author:
Mr. Justice Fortas Mr. Justice Harlan,
      Mr. Justice Black,

text:
    UNITED STATES v. YAZELL.
    No. 10.
    Argued October 13, 1965.
    Decided January 17, 1966.

      Solicitor General Marshall argued the cause for the United States. On the brief were former Solicitor General Cox, Assistant Attorney General Douglas, Louis F. Claiborne, Sherman L. Cohn and Edward Berlin.

      J. V. Hammett argued the cause and filed a brief for respondent.
   Mr. Justice Fortas

delivered the opinion of the Court.

This case presents an aspect of the continuing problem of the interaction of federal and state laws in our complex federal system. Specifically, the question presented is whether, in the circumstances of this case, the Federal Government, in its zealous pursuit of the balance due on a disaster loan made by the Small Business Administration, may obtain judgment against Ethel Mae Yazell of Lampasas, Texas. At the time the loan was made, Texas law provided that a married woman could not bind her separate property unless she had first obtained a court decree removing her disability to contract. Mrs. Yazell had not done so. At all relevant times she was a beneficiary of the peculiar institution of coverture which is now, with some exceptions, relegated to history’s legal museum.

The impact of the quaint doctrine of coverture upon the federal treasury is therefore of little consequence. Even the Texas law which gave rise to the difficulty was repealed in 1963. The amount in controversy in this extensive litigation, about $4,000, is important only to the Yazell family. But the implications of the controversy are by no means minor. Using Clearfield Trust Co. v. United States, 318 U. S. 363, as its base, the Government here seeks to occupy new ground in the inevitable conflict between federal interest and state law. The Government was rebuffed by the trial and appellate courts. We hold that in the circumstances of this case, the state rule governs, and, accordingly, we affirm the decision of the United States Court of Appeals for the Fifth Circuit, 334 F. 2d 454.

Reference in some detail to the facts of this case will illuminate the problem. Delbert L. Yazell operated in Lampasas, Texas, a small shop to sell children’s clothing. The shop was called Yazell’s Little Ages. Occasionally, his wife, Ethel Mae, assisted in the business. The business, under Texas law, was the community property of husband and wife, who, however, were barred by the cov-erture statute from forming a partnership. Dillard v. Smith, 146 Tex. 227, 230, 205 S. W. 2d 366, 367. A disastrous flood occurred in Lampasas on May 12, 1957. The stock of Yazell’s Little Ages was ruined. Its fixtures were seriously damaged.

The Small Business Administration had a regional office in Dallas, Texas. As of December 31, 1963, the agency had outstanding in Texas, generally under the supervision of its Dallas regional office, 1,363 business loans and 4,172 disaster loans, aggregating more than $60,000,000. Upon the occurrence of the Lampasas flood, the SBA opened a Disaster Loan Office in Lam-pasas, under the direction of the Dallas office.

On June 10, 1957, Mr. Yazell conferred with a representative of the SBA about a loan to enable him to cope with the disaster to his business. After a careful, detailed but commendably prompt investigation, the head of SBA’s Disaster Loan Office wrote Mr. Yazell on June 20, 1957, that authorization for a loan of $12,000 had been received. Yazell was informed that the loan would be made upon his compliance with certain requirements. He was told that a named law firm in Lampasas had been employed by the SBA to assist him in complying with the terms of the authorization.

Yazell and his wife “doing business as” Yazell’s Little Ages then signed a note in the amount of $12,000, payable to the order of SBA in Dallas at the rate of $120 per month including 3% interest. On the same day they also executed a chattel mortgage on their stock of merchandise and their store fixtures. By express reference to Article 4000 of the Revised Civil Statutes of Texas, the chattel mortgage exempted from its coverage retail sales made from the stock. The chattel mortgage was accompanied by a separate acknowledgment of Mrs. Yazell before a notary public, which was required by Texas law as a part of the institution of coverture. The notary attested, in the words of the applicable Texas statute, that “Ethel Mae Yazell, wife of Delbert L. Yazell . . . whose name is subscribed to the [chattel mortgage] . . . having been examined by me privily and apart from her husband . . . acknowledged such instrument to be her act and deed, and declared that she had willingly signed the same . . . .” See Tex. Rev. Civ. Stat. Ann. Art. 6608. See also Art. 1300, 4618 (Supp. 1964), 6605. These statutes all relate to conveyances of the marital homestead.

The note, chattel mortgage and accompanying documents were in due course sent to the Dallas office of SBA. Both the Lampasas law firm engaged by SBA to assist Yazell and the Acting Regional Counsel of SBA certified that “all action has been taken deemed desirable ... to assure the validity and legal enforceability of the Note.” Thereafter, the funds were made available to Yazell pursuant to the terms of the loan.

From the foregoing, it is clear (1) that the loan to Yazell was individually negotiated in painfully particularized detail, and (2) that it was negotiated with specific reference to Texas law including the peculiar acknowledgment set forth above. None of the prior cases decided by this Court in which the federal interest has been held to override state law resembles this case in these respects; the differences are intensely material to the resolution of the issue presented.

Next, it seems clear (1) that the SBA was aware and is chargeable with knowledge that the contract would be subject to the Texas law of coverture; (2) that both the SBA and the Yazells entered into the contract without any thought that the defense of coverture would be unavailable to Mrs. Yazell with respect to her separate property as provided by Texas law; and (3) that, in the circumstances, the United States is seeking the unconscionable advantage of recourse to assets for which it did not bargain. These points will be briefly elaborated before we reach the ultimate issue: whether, despite all of the foregoing, some “federal interest” requires us to give the United States this advantage.

It will be noted that the transaction was custom-tailored by officials of SBA located in Dallas and Lam-pasas, Texas, and undoubtedly familiar with Texas law. It was twice approved by Texas counsel who certified that “all action has been taken deemed desirable” even though no effort was made to cause Mrs. Yazell to have her incapacity removed under Texas law. In at least two decisions since 1949, federal courts had applied the Texas law of coverture in actions under federal statutes. At no time does it appear that the SBA made the slightest suggestion to the Yazells or their SBA-appointed counsel that it intended to enforce the contract against Mrs. Yazell’s separate property. The forms used, although specifically adapted to this transaction and to Texas law, made no reference to such an intent, and it is either probable or certain that no such intent existed. As stated above, the SBA now has more than 5,000 loans outstanding in Texas. The Solicitor General informed the Court that the SBA, in conformity with the general practice of government lending agencies, requires that the signature of the wife be obtained as a routine matter. If it had been intended that the result now sought by the Government would obtain, simple fairness as well as elementary craftsmanship would have dictated that in a Texas agreement the wife be advised, at least by formal notation, that she was, in the opinion of SBA, binding her separate property, despite Texas law to the contrary. Again, it must be emphasized that this was a custom-made, hand-tailored, specifically negotiated transaction. It was not a nationwide act of the Federal Government, emanating in a single form from a single source.

We now come to the basic issue which this case presents to this Court. Is there a “federal interest” in collecting the deficiency from Mrs. Yazell’s separate property which warrants overriding the Texas law of cover-ture? Undeniably there is always a federal interest to collect moneys which the Government lends. In this case, the federal interest is to put the Federal Government in position to levy execution against Mrs. Yazell’s separate property, if she has any, for the unpaid balance of the $12,000 disaster loan after the stock of merchandise and fixtures of the store have been sold, after any other community property has been sold, and after Mr. Yazell’s leviable assets have been exhausted. The desire of the Federal Government to collect on its loans is understandable. Perhaps even in the case of a disaster loan, the zeal of its representatives may be commended. But this serves merely to present the question — not to answer it. Every creditor has the same interest in this respect; every creditor wants to collect. The United States, as sovereign, has certain preferences and priorities, but neither Congress nor this Court has ever asserted that they are absolute. For example, no contention will or can be made that the United States may by judicial fiat collect its loan with total disregard of state laws such as homestead exemptions. Accordingly, generalities as to the paramountcy of the federal interest do not lead inevitably to the result the Government seeks. Our problem remains: whether in connection with an individualized, negotiated contract, the Federal Government may obtain a preferred right which is not provided by statute or specific agency regulation, which was not a part of its bargain, and which requires overriding a state law dealing with the intensely local interests of family property and the protection (whether or not it is up-to-date or even welcome) of married women.

The Government asserts that this overriding federal interest can be found in the unlimited right of the Federal Government to choose the persons with whom it will contract, citing Perkins v. Lukens Steel Co., 310 U. S. 113, which is remote from the issue at hand. Realistically, in terms of Yazell’s case, this has nothing to do with our problem: The loan was made to enable Yazell to reopen the store after the disaster of the flood. The SBA chose its contractors with knowledge of the limited office of Mrs. Yazell’s signature under Texas law. That knowledge did not deter them. If they had “chosen” Mrs. Yazell as their contractor in the sense that her separate property would be liable for the loan, presumably they would have said so, and they would have proceeded with the formalities necessary under Texas law to have her disability removed. In all reality, the assertion that this case involves the'right of the United States to choose its beneficiaries cannot determine the issue before us. This case is not a call to strike the shackles of an obsolete law from the hands of a beneficent Federal Government, nor is it a summons to do battle to vindicate the rights of women. It is much more mundane and commercial than either of these. The issue is whether the Federal Government may voluntarily and deliberately make a negotiated contract with knowledge of the limited capacity and liability of the persons with whom it contracts, and thereafter insist, in disregard of such limitation, upon collecting (a) despite state law to the contrary relating to family property rights and liabilities, and (b) in the absence of federal statute, regulation or even any contract provision indicating that the state law would be disregarded.

The institution of coverture is peculiar and obsolete. It was repealed in Texas after the events of this case. It exists, in modified form, in Michigan. But the Government’s brief tells us that there are 10 other States which limit in some degree the capacity of married women to contract. In some of these States, such as California, the limitations upon the wife’s capacity and responsibility are part of an ingenious, complex, and highly purposeful distribution of property rights between husband and wife, geared to the institution of community property and designed to strike a balance between efficient management of joint property and protection of the separate property of each spouse. It is an appropriate inference from the Government’s brief that its position is that the Federal Government, in order to collect on a negotiated debt, may override all such state arrangements despite the absence of congressional enactment or agency regulation or even any stipulation in the negotiated contract or any warning to the persons with whom it contracts.

