The opinion of the court was delivered by: DUBOIS
JAN E. DuBOIS, UNITED STATES DISTRICT JUDGE
Presently before me in this action for injunctive and declaratory relief is the Motion of one of the defendants, United States of America (hereinafter sometimes referred to as "Government"), for Summary Judgment Pursuant to Fed. R. Civ. P. 56. Oral argument was heard on the Motion on March 31, 1989. The Court has jurisdiction pursuant to 28 U.S.C. §§ 2410(a)(1) and 1340 and 26 U.S.C. §§ 7402 and 7403.
Plaintiff, in her Complaint, asks the Court to declare that the property located at 10610 Evans Street, Philadelphia, Pennsylvania ("the property") is being held by defendant, Albert M. Flitter, the owner of record, in trust for her, that title to the property should be transferred to her, and that a lien on the property held by defendant, United States of America, and a judgment and mortgage held by defendant, American General CDC, both creditors of Albert M. Flitter, are null and void.
It is Ms. Barrish's position that the resulting trust makes her the beneficial owner of the property and that, since none of the encumbrances on the property were authorized by her, they are invalid. The Government's Motion for Summary Judgment is based on the contention that Pennsylvania State law prohibits the plaintiff from asserting the alleged trust as a defense to the Government lien. As a necessary corollary of that argument, if the trust does not provide a defense to the Government lien, it cannot provide a defense to the judgment and mortgage held by American CDC. For the following reasons, the Government's Motion for Summary Judgment will be granted.
On September 17, 1973, defendant Albert M. Flitter purchased the property for $ 33,900.00. The plaintiff Jean Barrish supplied Mr. Flitter with the down payment of $ 6,800.00. The balance of the purchase price, $ 27,100.00, was provided by a mortgage. Ms. Barrish and Mr. Flitter are first cousins. Ms. Barrish alleges that she and Mr. Flitter created a resulting trust at the time of purchase whereby Mr. Flitter agreed to hold the property in trust for Ms. Barrish and further agreed to transfer title to Ms. Barrish on her request. A written declaration of trust was never recorded, executed or even prepared, and Ms. Barrish has never instituted an action for ejectment against Mr. Flitter.
During the years 1980 and 1981, Mr. Flitter incurred Federal Income Tax deficiencies. As a result of these deficiencies, the Government made various tax assessments against him and filed notices of federal tax lien in the Prothonotary's office in Philadelphia County on July 8, 1981, October 8, 1985 and February 13, 1986. The federal tax lien is an encumbrance on all property or rights to property of Mr. Flitter. The Government contends that the lien also encumbers the property in question because Mr. Flitter is the owner of record.
Mr. Flitter filed a petition in bankruptcy on or about February 22, 1982. On or about July 23, 1982, he was discharged from bankruptcy pursuant to Chapter 7 of the Bankruptcy Code.
On May 24, 1982, Mr. Flitter entered into a loan agreement with Finance One Consumer Discount Company for $ 5,475.85, and he secured the loan with a mortgage on the property. That mortgage is now held by defendant American General CDC.
On May 18, 1988, Manufacturers Hanover CDC (now American General CDC) instituted a foreclosure action against Flitter. Manufacturers Hanover CDC obtained a default judgment against Flitter and executed on the judgment on September 1, 1988. A sheriff's sale was scheduled for December 5, 1988, but that sale was postponed pending the resolution of the present action. The Internal Revenue Service issued a final notice of intention to levy on July 18, 1988, but the Service has also agreed to take no action until the present action is resolved.
The Government liens on the property are estimated to be $ 10,097.87 as of January 20, 1989, and the judgment by default on the mortgage was in the amount of $ 8,754.35. On April 2, 1988, the property was appraised at $ 75,000.00.
There is no evidence, nor any allegation, that Finance One Consumer Discount Company, the original mortgagee, had actual knowledge or notice of the resulting trust between Ms. Barrish and Mr. Flitter until after Mr. Flitter mortgaged the property in 1982. Similarly, there is no evidence, nor any allegation, that the Government had any actual notice or knowledge of the resulting trust between Ms. Barrish and Mr. Flitter until after the Notices of Federal Tax Lien had been filed. In addition, for the purposes of this Motion, the Court will assume that Ms. Barrish did not consent to the mortgage in 1982, and that she had no knowledge of the mortgage.
Under Fed. R. Civ. P. 56(c), summary judgment is appropriate if "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Summary judgment is mandatory when "a party . . . fails to make a showing sufficient to establish the existence of an essential element to that party's case, and on which that party ...