19930219a Judge Legge Affirms Bk Judge

1 UNITED STATES DISTRICT COURT

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} No. C-92-2996-CAL }

HAMILTON TAFT & COMPANY}

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et al.,

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_______________________________ 1 1 AND CONSOLIDATED CASES J ------------------ --------------------) FREDERICK S.

~YLE,

Trustee in Bankruptcy of HAMILTON TAFT & COMPANY/ Plaintiff,

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Chapter 11 No. 91-3-1077 LK Adv. Proe. No. 92-3-0057 LK

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v.

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S & S CREDIT COMPANY, INC.,

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Defendant.

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IN RE

ORDER OF AFFIRMANCE Plaintiff and appellant Frederick S. Wyle,

as trustee

in bankruptcy of Hamilton Taft & Company, appeals from a judgment of the Bankruptcy Court. on June 22, 1992.

That judgment was entered

The judgment dismissed the complaint and

directed that judgment be entered for defendant.

The court's

reasons were set forth in its findings of facts and conclusions of law, filed on June 17, 1992. This appeal was briefed, argued, and submitted to the court for decision.

The court has reviewed the record in the

bankruptcy court, the briefs and arguments.of counsel} and the

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applicable authorities, and concludes that the decision of the

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Bankruptcy Court should be affirmed.

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The complaint seeks to recover for payments made by Hamilton Taft & Company to the Internal Revenue Service on behalf of defendant S & S Credit Company.

The complaint

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alleges that the payments were preferential payments within

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the meaning of section 547(b) of Title 11 of the United

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Code.

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state~

That section requires that the trustee establish that

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the transfers were the property of the debtor.

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court belieVES that the plaintiff's complaint and the

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Bankruptcy Court t s dismissal of it I

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Internal Revenue Service, 496 U.S. 53 (1990).

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Begier controls the facts and the

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taxes withheld by defendant, and paid by Hamilton Taft to the

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Internal Revenue Service, were trust funds pursuant to section

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7501(a} of Title 26 of the United states Code and were not the

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property of the debtor.

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argues between this case and Begier do not change the

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application of Begier to this case.

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However, this

are governed bJl- Eegier v.

re~ult

here.

The decision in

The payroll

The distinctions for which plaintiff

The complaint was properly dismissed without leave to

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amend, because the alleged payments were as a matter of law

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not the property of the debtor, and no change in the

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allegations which might be made by plaintiff could alter the

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Order of Affirmance No. C-92-2996-CAL

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Iton Ta

of

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judgment of the Bankruptcy Court

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and were not the

trust for the Internal Revenue S

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held

law

were as a

t.

rmed.

J.L,

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1993.

C-~ Cc J--;,--.

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cHARLES A. LEGGE

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UNITED

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DISTRIC~

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Order Affirmance No. C-92-2996-CAL

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