We do not here consider the question of the constitutional power of the Congress to override state law in these circumstances by direct legislation or by appropriate authorization to an administrative agency coupled with suitable implementing action by the agency. We decide only that this Court, in the absence of specific congressional action, should not decree in this situation that implementation of federal interests requires overriding the particular state rule involved here. Both theory' and the precedents of this Court teach us solicitude for state interests, particularly in the field of family and family-property arrangements. They should be overridden by the federal courts only where clear and substantial interests of the National Government, which cannot be served consistently with respect for such state interests, will suffer major damage if the state law is applied.

Each State has its complex of family and family-property arrangements. There is presented in this case no reason for breaching them. We have no federal law relating to the protection of the separate property of married women. We should not here invent one and impose it upon the States, despite our personal distaste for coverture provisions such as those involved in this case. Nor should we establish a principle which might cast doubt upon the effectiveness in relevant types of federal suits of the laws of 11 other States relating to the contractual positions of married women, which, as the Government’s brief warns us, would be affected by our decision in the present case. Clearly, in the case of these SBA loans there is no “federal interest” which justifies invading the peculiarly local jurisdiction of these States, inN .disregard of their laws, and of the subtleties reflected by the differences in the laws of the various States which generally reflect important and carefully evolved state arrangements designed to serve multiple purposes.

The decisions of this Court do not compel or embrace the result sought by the Government. None of the cases in which this Court has devised and applied a federal principle of law superseding state law involved an issue arising from an individually negotiated contract. None of these cases permitted federal imposition and enforcement of liability on a person who, according to state law, was not competent to contract. None of these cases overrode state law in the peculiarly state province of family or family-property arrangements.

This Court’s decisions applying “federal law” to supersede state law typically relate to programs and actions which by their nature are and must be uniform in character throughout the Nation. The leading case, Clearfield Trust Co. v. United States, 318 U. S. 363, involved the remedial rights of the United States with respect to federal commercial paper. United States v. Allegheny County, 322 U. S. 174, was treated by the Court as involving the liability of property of the United States to local taxes. D’Oench, Duhme & Co. v. Federal Deposit Ins. Corp., 315 U. S. 447, involved the rights of the FDIC as an insurer-assignee of a bank as against the maker of a note given the bank on the secret understanding it would not be called for payment. The bank deposit insurance program is general and standardized. In all relevant aspects, the terms are explicitly dictated by federal law. The Court held that FDIC was entitled to a federal rule protecting it against misrepresentations as to the financial condition of the banks it insures, accomplished by secret arrangements inconsistent with the policy of the applicable federal statutes.

On the other hand, in the type of case most closely resembling the present problem, state law has invariably been observed. The leading case is Fink v. O’Neil, 106 U. S. 272. There the United States sought to levy execution against property defined by state law as homestead and exempted by the State from execution. This Court held that Revised Statutes § 916, now Rule 69 of the Federal Rules of Civil Procedure, governed, and that the United States’ remedies on judgments were limited to those generally provided by state law. These homestead exemptions vary widely. They result in a diversity of rules in the various States and in a limitation upon the power of the Federal Government to collect which is comparable to the coverture limitation. The purpose and theory of the two types of limitations are obviously related. Another illustration of acceptance of divergent and limiting state laws is afforded by Reconstruction Finance Corp. v. Beaver County, 328 U. S. 204. In that case this Court held that the state classification of property owned by the Reconstruction Finance Corporation as “real property” for tax purposes would prevail in determining whether the property was within the class of property as to which Congress had waived the federal exemption from local taxation.

Generally, in the cases applying state law to limit or condition the enforcement of a federal right, the Court has insisted that the state law is being “adopted” as the federal rule. Even so, it has carefully pointed out that this theory would make it possible to “adopt,” as the operative “federal” law, differing laws in the different States, depending upon the State where the relevant transaction takes place.

Although it is unnecessary to decide in the present case whether the Texas law of coverture should apply ex proprio vigore — on the theory that the contract here was made pursuant and subject to this provision of state law — or by “adoption” as a federal principle, it is clear that the state rule should govern. There is here no need for uniformity. There is no problem in complying with state law; in fact, SBA transactions in each State are specifically and in great detail adapted to state law. There is in this case no defensible reason to override state law unless, despite the contrary indications in Fink v. O’Neil and elsewhere as has been set forth, we are to take the position that the Federal Government is entitled to collect regardless of the limits of its contract and regardless of any state laws, however local and peculiarly domestic they may be.

The decision below is

Affirmed.

Mr. Justice Harlan,

concurring.

I join the Court’s opinion with a single qualification, namely, that I place no reliance on any of the particularities of the negotiations between the parties respecting this loan. In my view the conclusion that Texas law governs the issue before us is amply justified by the Court’s appraisal of the competing state and federal interests at stake, irrespective of whether the parties negotiated with specific reference to Texas law.

Mr. Justice Black,

with whom Mr. Justice Douglas and Mr. Justice White join,

dissenting.

Because I think the dissenting opinion of Judge Pretty-man in the Court of Appeals gives a more accurate picture of the relevant facts and issues in this case than does the opinion of the Court, and because I agree with the legal conclusion Judge Prettyman reached for the reasons he gave, I set out his dissent below and adopt it as my own.

“Mrs. Yazell and her husband, trading as a partnership, borrowed money from the Federal Government through the Small Business Administration. They signed a note for the loan. They also signed, as security for the loan, a chattel mortgage on the merchandise in their store. They could not pay, and the Government foreclosed on the security. A deficiency remained. The Government sued on the note, praying judgment for the balance of the loan. Mrs. Yazell moved for summary judgment on the ground that she is a married woman and so, in Texas, no personal judgment and no judgment affecting her separate estate can be rendered against her, with a few exceptions not here material. The District Court judge agreed with her, and so do my brethren on this court. I am contrari-minded.
“A loan from the Federal Government is a federal matter and should be governed by federal law. There being no federal statute on the subject, the courts must fashion a rule. This is the clear holding of Clearfield Trust Co. v. United States.
“To effectuate the policy of the Small Business Act, loans of many hundreds of thousands of dollars each year to businesses must be made throughout the country. These loans can be made only under conditions which will reasonably assure repayment. I think the Act should be of uniform application throughout the country. If local rules are to govern federal contracts in respect to the capacity of married women to contract, so too should local rules as to all other features of contractual capacity govern such contracts. Chaos which would nullify federal programs for disaster relief would arise. And of course there is no reason to restrict this decision to loans under the Small Business Act. It would necessarily apply with equal force to every other federal program which involves contracts between the Federal Government and individuals. A multitude of programs will be frustrated by it.
“It seems to me that, if a person has capacity to get money from the Federal Government, he has the capacity to give it back. The present lawsuit does not involve a general liability for debt; it involves merely the obligation to repay to the Government specific money borrowed from the Government. It seems to me that if a person borrows a horse from a neighbor he ought to be required to give it back if the owner wants it back, whether or not the borrower is a married woman. I suppose the Texas law, by nullifying repayments by married women, tends to minimize ill-advised borrowing. But I think the federal rule ought to be that you must repay what you borrow.
“It seems to me that United States v. Helz was correctly decided by the Sixth Circuit and that it applies here. I would follow it.” 334 F. 2d 454, 456.

Though I think that Judge Prettyman’s dissent is enough to justify his rejection of the Texas law of “coverture” as a part of federal law, I consider it appropriate to add another reason, which in itself would be enough for me. The Texas law of “coverture,” which was adopted by its judges and which the State’s legislature has now largely abandoned, rests on the old common-law fiction that the husband and wife are one. This rule has worked out in reality to mean that though the husband and wife are one, the one is the husband. This fiction rested on what I had supposed is today a completely discredited notion that a married woman, being a female, is without capacity to make her own contracts and do her own business. I say “discredited” reflecting on the vast number of women in the United States engaging in the professions of law, medicine, teaching, and so forth, as well as those engaged in plain old business ventures as Mrs. Yazell was. It seems at least unique to me that this Court in 1966 should exalt this archaic remnant of a primitive caste system to an honored place among the laws of the United States.

       Tex. Rev. Civ. Stat. Ann. Art. 4626. This section, as amended by Acts 1963, 58th Leg., p. 1188, c. 472, § 6, now gives to Texas wives the capacity to contract. Under old Art. 4626 a married woman could have her disability removed.

       See note 1, supra.

       The Court of Appeals by a vote of two to one affirmed the decision of the District Court in favor of the wife, based upon the Texas’ law of coverture. The action was instituted by the United States to recover the balance due on a note of approximately $12,000, secured by a chattel mortgage. The note was signed by both husband and wife. The mortgage had been foreclosed, the pledged assets sold, and a deficiency judgment was rendered against the husband in this same action. No appeal was taken by the husband.

       In the discussion which follows, as specifically indicated by reference to “SBA file,” we have occasionally referred to the official file of the Small Business Administration on the Yazell loan to supplement the record with facts which disclose the agency’s practice.

       SBA file.

       Brief of the United States, p. 12.

       SBA file.

       SBA file.

       SBA file.

       See note 1, supra.

        United States v. Belt, 88 F. Supp. 510 (D. C. S. D. Tex.) (suit held barred by coverture); Texas Water Supply Corp. v. Reconstruction Finance Corp., 204 F. 2d 190 (C. A. 5th Cir.) (case held within an exception to coverture).

       SBA file.

       The Ninth Circuit, in Bumb v. United States, 276 F. 2d 729 (C. A. 9th Cir.), aptly observed in response to a claim by the Small Business Administration that the “need for uniformity” excused it from complying with a California “bulk sales” statute requiring notice of intent to mortgage:
      “It is true that the Small Business Administration operates throughout the United States, but such fact raises no presumption of the desirability of a uniform federal rule with respect to the validity of chattel mortgages in pursuance of the lending program of the Small Business Administration. The largeness of the business of the Small Business Administration offers no excuse for failure to comply with reasonable requirements of local law, which are designed to protect local creditors against undisclosed action by their local debtors which impair the value of their claims. It must be assumed that the Small Business Administration maintains competent personnel familiar with the laws of the various states in which it conducts business, and who are advised of the steps required by local law in order to acquire a valid security interest within the various states.” Id., at 738.

