Kothe v. R. C. Taylor Trust, 280 U.S. 224 (1930). · Go Syfert
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Kothe v. R. C. Taylor Trust, 280 U.S. 224 (1930). Cases Citing This Book View Copy Cite
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cited 6× by 2 distinct cases, 2003–2012 · 2 courts · …the broad purpose of the bankruptcy act is to bring about an equitable distribution of the bankrupt's estate among creditors holding just demands based upon adequate consideration. ✓
cited 3× by 2 distinct cases, 2011–2022 · 2 courts · …bring about an equitable distribution of the bankrupt's estate among creditors holding just demands, ✓
cited 3× by 2 distinct cases, last quoted 1981 · 2 courts · …if one claimant is to be preferred over others, the purpose should be clear from the statute. at p. 227 ⚠ not in text
395 citation events (99 in the last 25 years) across 63 distinct courts.
Treatment trajectory · 1930 → 2026 · click a year to view as-of
1930 1978 2026
Top citers, strongest first. 27 distinct citers. How cited ↗
examined Cited as authority (verbatim quote) Howard Delivery Service, Inc. v. Zurich American Insurance (4×) also: Cited as authority (rule)
SCOTUS · 2006 · signal: see · quote attribution · 2 verbatim quotes · confidence high
the broad purpose of the bankruptcy act is to bring about an equitable distribution of the bankrupt's estate . . . .
examined Cited as authority (quoted) In Re Reynolds (3×)
Bankr.D. Colo. · 2012 · quote attribution · 3 verbatim quotes · confidence low
the broad purpose of the bankruptcy act is to bring about an equitable distribution of the bankrupt's estate among creditors holding just demands based upon adequate consideration.
examined Cited as authority (quoted) Disch v. Rasmussen (In Re Rasmussen) (3×)
W.D. Wis. · 2003 · quote attribution · 3 verbatim quotes · confidence low
the broad purpose of the bankruptcy act is to bring about an equitable distribution of the bankrupt's estate among creditors holding just demands based upon adequate consideration.
cited Cited as authority (rule) Jackie Burson v. Oil Patch Group, Inc.
S.D. Tex. · 2026 · confidence medium
Taylor Trust, 280 U.S. 224, 227 (1930))).
discussed Cited as authority (rule) Marathon Oil v. Mercuria Energy America
unknown court · 2025 · confidence medium
Taylor Tr., 280 U.S. 224, 226 (1930); BMG Direct Mktg., Inc. v. Peake, 178 S.W.3d 763, 767 (Tex. 2005)). 10 Atrium Med., 595 S.W.3d at 192 (quoting Stewart v. Basey, 150 Tex. 666 , 245 S.W.2d 484, 486 (1952)). 3 this rule, liquidated damages cannot operate as a penalty—whether by design or as applied—rather than a reasonable forecast of damages.11 Thus, a court applying a liquidated-damages clause must ensure three criteria are satisfied: (1) the harm to be remedied is difficult or impossible to quantify or estimate, (2) the liquidated dam- ages reasonably forecast just compensation for th…
discussed Cited as authority (rule) Optimistic Investments LLC v. Kangaroo Manufacturing Incorporated
D. Ariz. · 2022 · confidence medium
Taylor Trust, 8 280 U.S. 224, 227 (1930); Marrama v. Citizens Bank of Mass., 549 U.S. 365, 367 (2007)). 9 “Therefore, judicial estoppel must be applied in such a way as to deter dishonest debtors, 10 whose failure to fully and honestly disclose all their assets undermines the integrity of the 11 bankruptcy system, while protecting the rights of creditors to an equitable distribution of 12 the assets of the debtor’s estate.” Id. 13 The Ninth Circuit has set forth three factors that courts should consider when 14 deciding a judicial estoppel issue: 15 First, a party’s later position must…
