Document: 336 U.S. 328 69 S.Ct. 554 93 L.Ed. 710 CITY OF NEW YORKv.SAPER. STATE YORK v. CARTER. UNITED STATES Nos. 168, 200, and 201. Argued Jan. 4, 1949. Decided March 7, Mr. Seymour B. Quel, of New York City, for City York. David Haar, Saper. Francis R. Curran, Poughkeepsie, N.Y., State J. Henry Kutz, the United States. Sydney W. Cable, Carter. Justice JACKSON delivered opinion Court. 1 The ultimate issue in these three cases is whether tax claims against a bankrupt bear interest until date bankruptcy1 as held by court below,2 or payment, previously another Court Appeals.3 We granted certiorari4 to resolve conflict, matter being considerable practical importance5 administration Bankruptcy Act.6 2 If question were one first impression be decided light present statute alone, we should have no difficulty affirming below. More than forty years ago Holmes wrote this that rule stopping at bankruptcy had then been followed more century half. He said was not legislative command statutory construction but, rather, fundamental principle English bankruptcy7 system which copied. Sexton Dreyfus, 219 339, 344, 31 256, 257, 55 244. Our contains provision expressly repudiating allowing an exception favor claims. Every logical implication from relevant provisions contrary. Section 63, sub. (1), 11 U.S.C. § 103 U.S.C.A. 103, allows on judgments written instruments8 only bankruptcy. a(5), (5), debts reduced judgment9 after bankruptcy.10 No permits post-bankruptcy other general particular. 57, j, 93, forbidding allowance governmental penalties forfeitures permits11 losses sustained acts penalized, with actual costs 'such may accrued thereon according law.' However, its face appears delimit even such allowable allow does 63 respect there specified. Moreover, except accrues law—it exactly 'fundamental principle' cuts off n, requires proved same manner within time cause shown reasonable extension granted. Tax are treated fourth priority 64, a, 104, sub making taxes nondischargeable, 17, 35, 35. But each sections silent interest. 3 long-standing thus implicit our current Act. To read into would unwarranted and, original proposition, decline do so. comes here under Act 1898 ten 1938 Chandler Amendments. Petitioners contend judicial decisions during those periods now incorporated policy thereby producing law beyond further scrutiny. 4 It contended definitely established rule. And petitioners challenge lower court's holding, despite decisions, Congress through completed assimilation manifested intention treated, interest-wise, debts. They assert pre-Chandler payment grounded approved least silentio States Childs, 266 304, 45 110, 299, adopted Congressional reenactment section also courts, Meilink Unemployment Reserves Commission, 314 564, 62 389, 86 458, affirmed alleged prior interpretation j. In situation, it said, courts cannot modify what has become poli y though originally judicially developed now, construction, reject. 5 At outset admitted practice generally did paid. parties trace re Kallak, D.C., 147 F. 276, following decision. believe support petitioners' contention reflects Kallak itself refutes insofar based line cases. since 189812 gave absolute over every kind, 'public constitute 'claim' bankruptcy.' 277. require but trustee seek them out pay full. view requirement claims, saw reason why ordinary apply. found considerations expediency convenience case taxes. First, varying rates applicable different sharing estate prevent definite determination claimant's proportionate share. Secondly, recurring readjustments complicate estate. Since neither result fund obligations, inapplicable. This conclusion entirely reasons convenience. involved any part 1898, clearly 64 requirements 'all legally due owing,' which, together dispensation proof, considered indicating enjoyed status accorded Those controlling, while mentioned opinion. Consequently latter section's could adoption 'judicial gloss' resulting relied upon significantly amended deprive their preferred status, amendment 1926, later former13 provided yield expenses certain wages, amendments finalized subordination items. formerly dispensed a. argument recognition interpretations seems without force. And, contrary, enactment change decisive similar cases.14 6 rely most heavily, however, Court's decision reversing Menist & Co., Cir., 290 947. urged reflected enacting survives scrutiny supported history Appeals stated before 'whether exaction per cent month price delay amounts penalty.' 947, 949. anything excess 6% annum penalty barred true run payment. statement 'highly preferred' given owing.' establishing 12%, penalty, allowed 'pecuniary loss' meaning section, such, Government challenged holding 12% reversed point makes clear here. although discussed respondent's brief merits, induced bring here, agree represents sub-silentio approval Even assuming, arguendo, decision, help petitioners, relying solely largely changed 1926 7 Other cited little discussion. Dayton Stanard, 241 588, 36 595, 60 1190, individuals who, course bankruptcy, paid liens binding property bankrupt. parties, whose deeds invalidated because they issued custodia legis, reimbursed estate's both advances legal rate. simple equity claimants required People Jersawit, 263 493, 44 167, 68 405, limited claim d so described Childs opinion, 309, 111, discussion confirms similarly point. Coder Arts, 213 223, 29 436, 53 772, 16 Ann.Cas. 1008, states subsidiary that, where adequate, properly mortgage voidable preference. 