In re Veitch
Decision Date | 11 April 1900 |
Docket Number | 165. |
Citation | 101 F. 251 |
Court | U.S. District Court — District of Connecticut |
Parties | In re VEITCH et al. |
A Heaton Robertson, Corp. Counsel, for city of New Haven.
H. W Asher, for trustee in bankruptcy.
In this estate was real estate mortgaged for $5,700, which was also subject to tax liens for taxes assessed upon said real estate, amounting to $446.59. These tax liens, by the laws of the state of Connecticut, take precedence of the mortgage. There remains in the hands of the trustee approximately $500 above the expenses of settling the estate. The mortgaged property was sold to the mortgagee at auction for $1. It was worth less than the mortgage. The mortgagee sold it for $3,000, and the referee allowed his claim at $2,700; being the amount of his indebtedness above the mortgage. The referee ruled that the taxes upon personal property amounting to $211.30, should be paid by the trustee, and that the $446.59 assessed upon and secured by said real estate should not be paid by the trustee. The referee held that the taxes secured by liens upon the real estate were secured claims; that the only result of payment would be to take the amount from the general creditors for the benefit of the mortgagee, without benefit to the tax collector; that such result would be inequitable; and that taxes so secured came within the rule of secured claims, under the statute. That the practical result of payment of these taxes on real estate by the trustee would be to take the amount from the general creditors and give it to the mortgagee must, of course, be conceded. If the tax collector is obliged to enforce his lien, there are legal fees compensating him for his trouble. The municipalities to which the tax is due have no real interest in the controversy. The only precedent under the law of 1867, so far as I am aware, is Foster v. Inglee, 13 N.B.R. 239, Fed. Cas. No. 4,973. In this case an execution had been levied upon real estate subject to taxes. It was held that, if the taxes had been deducted in estimating the value of the real estate, the rules of equity would forbid their payment by the trustee. It follows, then, that, upon precedent, taxes should not be paid by the trustee, where such payment would operate to the advantage of a third party against another; the taxes being, in any event, secured. Under the law of 1898, in Re Tilden, 1 Am.Bankr.Rep. 300, 91 F. 500, the taxes were assessed against...
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...to the priority of the taxing unit. Holding that such purchaser may not be so subrogated are: In re Hollenfeltz, D.C., 94 F. 629; In re Veitch, D.C., 101 F. 251; In re Minogue, D.C., 39 F.2d 239; In re Brinker, D.C., 128 F. 634; and in the Matter of Hibbler Machine Supply Co., D.C., 192 F. ......
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