In re Independent Automobile Forwarding Corp., No. 127.

CourtUnited States Courts of Appeals. United States Court of Appeals (2nd Circuit)
Writing for the CourtSWAN, AUGUSTUS N. HAND, and CHASE, Circuit
Citation118 F.2d 537
PartiesIn re INDEPENDENT AUTOMOBILE FORWARDING CORPORATION. STATE OF NEW YORK v. UNITED STATES.
Docket NumberNo. 127.
Decision Date17 March 1941

118 F.2d 537 (1941)

In re INDEPENDENT AUTOMOBILE FORWARDING CORPORATION.
STATE OF NEW YORK
v.
UNITED STATES.

No. 127.

Circuit Court of Appeals, Second Circuit.

March 17, 1941.


118 F.2d 538

John J. Bennett, Jr., Atty. Gen. (Henry Epstein, Sol. Gen., of Albany, N. Y., and W. Gerard Ryan and Francis R. Curran, Asst. Attys. Gen., of counsel), for appellant.

Samuel O. Clark, Jr., Asst. Atty. Gen., J. Louis Monarch and Thomas G. Carney, Sp. Assts. to the Atty. Gen., and George L. Grobe, U. S. Atty., and Joseph J. Doran, Asst. U. S. Atty., both of Buffalo, N. Y., for appellee.

Before SWAN, AUGUSTUS N. HAND, and CHASE, Circuit Judges.

CHASE, Circuit Judge.

The Independent Automobile Forwarding Corporation, an employer of labor to whom and to whose employees the provisions of the Federal Social Security Act, c. 531, 49 Stat. 639, 42 U.S.C.A. § 1101 et seq., were applicable, was adjudicated a bankrupt in the District Court for the Western District of New York on April 26, 1938. The liquidation of its property in the bankruptcy proceedings brought into the hands of the trustee assets insufficient to pay in full the claims filed and allowed priority under § 64, sub. a (4) of the Bankruptcy Act, 11 U.S.C.A. § 104, sub. a (4). The trustee filed his petition for instructions governing the payment of such priority claims and an order thereon was made on June 23, 1939, from which an appeal was taken to this court. Part of the claims involved were for taxes due the State of New York and part were for taxes due the United States, including some social security taxes and the amount of a credit allowable on the latter was changed by an amendment to the statute that became effective August 10, 1939. In accordance with a stipulation of the parties, an order was entered discontinuing that appeal without costs and remanding the case to the District Court for a resettlement of its order which would give effect to the amendment. The order was resettled in a way that granted priority to all the taxes claimed by the federal government and by the state and fixed the percentage payable thereon after allowing a credit on the social security taxes to the extent payments were to be made the State of New York on its claim for taxes which were to be contributions to its unemployment fund. This appeal is from the order so made.

The only claimants who will share in the distribution are the State of New York and the United States whose claims are for taxes for the year 1937, and as their claims, regardless of any issues on this appeal, exceed the amount available

118 F.2d 539
for distribution, there must, in any event, be a pro rata distribution. That is not disputed, but what part of the amount due the government for social security taxes should be given priority is in dispute as well as the amount of the allowable credit. There is no controversy as to the amount due the State of New York or that its claim is entitled to priority. Nor is there any dispute but that the part of the government's claim which does not arise under the Social Security Act is also entitled to priority

Turning now to the points in dispute, the first question is whether all taxes assessed under Title VIII and Title IX of the Social Security Act are to be granted priority under § 64, sub. a (4) of the Act as taxes owed by the bankrupt. Those imposed under Title IX and under § 804 of Title VIII are clearly taxes assessed against the employer and so against the bankrupt. The right to priority for so much as may be the correct amount of such taxes is clear but that amount, being in controversy in respect to the Title IX taxes, will later be considered separately herein. That leaves in the first problem only the nature of the liability of the bankrupt under the Social Security Act for taxes imposed under Title VIII, § 801.

Sec. 801 of Title VIII, effective in 1937, provided in so far as presently material that, "In addition to other taxes, there shall be levied, collected and paid upon the income of every individual a tax equal to the following percentages of the wages (as defined in section 811 1011) received by him after December 31, 1936, with respect to employment (as defined in section 811 1011 of this chapter) after such date * * *". And in § 802 (a) of the same Title it was provided that, "The tax imposed by section 801 1011 of this chapter shall be collected by the employer of the taxpayer, by deducting the amount of the tax from the wages as and when paid. Every employer required so to deduct the tax is hereby...

