United States v. Lias

• Decision Date: 15 July 1957
• Citation: 154 F. Supp. 955
• Court: U.S. District Court — Northern District of West Virginia
• Parties: UNITED STATES of America, Plaintiff, v. William G. LIAS et al., Defendants.

154 F. Supp. 955

UNITED STATES of America, Plaintiff, v. William G. LIAS et al., Defendants.

Civ. A. 565.

United States District Court N. D. West Virginia, Wheeling Division.

July 15, 1957.

Daniel Krause, Pittsburgh, Pa., for Standard Finance Co.

Albert Morgan, Morgantown, W. Va., U. S. Atty., and Homer R. Miller, Special Asst. to the Atty. Gen., for the United States.

John E. Laughlin, Jr., Pittsburgh, Pa., and George Caravacios, Wheeling, W. Va., for William G. Lias.

Carl G. Bachmann, Wheeling, W. Va., for Alice Lias, John Lias, and other members of the Lias family.

HARRY E. WATKINS, District Judge.

Standard Finance Company, Pittsburgh, Pa., has filed a common claim against the Receivers of Wheeling Downs, Inc., and Wheeling Downs Racing Association, for $50,000, and asks that such claim, without interest, be paid from the proceeds of sale of the race track. The United States has a tax lien for more than three million dollars against William G. Lias, the owner of the majority (56.6%) of the stock of Wheeling Downs, Inc., and 60% of the stock of Wheeling Downs Racing Association. The balance of the stock of both companies is owned by his wife, Alice Lias, the children of William G. Lias, and his brother, John Lias. If the Standard Finance Company claim is paid, most of the funds to pay it will come from money which would otherwise go to the Government on its tax lien, by means of a liquidating dividend to the Receiver of William G. Lias. The United States has objected to the claim, taking the position that (1) the claim was not filed in time, and (2) that it is a debt of William G. Lias, Alice Lias and John Lias personally, and not the debt of the Receiver of Wheeling Downs, Inc., or Wheeling Downs Racing Association. I make the following findings of fact and conclusions of law:

(1) In a suit to enforce the tax lien mentioned above, this Court appointed Joseph Curl as Receiver of Wheeling Downs, Inc., the owner of the race track, and Carl O. Schmidt as Receiver for Wheeling Downs Racing Association, the lessee of the race track. Both Receivers were appointed and qualified on February 22, 1952. Lias appealed to the Court of Appeals of the Fourth Circuit from the order appointing the Receivers, D.C. 103 F.Sup. 341, which was affirmed, 196 F. 2d 90.

While these appeals were pending, Lias stated that he and his staff did not want the track to operate at the Spring race meet to begin in April, 1952, and that he and his track employees would not cooperate with the Receiver in operating the track at such race meeting, with the result that the Court ordered the Receivers to close the track and employ only watchmen to protect the property, and this was done.

Since neither of the Lias corporations owed the Government any money, Lias and his counsel were confident that the order appointing the Receivers would be reversed, with the result that Lias spent much money at the track after the appointment of the Receivers in cleaning up after a flood, building some additional stables, and making repairs. On the day of their appointment, the two Receivers went to the track and each told Lias, in person, and each of the Lias employees working at the track that they had no money for these improvements; that the track was in receivership, and that the Receivers would not be responsible for any labor or material used at the track after February 22, 1952, the date of their appointment, and that they must look to Lias personally. The Receivers also posted notices at the office building at the race track, and delivered to each workman a notice in writing to the effect that the Receivers would not be responsible for any labor or materials. The Pittsburgh, Wheeling, and other newspapers carried...