District of Columbia2

---

[58-1 USTC ¶9270]American Security and Trust Company, a corporation, 15th Street and Pennsylvania Avenue, N. W., Washington, D. C., Plaintiff v. Michael Home Equipment Co., Inc., a corporation, c/o Louis Taff, 516 N Street, N. E., Washington, D. C.; The District of Columbia, c/o Commissioner of The District of Columbia; Guy W. Pearson, Collector of Taxes, District of Columbia, Defendant, United States of America, Intervenor

U. S. District Court, Dist. Columbia, Civ. Action No. 2728-55, 12/20/57

[1939 Code Sec. 3670--similar to 1954 Code Sec. 6321]

Lien for taxes: Bank account: Priority over lien of District of Columbia.--Taxpayer owed the United States $4,055.42 for withholding and FICA taxes in 1952. On October 15, 1953 , it assigned a reserve bank account of over $6,000 to the Government, notifying the bank of the assignment in writing. In 1955, the District of Columbia levied on the bank account for local taxes in an amount over $10,000. The Court held that the tax liens of the United States on the reserve bank account were prior in time and prior in right to those of the District of Columbia .

Philip Rosenfield, Saul Schwartzbach, 1109 Woodward Building , Washington , D. C., for plaintiff. Carl Fogel, 1104 Vermont Avenue, N. W. , Washington , D. C., for Michael Home . Oliver Gasch, Edward Troxell, United States Attorneys Office, for United States .

Findings of Fact and Conclusions of Law

MATTHEWS, District Judge:

The Court finds the following facts:

1. This is an interpleader action to determine the rights in a fund of $6,371.44 which plaintiff, American Security & Trust Company has deposited in the Registry of the Court.

2. The United States was originally named a defendant but was dismissed because of lack of jurisdiction over the United States in such an action. The United States subsequently intervened.

3. The fund of $6,371.44 represents the proceeds of a bank account called a "reserve account" at the American Security & Trust Company in the name of defendant, Michael Home Equipment Company, Inc. That account was outstanding during the period of all of the other events referred to below.

4. On August 25, 1952 the Commissioner of Internal Revenue assessed against Michael Home Equipment Company, Inc., withholding and FICA taxes for the second quarter of 1952 in the amount of $2,932.03; on the same date the Commissioner certified the list to the Collector of Internal Revenue for the District of Maryland by whom notice was given to, and demand was made on September 2, 1952 upon, the Michael Home Equipment Company, Inc., for payment of the amount thereof; on May 20, 1953, notice of federal tax lien with respect to the assessment was filed in the United States District Court for the District of Columbia.

On February 22, 1953, the Commissioner of Internal Revenue assessed against Michael Home Equipment Company, Inc., withholding and FICA taxes for the fourth quarter of 1952 in the amount of $1,323.39; on February 27, 1953, the Commissioner certified the list of assessments to the Collector of Internal Revenue for the District of Maryland by whom notice was given to, and demand was made on March 19, 1953 upon, Michael Home Equipment Company, Inc., for payment of the amount thereof; on May 20, 1953, notice of federal tax lien with respect to the assessment was filed in the United States District Court for the District of Columbia. $200.00 has been paid on this assessment leaving a balance owing of $1,123.39 plus interest.

Michael Home Equipment Company, Inc., is indebted to the United States in the amount of $4,055.42, plus interest as provided by law.

5. In October of 1953, the Collection Division of the Internal Revenue Service was preparing to levy on all property of the Michael Home Equipment Company, Inc. In consideration of an agreement by the Collection Division of the Internal Revenue Service not to levy on the property of the Michael Home Equipment Company, Inc., Mr. Taff, President and General Manager of said company, orally assigned to the United States the money in the reserve account. The assignment was subject to two conditions: (1) the United States was not to collect from the account a larger amount than the taxes, including interest, owed by Michael Home Equipment Company, Inc., and (2) the rights of the United States in the bank account were to be subject to any contingent claim on the account which might arise as a result of default on notes owed to the corporation. Mr. Taff called Mr. Sparr of the plaintiff bank, the American Security and Trust Company, in order to formalize the assignment in writting. Mr. Sparr told him that a written assignment was not necessary and that all that he would have to do would be to send a letter to the bank advising the bank of the assignment. As a result of that conversation Mr. Taff, on behalf of Michael Home Equipment Company, Inc., wrote a letter dated October 15, 1953 , to the plaintiff bank, which letter stated in full:

"This is to advise you that I have assigned to the Director of Internal Revenue all monies in the reserve account."

