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FILIPOWICZ v. ROTHENSIES

February 13, 1942

FILIPOWICZ
v.
ROTHENSIES, Collector of Internal Revenue, et al.



The opinion of the court was delivered by: KALODNER

This case was begun by a petition for declaratory judgment, seeking an adjudication by this court as to the proper distribution of a certain fund paid into the Registry of the Court. The Collector of Internal Revenue claims a lien on the fund for social security taxes, interest and penalties.

Subsequent to the filing of the petition for declaratory judgment, a motion to dismiss was filed on behalf of the Collector. On February 16, 1940, I granted the motion to dismiss (31 F.Supp. 716) on the ground that the complaint failed to allege that the government's lien was not established prior to the assignment upon which the plaintiff's claim is based. Subsequently, the plaintiff filed a motion to amend his petition for declaratory judgment. This motion was granted, and an amended petition was filed. An answer to the amended petition was then filed on behalf of the Collector of Internal Revenue.

 Leave to intervene was granted to Amalgamated Clothing Workers of America, named in the written assignment as trustee for the plaintiff and other employees.

 Further, Herman Toll, counsel for United Coat Shop, who filed and prosecuted the claim in bankruptcy which resulted in the collection of the fund paid into the Registry, in an answer which he filed, seeks payment to him of $36.93 as his fee out of the fund.

 A jury trial was waived and the case was heard before the court on the pleadings and stipulation of facts, together with additional testimony.

 Findings of Fact.

 The stipulated statement of facts (filed November 11, 1941), which is hereby adopted as the findings of fact of this court, is as follows:

 1. For some time prior to June, 1938, defendants J. Michalowski and Charles Jasecki, trading as United Coat Shop, and hereinafter so-called, were engaged in carrying on various operations and work on garments owned by manufacturers Harry Steinberg and Louis Steinberg, trading as Steinberg Brothers, and hereinafter so-called.

 2. On February 15, 1938, Steinberg Brothers filed a petition under Section 74 of the Bankruptcy Act, 11 U.S.C.A. § 202, in this court and subsequently, on April 8, 1938, were adjudicated a bankrupt in Bankruptcy Cause No. 20243. At the time of the filing of said petition, Steinberg Brothers were indebted to the United Coat Shop for the operations performed on its garments in the sum of $539.58. Said Steinberg Brothers ceased business after February 15, 1938. In June, 1938, the United Coat Shop was indebted to its employees for wages earned and unpaid in the sum of $2,680.58.

 3. Defendant Herman Toll, as attorney for the United Coat Shop, filed on or about June 6, 1938, a written proof of debt in the aforesaid bankruptcy proceedings, No. 20243, against the bankrupt estate of Steinberg Brothers, a copy of which is attached to plaintiff's petition for declaratory judgment and is incorporated herein as if set out in haec verba.

 4. On or about July 11, 1938, defendant Amalgamated Clothing Workers of America filed a petition for leave to intervene in the aforesaid bankruptcy proceedings, No. 20243, a copy of which petition is attached to the plaintiff's petition for declaratory judgment as Exhibit 3 and is incorporated herein as if set out in haec verba.

 5. On or about May 1, 1938, the United States Commissioner of Internal Revenue, hereinafter called the Commissioner, duly made an assessment of $191.10 against the United Coat Shop for taxes and interest thereon and penalties due from it under Titles VIII and IX of the Social Security Act, 42 U.S.C.A. §§ 1001 et seq., 1101 et seq. The assessment list containing this assessment was received by defendant W. J. Rothensies, Collector of Internal Revenue, on May 10, 1938. Defendant W. J. Rothensies, Collector of Internal Revenue, filed notices of liens arising by reason of this assessment with the Clerk of the United States District Court for the Eastern District of Pennsylvania, and with the Prothonotary of the Philadelphia County Court, on August 1, 1938.

 6. On or about May 2, 1938, the Commissioner duly made an assessment of $583.10 against the United Coat Shop for taxes and interest thereon and penalties due from it under Titles VIII and IX of the Social Security Act. Defendant W. J. Rothensies, Collector of Internal Revenue, received the assessment list containing this assessment on May 12, 1938. Defendant W. J. Rothensies, Collector of Internal Revenue, filed notices of liens arising by reason of this assessment with the Clerk of the United States District Court for the Eastern District of Pennsylvania, and with the Prothonotary of the Philadelphia County Court, on August 18, 1938.

 7. On or about November 1, 1938, the Commissioner duly made an assessment against the United Coat Shop of $255.02, for additional taxes and interest thereon and penalties due from it under Titles VIII and IX of the Social Security Act. Defendant W. J. Rothensies, Collector of Internal Revenue, received the assessment list containing this assessment on November 10, 1938. Defendant W. J. Rothensies, Collector of Internal Revenue, filed notices of liens arising under this assessment with the Clerk of the United States District Court for the Eastern District of Pennsylvania, and with the Prothonotary of the Philadelphia County Court, on February 10, 1939.

 8. On March 31, 1939, defendant W. J. Rothensies, Collector of Internal Revenue, served defendant Herman Toll with notice of lien, levy and warrant of distraint because of taxes due from the United Coat Shop under the aforesaid assessments in the aggregate amount of $1,059.94 on the property of said United Coat Shop.

 In addition to the stipulated facts, the court makes the following special findings of fact:

 9. On or about March 23, 1939, three dividends were paid in the bankrupt estate of the Messrs. Steinberg, by reason of which the defendant Toll received a total of $246.24 in three checks. While the defendant Toll was still in possession of the dividend checks, intending to transmit them to Kraus and Weyl (attorneys for the Union), he was served on March 31, 1939, by defendant W. J. Rothensies, Collector of Internal Revenue, with a notice of lien, levy, and warrant for distraint because of the indebtedness of defendants Michalowski and Jasecki to the United States of America for taxes, penalties, and interest amounting to $1,059.94.

 10. In June, 1938, the defendants J. Michalowski and Charles Jasecki, trading as United Coat Shop, executed an assignment of the claims which they had against the bankrupt estates of S. Weiner and Sons and Steinberg Brothers to the Amalgamated Clothing Workers of America (the intervening party defendant) which assignment was in the following form:

 "This Agreement, made this day of June, 1938, by and between J. Michalowski and Charles Jasecki, trading as United Coat Shop, party of the first part (hereinafter called Michalowski), and Amalgamated Clothing Workers of America, party of the second part (hereinafter called Union). Witnesseth:

 "1. Michalowski is indebted to numerous employees (who are members of Union) for wages earned and unpaid in the sum of $2,680.58, as shown by Exhibit A, attached hereto.

 "2. Michalowski agrees to assign and hereby does assign, as collateral security, all its right, title and interest in any claim which it may have against the bankrupt estates of S. Wiener & Sons and Steinberg Bros., to Union, as Trustee for all of its wage earners to whom it is indebted in the aforesaid sum.

 "3. Michalowski further agrees that commencing one week after it resumes production it will pay to Kraus & Weyl, Esquires, attorneys for Union as Trustee, the following sums to be held in escrow by the said Trustee and to be applied on account of the indebtedness as hereinbefore stated in paragraph 1:

 "Michalowski will pay (in addition to the regular wages which it will pay to its employees) each week upon the following scale:

 "For each coat manufactured, the sum of eight cents (8():

 "For each coat manufactured over 200, the sum of nine cents (9():

 "For each coat manufactured over 300, the sum of ten cents (10().

 "4. The above assignments and payments are to constitute collateral security only, to insure payment of the wages now due. Union and Kraus & Weyl, Esquires assume no liability under this agreement except to see that any funds which may ...


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