California State Board of Equalization v. Goggin
191 F.2d 726
9th Cir.
1951
Check Treatment

*2 POPE, Before STEPHENS and Cir- FEE, Judges, cuit Judge. STEPHENS, Circuit Judge. February On West Coast Cab Works, Inc., corporation

inet manufacturing and selling cabinets at California, retail in petition filed a under Chapter 11 of Act1 and George Goggin appointed T. was receiver. February From until March receiver, Goggin, as conducted the corporation business of the under author ity court, sales, of the made retail paid the California tax sales thereon.2 12, 1946, corporation On March 'Was adjudicated Goggin a bankrupt and appointed trustee. Pie continued to con duct the business bankrupt until paid March the California sales on retail sales made.

On March the trustee was di- by order rected of the court to sell the assets of the estate. carrying out the order, the trustee made numerous sales of personal property bankrupt paid the California thereon. On retail, March the trustee sold at by public auction, five trucks which had bankrupt delivery been used pur- poses in the conduct of the business. sales tax was not added to the seq. Title 11 et Code, 2. California Revenue and Taxation seq. et one adminis- purchase price were not re- and the sales sessments essential ported bankrupt’s tax return tration and does estate n against amount to a the state. filed suit trustee. Jersey, v. New Gardner appellant, *3 The State Board California 565, 467, 91 L.Ed. 504. Equalization, an additional de- made trus- owing from the termination Appellant that the es- contends record and based sale of the trucks tee the by that the were sold tablishes five trucks mailed the was notice of assessment “during period in which the trustee- a he Upon failure the trustee. the trustee’s operating was the bank- business of the ** timely payment, penalty of to make a rupt ten that is averred claimed per cent was added to amount by stipulation is established entered the the. to be due.3 Equaliz- the into between State Board of trustee, ation and the states that which trustee, petition On the court the 12, period 1946, “During the March from granted directing an order cause to show May George Goggin, T. as appear why appellant to give reasons bankrupt, for said was trustee they permanently not should restrained be personal property the of tangible, in sale enjoined enforcing the from addition * * stipulation at retail is The al On assessment. November not to the effect that were made while cause, hearing order to show after a on the the business was being conducted. The enjoined appellant from the referee the shows evidence that sales of cabinets were any enforcing against the trustee of the April May 14, on made provisions tax the California sales pursuant liquidation after and the a result of the sale claimed due as order. judge trucks. The district affirmed West the referee’s order. In re Coast The of a operation continued Works, Inc., D.C.Cal.1950, 92 F. Cabinet bankrupt’s business a matter within is Supp. 636. Title 11 sound discretion the court. (5); Reynolds a sub. R. The contention as to lack of J. Inc., Jones, Cir., Co. A. 8 Tobacco B. jurisdiction is not well The taken.! court 1931, 54 F.2d 329. or The receiver trustee injunc jurisdiction had to issue the below empowered merely by virtue of not his §-11, (15); Title U.S.C.A. sub. tion. appointment to the business conduct Boteler, Board of Richter, bankrupt. In re D.C.N.Y. Cir., F.2d 386 Title . U.S. F.Supp. 758. When court 41(1), Title 28 U.S.C.A. C.A. § [now liquidation on March ordered provides which no district court that 1341] assets, authority to con the trustee’s jurisdiction any have' suit shall en the business The com terminated. duct join, suspend, assessment, or restrain the pletion and sale cabi of the unfinished levy, imposed by tax or collection they might order that be sold nets in as- pursuant to the laws state or where -pieces finished did not amount to conduct speedy, plain, remedy may and efficient D.C.Mo.1924,. Duke, business. re equity law be had at courts (receiver 15 F.2d who hired em abridge power state did not of such ployees caps for short to finish time in- granted bankruptcy specifically court they sold might order as finished may such judgments to make be nec caps pieces- rather than did of cloth essary pro- enforcement of business”). “conduct Ly visions of Act. See indicated, City York, Cir., of New undisputed, ford While as is 782; In stipulation 137 F.2d re California Pea Prod the record on- Inc., D.C.Cal.1941, ucts, F.Supp. that retail appeal, personal prop- sales of dealing with made erty -by state tax were as- the trustee March Equal Consult California Board of certiorari denied 340 U.S. Goggin, Cir., 1950, ization 183 F.2d S.Ct. 207. bankrupt him the es- undisputed is also 1946,it tate pursuant order. liquidating court sales, the trustee whether question remains business. The construction liqui- applies sales tax tax is a which is matter of law bind by a made personal property dation ing upon Corp. us. v. State Richfield Oil or- pursuant trustee in Equalization, Board of der. The California 91 L.Ed. 80. us in State were issues before Similar Supreme stated supra, Boteler, Equalization v. an excise for the measure involved is *4 of opinion disposes reading a and of that business, conducting privilege of a retail ap- urged this the contentions many of receipts by gross from measured the sales. deci- above the Appellant states peal. Lithograph Board of Western Co. v. State certain vitality because longer has sion no Equalization, 1938, 156, 11 Cal.2d 78 P.2d Sales in changes since made the 838; 731, 171 Cold A.L.R. National Ice & Tax Use law. and Storage Fruit California v. Pacific Co. imposed involved is tax measure The Express 1938, Co., 283, 11 Cal.2d 79 P.2d is de- “retailer” “retailers.”4 A all ap 380. The has been the tax fact that held