OCTOBER TERM, 1997
Syllabus
UNITED STATES
v. ESTATE OF ROMANI ET AL.
CERTIORARI TO THE SUPREME COURT OF PENNSYLVANIA No. 96-1613.
Argued January 12, 1998-Decided April 29, 1998
After a third party perfected a $400,000 judgment lien under
Pennsylvania law on Francis Romani's Cambria County real property,
the Internal Revenue Service filed notices of tax liens on the
property, totaling some $490,000. When Mr. Romani died, his entire
estate consisted of real estate worth only $53,001. Because the
property was encumbered by both the judgment lien and the federal
tax liens, the estate's administrator sought the county court's
permission to transfer the property to the judgment creditor in
lieu of execution. The court authorized the conveyance, overruling
the Federal Government's objection that the transfer violated the
federal priority statute, 31 U. S. C. § 3713(a), which provides
that a Government claim "shall be paid first" when a decedent's
estate cannot pay all of its debts. The Superior Court of
Pennsylvania affirmed, as did the Pennsylvania Supreme Court. The
latter court determined that there was a "plain inconsistency"
between § 3713 and the Federal Tax Lien Act of 1966, which provides
that a federal tax lien "shall not be valid" against judgment lien
creditors until a prescribed notice has been given, 26 U. S. C. §
6323(a). The court concluded that the 1966 Act effectively limited
§ 3713's operation as to tax debts, relying on
United States
v.
Kimbell Foods, Inc., 440 U. S. 715, 738, which
noted that the 1966 Act modified the Government's preferred
position in the tax area and recognized the priority of many state
claims over federal tax liens.
Held: Section 3713(a) does not require that a federal tax
claim be given preference over a judgment creditor's perfected lien
on real property. Pp. 522-534.
(a) There is no dispute about the meaning of either the
Pennsylvania lien statute or the Tax Lien Act. It is undisputed
that, under the state law, the judgment creditor acquired a valid
lien on Romani's real property before his death and before the
Government served notice of its tax liens. That lien was therefore
perfected in the sense that there is nothing more to be done to
have a choate lien.
E. g.,
United States v.
City
of New Britain, 347 U. S. 81, 84. And a
review of the Tax Lien Act's history reveals that each time
Congress has revisited the federal tax lien, it has ameliorated
pre-existing harsh consequences for the delinquent taxpayer's other
secured creditors. Here, all agree that by
518
§ 6323(a)'s terms, the Government's liens are not valid as
against the earlier recorded judgment lien. Pp. 522-524.
(b) Because this Court has never definitively resolved the basic
question whether the federal priority statute gives the United
States a preference only over other unsecured creditors, or whether
it also applies to the antecedent perfected liens of secured
creditors, see,
e. g., United States v.
Vermont,
377 U. S. 351,
358, n. 8, it does not seem appropriate to view the issue here as
whether the Tax Lien Act has implicitly amended or repealed §
3713(a). Instead, the proper inquiry is how best to harmonize the
two statutes' impact on the Government's power to collect
delinquent taxes. Pp. 524-530.
(c) Nothing in the federal priority statute's text or its long
history justifies the conclusion that it authorizes the equivalent
of a secret lien as a substitute for the expressly authorized tax
lien that the Tax Lien Act declares "shall not be valid" in a case
of this kind. On several occasions, this Court has concluded that a
specific policy embodied in a later federal statute should control
interpretation of the older federal priority statute, despite that
law's literal, unconditional text and the fact that it had not been
expressly amended by the later Act. See,
e. g., Cook County Nat.
Bank v.
United States, 107 U. S. 445, 448-451.
United States v.
Emory, 314 U. S. 423, 429-433,
and
United States v.
Key, 397 U. S. 322, 324-333,
distinguished. So too here, there are sound reasons for treating
the Tax Lien Act as the governing statute. That Act is the later
statute, the more specific statute, and its provisions are
comprehensive, reflecting an obvious attempt to accommodate the
strong policy objections to the enforcement of secret liens. It
represents Congress' detailed judgment as to when the Government's
claims for unpaid taxes should yield to many different sorts of
interests (including,
e. g., judgment liens, mechanic's
liens, and attorney's liens) in many different types of property
(including,
e. g., real property, securities, and motor
vehicles). See § 6323. Indeed, given this Court's unambiguous
determination that the federal interest in the collection of taxes
is paramount to its interest in enforcing other claims, see
Kimbell Foods, Inc., 440 U. S., at 733-735, it would be
anomalous to conclude that Congress intended the priority statute
to impose greater burdens on the citizen than those specifically
crafted for tax collection purposes. Pp. 530-534.
547 Pa. 41, 688 A. 2d 703, affirmed.
STEVENS, J., delivered the opinion of the Court, in which
REHNQUIST, C. J., and O'CONNOR, KENNEDY, SOUTER, THOMAS, GINSBURG,
and BREYER, JJ., joined. SCALIA, J., filed an opinion concurring in
part and concurring in the judgment,
post, p. 535.
