No. 2,354 | D. Conn. | Mar 14, 1910
That portion of section 64, subd. "a,” of the bankruptcy act (Act July 1, 1898, c. 541, 30 Stat. 563 [U. S. Comp. St. 1901, p. 3447]), next to be quoted, controls the decision herein:
“(a) 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. * * * ”
By this legislation Congress seems to have placed valid and subsisting taxes in a class by themselves and of the highest .rank. The only possible question to be decided is whether the taxes, which the trustee has not been ordered to pay, were collectible from the bankrupt prior to adjudication. If they were legally due and owing at that time, they must be paid now. The referee seems to think that they were not, because the collectors had been guilty of laches in failing to collect sooner. Without explanation of the reasons for noncolléction, it strikes one that the collectors have been disgracefully slack, but I cannot believe that in a suit against Weissman before bankruptcy such a defense would have been made, or, if it had been made, would have been seriously listened to by any court.
The logic of the referee has another peculiar twist in it. He has ordered the last two years’ taxes paid, and stopped there. He appears to have fixed the line of demarcation according to his own notions of equity and justice, but I can discover no substantial reason for including 1908 and excluding 1907 or 1906. His reasoning applies to one as well as to the other. So far as those who , .came creditors just prior to bankruptcy are concerned, they had the same facilities for discovering that each of these taxes had not been paid, and one tax lessened' their security quite as surely as the other did. This last thought applies to all the taxes. The city hall was easy to be found, and, for the matter of that, the telephone makes every tax collector’s office very accessible to every creditor, wherever he may be. The taxes were a matter of public record, and the creditors were bound to know about them, just as they were bound to know of any matter of record concerning Mr. Weissman’s affairs. I appreciate the good purpose of the referee in his decision and, if the law would permit me, I should uphold him with both hands. The conduct of the officials was atrocious, but the remedy lies with Congress, and not with the courts. Once in a while it seems unfortunate that the courts cannot legislate, but the country is too near the edge of disorder and chaos to even think of weakening the perfect line of cleavage between the executive, legislative, and j udicial departments. Let the trustee pay all the taxes which are legally due and owing from the bankrupt estate.
I shall not undertake to solve the abstract problem which the referee puts forward at the end of his certificate, until it presents itself to me in concrete form.