Document: 359 U.S. 29 79 S.Ct. 554 3 L.Ed.2d 601 UNITED STATES of America, Petitioner,v.EMBASSY RESTAURANT, INC., et al. No. 174. Argued Jan. 22, 1959. Decided March 9, Mr. John F. Davis, Washington, D.C., for petitioner. Richard H. Markowitz, Philadelphia, Pa., respondents. Justice CLARK, delivered the opinion Court. 1 The sole issue involved here is whether contributions by an employer to a union welfare fund which are required collective bargaining agreement entitled, in bankruptcy, priority as being 'wages * due workmen' under § 64, sub. a(2) Bankruptcy Act, amended.1 Both trial court, 154 F.Supp. 141, and Court Appeals, Cir., 254 F.2d 475, held that such enjoyed priority. This resulted conflict with Appeals Second Circuit, Local 140 Security Fund v. Hack, 242 375, view we granted certiorari, 358 811, 42, 55. 2 facts undisputed. Embassy Restaurant, Inc., was bound agreements Unions 111 301. related hours, wages other conditions employment. Under these obligated contribute trustees funds Locals 301 $8 per month full-time employee. plans were organized maintain 'life insurance, weekly sick benefits, hospital surgical benefits' advantages members locals. Trustees administered each plan formal trust authorized formulate establish eligibility control all received, collect contributions, their 'sole discretion' handle legal proceedings incident thereto. Title funds, property income placed exclusively no employee or anyone claiming him had any right whatsoever part thereof. In bankruptcy proceeding filed proofs cliam unpaid Embassy, asserted second amounts accrued during three months immediately preceding bankruptcy. disallowed Referee but, on review, it both court Appeals. We have concluded not entitled payment. At outset point out 'The broad purpose Act bring about equitable distribution bankrupt's estate *.' Kothe R. C. Taylor Trust, 280 224, 227, 50 142, 143, 74 L.Ed. 382, 'if one claimant be preferred over others, should clear from statute.' Nathanson National Labor Relations Board, 344 25, 29, 73 80, 83. 97 23.2 Moreover, if wage class, they will likewise rendered nondischargeable 17 Act,3 resulting remaining outstanding debts bankrupt assets insufficient discharge them prior 4 attempt within this class workmen.' claim has been given position 100 years,4 long before played labor negotiations. True, Congress amended but amendments few guarded ones, raising ceiling amount permitted,5 shifting relative priorities6 enlarging salesmen, clerks, etc.7 If wished include could easily included at times. On contrary, however, constantly enable employees displaced secure, some promptness, money directly back wages, thus alleviate degree hardship unemployment usually brings workers families. Evidence found 1934 amendment Act.8 year, 63 allow workmen's compensation claims provable debts. awarding priority, relegated seventh contrast then fourth wages.9 Only four years later, abolished status claims, though continued 63, 11 U.S.C. 103, a(6), U.S.C.A. a(6). It therefore evident types obligations employers regarded concept even having relation action indicated care exercised regard protection 5 Let us examine nature contributions. They flat sums workman. without his productivity. trustees, workman, latter interest its whatsoever. A workman cannot compel payment defaulting employer. Moreover does appear parties considered payments wages. contract refers 'contributions.' Finally, Embassy's obligation workmen; enforceable only who enjoy title, exclusive management funds. 6 contended, since 'unions bargain wages' industry considers 'as integral package,' must law 'wages.' approach overlooks fact deal statute, business practice. Nor do believe holdings various fringe benefits 151 seq.10 Social 42 seq.,11 apposite. construe section those statutes. specifically fixes classes creditors. Here 7 'due workmen,' nor customary attributes Thus, treated clear, unequivocal language unless satisfy established That provide 'protective cushion' against economic displacement caused employer's bankruptcy.12 These payments, owed trustee rather than offer support periods financial distress. Furthermore, par case where pay share walfare plan, reducing own recovery. 8 Respondents argue precedent allows himself. cited Shropshire, Woodliff & Co. Bush, 204 186, 27 178, 51 436, United States Benefit Behalf Sherman Carter, 353 210, 77 793, 776. assigned him, assignee seeking assignor. allowing said: 9 'When incurred debt workmen, *. 10 '* character fixed when incurred, changed assignment,' U.S., page 189, 179, also, attached debt, person creditor Ibid. Application principles helps respondents all; make workmen. never assignability may benefit employees, enabled obtain sooner might waiting procedure. Carter case, supra, granting There dealt Miller Act,13 every furnishing material sue contractor's bond 'for sum justly him.' contractor defaulted similar sued recovery 'justly due.' Our did hold pointed provided 'shall constitute deemed wages.' basis 'does limit statutory 'wages," id., 217, 797. protective purposes securing due,' recover. short, due' 'the Act.' not. so enlarged, done Congress. 