Marshall v. New York - 254 U.S. 380 (1920)
U.S. Supreme Court
Marshall v. New York, 254 U.S. 380 (1920)
Marshall v. New York
Submitted October 12, 1920
Decided December 20, 1920
254 U.S. 380
1. At common law the Crown of Great Britain, by virtue of a prerogative right, had priority over all subjects for the payment out of a debtor's property of all debts due to it, whether the property was in possession of the debtor or of a third person or in custodia legis, and the priority could be defeated or postponed only through passing the title to such property, absolutely or by way of lien, before the sovereign sought to enforce his right. P. 254 U. S. 382.
2. A like right of priority, based on sovereign prerogative, belongs to the State of New York, as her highest court has decided, through her adoption, by her constitutions, of the common law, and attaches to a debt due the state by a sister-state corporation as a license fee or tax for the privilege of doing business in New York, although no statute of the state makes the tax a lien or declares its priority. P. 254 U. S. 383.
3. The question whether this priority is a prerogative right or a rule of administration is a question of local law, the determination of which by the highest court of the state concludes the federal courts. P. 254 U. S. 384.
4. The priority extends to all property of the debtor within the borders
of the state, whether the debtor be a resident or a nonresident, and is enforceable against such property in the hands of a receiver appointed by a federal court within the state, since such a receiver takes property subject to all liens, priorities, or privileges existing or accruing under the state laws. P. 254 U. S. 385. City of Richmond v. Bird, 249 U. S. 174, distinguished.
262 F. 727 affirmed.
The case is stated in the opinion.