Halton Tractor Co. v. United States

The basic issue in these consolidated cases is whether the plaintiffs were coerced into paying to the Government taxes owed by a third party. Acting on behalf of the Halton Tractor Company and Wes Durston, Inc., Edward H. Hal-ton paid social security and withholding taxes that were owed to the Federal Government by Lloyd Watson; the defendant claims that Halton was a volunteer.

*412 Lloyd Watson used certain tractors and equipment in the operation of his contracting business. During 1947 Watson encountered financial difficulties, and on September 16, 1947, the Government filed a lien against Watson’s property for unpaid taxes. Watson’s tractors and equipment were either encumbered by a chattel mortgage, or sold to him under a conditional sales contract, which were in existence prior to the government lien. After the lien was filed Halton paid off a mortgage secured by some of Watson’s equipment, and Durston bought a conditional sale contract covering some more of Watson’s equipment, thereby acquiring the security position of Watson’s mortgagee and conditional vendor. Watson agreed that Halton should repair and resell the equipment covered by the mortgage and conditional sale…