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First National Bank & Trust Co. v. Macgarvie

Decided: May 7, 1956.

FIRST NATIONAL BANK & TRUST COMPANY, WOODBURY, NEW JERSEY, A NATIONAL BANKING CORPORATION, PLAINTIFF,
v.
JAMES B. MACGARVIE, THE ATCO NATIONAL BANK, A NATIONAL BANKING CORPORATION, EDWARD ROBBINS, SR., THE STATE OF NEW JERSEY, AND THE UNITED STATES OF AMERICA, DEFENDANTS



Goldmann, J.s.c. (orally).

Goldmann

[41 NJSuper Page 152] This matter comes before the court on the motion of the United States of America for a determination that it has properly exercised its right of redemption from the mortgage foreclosure sale previously held in this matter, and therefore is entitled to the ownership and possession of the premises described in the foreclosed

mortgage. It also asks for an order that the Atco National Bank execute a conveyance for said premises to it. The bank resists the motion on the ground the Government failed properly to exercise its right of redemption in that it submitted insufficient tender, and asks the court to enter an order determining that the Government's rights in the matter have expired.

The facts are much as Mr. Heine stated them to be. Back in October 1954 the First National Bank and Trust Company of Woodbury instituted an action to foreclose a first mortgage which had been given to it by the defendant MacGarvie, to secure the sum of almost $30,000, with interest at 5% annually, covering lands in Camden County. Nothing had ever been paid on the principal, and there was interest due from August 1953, in addition to certain taxes which MacGarvie had failed to pay. Named as defendants in the foreclosure action were a judgment creditor, Robbins, with a lien of $1,412; then subsequent to him the United States of America, which had a federal tax lien against MacGarvie of over $21,000; and the fourth lienor in order, Atco National Bank, which had a mortgage on part of the lands in question for $7,000, subsequently reduced to judgment.

The United States was properly served in accordance with 28 U.S.C.A., paragraph 2410. Neither the Federal Government nor Atco National Bank requested judgment fixing the amount due on their respective liens. Judgment was therefore entered in favor of the First National Bank and Trust Company of Woodbury in the sum of $32,306.05, with interest from February 7, 1955, and also costs and interest thereon. The judgment stated there was due to Robbins $1,333.70, with interest and costs.

What happened then was that in March 1955 Atco National Bank paid to First National Bank and Trust Company of Woodbury the sum of $33,740.68 in consideration of the assignment to it of the mortgage held by First National, and in further consideration of an assignment to it of all the bank's right, title and interest in the foreclosure action, including the right of Atco to continue the prosecution of

the action in the name of First National. This assignment was filed with the Superior Court Clerk, the foreclosure action was continued, execution issued on the judgment directed to the Camden County Sheriff, and on April 22, 1955, following proper advertisement, he cried the sale to satisfy the liens of plaintiff and of Robbins.

The sale was made and Atco National Bank purchased in the name of its assignor, the First National Bank and Trust Company of Woodbury, for $100, the one and only bid of the sale.

On April 25, 1955 First National assigned its bid to Atco, and on May 12 following the sheriff delivered his deed to Atco. The deed was recorded and Atco went into possession. Since then it has paid some $1,284 in taxes and insurance to protect the property.

On April 22, 1956, which would be exactly one year after the sheriff's sale, there was due to Atco National Bank under the mortgage -- for principal, interest, costs, sheriff's fees, taxes and insurance -- a sum which has been given to me as $36,535. Two days before, on April 20, 1956, the Government had tendered to Atco in redemption of the property the sum of $100, the amount bid at the sheriff's sale, and $6 interest for one year, and demanded a conveyance of the land in question. Both Atco and the First National Bank and Trust Company of Woodbury rejected the tender.

The Government now comes into this court under 28 U.S.C.A., paragraph 2410, which, among other things, provides in subsection (c) that:

"* * * Where a sale of real estate is made to satisfy a lien prior to that of the United States, the United States shall have one year from the date of sale within which to redeem. In any case where the debt owing the United States is due, the United States may ask, by ...


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