6. Thereafter, on February 10, 1955 , the District of Columbia and Collector of Taxes levied on the plaintiff bank for taxes owed by the Michael Home Equipment Company, Inc., in the total amount of $10,543.57.

Conclusions of Law

1. The tax liens of the United States were prior in time to the tax claims of the District of Columbia and Collector of Taxes and are prior in right to the fund of $6,371.44 deposited with the Registry of the Court.

2. The United States is entitled to payment from the fund of $4,055.42 plus interest at the rate of 6% per annum from the date of demands to the date of the assignment.

3. The plaintiff, American Security & Trust Company, is entitled to receive from the fund costs of this action in the sum of $15.00 and attorneys' fees in the sum of $500.00.

4. The remainder of the fund is awarded to the District of Columbia and the Collector of Taxes to be applied to their tax claims against defendant, Michael Home Equipment Company, Inc.

 

 

[49-1 USTC ¶9125]Harvey L. Cobb, Appellant v. United States of America , Mary R. Shore , Appellees

(CA-DC), In the United States Court of Appeals for the District of Columbia Circuit, No. 9823, 172 F2d 277, January 10, 1949

Appeal from the District Court of the United States for the District of Columbia (now United States District Court for the District of Columbia).

Lien for taxes: Priority as against junior District of Columbia lien and tax deed.--
The terms of the statute providing for District of Columbia tax deeds did not make a deed on a junior District lien superior to a deed arising from a senior Federal lien. Accordingly, a Federal deed resulting from a lien attaching in 1931 was superior to a District deed based on tax deficiencies for the years 1932-1936, and therefore based on a lien junior to the Federal lien. Affirming the decision of the District Court for the District of Columbia , 48-1 USTC ¶9222.

Mr. John U. Gardiner for appellant. Mr. A. Devitt Vanech, Assistant Attorney General, with whom Messrs. George Morris Fay, United States Attorney, John F. Cotter and Thomas L. McKevitt, Attorneys, Department of Justice, were on the brief, for appellee United States. Mr. Sidney S. Sachs and Mrs. Helena Doocy Reed, Assistant United States Attorneys, also entered appearances for appellee United States . Mr. N. Meyer Baker, with whom Mr. Lucien H. Mercier was on the brief, submitted on the brief for appellee Shore . Mr. Harry L. Walker, Assistant Corporation Counsel, with whom Messrs. Vernon E. West, Corporation Counsel, Chester H. Gray, Principal Assistant Corporation Counsel, and George F. Lynch, Assistant Corporation Counsel, were on the brief, for the District of Columbia as amicus curiae, urged reversal. Mr. George C. Updegraff, Assistant Corporation Counsel, also entered an appearance for the District of Columbia as amicus curiae.

Before EDGERTON, CLARK, and WILBUR K. MILLER, JJ.

EDGERTON, J.:

This is a suit by the United States to quiet title to certain real estate in the District of Columbia . On March 6, 1931 , the Commissioner of Internal Revenue assessed delinquent income taxes against Frank Shore , who then owned the property to which this suit relates. On March 7 the assessment list was received by the Collector of Internal Revenue. On March 9 the Collector filed with the clerk of the Supreme Court of the District of Columbia , now the United States District Court for the District of Columbia , notice of an income tax lien on all the property of Shore. ¹ He also filed this notice with the Recorder of Deeds.

The income taxes were not paid and three years later the Collector issued a warrant for distraint. An attempted public sale failed to bring enough to pay the delinquent income taxes. On August 7, 1935 , in accordance with the statute, the property was sold to the United States . ² As it was not redeemed within a year, a deed to the United States was executed on September 7, 1936 and recorded three days later. ³

All District of Columbia taxes assessed against the property before 1932 had been paid. The present suit results from the fact that District real estate taxes assessed for the years 1932 through 1936 have not been paid. On May 1, 1936 , pursuant to sales for these real estate taxes, the District of Columbia deeded the property to the grantor of the appellant Cobb. The deed was recorded June 18, 1936 .

