B-143322, JUL. 14, 1960

B-143322: Jul 14, 1960

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MEADE: REFERENCE IS MADE TO YOUR LETTER OF MAY 27. IT IS STATED IN YOUR LETTER. ON THE PREMISES WAS EXECUTED BY RONALD TAWNEY AND HELEN TAWNEY. WHICH MORTGAGE WAS FILED FOR RECORD ON NOVEMBER 21. IT IS STATED FURTHER. THE ECONOMY SAVINGS AND LOAN COMPANY AT WHICH TIME THERE WAS A BALANCE DUE OF $8. THAT ANSWERS AND CROSS-PETITIONS WERE FILED BY THE EMCHS. THE UNITED STATES WAS AWARDED JUDGMENT AGAINST THE TAWNEYS ON A COGNOVIT NOTE IN THE AMOUNT OF $1. THAT A CERTIFICATE OF JUDGMENT WAS FILED IN THE OFFICE OF THE CLERK OF COURTS OF WAYNE COUNTY. IT IS STATED THAT THE FORECLOSURE PROCEEDING WAS LIS PENDENS WHEN THE JUDGMENT IN FAVOR OF THE UNITED STATES WAS ENTERED. THAT SINCE THERE IS SOME QUESTION AS TO WHETHER OR NOT THE DOCTRINE OF LIS PENDENS IS APPLICABLE TO THE UNITED STATES A SUPPLEMENTAL PETITION WAS FILED IN THE FORECLOSURE PROCEEDING ON MAY 25.

B-143322, JUL. 14, 1960

TO MR. ROY B. MEADE:

REFERENCE IS MADE TO YOUR LETTER OF MAY 27, 1960, REQUESTING ON BEHALF OF THE CONTINENTAL ASSURANCE COMPANY OF CHICAGO, ILLINOIS, THAT A JUNIOR LIEN IN FAVOR OF THE UNITED STATES AGAINST THE PREMISES IN THE CITY OF ORRVILLE, COUNTY OF WAYNE, OHIO, KNOWN AS INLOT NO. 822, BE RELEASED AS PROVIDED FOR UNDER 28 U.S.C. 2410 (D).

