123 F. 639 | W.D.N.Y. | 1903
This is a review of a decision of Referee Van Voorhis. The facts are fully stated in the opinion of the referee.
The only liability of the bankrupt for the taxes specified, and which is sought to be allowed as a preferred claim, is a contractual one between the bankrupt and the Flour City National Bank, and therefore cannot be regarded as a tax owing from the bankrupt to any municipality, within the provisions of section 64(a). This section must be strictly construed when it would inure to the benefit of a particular creditor, and not to a municipality. This precise question was decided under the former bankruptcy act in In re Parker, Fed. Cas. No. 10,7x9, adverse to the contention of the petitioner herein. By section 28 of the act of March .2, 1867, 14 Stat. 517, c. 176, all debts due to the United States, and all taxes and assessments under the laws thereof, were entitled to preferential payment in full. The provision governing priority of payment of taxes under the present act includes, among others, municipal taxes legally due and owing by the bankrupt. No language is employed which will permit the interpretation contended for by the petitioner. Assuming, therefore, that the municipal charter of the city of Rochester expressly includes water rates, rents, or charges as within the definition and legal scope of the word “taxes,” I am, nevertheless, of the opinion that the failure of the bankrupt to comply with his covenant to pay water, rates or charges neither gave to the municipality or to the lessor a claim to priority of payment out of the funds of the estate of the bankrupt.
Decision of the referee afiFtne-s.