Shore died in 1941. In 1946 the United States brought this suit to quiet title. Cobb appeals from a judgment of the District Court that title is in the United States subject only to dower right in Shore's widow.

The Internal Revenue Code provides that "the [federal] lien shall arise at the time the assessment list was received by the collector and shall continue until the liability for such amount is satisfied or becomes unenforceable by reason of lapse of time." ⁴ Since the Collector received the list on March 7, 1931, the lien arose on that day. Tax liens and sales of the District of Columbia are governed by D. C. Code (1940) Title 47, §§ 1001-1015. ⁵ "Since no reference is made in the statute to a lien for taxes except in connection with taxes in arrears, it is a reasonable interpretation that the lien does not arise prior to the occurrence of a delinquency." ⁶ The District's lien therefore did not arise before 1932.

A senior federal lien is superior to a junior state lien. ⁷ A senior federal lien would of course be superior to a junior federal lien, if any, in the absence of express statutory language showing a different intention on the part of Congress. In the absence of such language we think it equally plain that a senior federal lien is superior to a junior lien created by congressional legislation for the District of Columbia .

We do not interpret the provision in the District Code that the District's tax deed shall be "prima facie evidence of a good and perfect title in fee simple" ⁸ as indicating a congressional intention that a junior District lien shall be superior to a senior federal lien. The present question was not before us and we had no intention of expressing an opinion about it when we said that a tax deed of the District "expunges all the interests which spring from the record title and vests in the holder a new and complete title to the property in fee simple." ⁹

The statute authorizing purchase by the United States provides that the Collector's deed "shall be considered and operate as a conveyance of all the right, title, and interest the party delinquent had in and to the real estate thus sold at the time the lien of the United States attached thereto." ¹⁰ This determines the effect of the deed. It is immaterial that the deed to the United States in the present case erroneously states that its effect is to convey "all the estate, right, title and interest, which the said Frank Shore had on the 7th day of August, 1935 or at any time afterwards . . ."

The appellant contends that the United States , in order to protect its lien, was obligated to pay District taxes assessed against the property after the federal lien arose. But the general policy of the United States was not to pay real estate taxes to the District of Columbia . ¹¹ We find no evidence of congressional intent to create the suggested exception to this policy. The rights of the United States acquired by enforcement of its senior lien cannot on any theory be subjected to the junior lien of the District of Columbia .

The United States does not question the ruling of the District Court that the dower right of Shore's wife was not part of Shore's interest in the property and did not pass to the United States . ¹² The rights and obligations of Shore's widow, the District of Columbia , and appellant Cobb, in relation to each other, were not before the court and have not been determined.

Affirmed.

¹ Revenue Act of 1928, §613, 45 Stat. 875, now Int. Rev. Code §3672(a)(3), 53 Stat. 882.

² Rev. Stat. §3197, 20 Stat. 332, now Int. Rev. Code §3701(e), 53 Stat. 453.

³ Rev. Stat. §3202, 14 Stat. 109, now Int. Rev. Code §3702(b)(1), 53 Stat. 454.

⁴ Formerly Revenue Act of 1928, §613, 45 Stat. 875, now Int. Rev. Code §3671, 53 Stat. 449.

⁵ D. C. Code (1929) Title 20, §§ 791-801.

⁶ Commissioner of Internal Revenue v. Rust's Estate, 116 Fed. (2d) 636, 638 [41-1 USTC ¶9144].

⁷ Michigan v. United States, 317 U. S. 338 [43-1 USTC ¶9225]. It is clear that "a lien is not deprived of validity because it attaches to a number of pieces of property instead of to a single piece, nor is it for that reason to be subordinated to a junior lien attaching to a single piece of property . . . It is not contended that the bar of the statute of limitations has fallen; and it is well settled that the rights of the government are not affected by laches of its officers and that it is not estopped by their conduct from asserting its rights." United States v. Greenville , 118 Fed. (2d) 963, 965, 966 [41-1 USTC ¶9381].

The fact that action is not taken to enforce a prior lien until a subsequent lien has been obtained and carried into execution does not destroy the priority of the first lien. Rankin v. Scott, 12 Wheat. (U. S.) 177; Ginder v. Giuffrida, 61 App. D. C. 338, 62 Fed. (2d) 877.

