Εικόνες σελίδας
PDF
Ηλεκτρ. έκδοση

57

Opinion of the Court,

Court of Appeals for the Seventh Circuit, we granted certiorari.

The trustee insists that the State is barred from collecting the penalties because of subdivision 57 (j) of the Bankruptcy Act which provides:

"Debts owing to the United States, a State, a county, a district, or a municipality as a penalty or forfeiture shall not be allowed, except for the amount of the pecuniary loss sustained by the act, transaction, or proceeding out of which the penalty or forfeiture arose, with reasonable and actual costs occasioned thereby and such interest as may have accrued thereon according to law."

Recognizing that 57 (j) prohibits allowance of tax penalties accruing prior to bankruptcy," the State nevertheless insists that this subdivision does not exempt the trustee from state laws applicable to the business he operates after bankruptcy. California considers the trustee subject to the requirements and penalties of its license and registration laws under an Act of Congress of June 18, 1934, 48 Stat. 993, reading in part as follows:

"Any receiver, liquidator, referee, trustee, or other officers or agents appointed by any United States court who is authorized by said court to conduct any business, or who does conduct any business, shall, from and after June 18, 1934, be subject to all State and local taxes applicable to such business the same as if such business were conducted by an individual or corporation;

[ocr errors]

First. Subdivision 57 (j) prohibits allowance of a tax penalty against the bankrupt estate only if incurred by the bankrupt before bankruptcy by reason of his own delinquency. After bankruptcy, it does not purport to ex

for briefing and hearing and are disposed of in this opinion." We have followed the same course.

'In re Messenger's Merchants Lunch Room, 85 F. 2d 1002. c. 6, 11 U. S. C., § 93 (j).

'Cf. New York v. Jersawit, 263 U. S. 493, 496.

Opinion of the Court.

308 U.S.

empt the trustee from the operation of state laws, or to relieve the estate from liability for the trustee's delinquencies. For 57 (j) is a subdivision of § 57 of the Bankruptcy Act governing "Proof and Allowance of Claims." And 57 (a) makes clear that § 57 as a whole relates only to claims "justly owing from the bankrupt to the creditor." The fees and penalties in issue were incurred by the trustee in operating the bankrupt business, and thus were not owed by the bankrupt to the State as a "creditor." Therefore, regardless of other rights the State might have, it could not file proof of claim for these fees and penalties as a creditor under § 57. And neither the tax liability nor the penalties incurred by the trustee after bankruptcy are governed by this section or its subdivisions. We must look elsewhere than to 57 (j) to determine whether the court below correctly held that California may enforce its statutory penalties against this estate.

Second. The Act of June 18, 1934 declares that a trustee in bankruptcy conducting a business, as this trustee was, "shall . . . be subject to all State and local taxes applicable to such business the same as if such business were conducted by an individual or corporation. . . . As originally offered, this Act applied only to receivers.' Reported by the House Committee on the Judiciary without amendment, the bill was amended on the House floor to apply not only to receivers but to a "liquidator, referee, trustee or other officer or agent."

[ocr errors]

8

We need not determine whether, without legislation such as the 1934 Act, the fact that a local business in

Whether the trustee might be personally surcharged because his refusal to pay the fees subjected the estate to the increased liability of the penalties, is not presented.

'Cong. Record, 73rd Cong., 2nd Sess., p. 4037.

* Id., p. 6067.

9 Id., p. 6656.

57

Opinion of the Court.

bankruptcy is operated by a bankruptcy trustee makes the business immune from state laws and valid measures for their enforcement. Clearly, means of permitting such immunity from local laws will not be read into the Bankruptcy Act. At any rate, Congress has here with vigor and clarity declared that a trustee and other court appointees who operate businesses must do so subject to state taxes "the same as if such business [es] were conducted by an individual or corporation." If businesses in California not conducted by a bankruptcy trustee are delinquent in the fees, they must pay the penalty. However, petitioner's contention would exempt a trustee operating a business in bankruptcy from this double tax liability which other delinquents must bear. A State would thus be accorded the theoretical privilege of taxing businesses operated by trustees in bankruptcy on an equal footing with all other businesses, but would be denied the traditional and almost universal method of enforcing prompt payment.

Taxation on and regulation of highway traffic are matters of constantly increasing importance and concern to the States. The Act of 1934 indicates a Congressional purpose to facilitate-not to obstruct-enforcement of state laws; the court below correctly recognized and applied this Congressional purpose and its judgment is Affirmed.

MR. JUSTICE BUTLER took no part in the consideration or decision of this case.

308 U.S.

Opinion of the Court.

UNITED STATES v. GLENN L. MARTIN CO.

CERTIORARI TO THE CIRCUIT COURT OF APPEALS FOR THE FOURTH CIRCUIT.

No. 30. Argued October 19, 20, 1939.-Decided November 6, 1939.

[ocr errors]

1. A contract for sale to the United States of aircraft and aircraft material, contained a provision that the stipulated prices included "any federal tax heretofore imposed by the Congress which is applicable to the material called for" by the contract, and a provision requiring additional compensation to the seller in the event of imposition by Congress subsequent to the date of the contract of any taxes which should be "made applicable directly upon production, manufacture, or sale of the supplies called for herein and are paid by the contractor on the articles or supplies herein contracted for..." Held, that federal Social Security taxes (subsequently imposed by Congress) were not taxes of such character as required additional compensation to the seller under the terms of the contract. P. 64.

2. It is unnecessary in this case to consider whether a tax paid under a state unemployment compensation statute is a tax "imposed by Congress.". P. 66.

100 F. 2d 793, reversed.

CERTIORARI, 307 U. S. 618, to review the reversal of a judgment in favor of the United States in an action against it on a contract, 23 F. Supp. 262.

Assistant Attorney General Clark, with whom Solicitor General Jackson and Messrs. Sewall Key and Joseph M. Jones were on the brief, for the United States.

Mr. John T. Koehler for respondent.

MR. JUSTICE BLACK delivered the opinion of the Court.

We must determine whether a contract to purchase certain aircraft and aircraft material from respondent required the United States to increase the stipulated

62

Opinion of the Court.

price by the amount of Social Security taxes paid by respondent.

June 28, 1934, the War Department and respondent, a Maryland manufacturer, made the contract, providing-"It is expressly understood and agreed to by and between the parties hereto that the prices herein stipulated include any Federal Tax heretofore imposed by the Congress which is applicable to the material called for under the terms of this contract. If any sales tax, processing tax, adjustment charge, or other taxes or charges are imposed or changed by the Congress subsequent to the date of this contract and made applicable directly upon production, manufacture, or sale of the supplies called for herein and are paid by the Contractor on the articles or supplies herein contracted for then the price herein stipulated will be increased or decreased accordingly and any amount due the Contractor as result of such change will be charged to the Government and entered on vouchers as separate items."

With respect to payrolls of employees alleged to have been engaged in fulfilling this contract during 1936 and 1937, respondent paid $794.03 in Federal Social Security taxes and $6,943.29 under the State of Maryland's Unemployment Compensation Law. Both the federal tax and Maryland's tax were levied "subsequent to the date of this contract." Respondent claims that both the Maryland Unemployment Compensation taxes1 and the federal Social Security taxes were "imposed . . . by

Congress" and were of the type for which the contract provided extra compensation.

Rejecting respondent's construction of the contract, the District Court held that no part of the taxes paid by respondent served to increase the liability of the Govern

'Laws of Maryland, extraordinary session, Dec. 1936, c. 1.

'49 Stat. 620, 637.

« ΠροηγούμενηΣυνέχεια »