271 U.S. 236 (1926), 272, Mellon v. Michigan Trust Company

Docket Nº:No. 272
Citation:271 U.S. 236, 46 S.Ct. 511, 70 L.Ed. 924
Party Name:Mellon v. Michigan Trust Company
Case Date:May 24, 1926
Court:United States Supreme Court
 
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Page 236

271 U.S. 236 (1926)

46 S.Ct. 511, 70 L.Ed. 924

Mellon

v.

Michigan Trust Company

No. 272

United States Supreme Court

May 24, 1926

Argued April 27, 1926

APPEAL FROM AND CERTIORARI TO THE CIRCUIT COURT OF APPEALS

FOR THE SIXTH CIRCUIT

Syllabus

1. In view of § 10 of the Federal Control Act, a claim for transportation charges and for conversion of goods shipped, presented by the Director General of Railroads against an insolvent who made a voluntary assignment, is not entitled to the priority granted the United States by Rev.Stats. § 3466. P. 237.

2. Cause held to be reviewable by certiorari, and not by appeal. P. 240.

2 F.2d 194 affirmed.

Certiorari to a judgment of the Circuit Court of Appeals which sustained the district court in denying priority of payment to a claim made by the Director General of Railroads in a suit to wind up affairs of an insolvent corporation. An appeal also was taken, and is dismissed.

Page 237

MCREYNOLDS, J., lead opinion

MR. JUSTICE McREYNOLDS delivered the opinion of the Court.

Creditors of the Rathbone Manufacturing Company filed a bill against it in the United States District Court, Western District of Michigan, wherein they alleged its inability to pay lawful debts in due course, etc., and asked for a receiver. Answering, the corporation (which was in fact insolvent) admitted the allegations and gave consent to the relief prayed. Thereupon the Michigan Trust Company was appointed receiver, took possession of the property, and entered upon administration of the trust.

The Director General of Railroads presented claims for transportation charges and conversion of a shipment of pig iron. He asked priority of payment, which was denied by both the trial court and the circuit court of appeals. 2 F.2d 194.

As pointed out in United States v. Butterworth-Judson Corporation, 269 U.S. 504, the things done by the Rathbone Manufacturing Company amounted, in substance, to a voluntary assignment of all its property within the meaning of R.S. § 3466. * Consequently, if the Director

Page 238

General [46 S.Ct. 512] is entitled to the priority granted to the United States by that section, the judgment below must be reversed. But it is said here, and was held below, that such priority is inhibited by the provisions of § 10, Act of March 21, 1918, c. 25, 40 Stat. 451, 456, which...

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