Document: 363 U.S. 237 80 S.Ct. 1108 4 L.Ed.2d 1192 UNITED STATES of America, Petitioner,v.William J. BROSNAN et al. BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, a National Banking Association, Petitioner, v. America. Nos. 137 and 183. Argued March 21, 22, 1960. Decided June 13, Mr. Daniel M. Friedman, Washington, D.C., for petitioner United states. Samuel B. Stewart, San Francisco, Cal., Bank America Nat. Trust & Savings Assn. William L. Jacob, Pittsburgh, Pa., respondents Brosnan others. Justice HARLAN delivered the opinion Court. 1 In these two cases, States purports to hold federal tax liens on Pennsylvania California real properties which are concededly junior defaulted mortgages held same by other parties suits. The basic issue in each case is whether lien was effectively extinguished state proceedings not, nor required under law be, party. 2 course giving rise this as follows: No. 137, involving tract land, respondent mortgagees, confession-of-judgment provision mortgage bond, obtained an personam judgment against mortgagor-taxpayer, pursuant property sold writ fieri facias.1 Subsequently, instituted suit 26 U.S.C. § 7403, U.S.C.A. seeking enforcement its foreclosure sale.2 District Court that Government's question had been proceedings, it entered defendants. Appeals affirmed. 3 Cir., 264 F.2d 762. 183, personal properties, subject deed trust chattel mortgages, were trustee-mortgagee powers sale contained respective instruments. received no actual notice sale. Thereafter, mortgagee, bought at sale, brought Government 28 2410, quiet title, claiming exercise lien. Appeals, reversing Court, dismissed suit, holding could be divested 'only with consent manner prescribed Congress.' 9 265 862, 869. did not reach effect give power upon liens. We cases here, 361 811, 63, 58, because importance administration laws conflict between decisions Third Ninth Circuits. I. 5 Federal wholly creatures statute. Detailed provisions govern their creation, continusance, validity, release.3 Consequently, matters directly affecting nature or operation such questions, regardless statutory scheme specifically deals them not. See Clearfield Co. States, 318 363, 63 573, 87 L.Ed. 838. Yet intrude relationships traditionally governed law, inevitable developing defining incidents liens, should often called determine whether, matter policy, local policy e adopted governing uniform nationwide rule formulated. 6 determining extent 'property rights property' (§ 6321) government attaches, we have looked law. Bess, 357 51, 55, 78 1054, 1057, 1135. mortgagees claim present principle Bess. They assert since taxpayer-mortgagors' interests being terminated means here invoked, limited extent; attaches only created law; therefore, interest similarly terminated. 7 fallacy contention evident. deceased's insurance policies his own life cash surrender value extend proceeds, he never enjoy. Here, however, mortgagors owned entire fee mortgages. This has repeatedly rejected taxpayer already encumbered enjoyed seniority necessarily attached lien.4 A fortiori, 'property' can attach diminished particular possessed competing lienor whom concedes priority. II. 8 nevertheless believe desirable adopt divestiture except Congress may field. It true form part machinery collection taxes, objective 'uniformity, far be.' Gilbert Associates, 345 361, 364, 73 701, 703, 97 1071. However, when resorted use came into area complex long settled regulated that, so concerned, need uniformity instance outweighed severe dislocation would result from our disregarding procedures. Long accepted nonjudicial enforcing private embarrassed, if nullified where involved, many titles secured cast doubt. think more harmonious tenets system consistent what done area, inject ourselves network interests, displacing well-established procedures enforcement, superimposing new rule. Cf. Board Com'rs Jackson County 308 343, 60 285, 84 313. III. conclusion course, withstand congressional direction contrary. argues enactment certain statutes relating judicial extinguishment has, least impliedly, spoken. 10 As early 1868, authorized enforce lien.5 similar now appears 7403.6 then well established indispensable party any interest, therefore maintained without consent.7 Furthermore, themselves all persons joined foreclose title property. Thus there way who senior get decree extinguishing interest. 11 To remedy situation, 1924 passed predecessor 7424, 7424,8 gives holder prior-filed right civil action exhaustion administrative remedies. court proceed 'a final determination claims question' 7403. latter section requires merits property, establishes claim, permits, but does require, order details procedure followed specified, expressly given redeem. 12 1931, Congress, reasons, whih name kind lien, lien.9 court, removable court.10 If conducted one year 13 These face evidence intent exclude otherwise available Their apparent purpose lift bar sovereign immunity theretofore considered work injustice lienors. Several features make clear: 14 (1) Both sections purely permissive tenor. 'may * file petition district court' 'the named party' 2410. (Emphasis added.) 15 (2) Under neither federally imposed requirement all. Nor statutes. sale' guidance followed. nothing indicates had. While guaranteed one-year redeem plaintiff proceeds 7424. 16 (3) specific permission 2410(a) institute quiet-title obviously contemplates declaration courts previously legal consequences. 