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12 practice notes
  • In re Wm. Akers, Jr., Co., No. 7411
    • United States
    • United States Courts of Appeals. United States Court of Appeals (3rd Circuit)
    • 30 Junio 1941
    ...27,581, p. 27, 111; In the Matter of Siegelbaum's Inc., D.C., 38 F.Supp. 1009; In re Independent Automobile Forwarding Corp., 2 Cir., 118 F.2d 537; cf. In re Lambertville Rubber Co., 3 Cir., 111 F.2d 45; In re Sixty-Seven Wall St. Restaurant Corp., D.C., 23 F.Supp. 672; City of New York v. ......
  • Sierocinski v. EI Du Pont De Nemours & Co., No. 7533.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (3rd Circuit)
    • 1 Abril 1941
    ...that the accident may have happened unaffected by any control of the defendant was not improper. It is of the office of cross-examination 118 F.2d 537 to appraise the weight, if any, to be ascribed to the inferences to be drawn from a witness' The appellee's further complaint that the parti......
  • In re Albert Lindley Lee Mem'l Hosp., No. 09-30845-5-mcr
    • United States
    • United States Bankruptcy Courts. Second Circuit. U.S. Bankruptcy Court — Northern District of New York
    • 7 Mayo 2010
    ...Act of 1898 and the Bankruptcy Code. See, e.g., State of New York v. United States (In re Independent Automobile Forwarding Corporation ), 118 F.2d 537 (2d Cir.1941), aff'd in part, rev'd in part, on other grounds; In re Cal-Test Enter., Inc., No. 82-10178 M, slip op. at 8 (Bankr.W.D.N.Y. A......
  • In re Berkshire Hardware Co., No. 63135.
    • United States
    • United States District Courts. 1st Circuit. United States District Courts. 1st Circuit. District of Massachusetts
    • 2 Julio 1941
    ...Coke Co., 301 U.S. 495, 57 S.Ct. 868, 81 L.Ed. 1245, 109 A.L.R. 1327 (Alabama law); In re Independent Automobile Forwarding Corp., 2 Cir., 118 F.2d 537 (New York law); In re Oshkosh Foundry Co., D.C., 28 F.Supp. 412 (Wisconsin law); In re Mid America Co., D.C., 31 F.Supp. 601 (Illinois law)......
  • Request a trial to view additional results
12 cases
  • In re Wm. Akers, Jr., Co., No. 7411
    • United States
    • United States Courts of Appeals. United States Court of Appeals (3rd Circuit)
    • 30 Junio 1941
    ...27,581, p. 27, 111; In the Matter of Siegelbaum's Inc., D.C., 38 F.Supp. 1009; In re Independent Automobile Forwarding Corp., 2 Cir., 118 F.2d 537; cf. In re Lambertville Rubber Co., 3 Cir., 111 F.2d 45; In re Sixty-Seven Wall St. Restaurant Corp., D.C., 23 F.Supp. 672; City of New York v. ......
  • Sierocinski v. EI Du Pont De Nemours & Co., No. 7533.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (3rd Circuit)
    • 1 Abril 1941
    ...that the accident may have happened unaffected by any control of the defendant was not improper. It is of the office of cross-examination 118 F.2d 537 to appraise the weight, if any, to be ascribed to the inferences to be drawn from a witness' The appellee's further complaint that the parti......
  • In re Albert Lindley Lee Mem'l Hosp., No. 09-30845-5-mcr
    • United States
    • United States Bankruptcy Courts. Second Circuit. U.S. Bankruptcy Court — Northern District of New York
    • 7 Mayo 2010
    ...Act of 1898 and the Bankruptcy Code. See, e.g., State of New York v. United States (In re Independent Automobile Forwarding Corporation ), 118 F.2d 537 (2d Cir.1941), aff'd in part, rev'd in part, on other grounds; In re Cal-Test Enter., Inc., No. 82-10178 M, slip op. at 8 (Bankr.W.D.N.Y. A......
  • In re Berkshire Hardware Co., No. 63135.
    • United States
    • United States District Courts. 1st Circuit. United States District Courts. 1st Circuit. District of Massachusetts
    • 2 Julio 1941
    ...Coke Co., 301 U.S. 495, 57 S.Ct. 868, 81 L.Ed. 1245, 109 A.L.R. 1327 (Alabama law); In re Independent Automobile Forwarding Corp., 2 Cir., 118 F.2d 537 (New York law); In re Oshkosh Foundry Co., D.C., 28 F.Supp. 412 (Wisconsin law); In re Mid America Co., D.C., 31 F.Supp. 601 (Illinois law)......
  • Request a trial to view additional results

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