Augus v. Stichman

Appellants, as employee tort claimants (or their representatives) under the Federal Employers’ Liability Act, 45 U.S. C.A. § 51 et seq., seek priority status for their claims (liquidated and unliqui-dated) from the debtor corporation. Their injuries were sustained prior to the appointment of the receiver pursuant to Chapter X of the Bankruptcy Act, 11 U.S.C.A. § 501 et seq.

Prior to 1933 the courts uniformly held that under equity receiverships such employee tort claimants were not equitably entitled to a preference over secured creditors. In 1933 and 1934 Congress added two sections to the…