merchants' Ass'n v. State, 15 Wash.2d 186, 130 P.2d 373.
However, the right to priority of payment under the above statute does not give the government any lien or right that may be enforced "against any mortgagee, pledgee, purchaser, or judgment creditor until notice thereof has been filed by the collector" in accordance with the provisions of 26 U.S.C.A. § 3672.
The appellees, Ossie Bishop and Ben Israel, are creditors who attached property of the debtors prior to the appointment of the Receiver. Even so, they had not reduced their claims to judgment at the time the right of priority of payment in favor of the government arose. Hence, they cannot claim priority under the above statute. They were not mortgagees, pledgees, purchasers or judgment creditors at the time the right to priority of payment arose in favor of the United States. United States v. State of Texas, supra; MacKenzie v. United States, 9 Cir., 109 F.2d 540.
Moreover, prior to the adoption of 26 U. S.C.A. §§ 3670, 3671 and 3672, not even innocent purchasers for value, holders of recorded mortgages, or of unsatisfied judgments of record were protected from an unrecorded tax lien. United States v. Snyder, *171 149 U.S. 210, 13 S.Ct. 846, 37 L.Ed. 705; MacKenzie v. United States, supra.
It is well, however, to keep in mind that priority of payment in favor of the government within the meaning of R.S. § 3466, 31 U.S.C.A. § 191, does not arise unless the debtor is insolvent. Board of Sup'rs of Louisiana State University v. Hart, 210 La. 78, 26 So.2d 361, 174 A.L.R. 1366; United States v. State of Oklahoma, 261 U.S. 253, 43 S.Ct. 295, 67 L.Ed. 638. But where a receiver is appointed the insolvency of the debtor, at the time of the appointment, is clearly demonstrated when it appears his assets when liquidated are insufficient to satisfy the claims of contesting creditors. People of State of Ill. ex rel. Gordon v. Campbell, supra.
Now, as to the appellee, State Trust Company, it is difficult to understand why the court below approved the payment of any portion of the funds remaining in the hands of the Receiver to this claimant. It appears from the record that the State Trust Company filed only two claims with the Receiver and that both of them were paid in full. Furthermore, the only reference to an additional claim by this concern is found in an order signed by his Honor 10 October, 1950, which contains the following statement: "The court further finds that the State Trust Company has a claim in the amount of $1,020.00, which it claims to be a first claim prior to the three creditors set up in said report." How this claim arose, why it was not filed with the Receiver, and why it should be allowed as either a preferred or common claim is not disclosed by the record.
Since it appears that all claims filed with the Receiver, which were secured and superior to the claim of the United States under the provisions of 26 U.S.C.A. §§ 3670, 3671 and 3672, have been paid in full, it is our opinion, and we so hold, that the claim of the United States for income taxes due from the debtors, claim for which was filed with, approved and reported by the Receiver, is entitled to full satisfaction out of the assets of the insolvent debtors before any additional claim or charge is paid except the costs incident to the receivership.
The judgment entered below is vacated and this cause is remanded for judgment in accord with this opinion.
Error and remanded.
