In re Rogers

Petition for review of determination of the Referee has been presented by claimant Aetna Casualty & Surety Company. The sole question presented is whether a claim for a payment, made prior to bankruptcy, by a surety on a bond given by the bankrupt to secure the payment of taxes is entitled to priority under Section -64, sub. a (4) of the Bankruptcy Act, 11 U.S.C.A. § 104 , sub. a (4). The facts in this case are not in dispute.

The equitable doctrine of subrogation is not new. Even without its general acceptance by the courts as a remedy for a surety who has discharged the indebtedness of the principal debtor, Section 57, sub. i of the Bankruptcy Act provides for the subrogation of a surety to “the rights” of the creditor who fails to file a claim. 11 U.S. C.A. § 93, sub. i.

Of course, subrogation will be denied to the mere volunteer, In re Green River Jockey Club, D.C., 5 F.2d 259 ; In the Matter of Inland Gas Corp., 6 Cir., 91 F.2d 113 , and it will be denied to- one who engineers a tax sale to buy the bankrupt’s, worthless equity for the sole purpose of claiming the government’s priority distribution. In the Matter of Gracey, D.C., 241 F. 981 . On the other hand, there is a…