519
Kent L. Jones argued the cause for the United States.
With him on the briefs were Acting Solicitor General Waxman,
Acting Solicitor General Dellinger, Assistant Attorney General
Argrett, Deputy Solicitor General Wallace, William S. Estabrook,
and Joan 1. Oppenheimer.
Patrick F. McCartan argued the cause for respondent
Romani Industries, Inc. With him on the brief were
Gregory
G.
Katsas and
Lawrence L. Davis.
JUSTICE STEVENS delivered the opinion of the Court.
The federal priority statute, 31 U. S. C. § 3713(a), provides
that a claim of the United States Government "shall be paid first"
when a decedent's estate cannot pay all of its debts.1 The question
presented is whether that statute requires that a federal tax claim
be given preference over a judgment creditor's perfected lien on
real property even though such a preference is not authorized by
the Federal Tax Lien Act of 1966, 26 U. S. C. § 6321
et
seq.
I
On January 25, 1985, the Court of Common Pleas of Cambria
County, Pennsylvania, entered a judgment for $400,000 in favor of
Romani Industries, Inc., and against Francis
1 "§ 3713. Priority of Government claims
"(a)(I) A claim of the United States Government shall be paid
first when-
"(A) a person indebted to the Government is insolvent and-
"(i) the debtor without enough property to pay all debts makes a
volun-
tary assignment of property;
"(ii) property of the debtor, if absent, is attached; or "(iii)
an act of bankruptcy is committed; or
"(B) the estate of a deceased debtor, in the custody of the
executor or administrator, is not enough to pay all debts of the
debtor.
"(2) This subsection does not apply to a case under title 11."
31
The present statute is the direct descendent of § 3466 of the
Revised Statutes, which had been codified in 31 U. S. C. § 191.
520
J. Romani. The judgment was recorded in the clerk's office and
therefore, as a matter of Pennsylvania law, it became a lien on all
of the defendant's real property in Cambria County. Thereafter, the
Internal Revenue Service filed a series of notices of tax liens on
Mr. Romani's property. The claims for unpaid taxes, interest, and
penalties described in those notices amounted to approximately
$490,000.
When Mr. Romani died on January 13, 1992, his entire estate
consisted of real estate worth only $53,001. Because the property
was encumbered by both the judgment lien and the federal tax liens,
the estate's administrator sought permission from the Court of
Common Pleas to transfer the property to the judgment creditor,
Romani Industries, in lieu of execution. The Federal Government
acknowledged that its tax liens were not valid as against the
earlier judgment lien; but, giving new meaning to Franklin's
aphorism that "in this world nothing can be said to be certain,
except death and taxes,"2 it opposed the transfer on the ground
that the priority statute (§ 3713) gave it the right to "be paid
first."
The Court of Common Pleas overruled the Government's objection
and authorized the conveyance. The Superior Court of Pennsylvania
affirmed, and the Supreme Court of the State also affirmed. 547 Pa.
41, 688 A. 2d 703 (1997). That court first determined that there
was a "plain inconsistency" between § 3713, which appears to give
the United States "absolute priority" over all competing claims,
and the Tax Lien Act of 1966, which provides that the federal tax
lien "shall not be valid" against judgment lien creditors until a
prescribed notice has been given.
Id., at 45, 688 A. 2d,
2 Letter of Nov. 13, 1789, to Jean Baptiste Le Roy, in 10
Writings of Benjamin Franklin 69 (A. Smyth ed. 1907). As is often
the case, the original meaning of the aphorism is clarified
somewhat by its context: "Our new Constitution is now established,
and has an appearance that promises permanency; but in this world
nothing can be said to be certain, except death and taxes."
Ibid.
521
at 705.3 Then, relying on the reasoning in
United States
v.
Kimbell Foods, Inc., 440 U. S. 715 (1979),
which had noted that the Tax Lien Act of 1966 modified the Federal
Government's preferred position in the tax area and recognized the
priority of many state claims over federal tax liens, id., at 738,
the court concluded that the 1966 Act had the effect of limiting
the operation of § 3713 as to tax debts.
The decision of the Pennsylvania Supreme Court conflicts with
two Federal Court of Appeals decisions,
Kentucky ex rel.
Luckett v.
United States, 383 F.2d
13 (CA6 1967), and
Nesbitt v.
United States,
622 F.2d
433 (CA9 1980). Moreover, in its petition for certiorari, the
Government submitted that the decision is inconsistent with our
holding in
Thelusson v.
Smith, 2 Wheat. 396 (1817),
and with the admonition that "'[o]nly the plainest inconsistency
would warrant our finding an implied exception to the operation of
so clear a
3 The Federal Tax Lien Act of 1966, 26 U. S. C. § 6321
et
seq., provides in pertinent part:
"§ 6321. Lien for taxes
"If any person liable to pay any tax neglects or refuses to pay
the same after demand, the amount (including any interest,
additional amount, addition to tax, or assessable penalty, together
with any costs that may accrue in addition thereto) shall be a lien
in favor of the United States upon all property and rights to
property, whether real or personal, belonging to such person."
