269 U.S. 492 (1926), 454, Price v. United States

Docket Nº:No. 454
Citation:269 U.S. 492, 46 S.Ct. 180, 70 L.Ed. 373
Party Name:Price v. United States
Case Date:January 11, 1926
Court:United States Supreme Court

Page 492

269 U.S. 492 (1926)

46 S.Ct. 180, 70 L.Ed. 373



United States

No. 454

United States Supreme Court

Jan. 11, 1926

        Submitted November 23, 1925




        1. Taxes due the United States are "debts" within the meaning of Rev.Stats. § 3466, giving the United States priority in certain cases. P. 499.

        2. Rev.Stats. § 3466 is to be construed liberally. P. 500.

        3. The joining by a defendant corporation in securing a receivership in a suit by a simple contract creditor, to take over the defendant's property and business for the purpose of conserving them and paying creditors, amounts to a voluntary assignment, within the meaning of § 3466, Rev.Stats., where the business is in a failing condition and turns out to be insolvent so that the assets are a trust fund for the creditors according to their priorities. P. 502.

        6 F.2d 758 affirmed.

        Certiorari to a judgment of the circuit court of appeals affirming an order of the district court directing a

Page 493

receiver to pay claims of the United States as priority claims. See Liberty Mutual Co. v. Johnson Shipyards, 6 F.2d 752; Stripe v. United States, post, p. 503.

Page 498

        BUTLER, J., lead opinion

        MR. JUSTICE BUTLER delivered the opinion of the Court.

        October 2, 1923, Charles H. Mears, a simple contract creditor, brought suit on behalf of himself and other creditors against J. M. Gidding & Co., a New York corporation. Among the facts alleged in the complaint are these. Defendant was engaged in the business of importing and selling wearing apparel at retail in New York and four other cities. It owed plaintiff $10,000 on a promissory note, its debts were large, and it was without money to pay those then due and shortly to become due.

Page 499

If its assets could be sold in the usual course of business, they would be in excess of its debts. Some of the creditors were pressing their claims, and others had commenced suit; and, if the assets were not taken into judicial custody, some creditors might obtain inequitable preferences as against plaintiff and other creditors, and the assets might not be enough to pay all. And, averring no adequate remedy at law, the complaint prayed the court to determine the rights of all creditors, and to appoint a receiver to take possession and control of all defendant's assets, and that, when just and proper, the assets be ordered sold and the proceeds distributed to those entitled thereto. On the same day, defendant filed its answer admitting the allegations and joining in the prayer of the complaint. The court immediately entered its decree granting the relief prayed, and appointed appellant temporary receiver with authority to take possession and control of, and to make disbursements to preserve, the assets. January 9, 1924,...

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