In United States v. Alabama, 313 U. S. 274, state liens had attached before the United States bought the property. No federal liens appear to have been involved.

⁸ D. C. Code (1929) §20-793, now D. C. Code (1940) §47-1003.

⁹ W. C. & A. N. Miller Development Co. v. Emig Properties Corp., 77 U. S. App. D. C. 205, 208, 134 Fed. (2d) 36, 39, cert. denied, 318 U. S. 788.

¹⁰ Rev. Stat. §3199, 14 Stat. 109, now Int. Rev. Code §3704(c)(2), 53 Stat. 454.

 

 

[56-1 USTC ¶9322] United States of America , Appellant v. Harry Saidman, Trustee, Lobel Enterprises, Inc., et al., Appellees

(CA-DC), In the United States Court of Appeals for the District of Columbia Circuit, No. 12,623, 231 F2d 503, March 1, 1956

Appeal from the United States District Court for the District of Columbia.

[1939 Code Sec. 3672--similar to 1954 Code Sec. 6323]

Priority of federal tax lien: Landlord's lien not perfected: District of Columbia lien for sales and use taxes.--
The absolute priority accorded by Sec. 3466 of the Revised Statutes to all kinds of debts due the United States entitled a claim for unpaid federal taxes to prior payment over a landlord's lien for rent. The law creating the landlord's lien did not state that the lien had priority or purport to give the landlord possession or title to the debtor's chattels. Since the landlord had not taken steps to make its lien specific and perfected, the United States had a prior claim to proceeds from sales of the chattels in local insolvency proceedings. The claim of the District of Columbia for sales and use taxes, however, had priority over the claim of the United States . The District of Columbia Code provides for absolute priority of sales and use taxes. This provision was enacted later than Sec. 3466 and awards priority to only one kind of tax claim. It must be inferred that Congress intended, by this this later and limited enactment, to create an exception to Sec. 3466.

One dissent on the ground that the landlord's lien is superior to both tax claims.

Fred E. Youngman, Special Assistant to the Attorney General (Ellis N. Slack and A. F. Prescott, Special Assistants to the Attorney General, Leo A. Rover, United States Attorney, Harold H. Greene, Lewis Carroll, Assistant United States Attorneys, were with him on brief), for appellant. Henry E. Wixon, Assistant Corporation Counsel for the District of Columbia (Vernon E. West, Corporation Counsel, Chester H. Gray, Principal Assistant Corporation Counsel, were with him on brief), for appellee District of Columbia. Hymie Nussbaum, Assistant Corporation Counsel, also entered an appearance for appellee District of Columbia . Ralph H. Deckelbaum (Bernard Margolius and Carleton U. Edwards, II, were with him on brief), for appellee Square Deal Market Company, Inc.

Before BAZELON , WASHINGTON and BASTIAN, Circuit Judges.

WASHINGTON, Circuit Judge:

This appeal presents these questions: whether under Section 3466 of the Revised Statutes the claim of the United States for unpaid taxes is entitled to prior payment (1) over a landlord's lien for rent created by Section 45-915 of the D. C. Code (1951), and (2) over a tax claim of the District of Columbia given priority by Section 47-2609, D. C. Code (1951).

Lobel Enterprises, Inc., operated a grocery business in the District of Columbia on premises leased from Square Deal Market, Inc. On August 17, 1953 , alleging that it was unable to pay its debts in full, Lobel assigned all of its property in trust to an assignee for the benefit of creditors. The assignee sold the assets on September 14, 1953 , and, after payment of the expenses of admin istration, there remains in the hands of the successor trustee Saidman the amount of $1,548.81 for distribution to creditors.