"§ 6323. Validity and priority against certain persons
"(a) Purchasers, holders of security interests, mechanic's
lienors, and judgment lien creditors
"The lien imposed by section 6321 shall not be valid as against
any purchaser, holder of a security interest, mechanic's lienor, or
judgment lien creditor until notice thereof which meets the
requirements of subsection (f) has been filed by the
Secretary."
Section 6323(f)(1)(A)(i) provides that the required notice
"shall be filed[,] ... [i]n the case of real property, in one
office within the State (or the county, or other governmental
subdivision), as designated by the laws of such State, in which the
property subject to the lien is situated." If the State has not
designated such an office, notice is to be filed with the clerk of
the federal district court "for the judicial district in which the
property subject to the lien is situated." § 6323(f)(1)(B).
522
command as that of [31 U. S. C. § 3713],'"
United States
v.
Key, 397 U.
S. 322, 324-325 (1970) (quoting
United States v. Emory,
314 U. S. 423,
433 (1941)). We granted certiorari, 521 U. S. 1117 (1997), to
resolve the conflict and to consider whether
Thelusson, Key,
or any of our other cases construing the priority statute requires
a different result.
II
There is no dispute about the meaning of two of the three
statutes that control the disposition of this case. It is therefore
appropriate to comment on the Pennsylvania lien statute and the
Federal Tax Lien Act before considering the applicability of the
priority statute to property encumbered by an antecedent judgment
creditor's lien.
The Pennsylvania statute expressly provides that a judgment
shall create a lien against real property when it is recorded in
the county where the property is located. 42 Pa. Cons. Stat. §
4303(a) (1995). After the judgment has been recorded, the judgment
creditor has the same right to notice of a tax sale as a
mortgagee.4 The recording in one county does not, of course, create
a lien on property located elsewhere. In this case, however, it is
undisputed that the judgment creditor acquired a valid lien on the
real property in
4 The Pennsylvania Supreme Court has elaborated:
"We must now decide whether judgment creditors are also entitled
to personal or general notice by the [County Tax Claim] Bureau as a
matter of due process of law.
"Judgment liens are a product of centuries of statutes which
authorize a judgment creditor to seize and sell the land of debtors
at a judicial sale to satisfy their debts out of the proceeds of
the sale. The judgment represents a binding judicial determination
of the rights and duties between the parties, and establishes their
debtor-creditor relationship for all the world to notice when the
judgment is recorded in a Prothonotary's Office. When entered of
record, the judgment also operates as a lien upon all real property
of the debtor in that county."
In re Upset Sale, Tax Claim
Bureau of Berks County, 505 Pa. 327, 334, 479 A. 2d 940, 943
(1984).
523
Cambria County before the judgment debtor's death and before the
Government served notice of its tax liens. Romani Industries' lien
was "perfected in the sense that there is nothing more to be done
to have a choate lien-when the identity of the lienor, the property
subject to the lien, and the amount of the lien are established."
United States v.
City of New Britain, 347 U. S. 81, 84 (1954);
see also
Illinois ex rel. Gordon v.
Campbell,
329 U. S. 362,
375 (1946).
The Federal Government's right to a lien on a delinquent
taxpayer's property has been a part of our law at least since
1865.5 Originally the lien applied, without exception, to all
property of the taxpayer immediately upon the neglect or failure to
pay the tax upon demand.6 An unrecorded tax lien against a
delinquent taxpayer's property was valid even against a bona fide
purchaser who had no notice of the lien.
United States v.
Snyder, 149 U.
S. 210, 213-215 (1893). In 1913, Congress amended the statute
to provide that the fed-
5 The post-Civil War Reconstruction Congress imposed a tax of
three cents per pound on "the producer, owner, or holder" of cotton
and a lien on the cotton until the tax was paid. Act of July 13,
1866, § 1, 14 Stat. 98. The same statute also imposed a general
lien on all of a delinquent taxpayer's property, see § 9, 14 Stat.
107, which was nearly identical to a provision in the revenue Act
of Mar. 3, 1865, 13 Stat. 470-471, quoted in n. 6,
infra.
6 The 1865 revenue Act contained the following sentence: "And if
any person, bank, association, company, or corporation, liable to
pay any duty, shall neglect or refuse to pay the same after demand,
the amount shall be a lien in favor of the United States from the
time it was due until paid, with the interests, penalties, and
costs that may accrue in addition thereto, upon all property and
rights to property; and the collector, after demand, may levy or by
warrant may authorize a deputy collector to levy upon all property
and rights to property belonging to such person, bank, association,
company, or corporation, or on which the said lien exists, for the
payment of the sum due as aforesaid, with interest and penalty for
nonpayment, and also of such further sum as shall be sufficient for
the fees, costs, and expenses of such levy." 13 Stat. 470-471. This
provision, as amended, became § 3186 of the Revised Statutes.
