effect are to be determined solely by the statute and the decisions interpreting it. * * *'
The court further stated, at page 542:
'* * * By the 1913 amendment it intended to extend protection, not to all third parties, but to the three classes of third parties designated therein, namely, mortgagees, purchasers and judgment creditors.
We conclude that in order to be protected, the claimant must show that he is within one of those three classes.'
Under the specific provisions of the statute the tax lien shall not be valid against any of such named parties until notice thereof has been filed as therein provided. However, it has been held that once the lien has been filed in accordance with local State requirements it can only be removed as federal laws permit.
In United States v. City of Greenville, 4 Cir., 118 F.2d 963, 966, in referring to the above statute, the court said:
'Whether the lien provided by the statute is entitled to priority over antecedent liens for taxes duly perfected by states or municipalities, is a question which is not before us and which we need not decide. It would seem, however, that the lien was intended to attach to the property of the taxpayer subject to existing encumbrances; and this is borne out by the provision that it shall not be valid as against mortgagees, purchasers or judgment creditors until notice thereof is duly filed as provided by the act. This interpretation places liens of the federal government and liens of the states on an equal basis for the application of the principle first in time, first in right ( Rankin v. Scott, 12 Wheat. 177, 179, 6 L. Ed. 592), which is the principle ordinarily applied with respect to priority of liens, and the one applied between a tax lien and other liens where the tax lien is not made paramount by statute. 61 C.J. p. 934. * * *' (Emphasis supplied.)
In Adler v. Nicholas, 10 Cir., 166 F.2d 674, 678, the court said:
'The reason why a taxpayer may not ordinarily challenge the validity of a tax claim asserted against him by the Government by an action to enjoin its collection is founded upon public policy and the necessity of prompt payment of such taxes in order to enable the Government to properly function. * * *'
United States v. Ryan, D.C.Minn.1954, 124 F.Supp. 1, 10, was a suit by the United States to establish and enforce federal tax liens and claims, for the foreclosure thereof and to obtain a judgment and decree that defendants had purchased at a mortgage foreclosure sale the real estate subject to liens. This case involved title to property registered under the Torrens system of land registration adopted by the State of Minnesota. The notice of the federal tax liens filed by the United States in the office of the Register of Deeds under debtor's name did not contain a description of the property, and were not memorialized on Torrens certificates applicable to the registered land in accordance with the State statute. Accordingly, the lien of the United States was not a perfected lien in accordance with the laws of the State of Minnesota. The court said, inter alia:
'* * * The mortgage contained a power of sale. Under the laws of the State of Minnesota, a mortgage containing a power of sale may be foreclosed by advertisement. There is nothing in the United States Code which precludes a foreclosure by advertisement. 28 U.S.C.A. § 2410 provides that in any action to foreclose a mortgage the United States may be joined as a party defendant. But there is nothing in this section, or in any section of the United States Code, which prohibits a foreclosure under a power of sale or which provides that the United States will not be bound thereby. The Minnesota Federal Savings and Loan Association was entitled to foreclose by advertisement, and the plaintiff, and all other parties interested in the property, is bound by the foreclosure. This exact question was before the Court in the case of Trust Co. of Texas v. United States, D.C., 3 F.Supp. 683, and the Court held that a mortgage foreclosure under power of sale extinguishes not only the rights of the owner in the property sold, but all subsequent and inferior liens thereon, including the lien of the United States. Therefore, in the instant case, the foreclosure divested the interest of the registered owner, Kenneth Ryan, and the rights of all parties claiming under or through him, including the plaintiff herein.'
No appeal was taken in this case.
Whether the Ryan case and the Miners Savings Bank of Pittston, Pa., case do or do not express conflicting views in relation to tax liens need not concern us here.
I find no evidence of a Congressional sensitivity in relation to claims of the Government predicated on loans made to individuals by various governmental agencies comparable to that evidenced in relation to tax claims, and for the very obvious reason that the latter deals, as above indicated, with a matter of public policy, -- the collection of taxes to enable the Government to function. Certainly what was said in the Ryan case, supra, is pertinent in connection with the problem presented in this case concerning the lien of the United States under a second mortgage created in the course of an ordinary business transaction of an agency of the United States, as to which there is no federal statutory provision conferring any particular sanctity, and which, therefore, is dependent entirely both as to its position and enforcement upon State laws.
No question has been raised by the plaintiff in its complaint as to the correctness of the foreclosure procedure under Pennsylvania law, and it certainly is well established in Pennsylvania that a junior lien held by an individual or a private corporation would be discharged by a foreclosure on a prior first mortgage.
In Pennsylvania the lien of a judgment on bond accompanying a mortgage on realty relates back to the date when the mortgage was recorded.
Plaintiff's motion for judgment on the pleadings will be denied.
Defendants have not moved for summary judgment. However, in the instant case there is no dispute as to the facts. Consequently, after full argument and on consideration of briefs, I am convinced there is no genuine issue as to any material fact. Had defendants made such a motion it is clear that they would be entitled to summary judgment.
Under the circumstances, summary judgment will be entered in favor of the defendants.