On the date of the assignment Lobel was indebted to its landlord in the amount of $900 on account of two monthly rental payments of $450 each due July 1, 1953 , and August 1, 1953 . Lobel was also indebted on the date of the assignment to the United States for unpaid Federal taxes in the amount of $934.88, plus interest, and to the District of Columbia for unpaid sales and compensating-use taxes in the amount of $753.93, plus interest. Each of these creditors urged that its claim was entitled to prior payment from the available fund. The successor trustee filed his final account which was referred to the Auditor of the District Court. The Auditor recommended that the balance of $1,548.81 available for creditors be distributed to pay the landlord's claim of $900 in full and to pay the claim of the United States to the extent of $648.81, the amount remaining. Objections were filed to the Auditor's report by both the United States and the District of Columbia . After a hearing, the District Court ordered [55-1 USTC ¶9372] that the landlord's claim be paid in full, and that the District of Columbia take the remainder of the fund, or $648.81. The United States has appealed, claiming that Section 3466 of the Revised Statutes gives it priority over the claims of both the landlord and the District of Columbia .

I. Priority as Between the United States and the Landlord

Section 3466 of the Revised Statutes, 31 U. S. C. §191 (1952), provides that--

"Whenever any person indebted to the United States is insolvent . . . the debts due to the United States shall be first satisfied; and the priority established shall extend as well to cases in which a debtor, not having sufficient property to pay all his debts, makes a voluntary assignment thereof . . .."

Its purpose is to secure adequate public revenue to sustain the public burdens, and it is to be construed liberally to effectuate that purpose. ¹ United States v. Emory, 314 U. S. 423, 426 (1941). The section gives an "absolute priority" to "the payment of indebtedness owing the United States , whether secured by liens or otherwise." United States v. New Britain , 347 U. S. 81, 85 (1954) [54-1 USTC ¶9191]. Its words "are broad and sweeping and, on their face, admit of no exception to the priority of claims of the United States ." United States v. Waddill Co., 323 U. S. 353, 355 (1945) [45-1 USTC ¶9126].

Notwithstanding the unqualified preference given by Section 3466, persons claiming that they held a perfected and specific lien on the debtor's property have frequently contested the right of the United States to have the debts due it satisfied first. The Supreme Court has, however, never decided whether the absolute priority accorded by Section 3466 would be overcome by a fully perfected and specific lien upon the property, since it has always found that the lien involved was not sufficiently specific and perfected. United States v. Texas, 314 U. S. 480, 484-486 (1941), and cases there cited; United States v. Waddill Co., supra at 355; Illinois v. Campbell, 329 U. S. at 370-371; United States v. Gilbert Associates, 345 U. S. 361 [53-1 USTC ¶9291], 365 (1953). United States v. Waddill Co. indicates that for this purpose a lien is not sufficiently specific when, on the date of the assignment, the lien has not been actually asserted, and the amount of the lien or the precise property to which the lien has attached is unknown or unascertainable (323 U. S. at 357-358); and that a lien is not perfected when, on the date of the assignment, the debtor has not been divested of title to, or possession of, the property involved (323 U. S. at 358-359). Other cases reiterate that the priority of the United States is not destroyed where the lien-holder has not taken possession of, or acquired title to, the debtor's property subject to the lien prior to the time when Section 3466 becomes effective. ² See Spokane County v. United States, 279 U. S. 80, 93-94 (1929) [1 USTC ¶387]; United States v. Texas, 314 U. S. at 488; Illinois v. Campbell, 329 U. S. at 376; United States v. Gilbert Associates, supra. In the last case the Supreme Court said (345 U. S. at 366):

"In claims of this type, 'specificity' requires that the lien be attached to certain property by reducing it to possession, on the theory that the United States has no claim against property no longer in the possession of the debtor. Thelusson v. Smith, 2 Wheat. 396. Until such possession, it remains a general lien. There is no ground for the contention here that the Town had perfected its lien by reducing the property to possession. . . . The taxpayer had not been divested by the Town of either title or possession. The Town, therefore, had only a general, unperfected lien."

In this case the District Court concluded as a matter of law that the landlord had a "specific lien" on specific property. No conclusion was stated that the lien was "perfected." The landlord contends, however, that its lien was both specific and perfected. Our first task is then to ascertain whether this contention is correct, under the tests laid down by the Supreme Court for our guidance. ³

The lien of the landlord arose under Section 45-915 of the D. C. Code (1951), which gives a landlord a

"tacit lien for his rent upon such of the tenant's personal chattels, on the premises, as are subject to execution for debt, to commence with the tenancy and continue for three months after the rent is due and until the termination of any action for such rent brought within said three months."

