Legal Document

391 U.S. 224 88 Supreme Court Reporter 1491 20 United States Reports Lawyer’s Edition 2d Series KF101.8 U54 546 JOINT INDUSTRY BOARD OF the ELECTRICAL et al., Petitioners,v.UNITED STATES. Number 616. Argued March 25, 1968. Decided May 20, Harold Stern, New York City, for petitioners. Lawrence G. Wallace, respondent. Mr. Justice WHITE delivered opinion of Court. 1 Section 64a(2) Bankruptcy Act, 30 Statutes-at-Large 563, 11 Code KF62 § 104(a)(2), grants priority over claims other creditors to 'wages * due workmen, *' being limited $600 and wages earned within three months before commencement proceedings.1 The question us is whether under must be accorded an employer's unpaid contributions employees' annuity plan established by a collective bargaining contract. referee District denied Appeals affirmed. In re A & Electric Corp., 379 Federal Reporter, 2nd 211 (C.A.2d Cir. 1967). We granted certiorari, sub nom. Joint Industry Board Electrical versus States, 389 969, 474, 19 459 (1967). affirm judgment. 2 Annuity Plan in City was agreement between Local Union 3, International Brotherhood Workers, AFL CIO, four associations electrical contractors. covers all employees unit represented union funded employer 'Four Dollars ($4.00) per day each worked or holiday which payment received his *.' Payments are made trustees who empowered collect administer provisions plan. These petitioners here. Contributions credited account individual but 'payable him only as hereinafter provided,' namely, upon death, retirement from industry at age 60, permanent disability, entry into Armed Forces, ceasing participant Death benefits paid out income, if available, benefits, though they may payable installments, will minimum return employee total name, without interest. 3 Corporation, liable plan, adjudicated bankrupt 1963. filed claim included $5,114 representing payments fell were during prior proceedings. Priority this amount asserted 64a(2). with fourth-class taxes, objected allowance Board's claim. courts agreed holding that not relying conclusion principally Embassy Restaurant, Inc., 359 29, 79 554, 601 (1959). 4 agree Restaurant controls case. There welfare fund, $8 month full-time employee; fund provided life insurance, weekly sick hospital surgical payments, advantages covered employees. That claim, held, entitled because such did satisfy manifest purpose priority, 'to enable displaced bankruptcy secure, some promptness, money directly them back wages, thus alleviate degree hardship unemployment usually brings workers their families.' U.S., 32, S.Ct., 556.2 involved there trustees, employees, disbursable on occurrence certain events, including employer. Neither nor any immediate support workmen period financial distress. 5 case concerns similarly never were; had exclusive right hold manage fund. Though contribution accounts, nothing except events. Until after military service, cessation participation no payable. Further, pointed out, could assign, pledge, borrow against contributions, otherwise use own.3 Quite obviously intended relieve distress temporary unemployment, arising reason. Hence, followed, do fundamental workmen. 6 Nor we inclined overrule Restaurant's construction This matter more appropriately left Congress, has infrequently given attention 64a Act priorities it creates.4 latest amendments occurred 1966, Acts July 5, 80 268 271. Although section completely re-enacted 1967,5 64a(2), unchanged despite fact every Congress since bills have been introduced modify result reached case.6 7 Despite general policy distribute assets estate equally creditors, give up bankruptcy. Other allowable priority. If delinquent funds providing deferred equal maximum immediately would reduced whenever wage approached permit full. Also, increasing amounts second reduce available distribution lower claimants priority.7 decided nine years ago. still provide should share bankrupts new resolution come Congress. 8 Affirmed. 9 FORTAS, whom THE CHIEF JUSTICE BRENNAN join, dissenting. 10 N Dec. Immigration Nationality Decisions (1959), believe workmen' Act. Those accrued proceedings statutory case, agreed, agreement, compensate stipulated and, additionally, $4 'for latter sum, instead remitted accounts sum employee, measured days work, employee. receive entrance leaving accepting employment company agreement. 12 It unmistakably clear (1) sums part bargain (2) specifically related work; (3) accounted separately individually; he trustee labor; (4) inevitably, sure point time when individual's work heirs. 13 my judgment, impossible distinguish, basis these direct labors. Court, however, holds 'manifest priority,' explained Restaurant. purpose, says, employer, promptly secure thereby brings. demonstrates, bankruptcy, fall definition 'wages' purposes. 14 But present materially different labor. used benefits. An demand earned. death contingencies. 15 dissenting Black (joined Chief Douglas) argued majority misconceived nature wages. need quarrel Court's conclusions purposes Here, entirely They his. Only receipt until separation industry, etc. 16 whatever 64 indicate, believe, lose position event whatever, ipse dixit say 'immediate distress.' authority this. proposition benefit through insurance various types services, applicable. 17 take priority—just priorities—is preferred status deemed particularly meritorious, so chances claimant recover enhanced. 'Wages category, costs administering taxes owed State. court cases 'in agreement' priority1 probably certainly majority's restrictive purpose. Lawsam Co., 300 KF105 F3 736 (D.C.N.Y.), Judge Learned Hand said: 'The statute favor those expected know anything credit accept job comes, personal factor practicable consideration.' Estey, F.Supp. 570 said 'the intention plainly special protection class wage-earners generally substantial savings reserves adversity therefore cannot afford lose.' Certainly neither statements, cites its constitutes caused following As fact, recognizing does assure payment. Payment interim final estate. merely increases prospects recovery.2 18 decision opinion, deprives here concerned congress claims. reverse judgment below. 64a, 563 (as amended June 22, 1938, 52 874, 30, 1956, 70 725), 104(a), provides relevant part: debts advance dividends full estates, order payment, shall commissions, exceed claimant, date proceeding, servants, clerks, traveling city salesmen salary commission basis, whole time, selling exclusively bankrupt; clause, term 'traveling salesman' include salesmen, independent contractors products services drawing formal contract See Collier Bankruptcy, 64.201, 2112, nn. 7—9 text (14th ed., also person claiming right, title, interest 9(f) imposes additional limitations: Participants beneficiaries assigned attachment, garnishment process, taken, appropriated applied legal equitable operation law, pay debt liability Participant beneficiary next-of-kin thereunder, either payment.' seems taxable made, later history dealt both opinions For complete consideration see 64.01, 64.201 November 28, 81 511. H.R. 2076, 90th Cong., 1st Sess. (1967); 991, 89th (1965); 1784, 88th (1963); 66, 2274, 87th (1961); 9831, 86th (1960). instructive workmen's compensation provable 1934, seventh 1938 abolished. Moreover, Social Security withheld fourth rather than ante, 227, n. 2. Even affirm. indulges major, unexplained, assumption agree: assumes, can find record anywhere else, likely suffer yet unlikely outside Of course, choose, seek contract, ceases participate may, terms monies account. plausible suspect, common situation, receives 'immediately' significant difference—and suggests none—between unattractive discharge

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