524
eral tax lien "shall not be valid as against any mortgagee,
purchaser, or judgment creditor" until notice has been filed with
the clerk of the federal district court or with the appropriate
local authorities in the district or county in which the property
subject to the lien is located. Act of Mar. 4, 1913, 37 Stat. 1016.
In 1939, Congress broadened the protection against unfiled tax
liens to include pledgees and the holders of certain securities.
Act of June 29, 1939, § 401, 53 Stat. 882-883. The Federal Tax Lien
Act of 1966 again broadened that protection to encompass a variety
of additional secured transactions, and also included detailed
provisions protecting certain secured interests even when a notice
of the federal lien previously has been filed. 80 Stat. 11251132,
as amended, 26 U. S. C. § 6323.
In sum, each time Congress revisited the federal tax lien, it
ameliorated its original harsh impact on other secured creditors of
the delinquent taxpayer.7 In this case, it is agreed that by the
terms of § 6323(a), the Federal Government's liens are not valid as
against the lien created by the earlier recording of Romani
Industries' judgment.
III
The text of the priority statute on which the Government places
its entire reliance is virtually unchanged since its enactment in
1797.8 As we pointed out in
United States v.
7 For a more thorough description of the early history and of
Congress' reactions to this Court's tax lien decisions, see
Kennedy, The Relative Priority of the Federal Government: The
Pernicious Career of the Inchoate and General Lien, 63 Yale L. J.
905, 919-922 (1954) (hereinafter Kennedy).
8The Act of Mar. 3,1797, §5, 1 Stat. 515, provided:
"And be it further enacted, That where any revenue
officer, or other person hereafter becoming indebted to the United
States, by bond or otherwise, shall become insolvent, or where the
estate of any deceased debtor, in the hands of executors or
administrators, shall be insufficient to pay all the debts due from
the deceased, the debt due to the United States shall
525
Moore, 423
U. S. 77 (1975), not only were there earlier versions of the
statute,9 but "its roots reach back even further into the English
common law," id., at 80. The sovereign prerogative that was
exercised by the English Crown and by many of the States as "an
inherent incident of sovereignty," ibid., applied only to unsecured
claims. As Justice Brandeis noted in
Marshall v.
New
York, 254 U. S.
380, 384 (1920), the common-law priority "[did] not obtain over
a specific lien created by the debtor before the sovereign
undertakes to enforce its right." Moreover, the statute itself does
not create a lien in favor of the United States.lO Given this
background, respondent argues that the statute should be read
as
be first satisfied; and the priority hereby established shall be
deemed to extend, as well to cases in which a debtor, not having
sufficient property to pay all his debts, shall make a voluntary
assignment thereof, or in which the estate and effects of an
absconding, concealed, or absent debtor, shall be attached by
process of law, as to cases in which an act of legal bankruptcy
shall be committed." Compare §3466 of the Revised Statutes with the
present statute quoted in n. 1,
supra.
It has long been settled that the federal priority covers the
Government's claims for unpaid taxes.
Price v.
United
States, 269 U. S.
492, 499502 (1926);
Massachusetts v.
United
States, 333 U. S.
611, 625-626, and
9"The earliest priority statute was enacted in the Act of July
31, 1789, 1 Stat. 29, which dealt with bonds posted by importers in
lieu of payment of duties for release of imported goods. It
provided that the 'debt due to the United States' for such duties
shall be discharged first 'in all cases of insolvency, or where any
estate in the hands of executors or administrators shall be
insufficient to pay all the debts due from the deceased ... .' §
21, 1 Stat. 42. A 1792 enactment broadened the Act's coverage by
providing that the language 'cases of insolvency' should be taken
to include cases in which a debtor makes a voluntary assignment for
the benefit of creditors, and the other situations that § 3466, 31
U. S. C. § 191, now covers. 1 Stat.
263." United States v.
Moore, 423 U. S., at 81.
10 "In construing the statutes on this subject, it has been
stated by the court, on great deliberation, that the priority to
which the United States are entitled, does not partake of the
character of a
lien on the property of public debtors. This
distinction is always to be recollected."
United States v.
Hooe, 3 Cranch 73, 90 (1805).
526
giving the United States a preference over other unsecured
creditors but not over secured creditors.ll
There are dicta in our earlier cases that support this
contention as well as dicta that tend to refute it. Perhaps the
strongest support is found in Justice Story's statement:
"What then is the nature of the priority, thus limited and
established in favour of the United States? Is it a right, which
supersedes and overrules the assignment of the debtor, as to any
property which the United States may afterwards elect to take in
execution, so as to prevent such property from passing by virtue of
such assignment to the assignees? Or, is it a mere right of prior
payment, out of the general funds of the debtor, in the hands of
the assignees? We are of opinion that it clearly falls, within the
latter description. The language employed is that which naturally
would be employed to express such an intent; and it must be
strained from its ordinary import, to speak any other."