The lien may be enforced under Section 45-916 ⁴ by attachment issued on affidavit; by execution on the chattels, after judgment against the tenant, wherever they are found; and by action against any purchaser of the chattels with notice of the lien.

[Specific and Perfected Landlord's Lien]

We said in Moses v. Labofish, 76 U. S. App. D. C. 401, 402, 132 Fed. (2d) 16, 17 (1942), that the lien is created by the statute and exists independently of the several means of enforcement. ⁵ But for present purposes this is not enough. In the Waddill case, the Supreme Court noted that the landlord's lien there involved had been declared by the Supreme Court of Appeals of Virginia to be a fixed and specific statutory lien on all goods found on the premises, not merely an inchoate lien, and "that such a lien exists independent of the right of distress or attachment, which are merely remedies for enforcing it" (323 U. S. at 356). Yet it held that this did not determine whether the lien was "sufficiently specific and perfected to raise questions as to the applicability" of the Federal priority (323 U. S. at 356-357). Its conclusion was that the landlord's lien was unspecific and unperfected in its actual legal effect, and was therefore inferior to the claim of the United States .

While Section 45-915 of the Code creates a lien, described as tacit, for rent for three months upon such of the personal chattels on the premises as are subject to execution for debt, the section does not state that the lien shall have priority nor does it purport to place title to, or possession of, the chattels in the landlord. The landlord may acquire title to or possession of the chattels on which the lien exists by following the first or second method prescribed by Section 45-916 for enforcing the lien, but affirmative action to accomplish this is required. The statutory provisions then do not of their own force create a specific and perfected lien in the sense long understood as essential to overturn the Federal priority.

Nor did the landlord have a specific and perfected lien in actual fact. The identity of the lienor, the landlord, and the amount of the lien, or $900, were of course known on the date of the assignment. But at that time the landlord had done nothing to indicate that it would insist upon its statutory lien. It had not filed the required affidavit and attached the tenant's property, or any part thereof; it had not obtained judgment against the tenant and levied execution on its property or any part thereof. Thus, although the statute makes the lien apply generally to such personal property on the premises as is subject to execution for debt, ⁶ the specific part of the property required to satisfy the lien had not been segregated and the debtor had not been divested of title or possession as to any part of his property. Apart from any other factors, the failure of the landlord to acquire title or take possession prior to the assignment compels the holding, under the Supreme Court cases cited, that its lien was not perfected in the sense required to defeat priority under Section 3466. The landlord here had merely "a caveat of a more perfect lien to come", New York v. Maclay, 228 U. S. 290, 294 (1933), a lien which might have been, but was not, made perfect before the determinative date.

We must conclude that the United States is entitled to have its tax claim paid in full before the claim of the landlord becomes eligible for payment.

II. Priority as Between the United States and the District of Columbia

The United States bases its claim to priority on the unrestricted right to first payment of its debts accorded by Section 3466, already discussed, whereas the claim of the District for priority rests on Section 47-2609 of the District of Columbia Code (1951). ⁷ Section 47-2609 is found in the title relating to sales taxes and is made applicable to compensating-use taxes by Section 47-2707 of the Code. It provides that where property is assigned for the benefit of creditors, these taxes for which the debtor is liable, "shall be a prior and preferred claim"; and it is the duty of any United States marshal, receiver, assignee, or any other officer to "first pay to the Collector the amount of said taxes . . . before making any payment of any moneys to any judgment creditor or other claimants of whatsoever kind or nature." Personal liability for the tax is imposed if the officer violates the terms of the section. ⁸