       Brief for the United States, p. 11.

       Contrast Clearfield Trust Co. v. United States, 318 U. S. 363. Compare also United States v. Helz, 314 F. 2d 301 (C. A. 6th Cir.), arising under the National Housing Act, 48 Stat. 1246, 12 U. S. C. § 1702 et seq., which issues separate forms for each State but does not negotiate with individual applicants. See United States v. View Crest Garden Apts., Inc., 268 F. 2d 380 (C. A. 9th Cir.), cert. denied, 361 U. S. 884.

       In this case, the Yazells’ general creditors collected about 20% of their claims.

       For example, Congress has provided for preference in the case of debts owed the United States on tax delinquencies. See 26 U. S. C. §§ 6321, 6323 (1964 ed.); 11 U. S. C. §104 (a) (4) (1964 ed.). 31 U. S. C. § 191 (1964 ed.) also provides a priority for the United States in some situations involving ordinary debts. See Kennedy, The Relative Priority of the Federal Government: The Pernicious Career of the Inchoate and General Lien, 63 Yale L. J. 905 (1954).

       See pp. 354-356, infra.

       The Government relies upon Perkins, at p. 127, for the proposition that the United States has “the unrestricted power ... to determine those with whom it will deal.” Brief for the United States, p. 9. Perkins had nothing to do with the question of the power of the United States to override state law declaring the incapacity of persons to contract. The Court there held that private companies alleging their right as potential bidders for government contracts lacked standing to challenge a federal statute requiring federal procurement contracts to include a minimum wage stipulation. The Government quotes the decision out of context, omitting the following italicized words: the Court stated that “Like private individuals and businesses, the Government enjoys the unrestricted power . . . to determine those with whom it will deal, and to fix the terms and conditions upon which it will make needed purchases.” Mrs. Yazell would subscribe to that proposition — indeed, the brunt of her case is that the Government, in entering ordinary commercial contracts, should be treated “like private individuals and businesses.”

       See note 1, supra.

       It is worth noting that in the only situation where the United States’ power to choose its contractors might arise — where a married woman has separate property in respect of which she seeks or the Government offers a loan — the Texas law expressly provided for her power to contract and to bind her separate property. Tex. Rev. Civ. Stat. Ann. Art. 4614.

       Mich. Stat. Ann. §§ 26.161, 26.181, 26.182, 26.183. See Koengeter v. Holzbaugh, 332 Mich. 280, 50 N. W. 2d 778; Weingarten, Creditors’ Rights, 10 Wayne L. Rev. 184 (1963).

       Brief for the United States, p. 15, n. 10. The States are, in addition to Texas and Michigan: Alabama, Arizona, California, Florida, Georgia, Idaho, Indiana, Kentucky, Nevada, and North Carolina. With the exception of Michigan, see n. 22, supra, none of these States other than Texas has a coverture rule applicable to facts such as those presented by this case.

       In California a wife has full capacity to contract. Cal. Civ. Code § 158. Her separate property is liable for her own debts, as are her earnings. Cal. Civ. Code §§ 167, 171. However, in connection with California’s community property law governing the management and control of community property, see Cal. Civ. Code (Supp. 1964) §§ 172, 172a, the community property is generally not subject to the debts of the wife. Cal. Civ. Code § 167. See also Ariz. Rev. Stat. Ann. § 25-214; Nev. Rev. Stat. § 123.230.

       The Government's argument, if accepted by this Court, would cast doubt, in addition, on state laws preventing wives from conveying realty without the consent of their husbands — see, e. g., Ala. Code Tit. 34, §73; Fla. Stat. Ann. (Supp. 1964) §708.08; Ind. Ann. Stat. §38-102; Ky. Rev. Stat. §404.020 (executory sales contract) ; N. C. Gen. Stat. § 52-2 — or from acting as guarantors or sureties — see, e. g., Ga. Code Ann. § 53-503; Ky. Rev. Stat. § 404.010.

       See, e. g., United States v. Bess, 357 U. S. 51, which held that the exemptions from execution to satisfy federal tax liens provided in § 3691 of the Internal Revenue Code of 1939 (now 26 U. S. C. § 6334) are exclusive of state exemptions.

       See, e. g., United States v. Shimer, 367 U. S. 374 (Pennsylvania rule precluding mortgagee who buys mortgaged property at foreclosure from seeking deficiency judgment held inconsistent with scheme of Veterans Administration regulations under which mortgage issued).

       On the contrary, in De Sylva v. Ballentine, 351 U. S. 570, the Court applied state law to define “children” although the issue arose in connection with the right to renew a copyright — a peculiarly federal area. Cf. Reconstruction Finance Corp. v. Beaver County, 328 U. S. 204; Commissioner v. Stern, 357 U. S. 39. We do not regard Wissner v. Wissner, 338 U. S. 655, as an exception. There California sought to apply its community property rule that a wife has a half interest in her husband’s life insurance if the premiums come out of community property (his earnings), in derogation of the federal statutory policy that soldiers have an absolute right to name the beneficiary of their National Service Life Insurance. The Court held that the California rule would directly have undercut congressional intent with respect to the Federal Government’s generalized, nationwide insurance program.

       The Court held that a state tax rule under which movable machinery was part of the realty of a manufacturer for purposes of an ad valorem property tax could not be applied so as to subject a manufacturer renting the machinery from the United States to such an enhancement of the value of its realty. The Court held that the title to the machinery was in the United States, and was effective to protect the machinery from local taxes. But compare Reconstruction Finance Corp. v. Beaver County, 328 U. S. 204.

       The statute involved in D’Oench, Duhme is now the Federal Deposit Insurance Act, 64 Stat. 873, 12 U. S. C. § 1811 et seq. (1964 ed.).

       See also Custer v. McCutcheon, 283 U. S. 514. Rule 69 provides that procedure on execution shall be “in accordance with the practice and procedure of the state in which the district court is held . . . except that any statute of the United States governs to the extent that it is applicable.” With the one exception of federal tax cases, see n. 26, supra, state execution procedure seems to be applied without question, even in suits by the United States. See, e. g.. United States v. Harpootlian, 24 F. 2d 646 (C. A. 2d Cir.) (applying state law on the time within which examination can be had of a judgment debtor after an execution against him is returned unsatisfied, over an objection by the Government that this was an improper application of a statute of limitations to the sovereign); United States v. Miller, 229 F. 2d 839 (C. A. 3d Cir.) (Pennsylvania prohibition of garnishment of future debts of garnishee to debtor).

       In Texas, the value of the homestead that is exempt from execution is $5,000, as of the time of its designation as a homestead and without reference to the value of any improvements, Tex. Rev. Civ. Stat. Ann. Art. 3833; Tex. Const. Art. 16, §§50, 51. In Tennessee and Maine, the homestead exemption is $1,000, Tenn. Const. Art. 11, §11; Me. Rev. Stat. Ann. Tit. 14, §§4551, 4552; in California, it is $15,000 for the head of a family, $7,500 for all others, Cal. Civ. Code §§ 1240, 1260 (Supp. 1964); cf. Cal. Const. Art. 17, § 1. If Mrs. Yazell’s separate property were a homestead under Texas law, she might have been able to defeat execution on the judgment that might have been entered against her in this suit to a far greater degree than some other debtor to the SBA could who happened to reside in Tennessee or Maine; and a Californian would do even better than Mrs. Yazell.
      Other exemptions from execution vary similarly. For example, Texas, Maine and California provide for detailed personal exemptions. In Texas, a family is exempt not only as to its homestead, but also its furniture, cemetery lot, implements of husbandry, tools and books of a trade, family library and pictures, five cows and their calves, two mules, two horses, one wagon, one carriage, one gun, 20 hogs, 20 sheep, harness, provisions and forage for home consumption, current wages, clothing, 20 goats, 50 chickens, 30 turkeys, 30 ducks, 30 geese, 30 guineas, and one dog. A somewhat less extensive list is provided for persons who are not constituents of a family. Tex. Rev. Civ. Stat. Ann. Art. 3832, 3835. Cf. also Me. Rev. Stat. Ann. Tit. 14, §4401; Cal. Civ. Proc. Code §§690-690.52 (1955 ed. and Supp. 1964). Texas also has other special protections, including a provision applicable to ferrymen, saving to them their ferryboat and tackle, Tex. Rev. Civ. Stat. Ann. Art. 3836.

       Rule 64, adopting state provisional remedies for security in advance of judgment, can lead to the same kind of diversity as does Rule 69. Cf. De Beers Consolidated, Mines, Ltd. v. United States, 325 U. S. 212. State provisional remedies vary greatly. See 7 Moore’s Fed. Prac. ¶ 64.04 [3].

       “In our choice of the applicable federal rule we have occasionally selected state law.” Clearfield Trust Co. v. United States, 318 U. S. 363, 367. The Court observed in Clearfield that the difficulty of determining which state rule to apply could be a persuasive argument in favor of a federal rule. Ibid. No such difficulty exists here, of course.
      In Royal Indemnity Co. v. United States, 313 U. S. 289, cited by the Government for the proposition that “the rights of the United States under contracts entered into as part of an authorized nationwide program are to be determined by federal and not by State law,” Brief for the United States, p. 7, the Court, while insisting that “the rule governing the interest to be recovered as damages for delayed payment of a contractual obligation to the United States is not controlled by state statute or local common law,” 313 U. S., at 296, nonetheless held that the statutory rate prevailing in the State where the obligation was undertaken and to be performed was a suitable one for adoption by the federal courts. Cf. also Board of Commissioners v. United States, 308 U. S. 343.