Conard v. Atlantic Ins. Co. of N. Y., 1 Pet.
386, 439 (1828).
Justice Story's opinion that the language employed in the
statute "must be strained" to give it any other meaning is entitled
to special respect because he was more familiar with 18th-century
usage than judges who view the statute from a 20th-century
perspective.
We cannot, however, ignore the Court's earlier judgment in
Thelusson v.
Smith, 2 Wheat., at 426, or the more
recent dicta in
United States v.
Key, 397 U. S., at
324-325. In
Thelusson, the Court held that the priority
statute gave the United States a preference over the claim of a
judgment creditor who had a general lien on the debtor's real
property.
11 Although this argument was not presented to the state courts,
respondent may defend the judgment on a ground not previously
raised.
Heckler v.
Campbell, 461 U. S. 458, 468-469,
n. 12 (1983). We will rarely consider such an argument, however.
Ibid.; see also
Matsushita Elec. Industrial Co. v.
Epstein, 516
U. S. 367, 379, n. 5 (1996).
527
The Court's brief opinion 12 is subject to the interpretation
that the statutory priority always accords the Government a
preference over judgment creditors. For two reasons, we do not
accept that reading of the opinion.
First, as a factual matter, in 1817 when the case was decided,
there was no procedure for recording a judgment and thereby
creating a choate lien on a specific parcel of real estate. See
generally 2 L. Dembitz, A Treatise on Land Titles in the United
States § 127, pp. 948-952 (1895). Notwithstanding the judgment, a
bona fide purchaser could have acquired the debtor's property free
from any claims of the judgment creditor. See
Semple v.
Burd, 7 Sergo & Rawle 286, 291 (Pa. 1821) ("The
prevailing object of the Legislature, has uniformly been, to
support the security of a judgment creditor, by confirming his
lien, except when it interferes with the circulation of property by
embarrassing a fair purchaser"). That is not the case with respect
to
12 The relevant portion of the opinion reads, in full, as
follows:
"These [statutory] expressions are as general as any which could
have been used, and exclude all debts due to individuals, whatever
may be their dignity .... The law makes no exception in favour of
prior judgment creditors; and no reason has been, or we think can
be, shown to warrant this court in making one.
" ... The United States are to be first satisfied; but then it
must be out of the debtor's estate. If, therefore, before the right
of preference has accrued to the United States, the debtor has made
a
bona fide conveyance of his estate to a third person, or
has mortgaged the same to secure a debt; or if his property has
been seized under a ft.
fa., the property is devested out of
the debtor, and cannot be made liable to the United States. A
judgment gives to the judgment creditor a lien on the debtor's
lands, and a preference over all subsequent judgment creditors. But
the act of congress defeats this preference in favour of the United
States, in the cases specified in the 65th section of the act of
1799."
Thelusson v.
Smith, 2 Wheat. 396, 425-426
(1817).
In the later
Conard case, Justice Story apologized for
Thelusson: "The reasons for that opinion are not, owing to
accidental circumstances, as fully given as they are usually given
in this Court."
Conard v.
Atlantic Ins. Co. of N. Y.,
1 Pet. 386, 442 (1828).
528
Romani Industries' choate lien on the property in Cambria
County.
Second, and of greater importance, in his opinion for the Court
in the
Conard case, which was joined by Justice Washington,
the author of
Thelusson,13 Justice Story explained why that
holding was fully consistent with his interpretation of the text of
the priority statute:
"The real ground of the decision, was, that the judgment
creditor had never perfected his title, by any execution and levy
on the Sedgely estate; that he had acquired no title to the
proceeds as his property, and that if the proceeds were to be
deemed general funds of the debtor, the priority of the United
States to payment had attached against all other creditors; and
that a mere potential lien on land, did not carry a legal title to
the proceeds of a sale, made under an adverse execution. This is
the manner in which this case has been understood, by the Judges
who concurred in the decision; and it is obvious, that it
established no such proposition, as that a specific and perfected
lien, can be displaced by the mere priority of the United States;
since that priority is not of itself equivalent to a lien."
Conard, 1 Pet., at 444.14
The Government also relies upon dicta from our opinion in
United States v.
Key, 397 U. S., at 324-325, which
quoted from our earlier opinion in
United States v.
Emory, 314 U. S., at 433: "Only the plainest inconsistency
would warrant our
13Justice Washington's opinion for this Court in
Thelusson affirmed, and was essentially the same as, his own
opinion delivered in the Circuit Court as a Circuit Justice. 2
Wheat., at 426, n. h.
14 Relying on this and several other cases, in 1857 the Attorney
General of the United States issued an opinion concluding that
Thelusson "has been distinctly overruled" and that the
priority of the United States under this statute "will not reach
back over any lien, whether it be general or specific." 9 Op. Atty.
