*1 Meyer City Lindenbaum, York New Edgar Lipton (Booth, Lipton, A. FUND & 140 SECURITY LOCAL Claimant-Appellant, Sheft, Booth and York Leonard A. New City, respondent-appel- counsel), for Bankruptcy lee. HACK, William S. Trustee Inc., Responde Products, Sleep Campbell Brown, Corp. Counsel, Peter nt-Appellee. City Buchsbaum, (Stanley New York 77, Docket 24113. No. Lyden, Bernard H. and J. Sherris John City, counsel), New York claim- for States, Appeals United Court ant, City of New York. Circuit. Second Williams, Atty. Paul for W. U. S. Argued Jan. York, Southern Dist. New New York 4, 1957. Decided March City (William Stackpole, City, York New counsel), amicus curiae. HINCKS, MEDINA and Before Cir- Judges, LEIBELL, cuit District Judge. LEIBELL, Judge. District bankruptcy pro- above entitled ceeding Security Local Fund filed a $2,400. It asserted claim for further priority as the claim entitled to was “wages” pursuant a claim for to Section a(2) of the Act.1 petition expunge the A Fund’s claim was filed with the Referee the trustee hearing bankrupt. Prior to on petition, stipulation of facts was amount into claim entered The was reduced claimant’s $993.75. right amount, priority for the reduced “wages,” as claim was contested be- fore Referee. He sustained the trus- was contention not tee’s pri- not and was entitled only ority. He allowed the claim as a general claim. petition review the Referee’s On determination, District sus- ruling Referee’s tained the entered accordingly. The issue is an order now Boudin, appeal on an Victor Rabino- claimant-appel- before this Court Rabinowitz City, witz, District Court’s order. York New York, claimant, City of New tax
lant. have commencement which the date Debts “§ proceeding, “(a) workmen, servants, have in ad- debts to priority, traveling city or salesmen or of dividends clerks, vance basis, or commission whole or paid salary and to full out of be creditors, selling exclusively not estates, the order of whether or time, bankrupt * * *." * * * (2) bankrupt; T. ment, shall claimant, to each which C.A. § exceed $600 months before within three been earned *2 376 bargaining
joins opposing pre- the in the with trustee in unit for the the ceding month., Fund’s claim to So does the Government, also a tax claimant. “It is understood that social the provided benefits to be requirements will meet the agree- bargaining A of form collective applicable all laws Sleep Prod- Local 140 and ment between ucts, satisfy Employer’s obli will the Stipula- (Ex. Inc. C annexed to the gations under the New York State provi- Fact) tion usual contained the Disability Law, ob without further hiring em- sions in relation the to ligation Employe part the ployees, employment, hours of rates r.2 legal days compensation, as to defined agreed “It that Local 140 Secur- is pay, holidays, the deduction vacation ity in Fund will be administered wages' ap- of an of the the compliance provisions of the all with propriate payable to for “dues” amount applicable laws.” the Union. Referee, expunging as in the Thirty-second agree- Paragraph of the priority claim, on a Judge decision based his payments provisions ment contained ruling in a similar Brennan’s employer made to Local to be D.C.N.D.N.Y., case, Brassel, Matter of Security follows: and reads as F.Supp. Employer “Thirty-second: The Judge Brennan In the Brassel case long agree- hereby agrees, as as this creditor, a union that welfare trust held fund, a effect, pay to remains in ment monthly making against a Brassel’s day the tenth on or before employ- as on failure an estate based his month, equal to a sum each 6% pay fund er to to the union’s welfare gross monthly payroll of the of the gross employees payroll of all 5% bargaining unit, employees to in the bargaining agree- by a covered ment, collective Security Fund, for the Local not entitled to on itsi was financing Security a Plan as claim. claim a employees of benefit of affirming order Referee Lowenthal’s bargaining Employer' within wrote in case at bar Herlands Employ- time At the same unit. opinion, D.C., 141 F. a well-considered setting report forward er shall Supp. 463, and that .en- concluded figures upon which forth “wages” largement of the term Sec- ment is based. Act, a(2) tion “Commencing February. 15th, by an em- include made so toas agrees Employer pay to ployer Fund under col- to a Welfare per (%%) one-half an additional bargaining agreement, should be lective Security Fund, to Local cent through Congressional action an to left applicable to be Wel- the sum support Act. To to the amendment Security provisions of fare the New York State he cites what view Legislature making Fund, it a of six and total amending did in per (6%%) cent. one-half Debtor and Creditor 22 of the agrees McKinney’s Consol.Laws, employer Law, c. further “The “wages monthly or remit- definition the aforesaid include make employers Security .Local 140 contributions salaries” the tances benefits, or welfare and that each insurance Fund at its offices annuity monthly payment up- pension funds. based Claims shall be. gross