United States v. A. D. Crocker

The United States filed a complaint alleging that appellee, a receiver appointed by the Superior Court of the State of California, took possession of assets of a certain debtor, sold them, and distributed the proceeds to creditors other than the United States, although appellee knew that the debtor was insolvent and indebted to the United States for unpaid taxes. The complaint prayed for a personal judgment against appellee in the amount of the unpaid tax, relying upon 31 U.S.C.A. § 192 . The District Court dismissed the action on the ground that Section 192 is inapplicable to court-appointed receivers. .

Sections 191 and 192 of Title 31 are part of a common statutory scheme, the language of which is to be liberally construed to effectuate its public purposes.

Section 191 provides that debts due to the United States shall have priority when a decedent’s estate is insufficient to satisfy all of its debts, or when a living debtor is insolvent and his insolvency is manifested in one of the ways specified in Section 191: i. e., by assignment for the benefit of creditors, by at tachment of the effects of an absconding, concealed, or absent debtor, or by an act of bankruptcy. When the…