       The Financial Assistance Manual of the Small Business Administration, SBA-500, is replete with admonitions to follow state law carefully. Thus §401.03 reads:

        “Compliance with Applicable Laws. When the United States disburses its funds, it is exercising a constitutional function or power and its rights and duties are governed by Federal rather than local law. However, it is frequently necessary, in the obtaining of a marketable title or enforceable security interest in property, to follow local procedural requirements and statutes. Accordingly, care should be used in following or meeting all applicable requirements and statutes of the State in which the property is located, including the filing and refiling, recording and re-recording of any documents.”
      See also, e. g., §§ 401.06, 402.04, 403.03, 404.01, 404.02, 406.02, 407.03, 407.04 (“State laws vary as to the dominion a lender must exercise over assigned accounts receivable. ... In drafting servicing provisions . . . counsel should carefully consider the applicable laws of the State . . . .”), 408.01, 410.08 (“In order to guard against this Agency’s liability for payment of insurance premiums under the standard mortgagee clause in any state the law of which . . . makes the mortgagee so liable, the regional director shall . . . .”), 706.01. Section 1008.03 authorizes a Regional Director of SBA, “In instances where a disaster area is distantly located from the Regional office and where speed and economy of administration make such procedure advisable,” to recommend to the General Counsel that “local counsel be appointed and that he be authorized to rely on such counsel for all legal matters and closing opinions.” See, in addition, 13 CFR (1965 Supp.) § 122.17.

      "1 318 U.S. 363 .. . (1943).”

      “ 15 U.S.C. § 636(a) (7); 13 C.F.R. § 120.4-2(c) (1958).”

      “ 314 F.2d 301 (1963).”


source: Caselaw Access Project

author: Per Curiam. Mr. Justice Black,

license: Public Domain

text:
    KOEHRING CO. v. HYDE CONSTRUCTION CO., INC., et al.
    No. 593.
    Decided January 17, 1966.

      Steven E. Keane for petitioner.

      Charles Clark for respondents.
   Per Curiam.

On March 11, 1964, pursuant to a transfer order issued by the Court of Appeals for the Fifth Circuit, the United States District Court for the Northern District of Oklahoma entered an order temporarily restraining respondents from proceeding with trial of a case in the Mississippi state courts. When respondents, in disregard of the temporary restraining order, proceeded to trial in Mississippi, the District Court on March 14 found them in civil contempt. Undeterred, respondents pressed the state court action to a conclusion and obtained a judgment against petitioner on April 8. But the District Court, on September 1, enjoined respondents from seeking to enforce the Mississippi judgment, required them to compensate petitioner for reasonable expenses in connection with the contempt proceeding, reserved decision as to whether they must also reimburse petitioner for expenses relating to the Mississippi litigation, and ordered the civil suit between the parties retried — this time in Oklahoma and in federal court.

Respondents appealed from this decree to the Court of Appeals for the Tenth Circuit which reversed, holding that at the time the District Court had entered the original restraining order it was without jurisdiction since it had not yet received the case file from the trans-feror court. We are asked to review that determination. We grant the petition and reverse.

The District Court had assumed jurisdiction of the cause and entered its restraining order on March 11, five days before the papers in the case were transferred to it from Mississippi. It acted upon the basis of a certified copy of an order entered the previous day by the Court of Appeals for the Fifth Circuit. That order provided not only that the District Court for the Southern District of Mississippi had erred in failing to comply with an earlier appellate mandate to transfer the case, but also that “pending the entry of the order of transfer by the District Judge and the physical filing of the record in Oklahoma, this order shall constitute a transfer to enable the parties to present the matter to the District Court of Oklahoma.”

Although a federal appellate court does not ordinarily itself transfer a case to another district, but remands to the District Court for that purpose, the extraordinary action in this case was taken as a result of extraordinary circumstances. These included the fact that the Federal District Court in Mississippi had granted a motion to dismiss despite instructions from the Fifth Circuit to transfer the cause to Oklahoma, and the further fact that trial of a duplicative action in the Mississippi state courts brought by respondent Hyde Construction Company was to commence, and did in fact commence, on March 11 — one day after the Fifth Circuit’s instanter transfer and the very day on which the Federal District Court in Oklahoma entered its order.

In the special circumstances of this case, we conclude that the District Court in Oklahoma had acquired jurisdiction on March 11 in accordance with the Fifth Circuit’s order for instanter transfer and that the Tenth Circuit erred in vacating the District Court’s orders on the stated jurisdictional ground. We do not read 28 U. S. C. § 1404 (a), providing that “a district court may-transfer any civil action/’ as precluding an appellate court, where unusual circumstances indicate the necessity thereof, from effecting a transfer by direct order.

Accordingly, we grant the petition, reverse the judgment, and remand to the District Court for the Northern District of Oklahoma for further proceedings consistent with this opinion, reserving to the parties the right to apply to that court to have the case transferred back to the Southern District of Mississippi because of changed conditions.

Mr. Justice Black,

with whom Mr. Justice Douglas joins,

dissenting.

I think, as shown by the record and the carefully prepared opinions of the able judges in both the Fifth and the Tenth Circuits, that the circumstances of this ease are both too complex and obscure, and the issues which concern among other things the relationship between state and federal courts and the transfer of cases between federal courts are all too important to be treated in the cursory manner as they are by the Court here. This Court’s reversal of the judgment below, without giving respondents any opportunity for oral argument to support the thoroughly considered opinion and holding of the Tenth Circuit, seems more extraordinary to me than what the Court’s per curiam opinion refers to as the “extraordinary circumstances” in the courts below. I dissent from that course of action taken by this Court.

       Criminal contempt charges were also filed, but are not involved in the present petition.

       Cf. Platt v. Minnesota Mining Co., 376 U. S. 240 (under Rule 21 (b) of the Federal Rules of Criminal Procedure).

       The Fifth Circuit suggests that the District Court’s action was the result of misunderstanding over whether an answer had been filed and hence of its duty to grant a voluntary dismissal under Rule 41 (a) (1) of the Federal Rules of Civil Procedure, rather than the result of unreadiness to respect appellate instructions.

         Drabik v. Murphy, 246 F. 2d 408 (C. A. 2d Cir.), is not authority for the proposition that the transferee court fails to acquire jurisdiction until papers are received from the transferor court. On the contrary, Drabik suggests that the transferor court may lose jurisdiction before that event.

       This reservation was made in the opinion of the Fifth Circuit.


author: Per Curiam.

text:
    INTERNATIONAL UNION OF ELECTRICAL, RADIO & MACHINE WORKERS, AFL-CIO v. NATIONAL LABOR RELATIONS BOARD et al.
    No. 87.
    Decided January 17, 1966.

      Irving Abramson, Benjamin C. Sigal and Winn I. Newman for petitioner.

      Solicitor General Cox, Arnold Ordman, Dominick L. Manoli, Norton J. Come and Laurence S. Gold for National Labor Relations Board, and David L. Benetar and Sanford Browde for General Electric Co., respondents.
   Per Curiam.

The petition for a writ of certiorari to the United States Court of Appeals for the Second Circuit is granted, the judgments are vacated and the case is remanded to that court for further consideration in light of Automobile Workers v. Scofield, ante, p. 205.


text:
    LLOYD v. BRICK et al.
    No. 679.
    Decided January 17, 1966.
   Per Curiam.

The appeal is dismissed for want of jurisdiction. Treating the papers whereon the appeal was taken as a petition for a writ of certiorari, certiorari is denied.


text:
    ALTIERE v. UNITED STATES.
    No. 100.
    Decided January 17, 1966.

      Anna R. Lavin and Maurice J. Walsh for petitioner.

      Solicitor General Cox for the United States.
   Per Curiam.

In the light of the suggestion of the Solicitor General and an independent examination of the record, the petition for a writ of certiorari is granted, the judgment is vacated, and the case is remanded to the United States District Court for the Northern District of Illinois for further proceedings in light of Sansone v. United States, 380 U. S. 343.


text:
    SMITH et al. v. AYRES, MAYOR, et al.
    No. 690.
    Decided January 17, 1966.

      Robert J. Corber for appellants.

      Wallace E. Sturgis, Jr., for appellees.
   Per Curiam.

The motion to dismiss is granted and the appeal is dismissed for want of jurisdiction. Treating the papers whereon the appeal was taken as a petition for a writ of certiorari, certiorari is denied.


text:
    PENNSYLVANIA RAILROAD CO. et al. v. UNITED STATES et al.
    No. 556.
    Decided January 17, 1966.

      Paul R. Duke and Edward A. Kaier for appellants.

      Solicitor General Marshall, Assistant Attorney General Turner, Robert B. Hummel, Neil Brooks, Robert W. Ginnane and I. K. Hay for the United States et al. Leo A. Larkin, Samuel Mandell, Sidney Goldstein, F. A. Mulhern, Arthur L. Winn, Jr., Samuel H. Moerman, J. Raymond Clark and James M. Henderson for appellee Port of New York Authority.
   Per Curiam.

The motions to affirm are granted and the judgment is affirmed.


text:
    ATLANTIC GULF & PACIFIC CO. v. GEROSA, COMPTROLLER OF THE CITY OF NEW YORK.
    No. 718.
    Decided January 17, 1966.

      Richard H. Appert for appellant.

      Leo A. Larkin, Stanley Buchsbaum and Samuel J. Warms for appellee.
   Per Curiam.

The motion to dismiss is granted and the appeal is dismissed for want of a substantial federal question.


text:
    NATIONAL BUS TRAFFIC ASSOCIATION, INC., et al. v. UNITED STATES et al.
    No. 635.
    Decided January 17, 1966.

      Robert J. Bernard, Drew L. Carraway, John S. Fessen-den and Richard R. Sigmon for appellants.

      Solicitor General Marshall, Assistant Attorney General Turner, Robert B. Hummel, Robert W. Ginnane and Leonard S. Goodman for the United States et al.
   Per Curiam.

The motion to affirm is granted and the judgment is affirmed.


text:
    GREAT COASTAL EXPRESS, INC., et al. v. UNITED STATES et al.
    No. 677.
    Decided January 17, 1966.

