In re W P. Williams Oil Corporation
| Decision Date | 24 April 1920 |
| Citation | 265 F. 401 |
| Parties | In re W. P. WILLIAMS OIL CORPORATION. |
| Court | U.S. District Court — Western District of Kentucky |
D. A Sachs, Jr., of Louisville, Ky., for trustee.
W. V Gregory, U.S. Dist. Atty., of Louisville, Ky., for collector.
The adjudication in this case was made on December 19, 1919. On January 14, 1920, Elwood Hamilton, collector of internal revenue, filed proof of the claim of the United States for income taxes alleged to be due from the bankrupt. This proof was in regular form, and the claim was thereupon allowed. On January 20, 1920, the trustee in bankruptcy filed a petition praying for a re-examination of the claim thus presented by the United States. On February 4, 1920, the collector of internal revenue moved to dismiss the trustee's petition for re-examination. On March 19, 1920, the referee sustained that motion, and this petition, asking a review of that order, was thereupon filed in due course.
It can hardly be denied that the proceedings up to this point were in exact conformity to the usual practice in bankruptcy cases, but it is insisted now on behalf of the United States that the only way to raise a question, even in the bankruptcy court, respecting the validity of the taxes claimed by the United States, is for the trustee to pay the taxes and file a claim for the refunding thereof. Many authorities have been cited which establish the general rule that, in cases other than those in bankruptcy, it is necessary under the law to pay the taxes and then petition the Commissioner for a refunding thereof, before an action can be brought for their recovery. Undoubtedly this is the general rule, where there is no bankruptcy proceeding; but the question here is whether, when there is a bankruptcy proceeding, other rules must not be applied and other statutes observed and enforced?
Although the proof of debt against the bankrupt was filed in the proper way by the proper officer for the United States, it is now insisted on its behalf that the defensive movement made by the trustee is not within the jurisdiction of the court. In other words, it is insisted, somewhat illogically, it may be, that while the United States may come in and prove its claim in bankruptcy, and have it allowed, the bankruptcy court is without any jurisdiction to question the accuracy or the justice of the claim thus presented against the bankrupt's estate.
It should not escape attention that no part of the taxes has been paid, and, of course, therefore, the trustee in bankruptcy has made no effort to sue the collector. The trustee only resists a claim proved in behalf of the government, to be paid, if found proper, out of the bankrupt's assets in due course. The contention that while the United States might sue to recover any taxes due (as in effect it did when it proved its claim), the person whose assets are sought to be subjected to the taxes cannot make any defense until he has paid them, and sought to have a refunding in the way suggested by an application to the Commissioner of Internal Revenue, is wholly unmaintainable in a bankruptcy proceeding.
It was the intention of the Bankruptcy Act (Comp. St. Secs. 9585-- 9656) that estates should be promptly wound up. To require the sort of procedure suggested here would make it impossible to say when there could...
To continue reading
Request your trial
-
In re Lasky
...D. C. Pa., 14 F.2d 323 8 A.B.R.,N.S., 623; In re Geo. F. Redmond, D.C. Mass., 17 F.2d 128 9 A.B.R.,N.S, 245, and In re Williams Oil Corp., D.C. Ky., 265 F. 401 45 A.B.R. "Nor is the estate in bankruptcy bound by the failure of the bankrupt seasonably to prosecute appeals from the action of ......
-
In re Monongahela Rye Liquors
...Redmond & Co., D.C.Mass., 17 F.2d 128; In re Sheinman, D.C.Pa., 14 F.2d 323; In re Wyley Co., D.C.Ga., 292 F. 900; In re W. P. Williams Oil Corporation, D.C.Ky., 265 F. 401. 2 Compare Henderson County, N. C., v. Wilkins, 4 Cir., 43 F.2d 670, with Steinbrecher v. Toman, 7 Cir., 105 F.2d ...
-
In re Raflowitz, 19893.
...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 re Williams Oil Corp., D.C., 265 F. 401. Nor is the estate in bankruptcy bound by the failure of the bankrupt seasonably to prosecute appeals from the action of the t......
-
Dickinson v. Riley
...and Ten Cent Store, 242 F. 1005 (D.C.); In re Simcox, Inc., 243 F. 479 (D.C.); In re Sheinman, 14 F.(2d) 823, 824 (D.C.); In re Williams Oil Corp., 265 F. 401 (D.C.); In re Heffron Co., 216 F. 642 (D.C.); In re Geo. F. Redmond & Co., Inc., 17 F.(2d) 128 On the other view, that is, that sect......