Gen. 28, 29. See also Kennedy 908-911 (advancing this same
interpretation of the early priority Act decisions).
529
finding an implied exception to the operation of so clear a
command as that of [§ 3713]." Because both
Key and
Emory were cases in which the competing claims were
unsecured, the statutory command was perfectly clear even under
Justice Story's construction of the statute. The statements made in
that context, of course, shed no light on the clarity of the
command when the United States relies on the statute as a basis for
claiming a preference over a secured creditor. Indeed, the
Key opinion itself made this specific point: "This case does
not raise the question, never decided by this Court, whether § 3466
grants the Government priority over the prior specific liens of
secured creditors. See
United States v.
Gilbert
Associates, Inc., 345 U. S. 361, 365-366
(1953)." 397 U. S., at 332, n. 11.
The
Key opinion is only one of many in which the Court
has noted that despite the age of the statute, and despite the fact
that it has been the subject of a great deal of litigation, the
question whether it has any application to antecedent perfected
liens has never been answered definitively. See
United
States v.
Vermont, 377 U. S. 351, 358, n. 8
(1964) (citing cases). In his dissent in
United States v.
Gilbert Associates, Inc., 345 U. S. 361 (1953),
Justice Frankfurter referred to the Court's reluctance to decide
the issue "not only today but for almost a century and a half." 345
U. S., at 367.
The Government's priority as against specific, perfected
security interests is, if possible, even less settled with regard
to real property. The Court has sometimes concluded that a
competing creditor who has not "divested" the debtor of "either
title or possession" has only a "general, unperfected lien" that is
defeated by the Government's priority. E. g., id., at 366. Assuming
the validity of this "title or possession" test for deciding
whether a lien on personal property is sufficiently choate for
purposes of the priority statute (a question of federal law, see
Illinois ex rel. Gordon v.
Campbell, 329 U. S., at
371), we are not aware of any decisions since
Thelusson
applying that theory to claims for real prop-
530
erty, or of any reason to require a lienor or mortgagee to
acquire possession in order to perfect an interest in real
estate.
Given the fact that this basic question of interpretation
remains unresolved, it does not seem appropriate to view the issue
in this case as whether the Tax Lien Act of 1966 has implicitly
amended or repealed the priority statute. Instead, we think the
proper inquiry is how best to harmonize the impact of the two
statutes on the Government's power to collect delinquent taxes.
IV
In his dissent from a particularly harsh application of the
priority statute, Justice Jackson emphasized the importance of
considering other relevant federal policies. Joined by three other
Justices, he wrote:
"This decision announces an unnecessarily ruthless
interpretation of a statute that at its best is an arbitrary one.
The statute by which the Federal Government gives its own claims
against an insolvent priority over claims in favor of a state
government must be applied by courts, not because federal claims
are more meritorious or equitable, but only because that Government
has more power. But the priority statute is an assertion of federal
supremacy as against any contrary state policy. It is not a
limitation on the Federal Government itself, not an assertion that
the priority policy shall prevail over all other federal policies.
Its generalities should not lightly be construed to frustrate a
specific policy embodied in a later federal statute."
Massachusetts v. United States, 333 U. S. 611, 635
(1948).
On several prior occasions the Court had followed this approach
and concluded that a specific policy embodied in a later federal
statute should control our construction of the priority statute,
even though it had not been expressly
531
amended. Thus, in
Cook County Nat. Bank v.
United
States, 107 U. S.
445, 448-451 (1883), the Court concluded that the priority
statute did not apply to federal claims against national banks
because the National Bank Act comprehensively regulated banks'
obligations and the distribution of insolvent banks' assets. And in
United States v.
Guaranty Trust Co. of N.
Y.,
280 U. S. 478,
485 (1930), we determined that the Transportation Act of 1920 had
effectively superseded the priority statute with respect to federal
claims against the railroads arising under that Act.
The bankruptcy law provides an additional context in which
another federal statute was given effect despite the priority
statute's literal, unconditional text. The early federal bankruptcy
statutes had accorded to "'all debts due to the United States, and
all taxes and assessments under the laws thereof' " a preference
that was "coextensive" with that established by the priority
statute.
Guarantee Title &
Trust Co. v.
Title
Guaranty &
Surety Co., 224 U. S. 152, 158 (1912)
(quoting the Bankruptcy Act of 1867, Rev. Stat. § 5101). As such,
the priority Act and the bankruptcy laws "were to be regarded as
in pari materia, and both were unqualified; ... as neither
contained any qualification, none could be interpolated." 224 U.
S., at 158. The Bankruptcy Act of 1898, however, subordinated the
priority of the Federal Government's claims (except for taxes due)
to certain other kinds of debts. This Court resolved the tension
between the new bankruptcy provisions and the priority statute by
applying the former and thus treating the Government like any other
general creditor.
Id., at 158-160;
Davis v.