discussed Cited as authority (rule) Marine Industrial Construction, LLC v. United States
Fed. Cl. · 2022 · confidence medium
Taylor Tr., 280 U.S. 224, 226 (1930), or is “so extravagant, or disproportionate to the amount of property loss, as to show that compensation was not the object aimed at or as to imply fraud, mistake, circumvention, or oppression,” Wise v. United States, 249 U.S. 361, 365 (1919).
cited Cited as authority (rule) Klitzke v. DCP Midstream, LLC
D. Colo. · 2020 · confidence medium
Taylor Tr., 280 U.S. 224, 227 (1930).
cited Cited as authority (rule) Bonsmara Natural Beef Company, LLC and George Chapman, Individually v. Hart of Texas Cattle Feeders, LLC, James Michael Hayes, Individually, Lynn Landrum, Individually, and Henry O. Pickett II, Individually
Tex. · 2020 · confidence medium
Taylor Tr., 280 U.S. 224, 226 (1930); BMG Direct Mktg., Inc. v. Peake, 178 S.W.3d 763, 767 (Tex. 2005).
cited Cited as authority (rule) Lone Star Engine Installation Center, Inc. and Rafael Sanchez v. Brenda Gonzales and Gonzalo Gonzales
Tex. App. · 2016 · confidence medium
Taylor Trust, 280 U.S. 224, 227 (1930) and Marrama v. Citizens Bank of Mass., 549 U.S. 365, 367 (2007)).
cited Cited as authority (rule) Southern Union Company v. CSG Systems, Inc.
Tex. App. · 2005 · confidence medium
Taylor Trust , 280 U.S. 224, 226 (1930).
cited Cited as authority (rule) Southern Union Company v. CSG Systems, Inc.
Tex. App. · 2005 · confidence medium
Taylor Trust, 280 U.S. 224, 226 (1930).
cited Cited as authority (rule) L & A Jackson Enterprises v. United States
Fed. Cl. · 1997 · confidence medium
And see Kothe v. [R.C.] Taylor Trust, 280 U.S. 224, 226 [ 50 S.Ct. 142, 143 , 74 L.Ed. 382 (1930)].
discussed Cited as authority (rule) Aurora Business Park Associates, L.P. v. Michael Albert, Inc.
Iowa · 1996 · confidence medium
Taylor Trust, 280 U.S. 224, 226 , 50 S.Ct. 142, 143 , 74 L.Ed. 382, 385 (1930) (lease provision that lessee’s bankruptcy terminates lease and lessor is entitled to damages equal to rent for remainder of term is an unenforceable penalty); Ricker v. Rombough, 120 Cal.App.2d Supp. 912 , 261 P.2d 328 , 331 (1953) (rent acceleration provision in real property lease is unenforceable and void).
discussed Cited as authority (rule) Smiley v. Citibank (2×)
Cal. · 1995 · confidence medium
Taylor Trust (1930) 280 U.S. 224, 226 [ 74 L.Ed. 382, 384 , 50 S.Ct. 142 ] (not defining “interest,” either generally or under section 85 specifically; distinguishing liquidated damages and penalties); Merchants’ Nat.
cited Cited as authority (rule) Duvoisin v. Anderson (In Re Southern Industrial Banking Corp.)
Bankr. E.D. Tenn. · 1988 · confidence medium
Taylor Trust, 280 U.S. 224, 227 , 50 S.Ct. 142, 143 , 74 L.Ed. 382, 385 (1930); Lynch v. Johns-Manville Sales Corp., 710 F.2d 1194, 1197 (6th Cir.1983).
discussed Cited as authority (rule) Cherry v. Abbott
Ga. · 1988 · confidence medium
In Swain v. Alabama, supra, the Supreme Court held that a defendant could make out a prima facie case of racial discrimination by the state in exercise of its peremptory strikes by showing that the peremptory challenge system was “being perverted” in this manner. 280 U. S. at 224.
