United States v. Halton Tractor Company, Inc., a Corporation, and Wes Durston, Inc., a Corporation

Halton Tractor Company, Inc., a corporation, here called Halton, and Wes Durston, Inc., a -corporation, here called Durston, both filed actions seeking to recover, as wrongfully collected, sums which they paid to the Collector of Internal Revenue, for social security and withholding taxes owing by one Lloyd H. Watson. In each case judgment was for the plaintiffs from which the United States has appealed.

Prior to January, 1948, Watson, a contractor, had purchased from each of these corporations, various items of heavy machinery including tractors, scrapers and land levellers. To secure payment of the balance of the purchase price on such equipment, Watson had executed a conditional sales contract dated March 13, 1947, to Durston, and a conditional sales contract dated April 19, 1947, to Halton. He also executed under date of March 24, 1947, a chattel mortgage to Morris Plan Company describing certain other similar equipment, given to secure payment of a note for $47,100. Durston assigned its conditional sales contract to C.I.T. Corporation, guaranteeing payment thereof.

On September 16, 1947, Watson was indebted to the United States for withholding and social security taxes in…