Legal Document

384 U.S. 323 86 Supreme Court Reporter 1561 16 United States Reports Lawyer’s Edition 2d Series KF101.8 U54 593 UNITED STATES, Petitioner,v.The EQUITABLE LIFE ASSURANCE SOCIETY OF the STATES. Number 645. Argued April 21, 1966. Decided June 6, Robert S. Rifkind, New York City, for petitioner. Frank W. Hoak, Newark, N.J., respondent. Mr. Justice CLARK delivered opinion of Court. 1 This writ involves recurring problem priority contests between a state lien and federal tax under §§ 6321 6322 Internal Revenue Code 1954, 26 KF62 6321, (1964 ed.). Since 1950—United versus Security Trust & Savings Bank, 340 47, 71 111, 95 L.Ed. 53—we have passed upon more than dozen cases involving some facet problem. In present case law Jersey provides allowance in foreclosure action an attorney's fee fixed by statute as certain percentage amount adjudged to be paid mortgagee taxed costs action. The question presented is whether entitled over mortgagee's claim such fee, where notice recorded prior default mortgagor. trial court held that was superior, Jersey's highest reversed, 45 N.J. 206, 212 Atlantic Reporter, 2nd 25, we granted certiorari, 382 972, 540, 15 464. Only three Terms ago, White writing Court, disposed almost identical question, i.e., 'a reasonable fee' provided mortgage note 'in event * placing this hands attorney collection, or collected through any proceedings' created superior after suit on filed but actual fixing fees. Pioneer American Insurance Co., 374 84, 83 1651, 10 770 (1963). We there superior. hold similarly here, reverse. I. 2 Albert Bagin his wife executed Equitable Life first real property Jersey. mortgage, which secured indebtedness $30,000, December 19, 1960. Bagins two other mortgages covering property—a second also 1960, third, May 18, 1961. On March 1962, $7,748.91 against Bagin. lien, unpaid withholding taxes, arose 6322, accordance with § 6323 ed.).1 Somewhat less year later, defaulted brought claimed principal interest due well authorized statute.2 admitted superiority Life's demanded reported upon. Both third mortgagees suffered their interests are not before us. conceded claims exclusive, however, it contended inferior lien. rendered summary judgment sums respective parties and, viewing controlled supra, subordinated Without awaiting sale property, respondent appealed Superior Appellate Division, certified appeal ordered sold, sale, statutory II. 3 City Britain, Conn., 347 81, 74 367, 98 520 (1954), leading field, debtor insolvent 'Congress has protected revenues imposing absolute priority' virtue 3466 Revised Statutes (1874), now 31 191 ed.), solvent 'United free pursue whole debtor's wherever situated' 6322. Id., at 85, 370. record here silent solvency debtors, issue below centered 6321—6323 may safely assume they solvent. As relative determined rule 'first time right,' turn hinges whether, date recorded, 'specific perfected.' A specific perfected when 'there nothing done *—when identity lienor, subject established.' 'Thus, each must depend attached became choate.' supra. These determinations course questions. Waddill Holland Flinn, Inc., 353, 356—357, 65 304, 306, 89 294 (1945). 4 American, dealt these problems therefore its teachings. There, 'the enforceable Arkansas contract indemnity filing liens.' earned recording liens. 'Nevertheless, because had been incurred could finally until all liens filed,' fees were 'inchoate least priority.' 87, S.Ct., 1654. said there, 'undetermined indefinite' recorded; nor 'reduced liquidated amount.' Moreover, no 'showing become obligated pay sum money services performed lien.' Thus, only 'uncertain amount' 'yet paid.' 90—91, 1656—1657. 5 Equitable's even clearly inchoate. At default—no reference whatever made attorneys, filed, 'adjudged Rule 4:55—7(c), n. 2, fixes invoked much applied establish wholly contingent matured. Cast setting inchoate character state-created stands out starkly. 