139 F. 600 | 6th Cir. | 1905
By intervening petition the state of Tennessee, the county of Hamilton, and the city of Chattanooga sought an order requiring the trustee to pay certain taxes due from the bankrupt corporation, the New Chattanooga Furnace Company, out of the funds in his hands before the payment of dividends. The aggregate of the claims is $'690. Of this about two-thirds is the tax assessed upon personal property and the remainder upon the real property of the bankrupt. The greater part of the property upon which this tax was assessed consisted of real and personal property covered by a mortgage. The mortgage debt being in excess of the value of the mortgaged property, the trustee, by consent of the court, relinquished it to the mortgage creditors. The unmortgaged property which came to the hands of the trustee represented about 15 per cent, of the total of the entire property upon which the tax was assessed. Upon this state of facts the court ordered the trustee to pay 15 per cent, of the tax claim, and declined to order the payment of the remainder.
The decree is erroneous, and the trustee should be required to pay all the taxes legally due by the bankrupt. • Section 64a of the bankrupt act (Act July 1, 1898, c. 541, 30 Stat. 563 [U. S. Comp. St. 1901, p. 3447]) reads as follows:
“The court shall order the trustee to pay all taxes legally due and owing by the bankrupt to the United States, state, county, district, or municipality in advance of the payment of dividends to creditors, and upon filing the receipts of the proper public officers for such payment he shall be credited with the amount thereof, and in ease any question arises as to the amount or legality of any such tax, the same shall be heard and determined by the court.”
There seems to be no room for construction. The taxes claimed are confessedly due and owing. Of the aggregate tax claimed $450 was assessed against the aggregate value of the personal property owned by the bankrupt and the remainder upon the aggregate value of the realty. Under the Tennessee statute this assessment con
The order of the bankrupt court is reversed, with direction to pay the entire claim for taxes.