United States v. Estate of Romani, 523 U.S. 517 (1998)

523 U.S. 517
118 S.Ct. 1478
140 L.Ed.2d 710

UNITED STATES, Petitioner,
v.
ESTATE OF Francis J. ROMANI et al.
No. 96-1613.

Supreme Court of the United States
Argued Jan. 12, 1998.
Decided April 29, 1998.

Syllabus *
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, 99 S.Ct. 1448, 1463-1464, 59 L.Ed.2d
711, 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.
____-____.
(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, 74 S.Ct. 367, 369-370, 98 L.Ed. 520. 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
§6323(a)'s terms, the Government's liens are not valid as against the
earlier recorded judgment lien. Pp. ____-____.
(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, 84 S.Ct. 1267, 1271, n. 8, 12 L.Ed.2d
370, 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. ____-____.

(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, 2 S.Ct. 561, 564-567, 27
L.Ed. 537. United States v. Emory, 314 U.S. 423, 429-433, 62 S.Ct. 317,
320-323, 86 L.Ed. 315, and United States v. Key, 397 U.S. 322, 324-333,
90 S.Ct. 1049, 1051-1056, 25 L.Ed.2d 340, 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
attorneys' 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, 99 S.Ct., at 1461-1462, 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. ____-____.
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.
Kent L. Jones, Washington, DC, for petitioner.
Patrick F. McCartan, Cleveland, OH, for respondent.
Justice STEVENS delivered the opinion of the Court.

1

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.

2

* 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 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.

3

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.''

4

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, at 705. 3 Then, relying on
the reasoning in United States v. Kimbell Foods, Inc., 440 U.S. 715, 99 S.Ct.
1448, 59 L.Ed.2d 711 (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,
99 S.Ct., at 1463-1464, the court concluded that the 1966 Act had the effect of
limiting the operation of §3713 as to tax debts.

5

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 (C.A.6 1967), and Nesbitt v. United States, 622 F.2d 433 (C.A.9 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, 4
L.Ed. 271 (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 command as that of [31 U.S.C. §3713],''' United States v. Key, 397
U.S. 322, 324-325, 90 S.Ct. 1049, 1051, 25 L.Ed.2d 340 (1970) (quoting
United States v. Emory, 314 U.S. 423, 433, 62 S.Ct. 317, 322-323, 86 L.Ed.
315 (1941)). We granted certiorari, 521 U.S. ----, 117 S.Ct. 2506, 138 L.Ed.2d
1010 (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

6

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.

7

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 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, 74 S.Ct. 367, 369, 98
L.Ed. 520 (1954); see also Illinois ex rel. Gordon v. Campbell, 329 U.S. 362,
375, 67 S.Ct. 340, 347-348, 91 L.Ed. 348 (1946).

8

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,
13 S.Ct. 846, 847-848, 37 L.Ed. 705 (1893). In 1913, Congress amended the
statute to provide that the federal 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. 1125-1132, as amended, 26 U.S.C. §6323.

9

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

10

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. Moore, 423 U.S. 77, 96 S.Ct. 310, 46 L.Ed.2d 219 (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, 96 S.Ct., at 313. 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, 41 S.Ct. 143, 145, 65 L.Ed. 315 (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.10 Given this background, respondent argues
that the statute should be read as giving the United States a preference over
other unsecured creditors but not over secured creditors.11

11

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:

12

"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, 7 L.Ed. 189 (1828).

13

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.

14

We cannot, however, ignore the Court's earlier judgment in Thelusson v. Smith,
2 Wheat. 396, 426, 4 L.Ed. 271 (1817), or the more recent dicta in United
States v. Key, 397 U.S. 322, 324-325, 90 S.Ct. 1049, 1051-1052, 25 L.Ed.2d
340 (1970). 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. The Court's brief opinion12 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.

15

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 Serg. & 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 Romani Industries' choate lien
on the property in Cambria County.

16

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:

17

"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, 7 L.Ed. 189. 14

18

The Government also relies upon dicta from our opinion in United States v.
Key, 397 U.S., at 324-325, 90 S.Ct., at 1051-1052, which quoted from our
earlier opinion in United States v. Emory, 314 U.S., at 433, 62 S.Ct., at 322323: "Only the plainest inconsistency would warrant our 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, 73 S.Ct. 701
[704-705], 97 L.Ed. 1071 (1953).'' 397 U.S., at 332, n. 11, 90 S.Ct., at 1056, n.
11.

19

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, 84 S.Ct. 1267, 1271, n. 8, 12 L.Ed.2d 370
(1964) (citing cases). In his dissent in the Gilbert Associates case, 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, 73 S.Ct., at 705.

