United States v. Nicholls

Yeates, J.

I cannot bring myself to believe, notwithstanding the generality of words used in the 5th section of the act of congress of 3d March 1797, “the debts due to the United States, “shall be first satisfied,” that the provision therein contained was ever intended to extend to cases where an individual state was a creditor, and as such was clearly entitled under its municipal laws to a lien on the estate real or personal, of the insolvent *258debtor. No section or clause in any part of the act respects in the most distant manner the several states in their political and corporate capacities, as competitors with the United States ; but on the contrary, every regulation and provision in the act is confined to the settlement of accounts, between the United States and individual citizens.

It has been truly said, that the constitution of the United States, considered as federal, is to be construed strictly in all cases, when the antecedent rights of a state may be drawn in question, Tuck. Bla. Append. 151 ; and it is a maxim of political law, that sovereign states cannot be deprived of any of their rights by implication, nor in any manner whatever, but by their own voluntary consent, or by submission to a conqueror. Ib. 143. It would certainly require strong, clear, marked expressions, to satisfy a reasonable mind, that the constituted authorities of the union contemplated by any public law, the devesting of any pre-existing right or interest in a state; or that the representatives of any state would have agreed thereto, even supposing the legitimate powers of congress in such particular, to be perfectly ascertained and settled.

The members of this court were unanimously of opinion, in Smith v. Nicholson, December term 1803, that the provision of the general lien, created by the act of assembly of 18th February 1785, on the settlement of an account by the comptroller general, continued in full force, and was not repealed either by the express words of any subsequent law, or by necessary implication. When the powers of the Supreme Executive Council became vested in the governor, the necessity of the governor’s de- *-] *cision in the settlement was wholly superseded, unless 59 J the comptroller general should disapprove of the settlement made by the register general.

The legislature of this commonwealth had the unquestionable right to make such a law in 1785, to secure the fiscal interest of the state. This power was not delegated to the United States amongst the other enumerated powers, nor prohibited to the state by the constitution of 1787. But congress was author-ised by act 1. s. 8 of that instrument, “to make all laws which “ should be necessary and proper for carrying into execution the “powers delegated to them, and all other powers vested in the “government of the United States, or in any department or of“ficer thereof.” Hence it results that congress have the concurrent right of passing laws to protect the interest of the union, as to debts due to the government of the United States arising from the public revenue ; but in so doing, they cannot detract from the uncontroulable power of individual states to raise their own revenue, nor'infringe on, or derogate from the sovereignty of any independent state. Federalist Letters, Nos. 32, 33. The consequences of a contrary doctrine are too obvious to be insisted upon.

The regulations and provisions in the bankrupt act of congress *259of 4th April 1800, stongly fortify in my mind the construction I have made of the act of 3d March 1797. The 31st section declares that in the distribution of the bankrupt’s effects, there shall be paid to every of the creditors a portion rate according to the amount of their respective debts. Creditors having judgments (on which executions have not been executed) statutes, recognizances, specialties or attachments áre placed on one common footing; “ they shall be entitled to no more than a rateable “part of their debts, with the other creditors of the bankrupt.” The Ó2Ó section saves the right of preference to prior satisfaction of debts due to the United States, or to any of them. And the 63d section provides, that nothing “contained in this act “ shall be taken, or construed to invalidate or impair any lien “ existing at the date of this act, upon the lands or chattels of “any person who may have become a bankrupt.” The rights of the general government to priority of payment, and the rights of individual states, are contemplated as subsisting at the same time, and as perfectly compatible with each other. This only can be effected by giving preference to each existing lien, according to its due priority in point of time. I know of no other mode whereby the several conflicting claims can with justice be protected and secured.

This, if my construction be correct, narrows the question before us to a simple point, viz. To what periods, do th'e liens *relate in the present case ? If the lien of the United „ , States on the property of William Nicholls, can be traced L 2 0 no further back in this instance than the date of his mortgage to Henry Miller on the 9th June 1798, then the settlement on the 31st December 1797 of Nicholls’s account by the comptroller and register general, being previous thereto, must necessarily give this commonwealth a preference but, if this lien refers to March 1797, then the United States would be entitled to priority.

Considering this point as a question merely between the United States and the commonwealth of Pennsylvania, I am of opinion for the reasons I have mentioned, that as to the contending parties, the lien did not attach earlier than the execution of the mortgage, and consequently, that the motion of the attorney general to take the money arising on the sheriff’s sales, to the extent of the debts due from the defendant to the commonwealth, out of court, be granted.