      John C. Bradley for appellants.

      Solicitor General Marshall, Assistant Attorney General Turner, Robert B. Hummel, Jerry Z. Pruzansky and Robert W. Ginnane for the United States et al. Francis W. Mclnerny for Turner’s Express, Inc., et al., appellees.
   Per Curiam.

The motions to affirm are granted and the judgment is affirmed.


text:
    NORTHWESTERN PACIFIC RAILROAD CO. v. PUBLIC UTILITIES COMMISSION OF CALIFORNIA.
    No. 676.
    Decided January 17, 1966.

      Thormund A. Miller, Jeremiah C. Waterman and Randolph Karr for appellant.

      Mary Moran Pajalich and Hector Anninos for appellee.

      Boris H. Lakusta for the City of San Rafael et al.
   Per Curiam.

The motion of the City of San Rafael, California, et al. for leave to be named parties appellee is denied. The motion to dismiss is granted and the appeal is dismissed for want of a substantial federal question.


text:
    SCHILDHAUS v. ASSOCIATION OF THE BAR OF THE CITY OF NEW YORK.
    No. 732.
    Decided January 17, 1966.

      Arnold Schildhaus, appellant, pro se.

      John G. Bonomi and Michael Franck for appellee.
   Per Curiam.

The motion to dismiss is granted and the appeal is dismissed for want of jurisdiction. Treating the papers whereon the appeal was taken as a petition for a writ of certiorari, certiorari is denied.


text:
    CONVOY CO. v. UNITED STATES et al.
    No. 719.
    Decided January 17, 1966.

      Marvin Handler and Moe M. Tonkon for appellant.

      Solicitor General Marshall, Assistant Attorney General Turner, Robert B. Hummel, Robert W. Ginnane, I. K. Hay and Betty Jo Christian for the United States et al. Donald W. Smith for Commercial Carriers, Inc., appellee.
   Per Curiam.

The motions to affirm are granted and the judgment is affirmed.


text:
    JOHN v. JOHN.
    No. 699.
    Decided January 17, 1966.

      Warner Pyne for appellant.

      Irwin L. Germaise for appellee.
   Per Curiam.

The motion to dispense with printing the motion to dismiss or affirm is granted.

The motion to dismiss is granted and the appeal is dismissed for want of jurisdiction. Treating the papers whereon the appeal was taken as a petition for a writ of certiorari, certiorari is denied.


text:
    AMERICAN TRUCKING ASSOCIATIONS, INC., et al. v. UNITED STATES et al.
    No. 510.
    Decided January 17, 1966.

      Peter T. Beardsley, Richard R. Sigmon, Bryce Rea, Jr., and Ralph C. Busser, Jr., for appellants in No. 510. Carl Helmetag, Jr., for appellant in No. 511.

      Solicitor General Marshall, Assistant Attorney General Turner, Lionel Kestenbaum and Robert W. Ginnane for the United States et al. John F. Donelan and John M. Cleary for National Industrial Traffic League, ap-pellee in both cases. Joseph E. Keller and W. H. Borghesani, Jr., for South Paterson Trucking Co., Inc., et al.; and William A. Goichman and Joseph C. Bruno for Pennsylvania Public Utility Commission, appellees in No. 511.

       Together with No. 511, Pennsylvania Railroad Co. v. United States et al., also on appeal from the same court.

   Per Curiam.

The motions to affirm are granted and the judgment is affirmed.

Mr. Justice Black and Mr. Justice Harlan are of the opinion that probable jurisdiction should be noted.


text:
    AMERICAN TRUCKING ASSOCIATIONS, INC., et al. v. UNITED STATES et al.
    No. 662.
    Decided January 17, 1966.

      Peter T. Beardsley, Richard R. Sigmon and Harry C. Ames, Jr., for appellants.

      Solicitor General Marshall, Assistant Attorney General Turner, Robert B. Hummel, Robert W. Ginnane and Betty Jo Christian for the United States et al. William M. Moloney, Hugh B. Cox, William H. Allen and James A. Bistline for Atchison, Topeka & Santa Fe Railway Co. et al., appellees.
   Per Curiam.

The motion of the Atchison, Topeka & Santa Fe Railway Company et al. to be added as parties appellee is granted.

The motions to affirm are granted and the judgment is affirmed.


text:
    NEWSPAPER DRIVERS & HANDLERS LOCAL UNION NO. 372, INTERNATIONAL BROTHERHOOD OF TEAMSTERS, CHAUFFEURS, WAREHOUSEMEN & HELPERS OF AMERICA, INC. v. DETROIT NEWSPAPER PUBLISHERS ASSOCIATION et al.
    No. 663.
    Decided January 17, 1966.

      David Previxmt for petitioner.

      Philip T. Van Zile II for Detroit Newspaper Publishers Association et al.; and Solicitor General Marshall, Arnold Ordman, Dominick L. Manoli and Norton J. Come for National Labor Relations Board, respondents.
   Per Curiam.

The petition for a writ of certiorari to the United States Court of Appeals for the Sixth Circuit is granted, the judgments are vacated and the case is remanded to that court with instructions that the case be remanded to the National Labor Relations Board for further consideration in light of American Ship Building Co. v. Labor Board, 380 U. S. 300.


author: Mr. Justice Harlan

text:
    SEGAL, dba SEGAL COTTON PRODUCTS, et al. v. ROCHELLE, TRUSTEE IN BANKRUPTCY.
    No. 44.
    Argued November 17, 1965.
    Decided January 18, 1966.

      Henry Klepak argued the cause and filed a brief for petitioners.

      William J. Rochelle, Jr., argued the cause pro se. With him on the brief was Marvin S. Sloman.

   Mr. Justice Harlan

delivered the opinion of the Court.

This case, presenting a difficult question of bankruptcy-law on which the circuits have differed, arises out of the following facts. On September 27, 1961, voluntary bankruptcy petitions were filed in a federal court in Texas by Gerald Segal, Sam Segal, and their business partnership, Segal Cotton Products. A single trustee, Rochelle, was designated to serve in all three proceedings. After the close of that calendar year, loss-carryback tax refunds were sought and obtained from the United States on behalf of Gerald and Sam Segal under Internal Revenue Code § 172. The losses underlying the refunds had been suffered by the partnership during 1961 prior to the filing of the bankruptcy petitions; the losses were carried back to the years 1959 and 1960 to offset net income on which the Segals had both paid taxes. By agreement, Rochelle deposited the refunds in a special account, and the Segals applied to the referee in bankruptcy to award the refunds to them on the ground that bankruptcy had not passed the refund claims to the trustee.

Concluding that the refund claims had indeed passed under § 70a (5) of the Bankruptcy Act as “property ... which prior to the filing of the petition . . . [the bankrupt] could by any means have transferred,” the referee denied the Segals’ application. The. District Court affirmed the denial, and the Segals and their partnership appealed to the Court of Appeals for the Fifth Circuit. That court too rejected the Segals’ contention.

As the Court of Appeals here recognized, the Court of Appeals for the First Circuit in Fournier v. Rosenblum, 318 F. 2d 525, and the Court of Appeals for the Third Circuit in In re Sussman, 289 F. 2d 76, have both ruled squarely that a bankrupt’s loss-carryback refund claims based on losses in the year of bankruptcy do not pass to the trustee but instead the bankrupt is entitled to the refunds when they are ultimately paid. Concedédly, under § 70a (5) the trustee must acquire the bankrupt’s “property” as of the date the petition is filed and property subsequently acquired belongs to the bankrupt. See note 1, supra; 4 Collier, Bankruptcy ¶ 70.09 (14th ed. 1962). Since the tax laws allow a loss-carryback refund claim to be made only when the year has closed, see I. R. C. §§ 172 (a), (c), 6411, both the First and Third Circuits reasoned that prior to the year’s end a loss-carryback refund claim was too tenuous to be classed as “property” which would pass under § 70a (5). Alternatively, the Third Circuit stated that because of the federal anti-assignment statute, inchoate refund claims were not in any event property “which prior to the filing of the petition . . . [the bankrupt] could by any means have transferred,” as § 70a (5) also requires. Both circuits felt the result to be unfortunate, not least because the very losses generating the refunds often help precipitate the bankruptcy and injury to the creditors, but both believed the statutory language left no option.

After detailed discussion of the problems, the Court of Appeals in this case resolved that the loss-carryback refund claims were both “property” and “transferable” at the time of the bankruptcy petition and hence had passed to the trustee. 336 F. 2d 298. We granted cer-tiorari because of the conflict and the significance of the issue in bankruptcy administration. 380 U. S. 931. Conceding the question to be close, we are persuaded by the reasoning of the Fifth Circuit and we affirm its decision.

I.

We turn first to the question whether on the date the bankruptcy petitions were filed, the potential claims for loss-carryback refunds constituted “property” as § 70a (5) employs that term. Admittedly, in interpreting this section “[i]t is impossible to give any categorical definition to the word ‘property/ nor can we attach to it in certain relations the limitations which would be attached to it in others.” Fisher v. Cushman, 103 F. 860, 864. Whether an item is classed as “property” by the Fifth Amendment’s Just-Compensation Clause or for purposes of a state taxing statute cannot decide hard cases under the Bankruptcy Act, whose own purposes must ultimately govern.

The main thrust of § 70a (5) is to secure for creditors everything of value the bankrupt may possess in alienable or leviable form when he files his petition. To this end the term “property” has been construed most generously and an interest is not outside its reach because it is novel or contingent or because enjoyment must be postponed. E. g., Horton v. Moore, 110 F. 2d 189 (contingent, postponed interest in a trust); Kleinschmidt v. Schroeter, 94 F. 2d 707 (limited interest in future profits of a joint venture); see 3 Remington, Bankruptcy §§ 1177-1269 (Henderson ed. 1957). However, limitations on the term do grow out of other purposes of the Act; one purpose which is highly prominent and is relevant in this case is to leave the bankrupt free after the date of his petition to accumulate new wealth in the future. Accordingly, future wages of the bankrupt do not constitute “property” at the time of bankruptcy nor, analogously, does an intended bequest to him or a promised gift — even though state law might permit all of these to be alienated in advance. E. g., In re Coleman, 87 F. 2d 753; see 4 Collier, Bankruptcy ¶¶ 70.09, 70.27 (14th ed. 1962). Turning to the loss-carryback refund claim in this case, we believe it is sufficiently rooted in the pre-bankruptcy past and so little entangled with the bankrupts’ ability to make an unencumbered fresh start that it should be regarded as “property” under § 70a (5).

