Sawhill v. Lawrence, 5256.

• Decision Date: 23 February 1934
• Docket Number: No. 5256.,5256.
• Citation: 69 F.2d 194
• Parties: SAWHILL et al. v. LAWRENCE, Collector of Internal Revenue, et al.
• Court: U.S. Court of Appeals — Third Circuit

69 F.2d 194 (1934)

SAWHILL et al. v. LAWRENCE, Collector of Internal Revenue, et al.

No. 5256.

Circuit Court of Appeals, Third Circuit.

February 23, 1934.

Louis J. Wiesen, of Sharon, Pa., and Samuel Kaufman and S. Leo Ruslander, both of Pittsburgh, Pa., for appellants.

Horatio S. Dumbauld, U. S. Atty., and John A. McCann, Sp. Asst. U. S. Atty., both of Pittsburgh, Pa., for appellees.

Before WOOLLEY, DAVIS, and THOMPSON, Circuit Judges.

THOMPSON, Circuit Judge.

This is an appeal from a decree of the District Court for the Western District of Pennsylvania. The appellants, receivers of the Mercer Tube & Manufacturing Company, Sharon Steel Products Company, and McDowell & Company, petitioned for an injunction to restrain the collector of internal revenue from proceeding with the sale of steel pipe, which had been seized by him upon distraint for income taxes assessed against one B. A. Small, and for an order on the collector to deliver the seized pipe to the appellants free and discharged of any lien of the United States.

Small had been employed by the Wheatland Tube Company as its general manager. On October 10, 1932, he released the company from all liability under the employment contract. In consideration of such release the company agreed in writing to deliver on his order 550 tons of pipe — 275 tons on or before December 15, 1932, and the remainder within three months thereafter. Prior to December 10, 1932, 220 tons had been delivered and 330, tons were on the premises of the Wheatland Company.

Small was indebted to the United States for income taxes. The collector of internal revenue at Philadelphia certified these taxes to the collector at Pittsburgh. On December 10, 1932, the Pittsburgh collector filed a notice of lien and on December 13, 1932, distrained on the undelivered 330 tons of pipe and advertised the same for sale.

The appellants' theory is that they are entitled to the injunction because, at the time of the filing of the lien, the Sharon Company and not Small was the owner of the pipe in question. They alleged and attempted to prove that in October, 1932, Small had transferred title to his wife by assignment; that she, acting through the agency of her husband, transferred title to the Sharon Company; that the latter and McDowell & Co. merged and transferred their assets to the Mercer Company; and that among the assets contributed by the Sharon Company to the merged corporation was the contract with the Wheatland Company.

Small testified that he dictated an assignment of his rights to the pipe to a public stenographer in a hotel in Youngstown, Ohio; that he executed the assignment; that he then visited his wife at a hospital where she was confined because of a...