Where Congress has the power to exempt property from taxation,
the intention must be clearly expressed.
There is nothing in the Bankruptcy Act of 1898 which exempts
property in the hands of a trustee in bankruptcy from the state and
municipal taxes to which similar property in the same locality is
The facts are stated in the opinion of the Court.
Page 194 U. S. 443
MR. JUSTICE McKENNA delivered the opinion of the Court.
The case involves the validity of taxes imposed upon property in
the hands of a trustee in bankruptcy.
The appellant was duly elected and qualified as trustee of the
estate of Siegel-Hillman Dry Goods Company, which had been adjudged
a bankrupt. The appellant, as such trustee, had in his hands and on
deposit in the designated depository the sum of $68,320, belonging
to the estate. The appellee, as collector of the revenue of the
City of St. Louis, Missouri, filed before the referee a petition
alleging state, school, and city taxes for the year 1901 had been
regularly assessed against said sum on the first of June, 1900, and
that a bill for said taxes, properly certified, had been delivered
to him for collection, and
Page 194 U. S. 444
prayed for an order directing the taxes to be paid. The trustee
filed an answer denying the liability of the property to the taxes.
After hearing, the referee made an order directing the appellant to
pay to appellee the sum of $1,298.08, the amount of the tax bill
for the year 1901, "together with the accrued penalties and fees
provided by laws."
The order was affirmed by the district court as to the amount of
taxes, but disapproved as to accrued penalties and fees. A decree
was duly entered, which was affirmed by the circuit court of
appeals. 120 F. 256.
The argument of appellant has taken somewhat wide range. The
case, however, is in narrow compass. The question is not the extent
of the power of Congress over the subject of bankruptcy, but what
Congress intended by the act of 1898. By section seven of that act,
the title to all of the property of the bankrupt not declared to be
exempt is vested in the trustee. By the transfer to the trustee, no
mysterious or peculiar ownership or qualities are given to the
property. It is dedicated, it is true, to the payment of the
creditors of the bankrupt, but there is nothing in that to withdraw
it from the necessity of protection by the state and municipality
or which should exempt it from its obligations to either. If
Congress has the power to declare otherwise, and wished to do so,
the intention would be clearly expressed, not left to be collected
or inferred from disputable considerations of convenience in
administering the estate of the bankrupt. Though the opinion of the
circuit court of appeals is brief, it is difficult to add anything
to its conclusiveness. But, as showing the trend of judicial
opinion, we may refer to In re Conhaim,
100 F. 268; In
109 F. 131; In re Sims,
118 F. 356.