In re CO Pick Co.

• Decision Date: 30 November 1925
• Docket Number: 7947.,No. 7368,7368
• Parties: In re C. O. PICK CO. et al.
• Court: U.S. District Court — District of Oregon

9 F.2d 207 (1925)

In re C. O. PICK CO. et al.

Nos. 7368, 7947.

District Court, D. Oregon.

November 30, 1925.

Sidney Teiser, of Portland, Or., for trustee.

C. C. Page, of Salem, Or., and Harris, Smith & Bryson, of Eugene, Or., for State Industrial Accident Commission.

BEAN, District Judge.

The question to be decided is whether debts due the State Industrial Accident Fund are entitled to prior payment over the debts due general creditors of a bankrupt. The state law (section 6629) provides that the amounts due such fund shall be deemed prior claims in all bankruptcy proceedings. This law, however, is unavailing, unless the priority is given by the Bankruptcy Act, for that act "takes into consideration * * * the whole range of indebtedness of the bankrupt, national, state and individual, and assigns the order of payment." Guarantee Co. v. Title Co., 224 U. S. 152-160, 32 S. Ct. 457, 460 (56 L. Ed. 706). The priority must therefore be found, if at all, in the Bankruptcy Act, and its assumed incorporation of section 6629 of the Oregon Laws.

Section 64b of the Bankruptcy Act (Comp. St. § 9648) gives priority to "debts owing to any person who by the laws of the state or United States is entitled to priority," and by section 1 of that act (Comp. St. § 9585) the word "person" includes corporations, and corporations are defined as "all bodies having any of the powers and privileges of private corporations not possessed by individuals or partnerships" (section 1, subds. 6 and 19). The Supreme Court of the United States, in the recent case of Davis v. Pringle, 268 U. S. 315, 45 S. Ct. 549, 69 L. Ed. 974 (decided May 25, 1925), held that the government may not itself, or through any of its public agents or functionaries, be allowed priority in bankruptcy, notwithstanding section 3466, R. S. (Comp. St. § 6372), giving debts due it priority in settlement of estates of insolvent debtors, for the reason that the United States is not a person within the meaning of the Bankruptcy Act.

The same rule would, of course, apply to the state. It is claimed however, that the Industrial Accident Commission is a corporation, and therefore a person within the meaning of the law. Butterfield v. Commission, 111 Or. 149, 223 P. 941, 226 P. 216, is cited in support of the contention. The only question involved in that case, however, was whether the state was a party to an action against the commission, and could appeal from a judgment against it. The court ruled that, since the law provides that the commission may sue or be sued, it is a corporation for the purpose of supporting a proceeding against it, though it is not in the ordinary sense of the word. The purpose of the act creating the Industrial Accident Commission, as appears from the preamble and its various provisions, is to provide a method...