6 relied preciseness—the percentages—of principle Mortgage company Powers, 278 149, 49 73 236 (1928). It found inapposite. cannot agree. did involve raised 'federal questions peculiar bankruptcy.' U.S., 154, 86. Our specifically pointed application cased status clause bankruptcy proceeding 'where rigorous choateness test necessarily applicable.' 90, 8, 1656. likewise find bearing presently noted earlier, matured 'adjudged.' Adjudication alone triggers mathematical machinery 4:55—7(c) whereby liability fixed. No having existence short, into play. III. 7 remaining contentions untenable. argues that, since concedes stand equal footing mortgage—neither ascertainable foreclosure. contention implicitly rejected American. There legislative history indicating protecting from secret, government liens, Congress intended include ancillary State afford mortgagees. See H.R.Rep. 1018, 62d Cong., Sess. (1912). 1337, 83d (1954); Congressional Administrative News Page 4025; S.Rep. 1622, (1954). 8 Nor does fact scheme taxes affect standing competing To repeat, question. Acri, 348 211, 213, 75 239, 241, 99 264 (1955). label given bind Buffalo 371 228, 229, 314, 315, 9 283 (1963), avoid rules formalistic device characterizing subsequently accruing local expenses sale.' Likewise permitted upgrade 'indemnity.' Even statute3 distinction allowances attorneys' recognized. People Sioux County, Neb. National Surety 276 238, 48 72 547 (1928), highly cogent terms: 'That directs (for fee) added make ordinary sense traditional, arbitrary small officers, docket like *.' 243—244, 241.4 foreclosing produce fund benefits, without expenditure part. akin liquidation assets creation, enhancement protection common equity permits reimbursement litigation.5 Finally, would contrary policy uniformity laws permit 'be diverse various States.' Speers, 266, 270, 411, 414, 314 (1965). Gilbert Associates, 345 361, 364, 701, 703, 97 1071 (1953). While believe established practice awarding fairly renders those items incident rights 6323, see warrant either intent practices prevailing among enactment treat right 4:55—7(c). intimate view disposition wish set aside principal, interest, costs, exclusive fee. That matter law. 88, 371. Reversed remanded. 11 DOUGLAS dissents. provisions state: 6321. LIEN FOR TAXES. 'If person liable neglects refuses same demand, (including additional amount, addition tax, assessable penalty, together accrue thereto) shall favor personal, belonging person.' PERIOD LIEN. 'Unless another law, imposed section arise assessment continue so assessed satisfied becomes unenforceable reason lapse time.' 6323. VALIDITY AGAINST MORTGAGEES, PLEDGEES, PURCHASERS, AND JUDGMENT CREDITORS. '(a) Invalidity notice.— 'Except otherwise subsections (c) (d), valid mortgagee, pledgee, purchaser, creditor thereof Secretary delegate— '(1) Under territorial laws.— 'In office designated Territory situated, whenever within notice; '(2) With clerk district court.— judicial '(b) Form pursuant subsection (a)(1) form if (a)(2), notwithstanding regarding content Rules Governing Courts (1965 ed.): '4:55—7. Counsel Fees 'No legal allowed otherwise, except: '(c) mortgage. calculated follows: plaintiff action, amounting $5,000 less, rate 3%, provided, minimum $75 allowed; excess up $10,000 1/2%; 1%.' Besides Jersey, provide explicitly allowance, actions. Iowa Ann. 625.22; Mont.Rev.Codes 93—8613; Okla.Stat.Ann. Tit. 46, 56. Several others enforcement contractually actions, See, e.g., Conn.Gen.Stat.Rev. 49—7; Vt.Stat.Ann. 12, 4527. Indeed, itself recognized distinction. Pipe Foundry Steelworkers America, 37 343, 355—356, 181 359 (1962), stated generally 'comprise principally amounts fees, specified disbursements counsel including sheriff's witness deposition printing costs. although allowable included entirely different matter.' (Emphasis added.) latter case, courts inherent equitable powers traditionally awarded Trustees Greenough, 105 527, 1157 (1882); Sprague Ticonic Nat. 307 161, 59 777, 1184 (1939). McCormick, Damages 62 (1935). stated: 'The benefit protect States, holding adverse received them charged therefor.' 92, 13, 1657.

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