8 when consideration reported either proof. There basis belief much less Court, applied gloss requiring treatment, drawn might justified need considered, purpose, seen, significant adverse effects Consequently, position issue. confirmed complete lack indication connection. fact asserting adding ruling silence reenacting precipitated time, deliberately level Mere proposition indicates rejection. 9 concluded Act, assimilated all purposes, including denial think sound §§ n. Considered conjunction interest15 well 63's limitations compel conclusion, already stated, contemplate 10 Petitioners' final continued interest, practice, unsuccessful attempt judgment reviewed, continue amendment.16 not, otherwise, passed question. That presented Childs: proscribed left substantially unchanged But, irrespective courts' post-Chandler can overruled legislation. Committee Report accompanying bill House 80th acted Senate. Among proposed designed 'both clarify modify' change, Report, make referred stops clarifying clause 'intended overrule obsolete rule' delinquent rendered reasoning obsolete, nevertheless legislation necessary, citing Davie Green, 133 F.2d 451, conflicts reviewed. text report devoted printed margin.17 fair reading leads believed, open, ignoring necessary intended implications below it, well-considered reached conclusion. contentions find abortive clarification.18 12 presents conflict between two Courts proper statute. judgments.19 13 Affirmed. 14 REED dissents 451. terms 'date bankruptcy' 'bankruptcy,' reference mean petition filed, 30 Stat. 544, 52 840, 841, used accordingly No. 168 istrict Judge 75 F.Supp. reversed, 268. 200—201, District 73 685, affirmed, 272. 335 811—812, 47, 52, 53. immediately concerned frequently expressed dissatisfaction inroads available creditors. For discussions problems see J.N.A.Ref.Bankr. 3; 17 id. 129; 18 17; 19 31; 21 106; 22 41; Com.L.J. 411; 370. See Bright's below, referees' comments Matter Dorsey, 46 A.B.R., N.S., 146, D. O. Summers 123. whole subject length Collier, (14th ed., 1941 1948 Cum.Supp.) 57.22, 57.30, 63.16, 63.26, 64.404, 64.407, 64.408. Comments appear 61 Harv.L.Rev. 354; Temp.L.Q. 428; Va.L.Rev. 206; 34 835; 23 N.Y.U.L.Q.Rev. 516. c. 541, June 22, 1938, 575, et seq., seq. England established, Blackstone, Commentaries *488; Bromley Goodere, Atk. 75; Ex parte Bennet, 527; mortgages unsecured debts, Badger, Ves. Jr. 165; arte Ramsbottom, Mont. Ayrt. 79; Penfold, DeG. Sm. 282; Lubbock, Jur.N.S. 854; Savin, L.R. Ch. 760, 764; Bath, Ch.Div. 450, 454; Quartermaine's Case, (1892) 639; Bonacino, Manson 59. Two exceptions recognized: if 'bankrupt' solvent, creditors received surplus reverted debtor, Mills, Ves.Jr. 295; Clarke, 676; securities creditor collateral produced dividends 228; Case 639. These carried system. American Iron Steel Mfg. Co. Seaboard Air Line Ry., 233 261, 267, 502, 505, 58 949; 346, 258, 'Debts his founded (1) fixed liability, evidenced instrument writing, absolutely owing filing him, payable recoverable rebate * *.' '* (5) provable bankrupt's application discharge, incurred up entry Although unearned eliminating operative infrequently, reflect long standing. Commentaries, *488. subdivision thereof forfeiture shall allowed, amount pecuniary loss act, transaction, proceeding arose, occasioned 'Sec. 64. Debts Which Have Priority.—a order States, State, county, district, municipality advance *. b full estates, ((1) preserving (2) fees (3) attorneys' (4) wages specified entitled state federal laws. *)' 15 May 27, 406, 662, 666. Ashland Emery Corundum 229 829, relies case. Clark Realty Co , 253 938, discusses relies, erroneously, 695, text. A. E. Fountain, Inc., 295 873, discuss issue, deciding Horn Boone County, 920, levy Martin, 618, Semon, 18, modified 80 81, Revenue 1928 penalty. Beardsley Wolcott 82 239, 104 A.L.R. 881, Compare William Fisher 148 907, denying claimed contained it; dictum McCormick Puritan Coal Min. 41 213, 214. note text; Thomas Western Car 149 95, 824, 37 663; 244; See, example, L. Gandolfi 42 706; Flayton, 1002; Referee's Union Beverage 50 825, 829. Hammer Tuffy, 145 447, 449, Roth, 164 577, 578. '11. 11(a) 57j act. 57j(c) limitation 'up relates loss,' addition Interest taxes, 64a, suspended rare solvent estate, date. Sec. 63a; Adams Napa Cantina Wineries, 94 694, 8; S.D.N.Y., 706, 51 521 (governmental priority); Collier Bankruptcy, 14th Ed., 1835 seq.; Remington 4th Secs. 771, 795. D.C.N.D., 1906, A.B.R. 414; D.C.Mass. 1916, 194; 1918, 403; silentio, 1924, 307, 5. debt (sec. 57n) ranks expenses, successfully opposing settlement procuring conviction offense 64a(1), (2), (3)), rendering case, changed, therefore modification. (Ref., N.D. Ohio, 1939), (45) 123; W.D.Wash., 1940) 146; Davis(e) 1943, 603. overruling Fabries, S.D.N.Y. 1947, appeal pending. 'The Judicial Conference once 57j. Its recent reaffirmation October 1946. (See Confererce, 1946, p. 15.) Administrative Office language satisfactory score.' H.R. Rep. 2083, Cong., 2d Sess., cites, confirming placed taxing statutes beginning 1924 direct nonpayment added, tax, rate ordinarily absence Billings 232 284—288, 421, 425—427, 596. permitted negative Act's is. early take 'the range indebtedness bankrupt—national, individual,' Guarantee Title Trust Guaranty Suprety 224 152, 160, 32 457, 460, 56 'with mind Congress,' Davis Pringle, 268 315, 317, 549, 550, 974. enactments amend comprehensive scheme effect contrary specific indeed strange way require, would, municipal treats equally. contention, standing itself, accepted. treatment nor rulings result, involves stare decisis. did, responsible exercise process, Helvering Hallock, 309 106, 119, 444, 84 604, 125 1368, dictate express principles prevail earlier inconclusive holdings failure correct them.

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