Lewis v. United States - 92 U.S. 618 (1875)
U.S. Supreme Court
Lewis v. United States, 92 U.S. 618 (1875)
Lewis v. United States
92 U.S. 618
1. The United States is entitled to priority of payment out of the effects of its bankrupt or insolvent debtor, whether he be principal or, surety, or be solely, or only jointly with others, liable, and it is immaterial where the debt was contracted.
2. The United States was the creditor of a firm, A., B. & Co., doing business in London, and consisting of several persons, some of whom resided there. The others resided in this country, and, with another partner, constituted the firm of A. & Co. The members of the latter firm were duly declared bankrupt, and a trustee was appointed under the forty-third section of the Bankrupt Act of March 2, 1867. Held that the relations of the bankrupt members of the firm of A., B. & Co. to the United States are the same as if they were severally liable to the United States, and that the United States
is entitled to the payment of its debt out of their separate property in preference and priority to all other debts due by them or either of them or by the firm of A. & Co.
3. The United States was under no obligation to prove its debt in the bankruptcy proceedings or pursue the partnership effects of A., B. & Co. before filing this bill against the trustee, and the circuit court had original jurisdiction of the case thereby made, although the fund arose, and the trustee was appointed, under the Bankrupt Act.
4. A creditor holding collaterals is not bound to apply them before enforcing his direct remedy against his debtor.