cited Cited as authority (rule) Matter of WT Grant Co.
Bankr. S.D.N.Y. · 1988 · confidence medium
Taylor Trust, 280 U.S. 224, 227 , 50 S.Ct. 142, 143 , 74 L.Ed. 382, 385 (1930)).
discussed Cited as authority (rule) Midlantic National Bank v. New Jersey Department of Environmental Protection (2×)
SCOTUS · 1986 · confidence medium
Taylor Trust, 280 U. S. 224, 227 (1930). 4 Collier ¶ 554.01.
cited Cited as authority (rule) Cegers v. United States
Ct. Cl. · 1985 · confidence medium
And see Kothe v. Taylor Trust, 280 U.S. 224, 226 [ 50 S.Ct. 142, 143 , 74 L.Ed. 382 (1930)].
discussed Cited as authority (rule) D. Federico Co. v. New Bedford Redevelopment Authority (In re D. Federico Co.)
D. Mass. · 1982 · confidence medium
Taylor Trust, 280 U.S. 224, 225-26 [ 50 S.Ct. 142, 143 , 74 L.Ed. 382 ] (1930) (quoting United States v. Bethlehem Steel Co., 205 U.S. 105, 119 [ 27 S.Ct. 450, 455 , 51 L.Ed. 731 ] (1906)).
discussed Cited as authority (rule) In Re Galbraith
Bankr. E.D. Pa. · 1981 · confidence medium
Taylor Trust, 280 U.S. 224, 227 [ 50 S.Ct. 142, 143 , 74 L.Ed. 382 ] and that “if one claimant is to be preferred over others, the purpose should be clear from the statute.” Nathanson v. Labor Board, 344 U.S. 25, 29 , 73 S.Ct. 80, 83 , 97 L.Ed. 23 . 359 U.S. at 31 , 79 S.Ct. at 555 (footnote omitted).
cited Cited as authority (rule) Better Food Markets, Inc. v. American District Telegraph Co.
Cal. · 1953 · confidence medium
Taylor Trust, 280 U.S. 224 *190 [ 50 S.Ct. 142 , 74 L.Ed. 382 ], would be applicable.
discussed Cited as authority (rule) Atkinson v. Pacific Fire Extinguisher Co. (2×)
Cal. · 1953 · confidence medium
Taylor Trust, 280 U.S. 224, 226 [ 50 S.Ct. 142 , 74 L.Ed. 382 ], a tenant had stipulated that, in the event of his bankruptcy, the lessor should be entitled to damages equal to the rent for the balance of the term.
discussed Cited "see" Howard Delivery Service, Inc. v. Zurich American Insurance (2×)
SCOTUS · 2006 · signal: see · confidence high
See Kothe, 280 U.S., at 227 , 50 S.Ct. 142 (“The broad purpose of the Bankruptcy Act is to bring about an equitable distribution of the bankrupt’s estate----”); Nathanson, 344 U.S., at 29 , 73 S.Ct. 80 (“The theme of the Bankruptcy Act is ‘equality of distribution’, ... and if one claimant is to be preferred over others, the purpose should be clear from the statute.” (quoting Sampsell v. Imperial Paper & Color Corp., 313 U.S. 215, 219 , 61 S.Ct. 904 , 85 L.Ed. 1293 (1941))); H.R.
cited Cited "see" City of Rye v. Public Service Mutual Insurance
N.Y. App. Div. · 1973 · signal: see · confidence high
See Kothe v. Taylor Trust, [ 280 U. S. 224 ] supra; Restatement, Contracts § 339.
discussed Cited "see" Priebe & Sons, Inc. v. United States (2×)
SCOTUS · 1947 · signal: see · confidence high
See Kothe v. Taylor Trust, supra; Restatement, Contracts § 339.
Retrieving the full opinion text from the archive…
Kothe, Trustee,
v.
R. C. Taylor Trust
48.
Supreme Court of the United States.
Jan 6, 1930.
280 U.S. 224
Mr. Frank H. Pardee for petitioner., Mr. George 8. Taft, with whom Mr. T. Hovey Gage was on the brief, for respondent.
McReynolds.
Cited by 138 opinions  |  Published
1 passages pin-cited by 2 cases
Pinpoint authority: bottom 77%
Citer courts: D. Colorado (3) · W.D. Wisconsin (3)
Mr. Justice McReynolds

