Illinois v. Campbell, 329 U.S. 362 (1946)
U.S. Supreme CourtIllinois v. Campbell, 329 U.S. 362 (1946)
Illinois ex rel. Gordon v. Campbell
Argued March 28, 1946
Reargued November 19, 1946
Decided December 23, 1946
329 U.S. 362
Having filed notice of a lien for state unemployment compensation taxes under Jones Ill.Stat.Ann., 1944, § 45.154, creating a lien "upon all the personal property" of an employer "used by him in connection with his . . . business," the state Director of Labor brought suit in a state court to enforce the lien, alleging that the employer was insolvent and that a creditor had obtained judgment and execution against him subsequent to the filing of notice of the lien. The court enjoined all creditors from interfering with the employer's property and appointed a receiver, who took charge of all his assets. Thereafter, the Collector of Internal Revenue filed claims on behalf of the United States for federal social security taxes
under § 1400 of the Internal Revenue Code and an intervening petition alleging that the debtor was insolvent, and claiming priority of payment. The receiver liquidated all of the debtors assets and realized less than enough to satisfy the claims of creditors.
1. Under R.S. § 3466, a claim of the United States for social security taxes under § 1400 of the Internal Revenue Code takes priority over a claim of a State for taxes under a state Unemployment Compensation Act. Illinois v. United States, 328 U. S. 8. Pp. 329 U. S. 366-367.
2. The receiver having been placed in control of all the debtor's assets and having liquidated all of them, and another creditor having intervened, the proceeding must be treated as a general equity receivership. Pp. 329 U. S. 368-369.
3. The debtor being insolvent, and a receiver having been appointed to take charge of his property, an act of bankruptcy was committed within the meaning of § 3 of the Bankruptcy Act, thus entitling the United States to the priority given by R.S. § 3466. Pp. 329 U. S. 367-370.
4. Under Jones Ill.Stat.Ann., 1944, § 45.154(e), making it unnecessary for the Director of Labor to describe the property to which the lien is to attach and requiring the employer to file a schedule of "all personal property . . . used in connection with his . . . business," the Illinois lien was not sufficiently specific or perfected to defeat the priority of the United States, since neither the notice of lien nor the appointment of the receiver made definite and certain the property to which the lien was to attach. Pp. 329 U. S. 370-376.
391 Ill. 29, 62 N.E.2d 537, affirmed.
In a suit by the Director of Labor of Illinois to enforce a lien for unemployment compensation contributions due the State, a general equity receiver was appointed, and the Collector of Internal Revenue intervened and filed a claim for social security taxes due the United States, claiming priority of payment under R.S. § 3466. The Illinois Supreme Court held that the United States was entitled to priority. 391 Ill. 29, 62 N.E.2d 537. This Court granted certiorari, 327 U.S. 772, and, after hearing argument and disposing of a companion case (Illinois v. United States, 328 U. S. 8), restored the case to the docket for reargument before a full bench. Affirmed, p. 329 U. S. 376.