Providence Engineering Corp. v. Downey Shipbuilding Corp.

• Decision Date: 14 May 1925
• Citation: 8 F.2d 304
• Parties: PROVIDENCE ENGINEERING CORPORATION v. DOWNEY SHIPBUILDING CORPORATION. CHASE NAT. BANK OF CITY OF NEW YORK v. SAME.
• Court: U.S. District Court — Eastern District of New York

8 F.2d 304 (1925)

PROVIDENCE ENGINEERING CORPORATION v. DOWNEY SHIPBUILDING CORPORATION.

CHASE NAT. BANK OF CITY OF NEW YORK v. SAME.

District Court, E. D. New York.

May 14, 1925.

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Cadwalader, Wickersham & Taft, of New York City (Kenneth E. Walser and Catherine C. Noyes, both of New York City, of counsel), for receivers.

Albert Ottinger, Atty. Gen., of New York (Robert P. Beyer, Deputy Atty. Gen., of New York, of counsel), for claimant.

GARVIN, District Judge.

The case is before the court on exceptions taken by the people of the state of New York to the report of a special master, which contains a comprehensive review of the facts and a careful statement of the reasoning upon which he bases his conclusions. There is no occasion, therefore, for a restatement of the case.

I regret that I cannot agree with a report so scholarly in style and evidencing such exhaustive research.

The state of New York claims that the failure of the corporation and of its receivers to take proceedings under the Tax Law of the state of New York (Consol. Laws, c. 60), to review a tax improperly assessed, precludes any review by this court of the propriety of the assessment of such tax, citing In Matter of Gorham Manufacturing Co. v. State Tax Commission of State of New York, 266 U. S. 265, 45 S. Ct. 80, 69 L. Ed. 279, decided November 17, 1924. The learned master has sought to distinguish this case on the ground that there the corporation had made application to the court to enjoin the collection of the tax, whereas in the case at bar, when the assessment was made, the assets of the corporation were in the custody of the court. It does not seem to me that the distinction is well taken. Indeed, in the Gorham Case, supra, it is said, "A taxpayer who does not exhaust the remedy provided before an administrative board to secure the reviewal or correction of a tax cannot be heard by a judicial tribunal to assert its invalidity." No suggestion is there indicated that a taxpayer may be heard under such circumstances, if the matter comes before the court as the result of a claim pressed by the state, and not as the result of an application by the corporation to enjoin the collection of the tax. I can see no justification for holding that, because the receivers took no steps to review the assessment, they thereby acquired any greater rights than the corporation would have...