Temporally, two key elements pointing toward realization of a refund existed at the time these bankruptcy petitions were filed: taxes had been paid on net income within the past three years, and the year of bankruptcy at that point exhibited a net operating loss. The Segals stress in this Court that under the statutory scheme no refund could be claimed from the Government until the end of the year, but as cases already cited indicate, postponed enjoyment does not disqualify an interest as “property.” That earnings by the bankrupt after filing the petition might diminish or eliminate the loss-carryback refund claim does further qualify the interest, but we have already noted that contingency in the abstract is no bar and the actual risk that the refund claims may be erased is quite far from a certainty. Unlike a pre-bankruptcy promise of a gift or bequest, passing title to the trustee does not make it unlikely the gift or bequest will be effected. Nor does passing the claim hinder the bankrupt from starting out on a clean slate, for any administrative inconvenience to the bankrupt will not be prolonged, see 110 U. Pa. L. Rev., at 279-280, and the bankrupt without a refund claim to preserve has more reason to earn income rather than less.

We are told that if this loss-carryback refund claim is “property,” that label must also attach to loss-carryovers, that is, the application of pre-bankruptcy losses to earnings in future years. Since losses may be carried forward five years and in some cases even seven or ten years, I. R. C. §§ 172 (b)(1) (B)-(D), great hardship for the estate is foreseen by petitioners in keeping it open for this length of time. While in fact the trustee can obviate this detriment to the estate — by selling a contingent claim in some instances or simply forgoing it — inconvenience and hindrance might be caused for the bankrupt individual. Without ruling in any way on a question not before us, it is enough to say that a carryover into post-bankruptcy years can be distinguished conceptually as well as practically. The bankrupts in this case had both prior net income and a net loss when their petitions were filed and apparently would have deserved an immediate refund had their tax year terminated on that date; by contrast, the supposed loss-carryover would still need to be matched in some future year by earnings, earnings that might never eventuate at all.

II.

Having concluded that the loss-carryback refund claims in this case constituted “property” at the time of the bankruptcy petitions, it remains for us to decide whether in addition they were property “which prior to the filing of the petition . ; . [the bankrupt] could by any means have transferred . . . .” The prime obstacle to an affirmative answer is 31 U. S. C. § 203, which renders “absolutely null and void” all transfers of any claim against the United States unless among other conditions the claim has been allowed and the amount ascertained. See n. 3, supra. Plainly since the tax laws calculate the refund only on the full year’s experience after the year has closed, the claims in the present instance could not have been'allowed or ascertained at the time the petitions were filed.

The respondent argues that the transferability requirement of § 70a (5) can be met by relying on the long-established rule that § 203 does not apply to prevent transfers by “operation of law.” See United States v. Aetna Surety Co., 338 U. S. 366, 373-374; Goodman v. Niblack, 102 U. S. 556, 560. The phrasing of § 70a (5), however, suggests that it contemplates a voluntary transfer and is not satisfied simply because property could have been transferred by operation of law, such as by death, bankruptcy, or judicial process. Not only is there practically no form of property that would not be transferable under the broader reading, but such a reading also makes redundant the alternative route for complying with § 70a (5) through showing that the property “might have been levied upon and sold under judicial process . . . .” Admittedly, the Bankruptcy Act defines the word “transfer” in its general definitional section to include at least certain transfers that are “involu ntary,” but legislative history indicates that the introduction of this latter term into the Act 40 years after its framing was not aimed at § 70a (5) at all. See H. R. Rep. No. 1409, 75th Cong., 1st Sess., p. 5; Analysis of H. R. 12889, 74th Cong., 2d Sess., p. 7 (House Judiciary Comm. Print).

Difficulty in defining the term “transfer” is enhanced by the absence of any explanation for Congress’ having made transferability a condition in the 'first place. Bankruptcy Acts prior to the present one enacted in 1898 had no like limitation on the trustee’s succession to property, see Bankruptcy Acts of 1867, § 14, 14 Stat. 522; of 1841, § 3, 5 Stat. 442; and of 1800, §§ 5, 13, 2 Stat. 23, 25, and under the predecessor Act claims against the Government passed without impediment to the trustee. See, e. g., Erwin v. United States, 97 U. S. 392. This history and the chance that the 1898 limitation sought only to respect state policies against alienating property such as a contingent remainder or spendthrift trust fund argue for flatly ignoring the limitation in this instance. See 14 Stan. L. Rev., at 383-386. Nevertheless, we have been shown no legislative history on the point, and an uncertain guess at Congress’ intent provides dubious ground for disregarding its plain language. In any event, we are not prepared to accept this argument, just as we cannot now go beyond a narrow definition of the term “transfer,” in a case in which these points have not been thoroughly briefed by the parties.

The Court of Appeals determined that despite § 203 a sufficient voluntary transfer of the loss-carryback refund claim could have been made prior to bankruptcy to satisfy § 70a (5), and on balance we share this view. In Martin v. National Surety Co., 300 U. S. 588, 596, a unanimous Court held that § 203, in spite of its broad language, “must be interpreted in the light of its purpose to give protection to the Government” so that between the parties effect might still be given to an assignment that failed to comply with the statute. The opinion reasoned that after claims have been collected by the assignor, requiring compliance with the invalid assignment by transfer of the recovery to the assignee presented no danger that the Government might become “embroiled in conflicting claims, with delay and embarrassment and the chance of multiple liability.” 300 U. S., at 594. While other circumstances encouraged Martin to uphold the assignment and this Court has not faced the problem head-on since that time, we find no reason to retreat now from the basic holding in Martin which was both anticipated and followed by a number of other courts, state and federal. See California Bank v. United States Fid. & Guar. Co., 129 F. 2d 751; Royal Indem. Co. v. United States, 93 F.Supp. 891; Leonard v. Whaley, 91 Hun 304, 36 N. Y. Supp. 147; Ann., 12 A. L. R. 2d 460, 468-475 (1950). Among these States is Texas, whose precedents leave little doubt that an assignment of the claims at issue would be enforced in equity in the normal case. Trinity Univ. Ins. Co. v. First State Bank, 143 Tex. 164, 183 S.W.2d 422; see United Hay Co. v. Ford, 124 Tex. 213, 76 S.W.2d 480 (dictum).

It should not be pretended that this contemplated “transfer” is one in the fullest sense that term permits. For example, this Court has ruled that one holding a claim invalidly assigned under § 203 may not sue the Government upon it though he join his assignor as well. United States v. Shannon, 342 U. S. 288. Yet it remains true that a Texas court of equity could and would compel the assignment of any refund received, if indeed it might not try to compel a reluctant assignor to collect the claim or make it over by a valid assignment when that became possible. This, we believe, suffices to make the Segals’ claims transferable within the meaning of § 70a (5). Cf. 4 Collier, Bankruptcy ¶ 70.37, at 1293, n. 6 (14th ed. 1962).

Affirmed.

       30 Stat. 565, as amended, 11 U. S. C. § 110 (a)(5) (1964 ed.). In relevant part that section provides: “(a) The trustee of the estate of a bankrupt . . . shall ... be vested by operation of law with the title of the bankrupt as of the date of the filing of the petition initiating a proceeding under this title, except insofar as it is to property which is held to be exempt, to all of the following kinds of property wherever located ... (5) property, including rights of action, which prior to the filing of the petition he could by any means have transferred or which might have been levied upon and sold under judicial process against him, or otherwise seized, impounded, or sequestered . . . .”

       The wife of Gerald Segal and the estate of the deceased wife of Sam Segal had unsuccessfully urged before the referee their own contingent rights to half the refunds, but review on this issue was not sought.

       Rev. Stat. §3477, as amended, 31 U. S. C. §203 (1964 ed.). The section, so far as relevant, states: “All transfers and assignments made of any claim upon the United States, or of any part or share thereof, or interest therein, whether absolute or conditional, and whatever may be the consideration therefor . . . shall be absolutely null and void, unless they are freely made and executed in the presence of at least two attesting witnesses, after the allowance of such a claim, the ascertainment of the amount due, and the issuing of a warrant for the payment thereof.”

       Considerable commentary has been directed to the problem. Practically all the writers agree that it is desirable for the trustee to receive the refunds although a minority contend that existing law will not permit this result. See Herzog, Bankruptcy Law — Modern Trends, 36 Ref. J. 18 (1962); 60 Nw. U. L. Rev. 122 (1965); 40 Notre Dame Law. 118 (1964); 14 Stan. L. Rev. 380 (1962); 40 Tex. L. Rev. 569 (1962); 42 Tex. L. Rev. 542 (1964); 17 U. Fla. L. Rev. 241 (1964); 16 U. Miami L. Rev. 345 (1961); 110 U. Pa. L. Rev. 275 (1961).

       So far as losses by the bankrupt after filing but before the year’s end might increase the refund — a situation not claimed to be present in this case — the Court of Appeals suggested “[a] proration of the refund in the ratio of the losses before and after the filing date would be indicated . . . .” 336 F. 2d, at 302, n. 5.

       The “choice of law” rules relevant to this question are not in dispute. What would constitute a “transfer” is a matter of federal law. 4 Collier, Bankruptcy ¶ 70.15, at 1035-1036 and n. 25 (14th ed. 1962). Whether an item could have been so transferred is determined generally by state law, save that on rare occasions overriding federal law may control this determination or bear upon it. Id., at 1034^1035 and n. 22. The Segals were Texas residents, the business was apparently based in Texas, and the bankruptcy court was located there; no other State’s law is claimed to be relevant.