Pringle, 268
U. S. 315, 317-319 (1925).15
15 Congress amended the priority statute in 1978 to make it
expressly inapplicable to Title 11 bankruptcy cases. Pub. L.
95-598, § 322(b), 92 Stat. 2679, codified in 31 U. S. C. §
3713(a)(2). The differences between the bankruptcy laws and the
priority statute have been the subject of criticism: "[A]s a result
of the continuing discrepancies between the bankruptcy and
insolvency rules, some creditors have had a distinct incentive
532
There are sound reasons for treating the Tax Lien Act of 1966 as
the governing statute when the Government is claiming a preference
in the insolvent estate of a delinquent taxpayer. As was the case
with the National Bank Act, the Transportation Act of 1920, and the
Bankruptcy Act of 1898, the Tax Lien Act is the later statute, the
more specific statute, and its provisions are comprehensive,
reflecting an obvious attempt to accommodate the strong policy
objections to the enforcement of secret liens. It represents
Congress' detailed judgment as to when the Government's claims for
unpaid taxes should yield to many different sorts of interests
(including, for instance, judgment liens, mechanic's liens, and
attorney's liens) in many different types of property (including,
for example, real property, securities, and motor vehicles). See 26
U. S. C. § 6323. Indeed, given our unambiguous determination that
the federal interest in the collection of taxes is paramount to its
interest in enforcing other claims, see
United States v.
Kimbell Foods, Inc., 440 U. S., at 733-735, it would be
anomalous to conclude that Congress intended the priority statute
to impose greater burdens on the citizen than those specifically
crafted for tax collection purposes.
Even before the 1966 amendments to the Tax Lien Act, this Court
assumed that the more recent and specific provisions of that Act
would apply were they to conflict with the older priority statute.
In the
Gilbert Associates case, which concerned the relative
priority of the Federal Government and a New Hampshire town to
funds of an insolvent taxpayer, the Court first considered whether
the town could qualify as a "judgment creditor" entitled to
preference under the Tax Lien Act. 345 U. S., at 363-364. Only
after deciding that question in the negative did the Court conclude
that
to throw into bankruptcy a debtor whose case might have been
handled, with less expense and less burden on the federal courts,
in another form of proceeding." Plumb, The Federal Priority in
Insolvency: Proposals for Reform, 70 Mich. L. Rev. 3, 8-9 (1971)
(hereinafter Plumb).
533
the United States obtained preference by operation of the
priority statute.
Id., at 365-366. The Government would now
portray
Gilbert Associates as a deviation from two other
relatively recent opinions in which the Court held that the
priority statute was not trumped by provisions of other statutes:
United States v.
Emory, 314 U. S., at 429-433 (the
National Housing Act), and
United States v.
Key, 397
U. S., at 324-333 (Chapter X of the Bankruptcy Act). In each of
those cases, however, there was no "plain inconsistency" between
the commands of the priority statute and the other federal Act, nor
was there reason to believe that application of the priority
statute would frustrate Congress' intent.
Id., at 329. The
same cannot be said in the present suit.
The Government emphasizes that when Congress amended the Tax
Lien Act in 1966, it declined to enact the American Bar
Association's proposal to modify the federal priority statute, and
Congress again failed to enact a similar proposal in 1970. Both
proposals would have expressly provided that the Government's
priority in insolvency does not displace valid liens and security
interests, and therefore would have harmonized the priority statute
with the Tax Lien Act. See Hearings on H. R. 11256 and 11290 before
the House Committee on Ways and Means, 89th Cong., 2d Sess., 197
(1966) (hereinafter Hearings); S. 2197, 92d Cong., 1st Sess.
(1971). But both proposals also would have significantly changed
the priority statute in many other respects to follow the priority
scheme created by the bankruptcy laws. See Hearings, at 85, 198;
Plumb 10, n. 53, 33-37. The earlier proposal may have failed
because its wide-ranging subject matter was beyond the House Ways
and Means Committee's jurisdiction.
Id., at 8. The failure
of the 1970 proposal in the Senate Judiciary Committeeexplained by
no reports or hearings-might merely reflect disagreement with the
broad changes to the priority statute, or an assumption that the
proposal was not needed because, as Justice Story had believed, the
priority statute does not
534
apply to prior perfected security interests, or any number of
other views. Thus, the Committees' failures to report the proposals
to the entire Congress do not necessarily indicate that any
legislator thought that the priority statute should supersede the
Tax Lien Act in the adjudication of federal tax claims. They
provide no support for the hypothesis that both Houses of Congress
silently endorsed that position.
The actual measures taken by Congress provide a superior insight
regarding its intent. As we have noted, the 1966 amendments to the
Tax Lien Act bespeak a strong condemnation of secret liens, which
unfairly defeat the expectations of innocent creditors and
frustrate "the needs of our citizens for certainty and convenience
in the legal rules governing their commercial dealings." 112 Congo
Rec. 22227 (1966) (remarks of Rep. Byrnes); cf.