In District of Columbia v. Greenbaum, -- U. S. App. D. C. --, 223 Fed. (2d) 633, 636 (1955), we stated in footnote 13 of the opinion that the scope of Section 47-2609 ⁹ will be similar to that of Section 3466 of the Revised Statutes in local insolvency proceedings, as distinguished from bankruptcy proceedings under the Federal Bankruptcy Act. But that statement was not a holding that the District's priority will be equivalent to that of the United States under Section 3466 in contests between the two. Although the United States was an appellee in that case, it did not urge priority for its tax claim under Section 3466, the Supreme Court having already decided that in proceedings under the Bankruptcy Act the taxes due the United States take the priority accored them by Section 64a of the Bankruptcy Act, rather than having a first priority under Section 3466. See Guaranty Co. v. Title Guaranty Co., 224 U. S. 152 (1912), and cf. Missouri v. Ross, 299 U. S. 72 (1936), and United States v. Emory, 314 U. S. 423, 427-429 (1941). Thus, our statement in the Greenbaum case, at footnote 13, related to the scope, in local insolvency proceedings, of the District's first priority for sales and use taxes in relation to creditors other than the Federal Government. A fortiori the District's claim would be prior to that of a landlord who has not perfected his lien, for the reasons already given in connection with our discussion of Section 3466 and the landlord's lien. But the question here, as to the rights of the United States and the District under statutes giving each a first priority, was not present or decided in the Greenbaum case.

[Repugnancy Between Priority Laws]

That question must now be decided. We are faced with the dilemma of choosing between two statutes enacted by Congress, each giving a first priority in terms absolute, each applicable here, and each imposing a personal liability on the assignee if he pays any other debt of the insolvent assignor first. Obviously, neither statute can be applied as it is written without violating the other, and we must therefore find some solution from extraneous aids.

We have searched the legislative history in vain for some indication from the Congress as to whether, in enacting the District statute, it intended to create an exception from Section 3466 of the Revised Statutes with respect to the District sales and use taxes. As we noted in the Greenbaum case, ¹⁰ the section follows almost verbatim the Maryland sales tax statute (Md. Ann. Code, Art. 81, §339 (1951)). In fact, sales-tax officials of Maryland were invited to sit with the subcommittee and advise it in writing the bill. 95 CONG. REC. 6087 (1949). Obviously, the Maryland statute, even though in terms absolute, could not and did not make the state taxes prior to the claims of the United States in insolvency proceedings of the types covered by Section 3466. ¹¹ But in legislating for the District of Columbia Congress is not subject to the same limitations as are state legislatures, Neild v. District of Columbia, 71 App. D. C. 306, 309-311, 110 Fed. (2d) 246, 249-251 (1940), and we can hardly impute to it without more an intent to have the District taxes occupy a priority status equivalent only to that of state taxes.

Other factors lead us to resolve the priority dispute in favor of the District. Section 47-2609 is a more recently enacted statute awarding priority to only one kind of tax claim whereas the Federal statute prescribes a general priority for all kinds of debts. The limited nature of the District's priority given by a later statute using language just as forceful as that of Section 3466 ¹² requires the inference that Congress intended to create an exception from the broad and general Federal priority in this one respect. Cf. Cook County National Bank v. United States , 107 U. S. 445 (1882); Mellon v. Michigan Trust Co., 271 U. S. 236 (1926); United States v. Guaranty Trust Co., 280 U. S. 478 (1930). In all of the cases just cited the Supreme Court held that later acts of Congress created an exception, as to specific debts due the United States, from the general priority accorded by Section 3466, even though the act did not in terms refer to Section 3466 and the legislative history was apparently silent on the matter. The repugnancy between the two priority statutes here is far clearer than the inconsistency in any of the cited cases.

We conclude that Section 47-2609 as the later, more specific, and more limited enactment creates an exception to Section 3466 to the extent of the District's claim for sales and use taxes, and that the District's claim for such taxes has first priority in local insolvency proceedings over the United States . We are reinforced in this conclusion by the consideration that since Congress has the obligation to provide revenues for both the District and the Federal Government, there could have been no real incentive for subordinating the District's taxes in an insolvency proceeding.

[Distribution of Fund]

Our decision requires that the case be remanded. It remains to consider how the available fund of $1,548.81 is to be distributed on remand. The District did not appeal from the order of the District Court. Under it the District was awarded $648.81 although, had it appealed, it would have been entitled to the full amount of its claim. We will not direct the District Court to increase the amount allowed the District. On remand the District Court may either order that the $900 previously allowed to the landlord be paid to the United States, or if it can justify so doing despite the failure to appeal, allow the District its full claim and allot the balance to the United States.

Remanded for proceedings consistent with this opinion.

