Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

First National Bank and Trust Co. v. Macgarvie

Decided: November 13, 1956.

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



For modification and affirmance -- Chief Justice Vanderbilt, and Justices Heher, Wachenfeld, Burling and Jacobs. For reversal -- None. The opinion of the court was delivered by Burling, J.

Burling

The First National Bank and Trust Company, Woodbury, New Jersey, held a first mortgage on property of defendant MacGarvie securing a sum of nearly $30,000. Default occurred and foreclosure proceedings were initiated by the first mortgagee. There were other parties who had liens encumbering the property at this time, in the following order of priority: Robbins, a judgment creditor (approximately $1,400); the United States of America by virtue of a federal tax lien (approximately $21,000); the Atco National Bank, a second mortgagee (approximately $7,000).

Thereafter and prior to the foreclosure sale Atco National Bank purchased the first mortgage of the First National,

and itself prosecuted the foreclosure. Sale was had and the property bought in by Atco for $100 on April 22, 1955. It received a deed and went into possession and has paid some $1,284 in taxes and insurance to protect the property.

On April 20, 1956 the United States tendered $106 (representing the purchase price at the sale and interest thereon) to Atco and demanded a conveyance of the property. The invitation was declined. A motion was addressed to the Superior Court, Chancery Division, for an order and decree directing that the property be vested in the United States in view of this exercise of its right of redemption. The motion was denied after hearing before Judge Goldmann, 41 N.J. Super. 151 (Ch. 1956). An appeal was addressed to the Superior Court, Appellate Division, and we have certified the cause prior to a review below.

There is no issue on the joinder of the United States as a defendant in the foreclosure suit. The procedural preliminaries were taken in view of 28 U.S.C.A., sec. 2410 (1950). This section constitutes a waiver of sovereign immunity by the United States in any action brought to quiet title or to foreclose a mortgage or other lien on real or personal property on which the United States has or claims a mortgage or other lien. Gerth v. United States, 132 F. Supp. 894 (D.C.S.D. Cal. 1955); cf. Wells v. Long, 162 F.2d 842 (9 Cir. 1947); Van Keuren v. United States, 138 N.J. Eq. 66 (Ch. 1946) (the latter two cases involved the substantially similar antecedent of section 2410 (28 U.S.C.A., secs. 901-905 (1940 ed.)).

Of significance here is subsection (c) of section 2410:

"(c) A judicial sale in such action or suit shall have the same effect respecting the discharge of the property from liens and encumbrances held by the United States as may be provided with respect to such matters by the local law of the place where the property is situated. A sale to satisfy a lien inferior to one of the United States, shall be made subject to and without disturbing the lien of the United States, unless the United States consents that the property may be sold free of its lien and the proceeds divided as the parties may be entitled. 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 way of affirmative relief, for the foreclosure of its own lien and where property is sold to satisfy a first lien held by the United States, the United States may bid at the sale of such sum, not exceeding the amount of its claim with expenses of sale, as may be directed by the head of the department or agency of the United States which has charge of the administration of the laws in respect of which the claim of the United States arises." (Emphasis supplied.)

(The United States did not seek "affirmative relief" in the instant case)

The United States, through its attorneys, contended below and asserts here, that by virtue of the statutory sentence emphasized above it is entitled to redeem the property from the foreclosure sale by paying the purchaser Atco National Bank the price bid and paid at the sale. We are told that redemption refers either to the equitable right before sale or the statutory right after sale; that in the former case the right is exercised by tendering the amount due on the prior encumbrances while in statutory redemption it is only necessary to pay the ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.