12 judgment reversed. 13 Reversed. 14 BLACK, whom CHIEF JUSTICE DOUGLAS concur, dissenting. 15 I made workmen *,' Act's section.1 history continuous congressional expansion. Priority 'full account 'any operative service bankrupt' first 1841 Act; limited $25.2 Acts 1867 1898 increased available broadened coverage beyond 'operatives' 'workmen' 'workmen, servants.'3 1906 brought still more into protected category defining group traveling city servants.'4 once again increased, now $600, 1926.5 16 Chandler passed 1938 raised workers' behind expenses administration ahead federal local taxes. same time scope further cover servants, salesmen salary commission basis, whole time, selling bankrupt.'6 1956, took occasion guard narrow interpretation covered adding words 'and clause, term 'traveling salesmen' shall independent contractors products services drawing contract.'7 last change subject very short Like most earlier changes, enacted after decisions barring indicating others barred.8 should, think, warned foregoing niggardly interpretations used section. 18 argues neither 'wages' hard me see how certainly gifts. As stated less year ago Senate Committee, extended study involved, 'regardless form take, employers' costs compensation.'9 Courts valid definition contexts.10 accord meaning word. appears, moreover, unions consider equivalent statutes.11 fact, treatment seemed undesirable, expressly excluded category.12 Of course, word need mean thing different statutes, attributed far irrelevant another. 19 argued paid worker's loses merely because purchase insurance benefits.13 For yet investigation worker spends determine he it. And events would seem type expenditure discourage. 20 also imagine moneys way connected question whatever relevance especially true light Government admits assignment here, granted. explain, lack can something else line policy.14 21 face somewhat difficult. But my thinking, correct answer easy cases Shropshire said, creditor; claim, claimant. act enumerate creditors confer upon privilege payment, hand, enumerates priority." 179. 22 Even meaningfully remained assignment, while them, are, precluded depart reasoning construed 2(a) 49 Stat. 794, 40 270b(a), provides 'Every furnished full (a) that, much earned payable cash.' 220, 798. better assignees unlike usual assignee, workers. why differently polices relevant provisions two quite similar. 23 Finally seems undesirable distinction area between trust. best let carrying policy depend skill prepare documents, state laws covering validity assignments. worst give priorities creditors, denying benefit. Unless prepared repudiate what said cases, think means contracted making provision narrowed, Congress—not 24 affirm. 30 563, amended, (Supp. V) 104, a(2), provides: '(a) advance dividends estates, order (2) exceed $600 claimant, date commencement proceeding, bankrupt; (4) taxes legally owing State subdivision thereof: *' See Kuehner Irving Trust Co., 299 445, 452, 57 298, 81 340; Sampsell Imperial Paper Color Corporation, 313 215, 219, 61 904, 85 1293. 550, 35 a(5), 35, a(5). August 19, 1841, c. third performed 'labor operative' bankrupt. E.g., May 27, 1926, 406, 15, 44 666. June 1938, 575, 52 874, 104. 1906, 3333, 34 267. 7, 1934, 424, 48 924. Id., 923. Inland Steel 170 247, 251, A.L.R.2d 240 (contributions pension plan). MacPherson Ewing, 107 666 (sick pay). re Victory Apparel Mfg. Corp., 819, 822; Blessing Blanchard, 223 37. §§ 270a—270d, 270a 270d. considerable difficulty courts. Compare, e.g., opinions below 141 Otto, 146 786, 375; Brassel, 135 827; 819. Similarly commentators split. Notes, Ga.B.J. 107; 66 Yale L.J. 449; Va.L.Rev. 995; Mich.L.Rev. 403, Chi.-Kent L.Rev. 235; Minn.L.Rev. 295. 445. 2, 1867, 529; July 1, 1898, 563. 667. 874. 70 725, See, Scanlan, 26; Greenewald, 99 705; Kominers, 252 183; Collin, 848; Clover Dairies, 1006; Herbert Candy 43 588. recommending latest House Judiciary Committee confusing (T)here infer salesman 'separate contractor' qualify.' H.R.Rep. 921, 84th Cong., 1st Sess. 2. S.Rep. 1440, 85th 2d 4. called attention 'In little decade private grown relatively small significance approximately 84 million persons depending manner promise.' 3. Gurewitz, 121 982; Glandzis Callinicos, 111; Board Bemis Bro. Bag. 206 33, Note, 107. 240. 449, 458, 460. 68A 32, 26 IV) 106, U.S.C.A 106; 417, 3121(a), 3121(a); 447, 3306(b)(2), 3306(b)(2). Cf. Brown Maryland, Wheat. 419, 438, 678, exception particular general words, proves lawgiver, excepted clause 790; Ross, 117 346. notes subsequently removed. rights exchange disposition problem case.

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