Court Opinion

ID: 8800491
Source: CourtListenerOpinion
Date Created: 2022-11-26 14:29:43.135401+00
Date Added: 2024-06-11T17:03:52.671718
License: Public Domain

LEARNED HAND, District Judge.
The question turns upon whether the duties were a “tax” under section 64a. In re Pedlow, 32 Am. Bank. Rep. 808, Referee Dexter held that duties were not taxes and this was affirmed by Judge Hough in an unreported decision. That decision, however, was certainly intended only to serve as a stepping stone to a final decision, not as a binding precedent, as clearly appears from the memorandum handed down. Therefore I shall not' treat it as such.
The word “tax,” in section 64a, is certainly used broadly. New Jersey v. Anderson, 203 U. S. 483, 492, 27 Sup. Ct. 137, 51 L. Ed. 284. It covers a franchise license tax, which is rather akin to an excise upon the privilege of doing business in corporate form than to a tax proper. The language used of the section in New Jersey v. Anderson, supra, 203 U. S. 492, 27 Sup. Ct. 137, 51 L. Ed. 284, would include a duty or impost. It is as follows:
“Generally speaking, a tax is a pecuniary burden laid upon individuals or property tor the purpose of supporting the government.”
*316A case like United States v. 59 Demijohns (D. C.) 39 Fed. 401, is not in point, because it construes the word “tax,” when it occurs in a statute which distinguishes between taxes and duties. Here the word is used alone, apparently to cover all sorts of governmental exactions.
Were it not true, a strange result would follow. Taxes would have a priority, all debts to the United States would have a priority, though in later order, duties alone would share equally with all other creditors. I say that debts to the United States would have priority, because that is the obvious implication from Guaranty Co. v. Title & Security Co., 224 U. S. 152, 32 Sup. Ct. 457, 56 L. Ed. 706. It is true that the only question in that case was of the priority between debts to the United States and wage claims, yet some priority was certainly supposed to be enjoyed by debts to the United States by virtue of section 64b(6).
The sovereign has always claimed priority in the payment of claims due it, and there is no conceivable reason to my thinking why an artificial distinction should be made because section 64a was not redundant in its expression.
Order affirmed; petition denied.