In re General Film Corporation
| Decision Date | 08 June 1921 |
| Docket Number | 227. |
| Citation | 274 F. 903 |
| Parties | In re GENERAL FILM CORPORATION. v. KELLOGG. UNITED STATES |
| Court | U.S. Court of Appeals — Second Circuit |
Francis G. Caffey, U.S. Atty., of New York City (E. F. Unger, of New York City, of counsel), for the United States.
Louis Weinberger and Max Sheinart, both of New York City, for appellee.
Before WARD, ROGERS, and HOUGH, Circuit Judges.
September 23 and December 23, 1919, the United States filed two proofs of claim against the General Film Corporation, bankrupt under the Act of October 13, 1913, for income tax in the sum of $11,395 with interest in addition to the amount paid by the corporation for the year ending December 31, 1914, and for income tax in the sum of $4,433.81 with interest assessed by the Commissioner of Internal Revenue in addition to the amount returned by the corporation for the year ending December 31 1915.
The additional tax claimed for 1914 never was assessed, and the time for assessment seems to have expired. Chapter 16, L 1913, sec. 2(e), 38 Stat.L. 169. The additional tax for 1915 was assessed.
The trustee in bankruptcy objected to the allowance of the claims on the ground that the company had correctly returned and paid the tax upon its net taxable income for 1914 and had correctly returned the amount of its net taxable income for 1915. Macgrane Coxe, Esq., the referee, disallowed both claims, and Judge Mayer confirmed his report. The United States filed petitions to revise.
The government's first proposition is that the only remedy open to the trustee for correcting any error is to pay the taxes and then proceed under Rev. Stat. 3226 (Comp. St. 5949) by appeal to the Commissioner of Internal Revenue and, if the Commissioner delay decision for more than six months, to bring suit. But Congress in the Bankruptcy Act of 1898 (Comp. St. Secs. 9585-9656) has departed very considerably from the principles of public policy theretofore prevailing as to the rights of the sovereign. The Supreme Court pointed this out in Guarantee Title & Trust Co. v. Title Guaranty & Surety Co., 224 U.S. 152, 32 Sup.Ct. 457, 56 L.Ed. 706.
Section 64a of the Bankruptcy Act reads:
'The court shall order the trustee to pay all taxes legally due and owing by the bankrupt to the United States, state, county, district, or municipality in advance of the payment of dividends to creditors, and upon filing the receipts of the proper public officers for such payment he shall be credited with the amount thereof, and in case any question arises as to the amount or legality of any such tax the same shall be heard and determined by the court. ' Comp. St. Sec. 9648.
We regard this section as binding upon the government because it is named therein and, while conferring priority, as giving the bankruptcy court the power to hear and determine any question that arises as to the amount or legality of a tax assessed by it. The provision applies to taxes of all the persons mentioned, and we could not differentiate the government from the other persons in the absence of language justifying it.
But section 3226, U.S. Rev. Stat., could under no circumstances apply to the case under consideration because the trustee is not seeking to maintain a suit for the recovery of internal revenue taxes illegally assessed. Clinkenbeard v. United States, 21 Wall. 65, 22 L.Ed. 477; United States v. Nebraska Distilling Co., 80 F. 285, 25 C.C.A. 418.
The United States Attorney contends that the trustee by moving that the government's 'proof of debt be reconsidered and rejected' has become the moving party and therefore bound to proceed under Rev. Stat. Sec. 3226. But in bankruptcy a verified proof of debt has greater effect than the filing of a complaint. It has probative force and makes out a prima facie case, for which reason the objector is required to go forward. We said in Re Dresser, 135 F. 495, at page 498, 68 C.C.A.
207, at page 210, affirmed Whitney v. Dresser, 200 U.S. 532, 26 Sup.Ct. 316, 50 L.Ed. 584:
...
To continue reading
Request your trial
-
Farmers Cooperative Co. v. Birmingham
...that the payments in issue were made as refunds rather than as dividends to stockholding customers." In the case of In re General Film Corp., 2 Cir., 1921, 274 F. 903, a return by the corporation to users of its film based on the amount of film used during the year was held not to be a dist......
-
In re Lasky
...denied Hipp v. Boyle, 303 U.S. 637, 58 S. Ct. 522, 82 L.Ed. 1097; In re Fuoco, D.C. N.J., 1938, 22 F.Supp. 808; In re General Film Corp., 2 Cir., 1921, 274 F. 903. See, also, City of Detroit, et al. v. Detroit & Canada Tunnel Co., et al., 6 Cir., 1937, 92 F.2d The weight of these authoritie......
-
In re Aero Services, 44420.
...been upheld. See 3 Collier, op.cit. supra, pp. 2145, 2146, and citations; and cf. Dickinson v. Riley, 8 Cir., 86 F.2d 385; In re General Film Corp., 2 Cir., 274 F. 903; In re Clayton Magazines, Inc., 2 Cir., 77 F.2d 852. There had been, however, a minority view, of which perhaps the leading......
-
In re Raflowitz, 19893.
...is not confined to cases involving state taxes; it extends to federal taxes as well. In re Anderson, 2 Cir., 279 F. 525; In re General Film Corp., 2 Cir., 274 F. 903; In re Wyley Co., D.C., 292 F. 900; In re Sheinman, D.C., 14 F.2d 323; In re Geo. F. Redmond & Co., D.C., 17 F.2d 128, and In......