SWARTS
v.
HAMMER

U.S. | 1904-05-16
No. 238
194 U.S. 441 Supreme Court of the United States (1904) Caution
Also reported at: 48 L. Ed. 1060 · 24 S. Ct. 695 · 1904 U.S. LEXIS 839 · SCDB 1903-121
Cited by 81 cases

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Synopsis

A bankruptcy trustee held estate funds in deposit when the City of St. Louis assessed and sought to collect state, school, and city taxes on those funds for 1901. The Supreme Court affirmed that property in a trustee's hands remains subject to state and local taxation, holding that Congress did not intend the Bankruptcy Act of 1898 to exempt such property from tax obligations merely because it had been transferred to the trustee for distribution to creditors.

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Opinion of the Court
Mr. Justice McKenna

Mr. Justice McKenna delivered the opinion of the eourt.

The case involves the validity of taxes imposed, upon property in the'hands of a trustee in bankruptcy.

The appellant was duly elected and qualified as trustee of t[ie estate of Siegel-Hillman Dry Goods Company, which had been adjudged a bankrupt. The appellant as such trustee' hád in"his hands and on deposit in the designated depository, the sum of $68,320, belonging to the estate. The appellee, as collector of the revenue of the city of St. Louis, Missouri, filed before the .referee a petition alleging state, school and city taxes for the year 1901 had been regularly assessed against said sum on the first of June, 1900, and that a bill for said taxes, properly certified, had been delivered to him for collection, and prayed for an order directing the taxes to be paid. The trustee filed an answer denying the liability of the property to the taxes. After hearing; the referee made an order directing the appellant to pay to appellee the sum of $1,298.08, the amount of the tax bill for the year 1901, “together with the accrued penalties and fees provided by law.”

The order was affirmed by the District Court as to the amount of taxes, but disapproved as to accrued penalties arid fees. A decree was duly entered, which was affirmed by the Circuit Court of Appeals. 120 Fed. Rep. 256.

The argument of appellant has taken somewhat wide range. The case, however, is in narrow compass. The question is not the extent of the power of Congress over the subject of bankruptcy, but what Congress intended by the act of 1898. By section seven of that act the title to all of the property of the bankrupt not declared to be exempt is vested iri the trustee. By the transfer to the trustee no mysterious or . peculiar ownership or qualities are given to the property. It is dedicátéd, it is true, to the payment of the creditors of the bankrupt, but there is nothing in that to withdraw it from the necessity of protection by the State and municipality, or which should exempt it from its obligations to either. If Congress has the power to declare otherwise and wished to do so the intention would be clearly expressed, not left to be collected or inferred from disputable considerations of convenience in administering the estate of the bankrupt. Though the opinion of the Circuit Court -of Appeals is brief, it is difficult to add anything to its conclusiveness. But, as showing the trend of judicial opinion, we may refer to In re Conhaim, 100 Fed. Rep. 268; In re Keller, 109 Fed. Rep. 131; In re Sims, 118 Fed. Rep. 356.

Decree affirmed.

Cases With Similar Vibessemantic neighbors from the corpus

Citator

Cited By (25 total)

  • Kelly v. Robinson, 479 U.S. 36 (U.S. 1986)
    …ary exemption from nonbankruptcy law, ‘the intention would be clearly expressed, not left to be collected or inferred from disputable considerations of convenience in administering the estate of the bankrupt.’” Id., at 501 (quoting Swarts v. Hammer, 194 U. S. 441, 444 (1904)) (citations omitted). B Our interpretation of the Code also must reflect the basis for this judicial exception, a deep conviction that federal bankruptcy courts should not invalidate the results of state criminal proceedings. The right…
  • Midlantic Nat'l Bank v. N.J. Dep't of Env't Prot., 474 U.S. 494 (U.S. 1986)
    …trustee an extraordinary exemption from nonbankruptcy law, “the intention would be clearly expressed, not left to be collected or inferred from disputable considerations of convenience in administering the estate of the bankrupt.” Swarts v. Hammer, 194 U. S. 441, 444 (1904); see Palmer v. Massachusetts, 308 U. S. 79, 85 (1939) (“If this old and familiar power of the states [over local railroad service] was withdrawn when Congress gave district courts bankruptcy powers over railroads, we ought to find langua…
  • Price v. United States, 269 U.S. 492 (U.S. 1926)

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