seem, even had the Trustees adopted the Guild contract, it would have been invalid because it lacked an order of the court authorizing the same. Erie Malleable Co. v. Standard Parts Company (In re Younder), 6 Cir., 299 F. 82.
It is also contended for the claimants that if we assume the contract to have been adopted by the Trustees during the operation of the business from November 7, 1941, to January 5, 1942, and if we further assume that there was a discharge by the Trustees within the meaning of Article 19 of the Typographical Union Contract, this severance pay would be entitled to priority in distribution because it is a cost of administration of the bankrupt estate within the provisions of Section 64, sub. a(1), which creates a priority for debts arising from the actual and necessary costs and expenses of preserving the estate subsequent to filing the petition. Claims for administration expenses must fall clearly within the meaning of the act. In the light of the limited authority given by the court to the Trustees in the instant case, the first leave being to continue the business for a period of only six days and other subsequent grants of authority for its continuance for like short intervals, we could not allow the severance pay and lay off pay as provided in the respective contracts as a cost of administration, in view of the fact that the Trustees had not received express authorization from the court to incur this obligation.
It is likewise contended that if we make the assumptions hereinabove made with reference to the continuation of the contract during the period of operation by the Trustees and the effect of the term 'discharge', that these claims are entitled to preference as wages within the provisions of section 64, sub. a(2), of the Bankruptcy Act of the sum of $ 600. While the contract here makes reference to severance pay as wages, it is in no sense conclusive thereof. Claimants seeking priority under the Act must clearly establish their rights thereto. In re Marshall E. Smith & Bros., Inc., D.C., 35 F.Supp. 56, 57. To broaden the purview of the Act so as here to include severance pay as wages would be an extension thereof not warranted by the trend of the cases which has been to deny the benefit of the clause to those claimants who do not come specifically within its phraseology. In re Lawsam Electric Co., Inc., D.C., 300 F. 376; In re Estey, D.C., 6 F.Supp. 570; In re Pacific Oil & Metal Co., D.C., 24 F.Supp. 767; In re Lewis Company, D.C.R.I., 12 A.B.R. 279.
A thorough consideration of all the facts and circumstances convinces us (1) that the contract was never adopted by the Trustees and was not in effect after November 7, 1941, (2) that there was no 'discharge' within the meaning intended in the severance pay clause, and (3) that even if the contract had been in effect between November 7, 1941, and January 5, 1942, and claimants had been 'discharged' by reason of the cessation of business of January 5, 1942, the claims for severance pay would not be entitled to priority either as administration expenses or wage claims. Accordingly, the claim of the Newspaper Guild of Philadelphia and Camden for severance pay as well as the claim of the Philadelphia Typographical Union No. 2, I.T.U., for discharged pay is denied.
With respect to the claim for vacation pay raised by members of the Philadelphia Typographical Union No. 2 and the members of Philadelphia Mailers Union No. 14, it is apparent that the same disposition must be made of them. While the employees did work the entire year of 1941, the contract was not in effect the whole year as previously determined above, since it has been found that the contract was not in effect from November 7, 1941, to the end of the year as it had not been assumed by the Trustees.
A further difficulty arises in connection with the claimants' right to vacation pay since even if it were held that there was an assumption of the contract by the Trustees, under the authority of Section 64, sub. a(2), of the Bankruptcy Act, claimants would be entitled to priority for wages, not to exceed $ 600 to each claimant, which have been earned three months before the date of the commencement of the proceedings on November 7th. Since the contract provided that employees who held regular situations 'during the entire previous calendar year' would be entitled to vacations with pay, the claimants could not have earned vacation pay until December 31, 1941, the end of the calendar year. On November 7, 1941, the date when the Union-Ledger contracts terminated by operation of law upon the appointment of Trustees, none of the claimants had earned vacation pay since the period of work required for the allowance of vacation pay under the terms of the contract had not been completed. Further, claimants did not become entitled to vacation pay on December 31, 1941, the end of the calendar year, because the contract was not in force and binding upon the Trustees at that time. There would therefore be no basis for earned vacation pay on November 7th because the work required for the allowance of such vacation pay had not been performed.
Claimants also press the contention that these claims for vacation pay have the status of costs of administration, if we assume that the Trustees adopted in their operation of the business the respective contracts herein involved. With this, we disagree. Section 64, sub. a(1), of the Bankruptcy Act limits priority to: 'the actual and necessary costs and expenses of preserving the estate subsequent to filing the petition.' Since the petition was filed on November 7, 1941, the expenses of administration in conformity with the Act would be limited to those which arose between November 7, 1941, and January 5, 1942. As to giving priority to vacation pay as a cost of administration, it is pointed out that the right to vacation pay as hereinabove shown is dependent upon continuous employment for an entire calendar year and how one can work out a priority for vacation pay under this section as a cost of administration for which, at most, there would be only two months in which to earn it, is difficult to imagine. The term 'cost of administration' has been strictly construed, and there is a noticeable tendency to enjoin any priority. In re Pacific Oil & Meal Co., supra.
Accordingly, the order of the Referee is sustained, and a decree may be presented in accordance with this opinion.