United
States v.
Speers, 382 U. S. 266, 275 (1965) (referring
to the "general policy against secret liens"). These policy
concerns shed light on how Congress would want the conflicting
statutory provisions to be harmonized:
"Liens may be a dry-as-dust part of the law, but they are not
without significance in an industrial and commercial community
where construction and credit are thought to have importance. One
does not readily impute to Congress the intention that many common
commercial liens should be congenitally unstable." E. Brown, The
Supreme Court, 1957 Term-Foreword: Process of Law, 72 Harv. L. Rev.
77, 87 (1958) (footnote omitted).
In sum, nothing in the text or the long history of interpreting
the federal priority statute justifies the conclusion that it
authorizes the equivalent of a secret lien as a substitute for the
expressly authorized tax lien that Congress has said "shall not be
valid" in a case of this kind.
The judgment of the Pennsylvania Supreme Court is affirmed.
It is so ordered.
535
JUSTICE SCALIA, concurring in part and concurring in the
judgment.
I join the opinion of the Court except that portion which takes
seriously, and thus encourages in the future, an argument that
should be laughed out of court. The Government contended that 31 U.
S. C. § 3713(a) must have priority over the Federal Tax Lien Act of
1966, because in 1966 and again in 1970 Congress "failed to enact"
a proposal put forward by the American Bar Association that would
have subordinated § 3713(a) to the Tax Lien Act, citing hearings
before the House Committee on Ways and Means, and a bill proposed
in, but not passed by, the Senate. See Brief for United States
25-27, and n. 10 (citing American Bar Association, Final Report of
the Committee on Federal Liens 7, 122-124 (1959), contained in
Hearings on H. R. 11256 and 11290 before the House Committee on
Ways and Means, 89th Cong., 2d Sess., 85, 199 (1966); S. 2197, 92d
Cong., 1st Sess. (1971)). The Court responds that these rejected
proposals "provide no support for the hypothesis that both Houses
of Congress silently endorsed" the supremacy of § 3713,
ante, at 534, because those proposals contained other
provisions as well, and might have been rejected because of those
other provisions, or because Congress thought the existing law
already made § 3713 supreme. This implies that, if the proposals
had not contained those additional features, or if Members of
Congress (or some part of them) had somehow made clear in the
course of rejecting them that they wanted the existing supremacy of
the Tax Lien Act to subsist, the rejection
would "provide
support" for the Government's case.
That is not so, for several reasons. First and most obviously,
Congress cannot express its will by a
failure to legislate.
The act of refusing to enact a law (if that can be called an act)
has utterly no legal effect, and thus has utterly no place in a
serious discussion of the law. The Constitution sets forth the only
manner in which the Members of Congress have the power to impose
their will upon the country:
536
by a bill that passes both Houses and is either signed by the
President or repassed by a supermajority after his veto. Art. I, §
7. Everything else the Members of Congress do is either prelude or
internal organization. Congress can no more express its will by not
legislating than an individual Member can express his will by not
voting.
Second, even if Congress
could express its will by not
legislating, the will of a later Congress that a law enacted by an
earlier Congress should bear a particular meaning is of no effect
whatever. The Constitution puts Congress in the business of writing
new laws, not interpreting old ones. "[L]ater enacted laws ... do
not declare the meaning of earlier law."
Almendarez-Torres
v.
United States, ante, at 237;
ante, at 269-270
(SCALIA, J., dissenting) ("This later amendment can of course not
cause [the statute] to have meant, at the time of petitioner's
conviction, something different from what it then said"). If the
enacted intent of a later Congress cannot change the meaning
of an earlier statute, then it should go without saying that the
later
unenacted intent cannot possibly do so. It should go
without saying, and it should go without arguing as well.
I have in the past been critical of the Court's using the
so-called legislative history of an enactment (hearings, committee
reports, and floor debates) to determine its meaning. See,
e.
g., Conroy v.
Aniskoff, 507 U. S. 511, 518-529
(1993) (SCALIA, J., concurring in judgment);
United States
v.
Thompson/Center Arms Co., 504 U. S. 505, 521 (1992)
(SCALIA, J., concurring in judgment);
Blanchard v.
Bergeron, 489
U. S. 87, 98-100 (1989) (SCALIA, J., concurring in part and
concurring in judgment). Today, however, the Court's fascination
with the files of Congress (we must consult them, because they are
there) is carried to a new silly extreme. Today's opinion
ever-so-carefully analyzes, not legislative history, but the
history of legislation-that-never-was. If we take this sort of
material seriously, we require conscientious counsel to investigate
(at clients' expense) not only the hear-
537
ings, committee reports, and floor debates pertaining to the
history of the law at issue (which is bad enough), but to find, and
then investigate the hearings, committee reports, and floor debates
pertaining to, later bills on the same subject that were never
enacted. This is beyond all reason, and we should say so.
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