7424 2410 invoked extinguish subsequent necessary. Therefore, must recognized possibility might affect 17 Government, aruges legislative history believed extinguished. But statements relied on11 reveal simply recognition lienors put unfair disadvantage inability join proceedings. disadvantage, clear thought barred attempt manner; effective divest large proceedings; existence effectiveness procedures, cloud removed conclusively binding States. event, existing was, even intended application whatever be. No inference drawn referred to. IV. 18 remains nonetheless ineffective defeat they de regarded unconsented suits Because proceeding 183 presents problem, unless hold, beyond anything heretofore decided, force liens,12 amounted 'suit' do doctrine reaches far. 19 different difficult score. Sheriff's mortgaged land facias having though holders made, proceedings.13 cannot consent. Siren, Wall. 152, 129; State Minnesota 305 382, 59 292, 83 235; Alabama, 313 274, 61 1011, 85 1327. suggested rpinciple applies holds render Cless, 254 590, 592. That, seems dubious distinction, depend supra, page 386, 294. Nevertheless, find, yet applied precise situation before us. Much said view States,14 than case. both practical exactly same. 20 Be may, shall immunity. produce incongruous results trespass considerations led refusal fashion respecting factors supporting field, those militating long-standing full considerations. involve imponderables ill-equipped assess, spoken, best left body deal light illumination. wise solution far-reaching problem achieved within confines lawsuit. Until determines, these. 21 affirmed, reversed. 22 ordered. 23 Judgment Circuit affirmed; 24 CLARK, THE CHIEF JUSTICE, BLACK FRANKFURTER join, dissenting. 25 I submit over-all adoption 'to afford prior time method clearing property.'1 Committee pointed out 'there whereby taxes discharged payment. Although valueless powerless remove.' And House stated, among things, estate recommended legislation years recorded lienholder 'in defeated foreclose' 'simple just proceeding' bill 'is fair amply fully protects Government. *' declared 'equity dictates circumstances status, practice bring execution ties hands making impossible him grant thus deprives benefits security (Italics understood procedures—by 'could possibly discharge lien.' (Chairman Graham Judiciary Committee, manager floor.) first gave mortgagee right, after exhausting remedies, test Thereafter 1931 enacted which, permitted title. Act filing actions '(u)nder conditions prescribed,' including redemption, requirements found necessary 'for protection States.' 27 brushed aside protections and, regard mandate, turned acts booby traps caught up benevolence. Giving carte blanche wipe summary trustee's notice, declares extraordinary 'of procedures.' For reason, whatsoever. All policy.' finds culminating consent.' Yet, admittedly consented, says 'no us,' will now. certainly less self-evident explanation wiping consent, anomalous ground decision bootstrap 'Pennsylvania case.' fact about presupposes, apart 'long-standing procedures' applicable apply equally ones. released books another over 90 years, indeed violent assumption. priorfiled some 30 three remedies follow secure release First, Secretary Treasury delegate 6325 Internal Revenue Code.2 Section authorizes official execute liability satisfied become legally unenforceable furnishing bond conditioned payment amount partial involved jeopardize provision, itself, entirely adequate protect moneylenders suffering injustice, stop there. additional alternative methods set 29 grants privilege provided originally 1868 request authorize Upon Secretary's failure six months, relief. Notice lienholders, required. majority emphasizes redemption place reliance absence understandable consider Secretary. ample filed pay off advantageous is, tantamount There point permitting relief equivalent months during considering mortgagee's request. addition procedure, separate proceed. require permits immediate invocation courts. Its extends type claimed taxes. made notice. Judicial sales ordered, Obviously inserted Unlike proceeding, ordinarily files suit. fairness reimburse 31 Now let us take seriatim grounds disregards carefully devised protecting 'features' 'clear' exclusive. word 'may' granting phrase dealing taken interpretation reduced semantology. stating petition' not—because not—require so. He wishes chances superior, thousands matters. Likewise, employed ordinary, familiar usage understanding. Congressional expression, all, Addisonian diction. Reaching Court's further objection language sale,' submitted logic i.e., receivership, quieting cetera. word. Certainly 'shall' inapplicable. appropriate hearing fix manner, condition appropriately leaves 32 third 'feature' makes much Acts 'on face' commonplace legislation, Hines Davidowitz, 1941, 312 52, 67, 399, 404, 581, test. Commonwealth Nelson, 1956, 350 497, 76 477, 100 640. 'contemplates consequences.' 1941 Attorney General Jackson. Being lawyer general practice, knew clouded times future 'persons acting good faith knowledge belief extinguished' likewise titles. moved suggestion. But, am confident dreamed suggestion strip capably representing trustee deprive defense Such construction clause repealer Why sue quid pro quo chance validity prior-claimed turn around through rights? wipes entirely—with exception according today, none protections. says, inferior contest bona fides priority trust, due it, regularity, exercised infirmities fraud collusion—unless allowed able construe statute tested written therein States,' stretches imagination me breaking point. 