This is a proceeding incident to a partition action in which the United States of America (the "Government") seeks to obtain the money deposited in court representing the interest of defendant Frederick Weh, Jr. in his share of the proceeds from the sale. N.J.S. 2 A:56-19 and 20. Plaintiff asserts an encumbrance on the fund and challenges the priority of the Government's claim.
On June 1, 1943 plaintiff and defendant Frederick Weh, Jr., then husband and wife, acquired title as tenants by the entirety to their home, a one-family dwelling and garage, in the Borough of Roselle, Union County, New Jersey. On June 15, 1953 they were divorced and thereby became tenants in common of the premises.
In January 1959 plaintiff instituted this partition action. The property could not be partitioned, a judgment for sale was entered, and the premises were sold for $9,500. The judgment for sale recited various judgments and liens of
record against defendant Frederick Weh, Jr., directed that they attach to defendant's interest in the proceeds of the sale, and that their amounts and priorities be reserved for determination by the court. There is now on deposit with the clerk of this court the sum of $4,725, representing defendant's interest in the proceeds subject to the judgments and liens.
In order to preserve the property and to protect defendant's interest therein, plaintiff paid off the mortgage, the property taxes, and the costs of repairs. On May 15, 1958 an order (judgment) was entered in the matrimonial proceeding modifying the alimony award, and requiring defendant to "pay to the plaintiff the sum of $2,495.30 at the rate of $10.00 per week as reimbursement to her for previous payments which she made for the benefit of the defendant with respect to premises 506 East Second Avenue, Roselle, New Jersey, owned by them as tenants in common since the judgment of divorce became final, which said total sum is made up of the following items: payments of one-half of principal of mortgage held by Harmonia Savings and Loan Association, $1,426.33; one-half of the repairs to property, $501.47; one-half of taxes paid on property, $567.50." Defendant has paid the sum of $1,360, leaving a balance due of $1,135.30.
It is stipulated that since May 15, 1958 the plaintiff has expended the further sum of $797.16 as follows: mortgage payments, $175.08; property taxes, $507.08; repairs, $75; and property liability insurance, $40. Plaintiff contends that one-half of the total sum, namely $398.58, as well as the balance of $1,135.30 owing on the May 15, 1958 order, making a total of $1,533.88, is chargeable to the interest of Frederick Weh, Jr. and prior in lien to the claims of the Government.
The Government applies for an order to pay it the sum of $4,725. It asserts by affidavit that it is the holder of a judgment against Frederick Weh, Jr., dated August 2, 1949, and various tax liens against him, the first being filed on August 31, 1949. Additional tax liens were filed on December
13, 1949, August 18, 1950, November 24, 1950, January 18, 1951, August 22, 1951, April 2, 1956 and August 16, 1956. The aggregate claims of the Government exceed the sum of $4,725.
Plaintiff contends that since she received no instructions from her former husband as to how the payments made under the order of May 15, 1958 should be applied, she has the right to apply them first to property taxes, then to maintenance and the balance toward payment on account of her mortgage. The Government contends that the plaintiff is estopped from itemizing the various expenditures recited in the order of May 15, 1958 since they were merged therein. Accordingly it is urged that the federal judgment and tax liens filed in 1949, 1950, 1951 and 1956 have priority. The Government argues that the applicable principle is: "The first in time is the first in right." United States v. City of New Britain , 347 U.S. 81, 74 S. Ct. 367, 370, 98 L. Ed. 520 (1954).
THE PRIORITY OF "HARMONIA'S" ...