¹ Section 3466 is derived from Section 5 of the Act of March 3, 1797 , c. 20, 1 Stat. 515, which was enacted as an aid in the collection of taxes. Price v. United States, 269 U. S. 492, 500-501 (1926) [1 USTC ¶158]. Its provisions have been in force since 1797 without significant modification. United States v. Emory, 314 U. S. at 428; Illinois v. Campbell, 329 U. S. 362, 370 (1946). For a review of the early history of the provision, see United States v. Fisher, 6 U. S. (2 Cranch) 358 (1805).

² The early cases are entirely consistent with this rule. In Conard v. Atlantic Ins. Co., 26 U. S. (1 Pet.) 386 (1828), the debtor had assigned a cargo of tea to the insurance company to secure a loan prior to the time the priority of the United States attached to the debtor's property. It was held that the tea was not covered by the priority, since title to it had been transferred to the mortgagee. It was stated as dicta in Thelusson v. Smith, 15 U. S. (2 Wheat.) 396 (1817), that if, before the right of preference has accrued to the United States, the debtor has conveyed bona fide his estate to a third person, or has mortgaged it to secure a debt, or if his property has been seized under a fieri facias, the property cannot be made liable to the United States because divested out of the debtor. The actual decision in the Thelusson case was, however, that the United States had priority over a prior judgment creditor who had a lien but who had not perfected it by levying on the property itself. See also Brent v. Bank of Washington, 35 U. S. (10 Pet.) 596 (1836), decided on the ground that the debtor did not have legal or equitable title to bank stock and thus the priority of the United States did not attach to the stock. As stated in United States v. Texas, 314 U. S. at 484-485, these cases seem to have been decided on the "theory that mortgaged property passes to the mortgagee and is no longer a part of the estate of the mortgagor."

³ There is no contention that the United States does not have the benefit of whatever rights Section 3466 may give it. The conditions necessary to bring that section into play are present. Lobel was indebted to the United States , since taxes are debts. Price v. United States, 269 U. S. 492, 499 (1926) [1 USTC ¶158]; Illinois v. United States, 328 U. S. 8, 9 (1946). It voluntarily assigned its property for the benefit of creditors, alleging that it was unable to pay its debts in full. It actually was insolvent.

⁴ Section 45-916 reads as follows:

"The said lien may be enforced--

"First. By attachment, to be issued upon affidavit that the rent is due and unpaid; or, if it be not due, that the defendant is about to remove or sell some part of said chattels.

"Second. By judgment against the tenant and execution, to be levied on said chattels, or any of them, in whosesoever hands they may be found.

"Third. By action against any purchaser of said chattels, with notice of the lien, in which action the plaintiff may have judgment for the value of the chattels purchased by the defendant not exceeding the rent in arrear."

⁵ In the Moses case, the lien would seem actually to have been specific and perfected within the tests laid down by the Supreme Court for purposes of applying Section 3466, although that section was not there involved. The landlord had obtained judgment against the tenant, and the marshal had levied on the chattels before the tenant filed his voluntary petition in bankruptcy.

⁶ It is agreed that the whole fund available for distribution here was derived from personal property on the premises that was subject to execution for debt.

⁷ This section reads:

"Whenever the business or property of any person subject to tax under the terms of this title, shall be placed in receivership or bankruptcy, or assignment is made for the benefit of creditors, or if said property is seized under distraint for property taxes, all taxes, penalties, and interest imposed by this title for which said person is in any way liable shall be a prior and preferred claim. Neither the United States marshal, nor a receiver, assignee, or any other officer shall sell the property of any person subject to tax under the terms of this title under process or order of any court without first determining from the Collector the amount of any such taxes due and payable by said person, and if there be any such taxes due, owing, or unpaid under this title it shall be the duty of such officer to first pay to the Collector the amount of said taxes out of the proceeds of said sale before making any payment of any moneys to any judgment creditor or other claimants of whatsoever kind or nature. Any person charged with the admin istration or distribution of any such property as aforesaid who shall violate the provisions of this section shall be personally liable for any taxas accrued and unpaid which are chargeable against the person otherwise liable for tax under the terms of this section."

⁸ This provision is comparable to Section 3467 of the Revised Statutes, as amended (31 U. S. C. §192 (1952)), which states:

"Every executor, admin istrator, or assignee, or other person, who pays, in whole or in part, any debt due by the person or estate for whom or for which he acts before he satisfies and pays the debts due to the United States