33 Other Acts, 'matter policy,' reason adopting Of if, holds, applicable, acted 'fashion law.' 1943, 367, 575, 'singularly inappropriate.' liabilities securing same, arising therefrom rights, controlled Would include assessed collector asserted lien? permit law? open endless problems. vary State, resulting 50 rules entailing varying interpretations, practices pitfalls peculiar jurisdiction. better Nation? concluded that: 34 'The issuance commercial paper vast scale transactions commonly occur several forum, duties exceptional uncertainty. lead great diversity identical vagaries desirability plain.' 575. 35 forcefully spelled compelling revenue imperiled. illustrated 1953, 1071, again emphasized necessity words: 36 'A cardinal uniformity, 'judgment creditor' (as used (1946 ed.) 3672, U.S.C.A 3672) state.' 37 important basis 38 serious cases. seen, States' wiped officials know mortgage. protection. With thosuands trustees' going country day seriously jeopardized. 39 exclusive, insists 'just process—without thereof? millions transactions, how else public treasury protected? 'inject interests' displace 'well-established enforcement.' wishes, Fourteenth Amendment requirements, lienholders. Only lienholders cause hardship money-lenders agreed until today bear 40 reverse affirm Subsequent entry judgment, attempted agree comply Alternatively, event properly sought redemption. That pressed 6321, 6321 (Lien taxes); 6322 (Period lien); 6323 (Validity pledgees, purchasers, creditors); (Release property). Security Bank, 340 47, 71 111, 95 53; City New Britain, 347 81, 74 98 520; Acri, 348 211, 75 239, 99 264; Liverpool London Globe Ins. Co., Ltd., 215, 247, 268; Scovil, 218, 244, 271; Colotta, 808, 82, 725; White Bear Brewing 1010, 646, 871; W. H. Vorreiter, 355 15, 19, 23; R. F. Ball Construction Inc., 587, 442, 510; Hulley, 358 66, 79 117, 106. July 20, c. 186, 106, Stat. 167. '§ Action tax. '(a) Filing. neglect tax, respect thereof, levy delegate, direct nature, delinquent, liability. '(b) Parties. thereto. '(c) Adjudication decree. shall, duly notified action, adjudicate finally established, proper officer distribution findings '(d) Receivership. appoint receiver or, certification pendency equity.' 294, 282, 1014, 43 253. provides: Civil Obtaining leave file. '(1) Request institution Any person record jurisdiction located, 6323, purchasing satisfy '(2) Petition court. fails receipt request, purchaser praying question. '(3) order. After discretion enter parties. Adjudication. therein, adjudication, assessment based presumed valid.' 46 1528, amended, 56 1026. presently codified, Actions 1444 matter, complaint forth particularity service serving process copy attorney assistant clerical employee designated writing clerk sending copies complaint, registered mail, Columbia. appear answer, plead demur sixty days allow. encumbrances situated. Where date debt owing due, ask, affirmative relief, bid sum, exceeding expenses directed head department oragency agency charge arises.' 1444, 1444. Senate reported became stated (S.Rep. 398, 68th Cong., 1st Sess. 46): 'At time, equals exceeds remove. subdivision designed achieve sae (H.R.Rep. 95, 71st 2d 1—3): 'This number American Bar Association committee removal estate, League Local Building Loan Associations, numerous companies, relieve confronted owner equity owes obligation either moral. circumstances, himself impasse. remove proceeding. willing responsible look provide simple *. reflief caused innocent estate. steadily growing. provides placed subsequently plaintiff's encumbrance During debates leading *s Representative Graham, explained follows (72 Cong.Rec. 3119): 'It whenever instance, go mortgage, relieved Government.' following colloquy took questionable worthless 3121 3122): 'Mr. Burtness (of North Dakota). So understand little act apply. understand, sort: advertisement permitted, Assume foreclosed, expires gets laws. Presumably sort enforcibility proposition out, still Now, case, officers amendment proposed way? Hawley Oregon). find pending amendment. Burtness. depreciation foreclosed else. Pennsylvania). gentleman speaks discharged, but, subrogated acquired it.' sent letter Chairman urging amended 1646, 77th 2): observed connection Welch Hamilton (S.D.Calif.), F.(2d) 224, Turner (C.C.A.8), 47 86. 'In instances purchased instances, failed justice real-estate Accordingly, suggest inserting or' words 'matter' of' line bill.' Cal.Civ.Code, 2932; Bracey V. Gray, 49 Cal.App.2d 121 P.2d 770; Sohn Pac. Title 124 757, 269 223; Cal.Jur.2d, Mortgages Deeds 463. Purdon's Pa.Stat.Ann. Tit. 12, 2447; Liss Medary Homes, 388 Pa. 139, 130 A.2d 137; College Borough Leathers, Pa.Dist. 405; Moore Schell, Pa.Super. 81; Standard Practice, 68, 32. also Keystone Graphite 257 249, 101 A. 766; 4, n. 20. undertook discriminate joinder, questions presented. sake brevity, see note 11, pages 247—249 U.S., 1114 S.Ct., references to, citations authorities for, quotations. 6325. Release Subject regulations prescribe, certificate internal if— Liability unenforceable. assessed, together satisfied, unenforceable, chapter gift for; Bond accepted. furnished (including extension time), accordance terms, conditions, sureties thereon, specified regulations. Partial Discharge Property.— Property double market remaining unsatisfied Part valueless. '(A) paid satisfaction determined value, '(B) determines value. consideration thereon Effect discharge. issued conclusive covered extinguished.' 68A 781, 6325,

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