delivered the opinion of the Court.

April 20th, 1927, respondent — the R. C. Taylor Trust— leased to one Turkel certain real estate, reserving rent at the rate of $4,000 per annum. The meager record before[*225] us does not affirmatively show the length of the term, but we accept the statement by counsel for both sides that it was two years. The lease contained the following provision—

“ The filing of any petition in bankruptcy ... by or against the Lessee shall be deemed to constitute a breach of this lease, and thereupon, ipso facto and without entry or other action by the Lessor, this lease shall become and be terminated; and, notwithstanding any other provisions of this lease the Lessor shall forthwith upon such termination be entitled to recover damages for such breach in an amount equal to the amount of the rent reserved in this lease for the residue of the term hereof.”

Turkel having been adjudged bankrupt the lessor filed proof of debt for $5,000 demanded as “ damages for breach of lease . . . that being the same as the amount of rent reserved in the lease from February 15, 1928 to May 15, 1929, the end of the term.”

The referee disallowed the claim “ for the reason that the proof is based on damages for the amount of rent running from the date of the filing of the petition to the end of the term of the lease, no part of such claim being for any rent which had accrued at the time of the filing of said bankruptcy petition.” The District Court affirmed his action; but the court below held the claim valid and allowable under § 63 (a) 4 of the Bankruptcy Act, 1898, 30 Stat. 563 (U. S. C.,'Title 11, c. 7, § 103).

The Trustee, petitioner here, maintains that the quoted provision of the lease imposed a penalty and did not express any lawful purpose to fix the liquidated damages which might follow failure to perform. On the other hand, the respondent insists that in view of the length of the term the agreement must be regarded as one for liquidated damages and therefore unobjectionable.

Sun Printing & Publishing Ass’n v. Moore, 183 U. S. 642 and United States v. Bethlehem Steel Co., 205 U. S.[*226] 105, 119, point out principles applicable to enforcement of contracts providing for payment of definite sums upon failure to perform. The courts are “ strongly inclined to allow parties to make their own contracts, and to carry out their intentions, even when it would result in the recovery of an amount stated as liquidated damages, upon proof of the violation of the contract, and without proof of the damages actually sustained. . . . The question always is, what did the parties intend by the language used? When such intention is ascertained it is ordinarily the duty of the court to carry it out.” And see United States v. United Engineering Co., 234 U. S. 236, 241: “ Such contracts for liquidated damages when reasonable in their character are not to be regarded as penalties and may be enforced between the parties.” But agreements to pay fixed sums plainly without reasonable relation to any probable damage which may follow a breach will not be enforced. This circumstance tends to negative any notion that the parties really meant to provide a measure of compensation — “ to treat the sum named as estimated and ascertained damages.”

Here, we find the lessee in a lease for two years agreeing that the mere filing of a petition in bankruptcy against him shall be deemed a breach and thereupon, ipso facto, it shall be terminated and the lessor shall become entitled to re-enter, also to recover damages equal to the full amount of the rent reserved for the remainder of the term. The amount thus stipulated is so disproportionate to any damage reasonably to be anticipated in the circumstances disclosed that we must hold the provision is for an unenforceable penalty. The parties were consciously undertaking to contract for payment to be made out of the assets of a bankrupt estate — not for something which the lessee personally would be required to discharge. He, therefore, had little, if any, immediate concern with the amount of the claim to be presented; most probably, that[*227] would affect only those entitled to share in the proceeds of property beyond his control.

The broad purpose of the Bankruptcy Act is to bring about an equitable distribution of the bankrupt’s estate among creditors holding just demands based upon adequate consideration. Any agreement which tends to defeat that beneficent design must be regarded with disfavor. Considering the time which the lease, here involved had to run, nothing else appearing, it seems plain enough that the real design of the challenged provision was to insure to the lessor preferential treatment in the event of bankruptcy. The record discloses no circumstance sufficient to support a contrary view. If the term were much shorter, or there were facts tending to disclose a proper purpose, the argument in favor of the lessor would be more persuasive.

The decree of the court below must be reversed. The judgment of the District Court will be affirmed and the cause remanded there for further appropriate proceedings.

Reversed.