United States v. Arizona Fuels Corporation and Eugene Dalton, President, Tenneco Oil Company

■ Tenneco Oil Company appeals from an order requiring it to repay to the Receiver of Arizona Fuels Corporation funds received as advance payments for crude oil and retained as setoffs of pre-receivership debts. Tenneco argues that the district court erroneously rejected Tenneco’s contractual and equitable right to setoff, improperly used summary proceedings to decide whether to issue the order, and lacked statutory jurisdiction over the funds.

I. FACTS.

The United States won a $38,000,000 judgment against Arizona Fuels in July, 1981. On June 9, 1982; at the request of the United States, the district court appointed a receiver of Arizona Fuels [R. 210]. Tenneco was one of two creditors specifically named in and served with the order of appointment [id. at 5].

On June 1,1982, Arizona Fuels had made a $750,000 advance payment for oil to be delivered to it in the first half of June. Tenneco delivered about $541,076 worth of oil in this period. On June 14, Tenneco claimed that Arizona Fuels owed a $230,-648 deficiency from May, and on June 17 Tenneco applied the remaining $208,924 of the June 1 advance to this deficiency, leaving a claimed deficiency of $21,724 for May. [R. 354 at…