       This exception is the simplest reason why § 203 does not interfere with the vesting in the trustee of property coming within § 70a (5), for all transfers under § 70a are explicitly by “operation of law,” see n. 1, supra; but of course property must still qualify as transferable within the meaning of § 70a (5).

       See n. 1, supra. The respondent has not argued that under Texas law the Segals’ inchoate refund claims would be subject to such judicial process, and apparently in Texas the claims’ contingent status would render this argument quite doubtful. See 26 Tex. Jur. 2d, Garnishment § 17 (1961), and cases there cited.

       Bankruptcy Act §1(30), as amended by the Chandler Act, 52 Stat. 842, as amended, 11 U. S. C. § 1 (30) (1964 ed.), pertinently reads: “ ‘Transfer’ shall include the sale and every other and different mode, direct or indirect, of disposing of or of parting with property or with an interest therein or with the possession thereof or of fixing a lien upon property or upon an interest therein, absolutely or conditionally, voluntarily or involuntarily, by or without judicial proceedings, as a conveyance, sale, assignment, payment, pledge, mortgage, lien, encumbrance, gift, security, or otherwise . . . .”


author: Mr. Justice Brennan

text:
    CALIFORNIA v. BUZARD.
    No. 40.
    Argued November 16, 1965.
    Decided January 18, 1966.

      Doris H. Maier, Assistant Attorney General of California, argued the cause for petitioner. With her on the briefs were Thomas C. Lynch, Attorney General, and Edsel W. Haws, Deputy Attorney General.

      Thomas Keister Greer argued the cause for respondent. With him on the brief was C. Ray Robinson.

      Acting Solicitor General Spritzer, Acting Assistant Attorney General Jones and 7. Henry Kutz filed a memorandum for the United States, as amicus curiae, urging reversal.
   Mr. Justice Brennan

delivered the opinion of the Court.

Section 514 of the Soldiers’ and Sailors’ Civil Relief Act of 1940, 56 Stat. 777, as amended, provides a nonresident serviceman present in a State in compliance with military orders with a broad immunity from that State’s personal property and income taxation. Section 514 (2) (b) of the Act further provides that

“the term ‘taxation’ shall include but not be limited to licenses, fees, or excises imposed in respect to motor vehicles or the use thereof: Provided, That the license, fee, or excise required by the State . . . of which the person is a resident or in which he is domiciled has been paid.”

The respondent here, Captain Lyman E. Buzard, was a resident and domiciliary of the State of Washington stationed at Castle Air Force Base in California. He had purchased an Oldsmobile while on temporary duty in Alabama, and had obtained Alabama license plates for it by registering it there. On his return, California refused to allow him to drive the car on California highways with the Alabama plates, and, since he had not registered or obtained license tags in his home State, demanded that he register and obtain license plates in California. When he sought to do so, it was insisted that he pay both the registration fee of $8 imposed by California’s Vehicle Code and the considerably larger “license fee” imposed by its Revenue and Taxation code. The license fee is calculated at “two (2) percent of the market value of the vehicle,” § 10752, and is “imposed ... in lieu of all taxes according to value levied for State or local purposes on vehicles . . . subject to registration under the Vehicle Code . . . .” § 10758. Captain Buzard refused to pay the 2% fee, and was prosecuted and convicted for violating Vehicle Code § 4000, which provides that “[N]o person shall drive . . . any motor vehicle . . . upon a highway unless it is registered and the appropriate fees have been paid under this code.” The conviction, affirmed by the District Court of Appeal, 38 Cal. Rptr. 63, was reversed by the Supreme Court of California, 61 Cal. 2d 833, 395 P. 2d 593. We granted certiorari, 380 U. S. 931, to consider whether § 514 barred California from exacting the 2% tax as a condition of registering and licensing Captain Buzard’s car. We conclude that it did, and affirm.

The California Supreme Court’s reversal of Captain Buzard’s conviction depended on its reading of the words “required by” in the proviso of § 514 (2)(b). In the context of the entire statute and its prior construction, it gave those words the effect of barring the host State from imposing a motor vehicle “license, fee, or excise” unless (1) there was such a tax owing to and assessed by the home State and (2) that tax had not been paid by the serviceman. The mandatory registration statute of Washington, as of most States, imposes the duty to register only as to cars driven on its highways, and Captain Buzard had not driven his car in Washington during the registration year. The court reasoned that there was thus no “license, fee, or excise” owing to and assessed by his home State. Since there was on this view no tax “required by” Washington, the court concluded that California could not impose its tax, even though Captain Buzard had not paid any Washington tax.

If this reading of the phrase “required by” in the proviso were correct, no host State could impose any tax on the licensing or registration of a serviceman’s motor vehicle unless he had not paid taxes actually owing to and assessed by his home State. If the serviceman were under no obligation to his home State, and payment of taxes was a prerequisite of registration or licensing under the host State statutes, the host State authorities might consider themselves precluded from registering and licensing his car. The California court did not confront this consequence of its construction, because it regarded the relevant provisions of California statutes as allowing registration and licensing whether or not taxes were paid; hence, the possibility of unregistered cars using the California highways was thought not to be at issue. The court’s construction, however, pertained to the federal, not the state, statute; if correct, it would similarly restrict the imposition of other host States’ registration and licensing tax provisions, whether or not they are as flexible as California’s. We must therefore consider the California court’s construction in the light of the possibility that in at least some host States, it would permit servicemen to escape registration requirements altogether.

Thus seen, the California court’s construction must be rejected. Although little appears in the legislative history to explain the proviso, Congress was clearly concerned that servicemen stationed away from their home State should not drive unregistered or unlicensed motor vehicles. Every State required in 1944, and requires now, that motor vehicles using its highways be registered and bear license plates. Such requirements are designed to facilitate the identification of vehicle owners and the investigation of accidents, thefts, trafile violations and other violations of law. Commonly, if not universally, the statutes imposing the requirements of registration or licensing also prescribe fees which must be paid to authorize state officials to issue the necessary documents and plates. To assure that servicemen comply with the registration and licensing laws of some State, whether of their home State or the host State, we construe the phrase “license, fee, or excise required by the State . . as equivalent to “license, fee, or excise of the State. . . .” Thus read, the phrase merely indicates Congress’ recognition that, in one form or another, all States have laws governing the registration and licensing of motor vehicles, and that such laws impose certain taxes as conditions thereof. The serviceman who has not registered his car and obtained license plates under the laws “of” his home State, whatever the reason, may be required by the host State to register and license the car under its laws.

The proviso is to be read, at the least, as assuring that § 514 would not have the effect of permitting servicemen to escape the obligation of registering and licensing their motor vehicles. It has been argued that §514(2)(b) also represents a congressional judgment that servicemen should contribute to the costs of highway maintenance, whether at home or where they are stationed, by paying whatever taxes the State of registration may levy for that purpose. We conclude, however, that no such purpose is revealed in the section or its legislative history and that its intent is limited to the purpose of assuring registration. Since at least the 2% tax here involved has been held not essential to that purpose as a matter of state law, we affirm the California Supreme Court’s judgment.

It is plain at the outset that California may collect the 2% tax only if it is a “license, fee, or excise” on a motor vehicle or its use. The very purpose of § 514 in broadly freeing the nonresident serviceman from the obligation to pay property and income taxes was to relieve him of the burden of supporting the governments of the States where he was present solely in compliance with military orders. The statute operates whether or not the home State imposes or assesses such taxes against him. As we said in Dameron v. Brodhead, 345 U. S. 322, 326, “. . . though the evils of potential multiple taxation may have given rise to this provision, Congress appears to have chosen the broader technique of the statute carefully, freeing servicemen from both income and property taxes imposed by any state by virtue of their presence there as a result of military orders. It saved the sole right of taxation to the state of original residence whether or not that state exercised the right.” Motor vehicles were included as personal property covered by the statute. Even if Congress meant to do more by the proviso of § 514 (2) (b) than insure that the car would be registered and licensed in one of the two States, it would be inconsistent with the broad purposes of § 514 to read subsection (2)(b) as allowing the host State to impose taxes other than “licenses, fees, or excises” when the “license, fee, or excise” of the home State is not paid.

Although the Revenue and Taxation Code expressly denominates the tax “a license fee,” § 10751, there is no persuasive evidence Congress meant state labels to be conclusive; therefore, we must decide as a matter of federal law what “licenses, fees, or excises” means in the statute. See Storaasli v. Minnesota, 283 U. S. 57, 62. There is nothing in the legislative history to show that Congress intended a tax not essential to assure registration, such as the California “license fee,” to fall within the category of “licenses, fees, or excises” host States might impose if home State registration was not effected. While it is true that a few state taxes in effect in 1944, like the California 2% “license fee,” were imposed solely for revenue purposes, the great majority of state taxes also served to enforce registration and licensing statutes. No discussion of existing state laws appears in the Committee Reports. There is thus no indication that Congress was aware that any State required that servicemen contribute to the costs of highway maintenance without regard to the relevance of such requirements to the non-revenue purposes of state motor vehicle laws.

The conclusion that Congress lacked information about the California practice does not preclude a determination that it meant to include such taxes, levied only for revenue, as “licenses, fees, or excises.” But in deciding that question in the absence of affirmative indication of congressional meaning, we must consider the overall purpose of § 514 as well as the words of subsection (2)(b). Taxes like the California 2%> “license fee” serve primarily a revenue interest,, narrower in purpose but no different in kind from taxes raised to defray the general expenses of government. It is from the burden of taxes serving such ends that nonresident servicemen were to be freed, in the main, without regard to whether their home States imposed or sought to collect such taxes from them. Dameron v. Brodhead, supra. In recent amendments, Congress has reconfirmed this basic purpose. We do not think that subsection (2)(b) should be read as impinging upon it. Rather, reading the Act, as we must, “with an eye friendly to those who dropped their affairs to answer their country’s call,” Le Maistre v. Leffers, 333 U. S. 1, 6, we conclude that subsection (2)(b) refers only to those taxes which are essential to the functioning of the host State’s licensing and registration laws in their application to the motor vehicles of nonresident servicemen. Whether the 2% tax is within the reach of the federal immunity is thus not to be tested, as California argues, by whether its inclusion frustrates the administration of California’s tax policies. The test, rather, is whether the inclusion would deny the State power to enforce the nonrevenue provisions of state motor vehicle legislation.

