West Coast Power Co. v. Southern Kansas Gas Co.

The Chancellor : Because of its peculiar facts the [131] case of Ferris v. Chic-Mint Gum Co., 14 Del. Ch. 232, 124 A. 577, has no application to this case. The United States government asserts its priority by virtue of Section 3466 of the Revised Statutes of the United States (31 USGA § 191), which is as follows: “Whenever any person indebted to the United States is insolvent, or whenever the estate of any deceased debtor, in the hands of the executors or administrators, is insufficient to pay all the debts due from the deceased, the debts due to' the United States shall be first satisfied; and the priority established shall extend as well to cases in which a debtor, not having sufficient property to pay all his debts, makes a voluntary assignment thereof, or in which the estate and effects of an absconding, concealed, or absent debtor are attached by process of law, as to cases in which an act of bankruptcy is committed.” The State of Delaware asserts its claim pursuant to the provision of Section 69 of the Franchise Tax Law which provides that “The franchise tax, as assessed and levied * * * shall also be a preferred debt in case of insolvency.” Revised Code 1915, § 106, as amended by 36 Del. Laws, c. 6, § 5. The provisions of Article 6 of the Constitution of the United States, which declare inter alla, that the laws of the United States which shall be made in pursuance of the Constitution, shall be the supreme law of the land, require that the priority conferred by Section 3466 of the U. S. Revised Statutes, above quoted, should outrank the preference which is given to the State by Section 69 of the Franchise Tax Law. Spokane County v. United States, 279 U. S. 80, 49 S. Ct. 321, 73 L. Ed. 621; New York v. Maclay, et al., 288 U. S. 290, 53 S. Ct. 323, 77 L. Ed. 754. Order in accordance with the foregoing.