The opinion of the court was delivered by: CLARY
This is an action to quiet title to real estate brought by the plaintiff against various defendants including the United States of America. The matter is presently before the Court on cross motions for summary judgment filed by the plaintiff and the defendant, United States of America.
This action was originally instituted in the Court of Common Pleas of Delaware County, Commonwealth of Pennsylvania, and was removed to this court upon a petition for said removal by the United States of America under the authority granted by 28 U.S.C.A. § 1444. Originally the complaint named 9 defendants and service was made upon all said 9 defendants by the Sheriff of Delaware County. With the exception of the Borough of Folcroft and the United States of America, no appearances were entered or answers filed on behalf of the remaining defendants. The facts giving rise to this action are as follows:
Prior to May 1, 1940, two lost situated in the Borough of Folcroft, Delaware County, Commonwealth of Pennsylvania, known as lots Nos. 237 and 238 Charmount Avenue, (hereinafter collectively referred to as the 'property') were owned by Frank Briggs, Jr. Because of a delinquency in real estate taxes, on that date the property was sold at public sale by the Treasurer of Delaware County to the Commissioners of the said County for the sum of $ 30.18, the amount of the delinquency. A deed from the Treasurer to the Commissioners was thereafter recorded in the Office of the Recorder of Deeds of Delaware County. On May 27, 1947 the Commissioners of Delaware County sold the property at public sale to William A. Mousley for the sum of $ 215.29. The deed evidencing this transaction was never recorded as provided by the Pennsylvania Statute, but a copy thereof was found filed among the records of the said County Commissioners.
On October 19, 1949 the United States of America filed a Federal Tax Lien against W. Ashton Mousley in the amount of $ 65,739.92 in Federal Tax Lien Docket No. 1, Page 71, in the office of the Prothonotary of Delaware County. The defendant, United States of America, as part of its motion for summary judgment, filed an affidavit on information and belief that W. Ashton Mousley and William A. Mousley were one and the same person. Since no one has seriously controverted that assertion, for the purposes of this opinion the Court will consider that they are one and the same person.
Approximately one month after the filing of the aforesaid lien, on November 14, 1949, the Treasurer of Delaware County sold the property at public sale, not as the property of William A. Mousley but as the property of Frank Briggs, Jr., to one William Reiter for the sum of $ 36.87, the amount due for delinquent Delaware County 1947 real estate taxes. The deed evidencing this transaction was recorded on November 27, 1951 in Deed Book No. 1481, Page 363, in the Office of the Recorder of Deeds of Delaware County. William Reiter died intestate on November 6, 1950, and his interests in the said property by adjudication of the Orphans Court of Delaware County vested in his widow, Jennie Reiter, plaintiff herein.
It is the contention of the plaintiff that the lien of the United States did not attach to the property because Mousley's ownership of the property never appeared of record in the Office of the Recorder of Deeds and that by purchase plaintiff's predecessor in title took it free and clear of the Government's lien. On the other hand, the Government asserts in its affidavit that in the records of Delaware County there was evidence of the sale to Mousley; that a minimal amount of investigation in connection with the tax sales would have disclosed Mousley's ownership and, therefore, the Court should determine that the plaintiff had constructive notice of the existence of the lien and that the property was purchased subject to the Government's lien.
In the recent case in Matter of Litt, D.C.1955, 128 F.Supp. 34, this Court had occasion to review the scope of Sections 3670 and 3672 of the Internal Revenue Code, 26 U.S.C.A. §§ 3670, 3672. It was therein determined that it was necessary for any litigant asserting the invalidity of a Federal tax lien to bring himself within the scope of the exempted classes (mortgagee, pledgee, purchaser or judgment creditor) and have such status before the filing of the Government's lien in accordance with the laws of the state or territory in which the property subject to the lien is situated.
Section 3670 and 3672(a) of the Internal Revenue Code were reenacted as Section 6321 and 6323(a) of the Internal Revenue Code of 1954, Public Law 591, approved August 16, 1954, and read as follows:
§ 3670. Property subject to lien.
'If any person liable to pay any tax neglects or refuses to pay the same after demand, the amount (including any interests, penalty, additional amount, or addition to such tax, together with any costs that may accrue in addition thereto) shall be a lien in favor of the United States upon all property and rights to property, whether real or personal, belonging to such person.'
§ 3672(a). Invalidity of lien without notice.
'Such lien shall not be valid as against any mortgagee, pledgee, purchaser, or judgment creditor until notice thereof has been filed by the collector --
(1) Under State or Territorial laws.
'In accordance with the law of the State or Territory in which the property subject to the lien is situated, whenever the State or Territory has by law ...