Whatever may be the case under the registration and licensing statutes of other States, California authorities have made it clear that the California 2% tax is not imposed as a tax essential to the registration and licensing of the serviceman’s motor vehicle. Not only did the California Supreme Court regard the statutes as permitting registration without payment of the tax, but the District Court of Appeal, in another case growing out of this controversy, expressly held that “[t]he registration statute has an entirely different purpose from the license fee statutes, and it is clearly severable from them.” Buzard v. Justice Court, 198 Cal. App. 2d 814, 817, 18 Cal. Rptr. 348, 349-350. The California Supreme Court also held, in effect, that invalidity of the “license fee” as applied was a valid defense to prosecution under Vehicle Code § 4000. In these circumstances, and since the record is reasonably to be read as showing that Captain Buzard would have registered his Oldsmobile but for the demand for payment of the 2%. tax, the California Supreme Court’s reversal of his conviction is

Affirmed.

       50 U. S. C. App. §574 (2)(b). Section 514, 50 U. S. C. App. § 574, reads in relevant part as follows :
      “(1) For the purposes of taxation in respect of any person, or of his 'personal property, income, or gross income, by any State, . . . such person shall not be deemed to have lost a residence or domicile in any State, . . . solely by reason of being absent therefrom in compliance with military or naval orders, or to have acquired a residence or domicile in, or to have become resident in or a resident of, any other State, . . . while, and solely by reason of being, so absent. For the purposes of taxation in respect of the personal property, income, or gross income of any such person by any State, ... of which such person is not a resident or in which he is not domiciled, . . . personal property shall not be deemed to be located or present in or to have a situs for taxation in such State, Territory, possession, or political subdivision, or district. . . .

      “(2) When used in this section, (a) the term ‘personal property’ shall include tangible and intangible property (including motor vehicles), and (b) the term ‘taxation’ shall include but not be limited to licenses, fees, or excises imposed in respect to motor vehicles or the use thereof: Provided, That the license, fee, or excise required by the State ... of which the person is a resident or in which he is domiciled has been paid.’’ (50 U. S. C. App. § 574.)
      The unitalicized text was enacted in 1942, 56 Stat. 777. Concern whether nonresident servicemen were sufficiently protected from personal property taxation by host States led to a clarifying amendment in 1944, 58 Stat. 722. That amendment gave § 514 its two subsections. The italicized words in subsection (1) are the relevant additions to the original section. Subsection (2) was entirely new.

       The relevant provisions of the Vehicle Code, enacted in 1935, and recodified in 1959, are §§ 4000, 4750 and 9250.

       The relevant provisions of the Revenue and Taxation Code, enacted in 1939, are §§ 10751, 10752 and 10758.

       Captain Buzard did not have sufficient cash to pay the $8 registration fee and the approximately $100 demanded in payment of the 2% tax and penalties. He testified without contradiction that at that time he “didn’t refuse to pay” the tax. “He [the registration officer] said, ‘Do you want to pay it now?’ and I said, T don’t have the money in cash with me, will you accept a check?’ and he said, ‘No.’” It was thereafter that Captain Buzard asserted his contention that the tax could not legally be assessed.

       “Defendant does not contend that California may not, as an exercise of its police power, require him to register his automobile. In fact, his attempt to register the vehicle independently of the payment of fees and penalties was frustrated by the department. Defendant’s position is simply that the Soldiers’ and Sailors’ Civil Relief Act of 1940 . . . prohibits the collection of such fees as an incident to a proper exercise of the police power or otherwise. As a consequence of the narrow question thus raised by the defendant, contentions which look to the purpose of registration in furtherance of proper law enforcement and administration fail to address themselves to the issue.” 61 Cal. 2d, at 835, 395 P. 2d, at 594.
      The statutory scheme severs the 2% tax provision of the Revenue and Taxation Code from the flat registration fee of |8 requirement in the Vehicle Code. Vehicle Code § 4000, under which respondent was prosecuted, refers only to payments of “the appropriate fees . . . under this code” and Vehicle Code § 4750 refers only to “the required fee.” (Emphasis supplied.) The severability clause of the Revenue and Taxation Code, § 26, provides that if application of any provision of that Code to “any person or circumstance, is held invalid . . . the application of the provision to other persons or circumstances, is not affected.”

       H. R. Rep. No. 1514, 78th Cong., 2d Sess.; S. Rep. No. 959, 78th Cong., 2d Sess. There were no debates.

       Contra, Whiting v. City of Portsmouth, 202 Va. 609, 118 S. E. 2d 505; Snapp v. Neal, 250 Miss. 597, 164 So. 2d 752, reversed today, post, p. 397.

       Most States in 1944, as now, conditioned registration and the issuance of license plates upon the payment of a registration fee measured by horsepower, weight or some combination of these factors. See, e. g., Del. Rev. Code 1935, § 5564 (weight); Page’s Ohio Gen. Code (1945 Repl. Vol.), § 6292 (weight); Mo. Rev. Stat. Ann. 1942, §8369 (horsepower); N. J. Rev. Stat. 1937, §39:3-8 (horsepower) ; Conn. Gen. Stat. Rev. 1930, § 1578 (cubic displacement); Iowa Code 1939, § 5008.05 (value and weight); Digest Ark. Stat. 1937, § 6615 (horsepower and weight).
      Other States charged a flat fee. See, e. g., Ore. Comp. Laws 1940, §§ 115-105, 115-106; Ariz. Code 1939, § 66-256; Alaska Comp. Laws 1933, § 3151.
      A few States, such as California, charged both a flat registration fee and a larger, variable “license fee” measured by vehicle value. See, e. g., Cal. Vehicle Code 1935, §§ 140, 148, 370, Cal. Rev. & Tax. Code 1939, §§ 10751-10758; Remington’s Wash. Rev. Stat. (1937 Repl. Vol.), §§6312-16, 6312-102; compare Miss. Code 1942, §§ 9352-19, 9352-03 (certificate of payment of ad valorem tax required of those who must pay it); Wyo. Comp. Stat. 1945, §§ 60-103, 60-104 (flat fee plus ad valorem fee; ad valorem fee to be paid only by persons actually driving in the State).
      The statutes commonly recited that these fees, whatever their measure, were imposed for the privilege of using the State’s highways; the proceeds were usually devoted to highway purposes. Even where property value was the measure of the fees, they were characterized as privilege, not property, taxes. See, e. g., Ingels v. Riley, 5 Cal. 2d 154, 53 P. 2d 939 (1936).

       Indeed, the 2% “license fee” was adopted in 1935 as a substitute for local ad valorem taxation of automobiles, which had proved administratively impractical. Stockwell, Studies in California State Taxation, 1910-1935, at pp. 108-110 (1939); Final Report of the California Tax Commission 102 (1929). Its basis remains the location of the automobile in the State.

       Pub. L. § 87-771, 76 Stat. 768.

       It is not clear from the California courts’ opinions whether they regard the $8 registration fee as a fee essential to the registration and licensing of the motor vehicle. Therefore that question remains open for determination in the state courts.

       See note 5, supra.


text:
    SNAPP v. NEAL, STATE AUDITOR, et al.
    No. 16.
    Argued November 15-16, 1965.
    Decided January 18, 1966.

      Leon D. Hubert, Jr., argued the cause for petitioner. With him on the briefs was Carl J. Felth.

      Martin R. McLendon, Assistant Attorney General of Mississippi, argued the cause for respondents. With him on the brief was Joe T. Patterson, Attorney General.

      Acting Solicitor General Spritzer, Acting Assistant Attorney General Jones and I. Henry Kutz filed a brief for the United States, as amicus curiae, urging reversal.
   Mr. Justice Brennan

delivered the opinion of the Court.

This is a companion case to California v. Buzará, ante, p. 386, decided today. The State of Mississippi levied an ad valorem tax against a house trailer of the petitioner, Sergeant Jesse E. Snapp. Sergeant Snapp was stationed under military orders at Crystal Springs Air Force Base, Mississippi. He bought the trailer in Mississippi and moved it on Mississippi highways to a private trailer park near the Air Force Base where he placed it on movable concrete blocks and used it as a home. He did not register or license the trailer, or pay any taxes on it in his home State of South Carolina. He challenged the Mississippi tax as a tax on his personal property prohibited by the Soldiers’ and Sailors’ Civil Relief Act of 1940, 54 Stat. 1178, as amended in 1944, § 514, 50 U. S. C. App. § 574. The Mississippi Supreme Court sustained the levy on the ground that, as applied to motor vehicles, § 514 (2) (b) conditions the nonresident serviceman’s immunity from its ad valorem tax on the serviceman’s prior payment of the fees imposed by his home State. The court reasoned that since § 514 (2) (b) “stipulates] expressly that the taxation should not be limited to privilege and excise taxes, it necessarily follows that the prohibited tax must include the only other general branch of taxation, that is, ad valorem. It is emphasized that the federal statute is meant to include ad valorem taxes as being one of the taxes for which the serviceman is immune, -provided he complies with the laws of his home state concerning registration of the motor vehicle. If he fails to so comply, as was done in this case at bar, he is no longer entitled to protection of the Act of Congress.” 250 Miss. 597, at 614-615, 164 So. 2d 752, at 760. We granted certiorari, 380 U. S. 931. We reverse on the authority of our holding today in Buzará that the failure to pay the motor vehicle “license, fee, or excise” of the home State entitles the host State only to exact motor vehicle taxes qualifying as “licenses, fees, or excises”; the ad valorem tax, as the Mississippi Supreme Court acknowledged, is not such an exaction. We thus have no occasion to decide whether the Mississippi Supreme Court was correct in holding that the house trailer was a “motor vehicle” within the meaning of §514(2)(b).

Reversed.

       The relevant text of the statute is in California v. Buzard, ante, p. 388, n. 1.