contract Graham would owe the statutory duty to pay over the taxes due, just as it would to pay its income tax on profits earned. Graham's embezzlement lay neither in execution nor in breach of the contract. It arose from the conversion of the withheld taxes which Graham held as trustee for the United States pursuant to § 3661 of the Code. Assignor Graham's indebtedness to the United States arose, we think, "independently" of the contract.

Finally it is urged that the Act should be construed so as to protect the United States. The short answer to this is that the Act should be construed so as to carry out the purpose of Congress to encourage the private financing of government contracts. To grant the Gov

7"§ 3661. Enforcement of liability for taxes collected.

"Whenever any person is required to collect or withhold any internal-revenue tax from any other person and to pay such tax over to the United States, the amount of tax so collected or withheld shall be held to be a special fund in trust for the United States. The amount of such fund shall be assessed, collected, and paid in the same manner and subject to the same provisions and limitations (including penalties) as are applicable with respect to the taxes from which such fund arose."

8 United States v. Guaranty Trust Co., 280 U. S. 478, 483. In the Guaranty Trust case the United States sought priority under R. S. $3466 for its debts from embarrassed railroads. Transportation Act of 1920, Tit. II, §§ 207, 209, 210, 41 Stat. 456, 457-469. Although there was no specific waiver of § 3466, similar to the waiver of the right of set-off or reduction here claimed, this Court held:

"To have given priority to debts due the United States pursuant to Title II, would have defeated the purpose of Congress. It not only would have prevented the reëstablishment of railroad credit among bankers and investors, but it would even have seriously impaired the market value of outstanding railroad securities. It would have deprived the carriers of the credit commonly enjoyed from supplymen and others; would have seriously embarrassed the carriers in their daily operations; and would have. made necessary a great enlargement of their working capital. The provision for loans under § 210 would have been frustrated. For, carriers could ill

639

Opinion of the Court.

ernment its sought-for rights of set-off under the circumstances of this case, would be to defeat the purpose of Congress. It would require the assignee to police the assignor's accounting and payment system. It would increase the risk to the assignee, the difficulty of the assignor in financing the performance, and the ultimate cost to the Government.

Reversed.

THE CHIEF JUSTICE, MR. JUSTICE BURTON and MR. JUSTICE CLARK dissent.

MR. JUSTICE BLACK and MR. JUSTICE JACKSON took no part in the consideration or decision of this case.

afford voluntarily to contract new debts thereunder which would displace, pro tanto, their existing bonded indebtedness. The entire spirit of the Act makes clear the purpose that the rule leading to such consequences should not be applied." 280 U. S., at 485.

LEVINSON ET AL. v. DEUPREE, ANCILLARY ADMINISTRATOR.

CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT.

No. 439. Argued February 5-6, 1953. Decided June 1, 1953. A New York girl was killed in a collision between two motorboats on the Ohio River in Kentucky. Respondent obtained a defective appointment as ancillary administrator of her estate and filed a timely libel in personam in a Federal District Court in Kentucky against the owners and operators of the motorboats for damages under the Kentucky wrongful death statute, which prescribed a one-year statute of limitations. Respondent later obtained an undoubtedly valid appointment and, more than a year after the death, moved to amend his libel to allege his new appointment. This was not permitted under Kentucky law, because a new suit would have been barred by the statute of limitations. Held: The suit being in admiralty, federal practice controls. The adminis trator, holding an effective appointment under Kentucky law, should be permitted to amend his libel so as to allege that appointment, even though the applicable statute of limitations would bar a new suit. Pp. 649-652.

199 F. 2d 760, affirmed.

A Federal District Court dismissed an administrator's libel to recover for a wrongful death occurring on a navigable river. The Court of Appeals reversed. 186 F. 2d 297. This Court denied certiorari. 341 U. S. 915. On remand, the District Court awarded a decree to the administrator. The Court of Appeals affirmed. 199 F. 2d 760. This Court granted certiorari. 344 U. S. 903. Affirmed, p. 652.

Charles E. Lester, Jr. argued the cause for petitioners. With him on the brief was Stephens L. Blakely.

Robert S. Marr argued the cause for respondent. With him on the brief was Harry M. Hoffheimer.

648

Opinion of the Court.

MR. JUSTICE FRANKFURTER delivered the opinion of the Court.

Katherine Wing of New York was killed in a collision between two motorboats on the Ohio River within Campbell County, Kentucky, on June 19, 1948. On December 7, 1948, Deupree was appointed ancillary administrator of Katherine Wing's estate by the County Court of Kenton County, Kentucky, and on the same day he filed in the United States District Court for the Eastern District of Kentucky a libel seeking to recover damages for her death from petitioners Levinson and Hall, the owners and operators of the boats which had collided. The libel alleged Deupree's appointment as administrator. On March 3, 1949, petitioners answered with a general denial. On July 7, 1949, petitioners having moved for an order requiring the administrator to provide security for costs, Deupree filed an "affidavit for leave to sue in forma pauperis." This affidavit stated that "decedent was possessed of no estate out of which costs or expenses herein can be paid or from which security therefor can be given." On the same day petitioners filed a special demurrer putting in issue Deupree's capacity to sue, on the ground that the appointment of an administrator in a county. where there is no estate is void. Jewel Tea Co. v. Walker's Administrator, 290 Ky. 328, 331, 161 S. W. 2d 66, 68. Deupree thereupon obtained another appointment as ancillary administrator, this time from the County Court of Campbell County, where the cause of action for wrongful death, itself an estate, had its locus. On July 29, 1949, Deupree filed a motion to amend his libel by alleging this new appointment. To the amended libel, petitioners, on September 9, 1949, entered a general demurrer.

The District Court sustained both the general and special demurrers. It held that the Kenton County appointment of Deupree as administrator was void and that

the amended libel alleging the Campbell County appointment "cannot relate back to the inception of the libel proceeding." The claim as set out in the amended libel, the court held, was therefore barred by the Kentucky oneyear statute of limitations, and the libel had to be dismissed.

The Court of Appeals agreed that under Kentucky law the Kenton County appointment was defective, although it held that the existence of a cause of action alone is sufficient, in Kentucky, to support the appointment of an administrator, and hence that the Campbell County appointment was valid. The court agreed also that under the Kentucky law the amended libel was barred. But, the Court of Appeals held, as to this matter, Kentucky law was not controlling. And it reversed and remanded for trial. 186 F. 2d 297. We denied a petition for certiorari to review this judgment, 341 U. S. 915, but, after a decree had been awarded to the administrator and the Court of Appeals had affirmed, 199 F. 2d 760, we granted the present petition. 344 U. S. 903. Although the issue, embedded as it is in peculiarities of Kentucky law, is now seen to be a narrow one, it appeared to us at first that there was involved a broader and more important question of the binding force of local law in federal admiralty courts administering remedies created by that law.

The maritime law does not allow recovery for wrongful death. The Harrisburg, 119 U. S. 199; Butler v. Boston & Savannah Steamship Co., 130 U. S. 527, 555. In 1920, Congress adopted a Lord Campbell's Act restricted to deaths on the high seas, 41 Stat. 537 et seq., 46 U. S. C. § 761 et seq. In further alleviation of the maritime law, we have held that "where death . . . results from a maritime tort committed on navigable waters within a State whose statutes give a right of action on account of death by wrongful act, the admiralty courts will entertain a