Source: https://www.law.cornell.edu/supremecourt/text/397/286
Timestamp: 2019-04-19 14:33:01+00:00

Document:
A Michigan statute purported to authorize the filing of federal tax lien notices with the county register of deeds. However, the Michigan statute expressly required that notices of federal tax liens upon real property contain 'a description of the land on which a lien is claimed.' 2 The standard tax lien notice form used by the Treasury Department made no provision for such a description, but was rather a blanket notice covering all property of the taxpayer in the county. The Department had taken the position that § 3672 permitted state law to dictate the place for filing the notice of lien, but not the form or content of the notice. Accordingly, the Department, believing that state law did not 'authorize' filing of the standard federal notice with the register of deeds, filed its notice of lien on Donnelly's property in the United States District Court for the Eastern District of Michigan. The Eastern District includes the land involved in the case, which was held by Donnelly and his wife as tenants by the entirety. The question is whether the filing in federal court gave the United States priority against a subsequent good-faith purchaser of Donnelly's land.
Thus, the Carlsons did not rely on any statute subsequently declared unconstitutional by this Court. The most that can be said is that they may have failed to search for notices of tax lien in the federal court on the basis of a construction of § 3672 given by the Court of Appeals for the Sixth Circuit in Youngblood v. United States, supra. However, the Youngblood construction, which the Government never accepted and which it could not seek to have reviewed in this Court because the judgment in that case rested on independent grounds, 4 cannot be sufficient to deprive the Government of the fruits of following what under the statute was the proper filing procedure.
Further, in Chicot County the petitioner did not merely rely on a federal statute later declared unconstitutional, but on a final judgment rendered in his favor in a proceeding in which the respondent did not even raise the constitutional issue. The analogous situation would be presented here only if the Carlsons had, before the decision in Union Central, obtained a decree of quiet title to their property in a proceeding to which the United States was a party and in which the United States had not raised the issue of the priority of its lien under § 3672. In short, this case lacks the element of res judicatareliance by a party on a final judgment rendered in his favorwhich was the decisive factor in Chicot County.
The judgment of the Court of Appeals is reversed, and the case is remanded for further proceedings 5 not inconsistent with this opinion.
I fully agree that the Government is entitled to prevail in this case, but I would rest that conclusion on a broader ground than the Court's opinion might be taken to evince. More especially, I fear that certain distinctions suggested by the Court's opinione.g., between clear and ambiguous statutes, decisions construing statutes for the first time, decisions overruling prior constructions of statutesmay point in the direction of a retroactivity quagmire in civil litigation not unlike that in which the Court has become ensnared in the criminal field. See my dissenting opinion in Desist v. United States, 394 U.S. 244, 256, 89 S.Ct. 1030, 1037, 22 L.Ed.2d 248 (1969).
To the extent that equitable considerations, for example, 'reliance,' are relevant, I would take this into account in the determination of what relief is appropriate in any given case. There are, of course, circumstances when a change in the law will jeopardize an edifice which was reasonably constructed on the foundation of prevailing legal doctrine. Thus, it may be that the law of remedies would permit rescission, for example, but not an award of damages to a party who finds himself able to avoid a once-valid contract under new notions of public policy. Cf. Simpson v. Union Oil Co., 377 U.S. 13, 25, 84 S.Ct. 1051, 1059, 12 L.Ed.2d 98 (1964). Another instance, though apt to arise infrequently in federal court, would be where certain real property transactions fail to anticipate changes in principles governing land usage, for example, the enforce-ability of certain kinds of easements or covenants. In such instances it may be appropriate to withhold an equitable remedy and confine an award of damages to a limited period, or the like. * The essential point is that while there is flexibility in the law of remedies this does not affect the underlying substantive principle that short of a bar of res judicata or statute of limitations, courts should apply the prevailing decisional rule to the cases before them.
'The actual existence of a statute, prior to such a determination, is an operative fact and may have consequences which cannot justly be ignored. The past cannot always be erased by a new judicial declaration. The effect of the subsequent ruling as to invalidity may have to be considered in various aspects,with respect to particular relations, individual and corporate, and particular conduct, private and official. Questions of rights claimed to have become vested, of status, of prior determinations, deemed to have finality and acted upon accordingly, of public policy in the light of the nature both of the statute and of its previous application, demand examination.' The majority of the Court in the present case narrowly confines that statement to the particular facts involved in Chicot County. The principle there involved, however, rooted deeply in considerations of fairness, clearly applies to the present case. I would hold that bona fide purchasers, whose purchases antedate our Union Central decision and who relied on the law as it had been previously construed, are protected in their investments. I dissent from the Court's holding to the contrary.
'If any person liable to pay any tax neglects or refuses to pay the same after demand, the amount (including any interest, penalty, additional amount, or addition to such tax, 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.' 26 U.S.C. 3670 (1940 ed.).
'(2) With Clerk of District Court.In the office of the clerk of the United States district court for the judicial district in which the property subject to the lien is situated, whenever the State or Territory has not by law authorized the filing of such notice in an office within the State or Territory * * *.' 26 U.S.C. 3672 (1946 ed.).
In Youngblood, the United States sought an order in the nature of a writ of mandamus to compel a county register of deeds in Michigan to accept and file a standard federal lien notice, which lacked the description of the encumbered land required by the state statute. The Court of Appeals held that the order should not issue, first, because United States district courts lack jurisdiction to issue original writs of mandamus or orders in the nature of mandamus; and second, because the law of Michigan clearly provided in terms that in order to be filed with the register of deeds, a federal tax lien notice had to contain a description of the land. The court went on, in apparent dictum, to confirm its earlier holding in United States v. Maniaci, 116 F.2d 935 (1940), aff'g 36 F.Supp. 293 (D.C.W.D.Mich.1939), that § 3672 required the United States to file in the local office lien notices conforming to the state law requirements as to content. In delivering this apparent dictum, the Court of Appeals ignored the clear legislative history, summarized in this Court's Union Central decision, 368 U.S., at 295296, 82 S.Ct., at 352, which showed that in enacting the 1942 amendment to § 3672, Congress had meant to disapprove the Maniaci holding.
Victor P. DIEDRICH et ux., Petitioners v. COMMISSIONER OF INTERNAL REVENUE. UNITED MISSOURI BANK OF KANSAS v. COMMISSIONER OF INTERNAL REVENUE.

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