payroll Funds for sums Welfare pres- agreement recognizes Disability Law an such as the New York Benefits 2. The compliance one, em- Com is of the Workmen’s ent which Consol.Laws, obligations McKinney’s ployer’s Law, statute. nensation 211(5) thereof c. §§ wages earned, granted prefer- formed more than employer are from the obligation estate contractual owed administration ence in the * * * fringe person. third As- If the a General make who of signment *3 benefits now common under modern his creditors of for the benefit employment are mass contracts New York statute. under the protected against impact be bankruptcy, of the July of 1952 amendment Prior to the substantial revision Debtor and York 22 of the New in would have be made the both judges Law, Su of the State Creditor statutory language and in the funda- conflicting preme had rendered concepts concerning priori- mental right opinions of a Welfare on the ties.” preference preference to the a similar given wage proceeding Judge in a opinion claims Herlands’ in the case at Assignment.3 Genera] In Federal the a bar been rather has discussed ex- conflicting opinions Journal, now have Court we note in 66 Yale tensive Law No. right 3, pp. of Courts in the District 449 to 461. The author states wage priority legislative claim standpoint Funds to a Welfare that “from the of against bankrupt employer.4 however, Sleep intent, opinion may the * ** ground.” appear to be solid Judge opinion in the Bras- Brennan’s however, courts, “The should ascribe a subject commen- the case has been sel wage priority.” broader to the tary in two Law Reviews. The *4 85 L.Ed. if claimant.” and one preferred claimant is to ers, oth- be over National Rela- In Nathanson v. Labor should clear from be 80, Board, 26, tions S.Ct. statute. can find We writing 23, Douglas, Justice Mr. L.Ed. Bankruptcy giv- Act no for warrant majority opinion, denied claims ing pay any these back dif- awards pay made under for back Board awards ferent treatment than other 10(c) Labor of the National Section enjoy.” claims 160(c), Act, 29 U.S.C.A. Relations priority as a claim of the fifth class specified What were in the collective a(5) under sub. United States Section bargaining agreement, C, Exhibit as Bankruptcy The claims were of genuine Act. employer ments curity to Local 140 Se- wages they but could claims paragraphs Thirty- Fund under priority requirement of not meet the Thirty-third, only second and created having months of accrued within three obligation debtor creditor between bankruptcy employer’s under Section employer parties, and third for some- opinion stated, The thing wages. language other than The pages 28-29, page 82: 73 S.Ct. at U.S. at granting wages priority of the statute argues cannot be stretched so as to embrace this that the inter- “The Board type every type If claim. of the United States in eradicat- est ing great practices made ato union labor welfare unfair is so given priority fund is “wages” pay be as a claim for the back order should be given pri- a(2) additional sanction of Bankruptcy Act, ority payment. the through should be done Whether that legislative legislative action of the be done is a Con- should deci- gress, by any judicial mislabeling longer and not The contest now is no sion. “wages.” management of such as between various classes of between cred- but The order of the District Court is af- policy itors. National firmed. fully Relations Act is served Labor by recognizing the claim for back Judge HINCKS, (concurring). Circuit paid pay one to be from the as estate. respects question in all I concur whether it should opinion. preference I add paid in to other Leibell’s only these few creditors words plain my question opinion it to make that in be answered from is a required only indicated result is Act. not When Con- wag- statutory gress for which came to claims because debts grant “wages” priori- priority is claimed all of them are not es it did but they ty. limited are not also because “due to work- It $600 * * men, servants, clerks, only each claimant even then To me respects appellant- self-evident that it earned it seems allowed three before is not a workman. Nor months the date within assigned proceed- commencementof the “workmen” their claims Shropshire, Bush, 436; Woodliff Co. v. S.Ct. 204 U.S. 51 L.Ed. Bros., D.C., In re Stultz F. appears whol- appellant. to me It to the ly say appellant that the inadmissible assignee” of “workmen” “equitable is an says truly when, appellant its as the any right, brief, title employee “has fund, except the or right in the trust interest coverage and welfare to insurance op- benefits”; has an “No employ- any part of the tion to receive ben- in lieu insurance
er’s contribution
efits.” *5 GINSBURG, Appellant,
Paul Bolsinger. N. Patrick
Horace STERN
No. 12052. Appeals United States Circuit. Third Ginsburg, Pittsburgh, Pa., Paul appellant. Argued Jan. 1957. Pittsburgh, Marshall, Elder W. Pa. March Decided (Carl Glock, Smith, Jr., Reed, E. Shaw April
Rehearing Denied McClay, Pittsburgh, Pa., on the brief), appellees. McBride, Atty.
