The opinion of the court was delivered by: BIUNNO
The U.S. Court of Appeals for the Third Circuit has filed an opinion August 23, 1976, 541 F.2d 275, remanding the case (without deciding the appeal), "with directions to proceed forthwith" so that the parties and the court can address what the opinion designates as a "threshold question", expressed as follows:
To assist the parties in preparing their submissions, but without in any way limiting their scope or depth, the following items are mentioned.
1. Complaint was filed August 15, 1969 and the suit was assigned to the late Judge Robert Shaw on August 18, 1969.
2. Judgment of foreclosure, etc., was filed March 29, 1971. Writ of execution was issued June 18, 1971 and report of sale was filed August 25, 1971. [Note: The writ itself was not returned and filed until September 20, 1972].
3. A motion for deficiency judgment (based on the absence of any bids) was filed November 18, 1971, returnable December 13, 1971.
4. At the hearing on the motion the following colloquies occurred:
(P. 2, ll. 5 to 10): "THE COURT: The property has never been sold, has it? MISS ARCH: There was a writ of execution issued to the United States Marshal and a foreclosure sale was held, but no bidders appeared at the sale. THE COURT: Nobody bid. MISS ARCH: And consequently there was no sale." (P. 3, ll. 8 to 20): "THE COURT: Why don't you try another sale? MISS ARCH: We could do that. THE COURT: I would assume that the property had some value. MISS ARCH: As you know, ordinarily the Veterans Administration or any Federal agencies normally bid in at foreclosure sales of property being foreclosed by them. In this case it was felt by the Veterans Administration that the property had little or no value to it, and consequently it did not bid in at the sale, and there were no third parties interested. THE COURT: You are more or less proceeding on the bond. MISS ARCH: Yes, sir. THE COURT: And the only matter at issue now, I would assume, is the amount of the loss? MISS ARCH: That is correct."
(Tr. p. 8, l. 24 to p. 8, l. 16): "THE COURT: Is there any reason why you can't proceed in this litigation on the bond obligation, on the bond? MISS ARCH: I'm not sure I understand. THE COURT: You have a mortgage and a bond. The bond states the amount of the obligation. Is there any reason you can't proceed with this litigation as a suit on the bond to recover a loss that the government has sustained? MISS ARCH: I thought that was what I was doing here today, but if you want to set a specific trial date for it -- THE COURT: He indicates he has certain equitable defenses. I'm not impressed with the references so far, but I will resolve the doubt in favor of the defendants and direct that this be placed on my next non-jury calendar, and you can bring in whatever evidence you want. MISS ARCH: I take it you are denying my motion without prejudice. THE COURT: Your motion is denied without prejudice."
5. On October 5, 1972 following the death of Judge Shaw, the case was reassigned to Judge Leonard I. Garth.
6. On August 10, 1973, following Judge Garth's appointment to the Court of Appeals, the case was reassigned to Judge Biunno.
7. Trial was held November 14, 1974. After submission of briefs on both sides, the case was decided by opinion dated December 11, 1974.
B. Nature and tenor of federal law.
1. It has been said that "there is no Federal law of mortgages." See, Southland, etc. v. Oil, etc., 248 F. Supp. 520 (D.C.La., 1965); First Federal, etc. v. Zequeira, 288 F. Supp. 384 (D.C.P.R., 1968).