Gardner, Trustee, v. New Jersey (329 U.S. 565)
U.S. Supreme Court · decided January 20, 1947 · Supreme Court Database (Spaeth)
- Citation
- 329 U.S. 565 · 67 S. Ct. 467
- Decided
- January 20, 1947
- Term
- October Term 1946
- Vote
- 9–0
- Majority author
- Justice Douglas
- Issue area
- Economic Activity
- Disposition
- Affirmed and reversed (or vacated) in part and remanded
- Outcome
- Petitioning party won
- Ideological direction
- Liberal
Opinion excerpt
MR. Justice Douglas delivered the opinion of the Court. This case, here on certiorari, presents important problems under § 77 of the Bankruptcy Act. 49 Stat. 911, 11 U. S. C. § 205. The Central Railroad Company of New Jersey (the debtor), of which petitioner is trustee, filed its petition for reorganization in 1939 shortly after receiving notice from the Attorney General of New Jersey that he would apply to a state court for a summary judgment for unpaid taxes of the debtor and seek to sell its property in satisfaction of the judgment. The tax assessments for the years 1932 to 1939 had been extensively litigated both in the state and federal courts and the results were for the most part adverse to the debtor. By the end of 1939 the tax claims of the State against the debtor, exclusive of interest and penalties, exceeded $15,000,000, while the liquid assets of the debtor available to pay them were apparently less than half that amount. The reorganization court stayed suits to collect the taxes but from time to time entered orders directing the debtor to make specified installment payments on account of the taxes for various years. In 1941 the New Jersey legislature passed a law designed to lessen the tax burden of railroads in the State. P. L. 1941, chs. 290, 291. This law was implemented and somewhat modified in 1942. P. L. 1942, chs. 169, 241. These acts included changes in…
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