Thomas D. Gen. of Pennsylvania (Leonard Mendelson, M. Pittsburgh, Forer, Pa., Deputy Lois G. Atty. Gen., Cohen, Herbert B. former Atty. Gen., brief), on the Com- Pennsylvania, monwealth of amicus curiae. BIGGS, Judge, Before Chief
MARIS, GOODRICH, McLAUGHLIN,
STALEY,
KALODNER,
HASTIE,
Judges.
Circuit
Judge.
BIGGS, Chief
This is the second time this case
appeal.
before us on
has been
On Oc-
26, 1954, the court
tober
below dis-
F.Supp.
See also
complaint
plaintiff-
missed
ground
Ginsburg,
appellant,
a cause of
it failed
state
action.
D.C.1954,
F.Supp. 596.
See
Cf.
12(f), Fed.Rules Civ.Proc.
U.S.C.
notes
August
Georgia
1956
Bar Journal of
suggestion
To
would
follow
lead
107-108,
(Vol.
1) pp.
XIX,
disa-
Number
judicial
many
opinions
to as
different
Judge
opinion.
greed with
Brennan’s
forms of
there are different
collective
opinion seem-
that the
The article stated
bargaining agreements containing provi-
partial
ed to minimize the idea
benefit
payments
sions for
to Welfare Funds.
(who
would
to the
cease
de-
assignment
portion
Some
an
of a
contain
upon
lapse
in union
rive
benefit
wages
as a
workmen’s
disregard
membership) and to
the con-
Ross, D.C.,
In re
Fund.
117
the Welfare
F.Supp.
nection
the
to the fund
between
is a
basis
346. There
sound
and the work done.
assignee,
priority by
the
Chicago-Kent
although
Fund,
case,5
in the
Law
in such
Welfare
article
Review,
pp.
(1955-1956)
amount of its
Vol. XXXIV
the determination
Judge
agreed
claim,
Brennan’s
235-239
with
if the
also
filed
wages,
may present
disposition of the Brassel case and stat-
claims for
bargain-
difficulty.
ed:
some
ing agreements,
Other collective
as in the
such
case at
in-
reached in the
“The conclusion
payment by
bar, provide only for a
case, therefore,
stant
to be
seems
Fund,
to Welfare
inescapable one even under the most
assignment or deduction from
work-
liberal construction
all of
wages.
class,
An intermediate
men’s
portions
terms
of the relevant
payments by
a combination of
contains
statute for
claimant was
employer to
the workman
assignee
workman, or an
of a work-
Fund.
man;
rep-
did not
the sum claimed
origin
wages
ordinary
in its
must be one for
in the
sense
resent
workman,
term;
wages
payable
to a
to be entitled to
the amount
64,
a(2).
If
is,
priority
under Sec.
it
while
the amount
measured
present
opinion
Spring Corp.,
in the
3.
Box
Herlands’
See In re Well Bilt
conflicting
818,
1949,
are
addition there
Misc.
In
89 N.Y.S.2d
ease.
Bankruptcy.
opinions
of Referees
Dis
Northern
The Brassel case
Bush,
(Judge
Shropshire,
& Co.
Woodliff
v.
Brenmn’s
trict of New York
378,
436;
opinion);
L.Ed.
27 S.Ct.
in the
the In re Otto case
U.S.
D.C.,
California,
Bros.,