20

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, 73 S.Ct., at 704-705.
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, 67 S.Ct., at 345-346), we are not aware of any decisions since
Thelusson applying that theory to claims for real property, or of any reason to
require a lienor or mortgagee to acquire possession in order to perfect an interest
in real estate.

21

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

22

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:

23

"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, 68 S.Ct. 747, 760-761, 92 L.Ed. 968 (1948) (Jackson, J., dissenting).

24

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
amended. Thus, in Cook County Nat. Bank v. United States, 107 U.S. 445, 448451, 2 S.Ct. 561, 564-567, 27 L.Ed. 537 (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, 50 S.Ct. 212, 214, 74 L.Ed. 556 (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.

25

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,
32 S.Ct. 457, 459, 56 L.Ed. 706 (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.'' Ibid. 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, 32 S.Ct., at 459-460; Davis v. Pringle, 268 U.S. 315,
317-319, 45 S.Ct. 549, 550, 69 L.Ed. 974 (1925). 15

26

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 attorneys' 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, 99 S.Ct.,
at 1461-1462, 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.

27

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, 73 S.Ct., at 703-704. Only after
deciding that question in the negative did the Court conclude that the United
States obtained preference by operation of the priority statute. Id., at 365-366,
73 S.Ct., at 704-705. 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, 62 S.Ct., at 320-323 (the National
Housing Act), and United States v. Key, 397 U.S., at 324-333, 90 S.Ct., at
1051-1056 (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, 90 S.Ct., at
1053-1054. The same cannot be said in the present suit.

28

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. Plumb 8. The failure of the 1970 proposal in the Senate Judiciary
Committee-explained 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 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.

29

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 Cong.
Rec. 22227 (1966) (remarks of Rep. Byrnes); cf. United States v. Speers, 382
U.S. 266, 275, 86 S.Ct. 411, 416, 15 L.Ed.2d 314 (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:

30

"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).

31

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.

32

The judgment of the Pennsylvania Supreme Court is affirmed.

33

It is so ordered.

34

Justice SCALIA, concurring in part and concurring in the judgment.

35

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 __, 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.

36

That is not so, for several reasons. First and most obviously, Congress can not
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: 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.

37

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, 523 U.S. ----, 118 S.Ct. 1219, 1227, --- L.Ed.2d ---- (1998); id., at
----, 118 S.Ct., at 1243 (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.

38

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, 518-528,
113 S.Ct. 1562, 1566-1572, 123 L.Ed.2d 229 (1993) (SCALIA, J., concurring
in judgment); United States v. Thompson/Center Arms Co., 504 U.S. 505, 521,
112 S.Ct. 2102, 2111-2112, 119 L.Ed.2d 308 (1992) (SCALIA, J., concurring
in judgment); Blanchard v. Bergeron, 489 U.S. 87, 98-100, 109 S.Ct. 939, 946948, 103 L.Ed.2d 67 (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 hearings, 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.

*

The syllabus constitutes no part of the opinion of the Court but has been
prepared by the Reporter of Decisions for the convenience of the reader.
See United States v. Detroit Timber & Lumber Co., 200 U.S. 321, 337, 26
S.Ct. 282, 287, 50 L.Ed. 499.

1

" §3713. Priority of Government claims
" (a)(1) 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 voluntary
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 U.S.C.
§3713.
The present statute is the direct descendent of §3466 of the Revised
Statutes, which had been codified in 31 U.S.C. §191.

2

Letter of November 13, 1789 to Jean Baptiste Le Roy, in 10 The 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.

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).

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).

5

6

7

8

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.
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.
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).
The 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 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,
and 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, 499-502, 46
S.Ct. 180, 180-182, 70 L.Ed. 373 (1926); Massachusetts v. United States,
333 U.S. 611, 625-626, and n. 24, 68 S.Ct. 747, 755-756, and n. 24, 92
L.Ed. 968 (1948).

9

10

11

" 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, 96 S.Ct., at 313.
" 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, 2 L.Ed. 370 (1805).
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, 103 S.Ct. 1952, 1958, n. 12, 76
L.Ed.2d 66 (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, 116 S.Ct. 873, 880, n. 5, 134 L.Ed.2d 6 (1996).

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 fi. 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, 4
L.Ed. 271 (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, 7 L.Ed. 189 (1828).

13

14

15

Justice 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, 4 L.Ed. 271, n. h.
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. Att. Gen. 28, 29. See also Kennedy 908-911 (advancing
this same interpretation of the early priority act decisions).
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:
"as a result of the continuing discrepancies between the bankruptcy and
insolvency rules, some creditors have had a distinct incentive 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).