alia, person as, every inter fined opto plicable glasses by sale of retail of sales at making in the business of Johnson, 1940, Cal.2d metrist, Kamp v. 15 1945, property.5 In some tangible personal 187, 274, print P.2d to sale used Board of State years decision in after ing equipment conducting in course of Boteler, supra, Equalization Section v. business, printing Bigsby Johnson, a v. 6005, included within those defines which 1941, 860, 268, 18 Cal.2d 99 P.2d 118 P.2d “person”, as used meaning the word 289, liquor by and sold a non to meals act, words in the was amended profit members, social Union club added.6 States” were “trustee” and “United League 1941, Johnson, Club v. 18 Cal.2d changes impose that these is contended 275, 425, P.2d to the transfer of upon liquidation by made a the tax by equipment corpora railroad railroad a operation bankruptcy through the in trustee primarily engaged carriage tion 124a of Title 28.7 of former Section freight passengers, Northwestern Company Pacific Railroad v. State Board changes not made in We do feel 1943, Equalization, 524, 21 Cal.2d act have the effect which is the California 400, alter P.2d does not the fact that when placed upon by appellant. sought to be them disposed of bankruptcy trustee in 1939, 521, Ingels, 57, v. 308 U.S. Boteler “ * ** trucks here involved 78, 442, 29, 84 L.Ed. made it clear in sale made the course con- operates who that a trustee in but in the ducting a business business, subject to does so state taxes. putting An- an end business.” Los question presented is here which geles School v. City High State which in Board of was decided State 1945, Equalization, Cal.App. Board Equalization Boteler, supra, v. is 486, 45, 47, to our referring 2d 163 P.2d applies bank- a trustee whether opinion in State Board of applies made ruptcy, whether but by any au- United States court who is Code, 4. Taxation California Revenue and said to conduct busi- thorized § 6051. business, ness, who does conduct or Code, Taxation California Revenue and 5. shall, the enactment from and 1943, 6015, by Cal.Stats., § amended subject Act, be to all and local 1, p. 2455, 822, p. 699, 3, § c. 2620. e. § applicable such business Cal.Stats.1949, amendment See later c. were as if business conducted same 728, 1.5. § ** corporation an individual 1934, c. Stat. 993. Cal.Stats.1945, Act of June ch. 1. § 960, Act of Title 28 U.S.C.A. See new “Any receiver, liquidator, referee, trus- 62 Stat. 927. June c. agents appointed tee, other officers or Boteler, power supra. 'Congress pass also Co. uniform See Coca-Cola Equalization, bankruptcies para 25 laws in relation is 1; People Imperial Pinkus, 156 P.2d mount. International Cal.2d Shoe Co. v. County, Cal.App.2d P.2d 278 U.S. 73 L.Ed. 318; 352; Constitution, I, Equali U. S. cl. State Board of Art. Schneider v. zation, 1944, Cal.App.2d 463, emphasize 145 P.2d The statutes so ne enacted 90; Thomas, 1940, People Cal.App.2d cessity order make dis 294; given P.2d Board tribution of Congress Banken v. State assets. Equalization, 1947, Cal.App.2d powers plenary to that 11, 66; end. 11 180 P.2d 400. Continental §§ Illinois, Bank National Co. v. & Chi Trust More construction tenable Co., I. & cago, R. P. R. tax, as indicated seq., et 55 SCt. 1110. Acting to, in the cases referred California courts powers, under these the referee ordered a geared statute, to the federal which is liquidating sale certain A trucks. nature, general appointed officers transaction, takes, on this whatever form it *5 for state United States courts liable process liqui o'f the Court A they taxes business”.8 if “conduct dating assets in with accordance constitu application of the harmonious federal power.- aspect, tional In may another us to the state laws here involved leads required considered as a license fee of a that in the sale conclusion liquidation. federal officer to In make pursuant bankrupt estate assets event, may either it is void. A tax purpose liquidation, order upon specific levied property in the hands subject to the Califor trustee was of a bankruptcy. trustee in Swarts v. tax. nia Hammer, 194 U.S. S.Ct. Boteler, supra; re Pea empowered L.Ed. 1060. no But state is Inc., Products, supra. upon levy of the courts It would be unwise to foster con of the impede United or to States the offi a de Congress flict where manifested of court judicial cers in an essential func Any harmony. such would sire for conflict Maryland, tion. McCulloch v. 4 Wheat application of necessarily entail 4 L.Ed. U.S. laws, fundamental doctrine enacted The District Court held as a fact that the pursuant power delegated United transaction in the nature under the su States Constitution are the and was not a state tax business land, in preme law the and state laws constructing and selling cabinets con therewith in consistent are that extent trustee, ducted who was authorized Maryland, McCulloch valid. thereto the United Court. States 17 U.S. Our Wheat L.Ed. 579. finding U.S.C.A. fact This §§ conclusion, however, only adheres binding clearly unless Rule erroneous. view, Equaliza Board our former Procedure, Federal Rules Civil Boteler, supra, doc but also to the tion v. conditions, neither Under problems sphere where trine that enactments of the State of California nor involved, sovereignty legislation dual are practices decisions of state courts nor per a construction which should receive administrative bodies can burden or to function with a mits both minimum impede relating administration of acts each with the Metcalf interference other. bankruptcies. International Shoe Co. Eddy Mitchell, & 269 U.S. Pinkus, S.Ct. 70 L.Ed. 384. S.Ct. right pro Court had a L.Ed. own discharge officers tect Affirmed. by Congress. laid their duties down- Okla Texas, homa v. U.S. FEE, 296; Id., ALGER Judge, JAMES (concurring). 609, 69 L.Ed. 1057. 7, supra. 124a,

8. Title 28 ed. see U.S.C.1940 footnote