IT IS STATED IN YOUR LETTER, IN EFFECT, THAT ON JULY 27, 1955, A MORTGAGE, IN THE ORIGINAL AMOUNT OF $9,050, ON THE PREMISES WAS EXECUTED BY RONALD TAWNEY AND HELEN TAWNEY, HUSBAND AND WIFE, IN FAVOR OF THE NATIONAL HOMES ACCEPTANCE CORPORATION, AND RECORDED ON AUGUST 24, 1955; THAT BY AN ASSIGNMENT DATED DECEMBER 14, 1955, FILED FOR RECORD ON DECEMBER 28, 1955, NATIONAL HOMES ACCEPTANCE CORPORATION SOLD AND ASSIGNED THIS MORTGAGE, AND THE NOTE SECURED THEREBY, TO CONTINENTAL; THAT ON OCTOBER 15, 1959, THE TAWNEYS EXECUTED A SECOND MORTGAGE IN FAVOR OF PAUL J. EMCH IN THE ORIGINAL AMOUNT OF $487, WHICH MORTGAGE WAS FILED FOR RECORD ON NOVEMBER 21, 1959, AND THAT ON JANUARY 15, 1960, THE WOOSTER MUNICIPAL COURT, WOOSTER, OHIO, AWARDED A JUDGMENT AGAINST THE TAWNEYS IN THE AMOUNT OF $780.67 WITH INTEREST AND COSTS IN FAVOR OF THE ECONOMY SAVINGS AND LOAN COMPANY, EAST MARKET STREET, ORRVILLE, OHIO, THE CERTIFICATE OF JUDGMENT BEING FILED ON JANUARY 15, 1960. IT IS STATED FURTHER, IN EFFECT, THAT ON MARCH 19, 1960, CONTINENTAL FILED A FORECLOSURE PETITION AGAINST THE TAWNEYS, THE EMCHS, AND THE ECONOMY SAVINGS AND LOAN COMPANY AT WHICH TIME THERE WAS A BALANCE DUE OF $8,266.04 WITH INTEREST AT 4 1/2 PERCENT PER ANNUM FROM FEBRUARY 24, 1960, ON THE FIRST MORTGAGE; THAT ANSWERS AND CROSS-PETITIONS WERE FILED BY THE EMCHS, AND THE ECONOMY SAVINGS AND LOAN COMPANY, THE SECOND AND THIRD LIEN HOLDERS, RESPECTIVELY; THAT ON APRIL 20, 1960, IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF OHIO, EASTERN DIVISION, THE UNITED STATES WAS AWARDED JUDGMENT AGAINST THE TAWNEYS ON A COGNOVIT NOTE IN THE AMOUNT OF $1,509.67 WITH INTEREST AT 6 PERCENT PER ANNUM FROM APRIL 20, 1960, TOGETHER WITH COURT COST OF $35; AND THAT A CERTIFICATE OF JUDGMENT WAS FILED IN THE OFFICE OF THE CLERK OF COURTS OF WAYNE COUNTY, OHIO, RECORDED IN LIEN DOCKET 3, PAGE 121, AS CERTIFICATE NO. 484. ALSO, IT IS STATED THAT THE FORECLOSURE PROCEEDING WAS LIS PENDENS WHEN THE JUDGMENT IN FAVOR OF THE UNITED STATES WAS ENTERED, BUT THAT SINCE THERE IS SOME QUESTION AS TO WHETHER OR NOT THE DOCTRINE OF LIS PENDENS IS APPLICABLE TO THE UNITED STATES A SUPPLEMENTAL PETITION WAS FILED IN THE FORECLOSURE PROCEEDING ON MAY 25, 1960, MAKING THE UNITED STATES AN ADDITIONAL PARTY DEFENDANT, AND THAT SERVICE OF SUMMONS HAS BEEN STARTED ON THE SUPPLEMENTAL PETITION, IN ACCORDANCE WITH 28 U.S.C. 2510 (B).

SECTION 2410 (D), TITLE 28 U.S. CODE, PROVIDES AS FOLLOWS:

"WHENEVER ANY PERSON HAS A LIEN UPON ANY REAL OR PERSONAL PROPERTY, DUTY RECORDED IN THE JURISDICTION IN WHICH THE PROPERTY IS LOCATED, AND A JUNIOR LIEN, OTHER THAN A TAX LIEN, IN FAVOR OF THE UNITED STATES ATTACHES TO SUCH PROPERTY, SUCH PERSON MAY MAKE A WRITTEN REQUEST TO THE OFFICER CHARGED WITH THE ADMINISTRATION OF THE LAWS IN RESPECT OF WHICH THE LIEN OF THE UNITED STATES ARISES, TO HAVE THE SAME EXTINGUISHED. IF AFTER APPROPRIATE INVESTIGATION, IT APPEARS TO SUCH OFFICER THAT THE PROCEEDS FROM THE SALE OF THE PROPERTY WOULD BE INSUFFICIENT TO WHOLLY OR PARTLY SATISFY THE LIEN OF THE UNITED STATES, OR THAT THE CLAIM OF THE UNITED STATES HAS BEEN SATISFIED OR BY LAPSE OF TIME OR OTHERWISE HAS BECOME UNENFORCEABLE, SUCH OFFICER SHALL SO REPORT TO THE COMPTROLLER GENERAL WHO MAY ISSUE A CERTIFICATE RELEASING THE PROPERTY FROM SUCH LIEN.'

THE FOREGOING STATUTE REQUIRES AS CONDITIONS FOR EXECUTION OF A CERTIFICATE OF RELEASE BY THE COMPTROLLER GENERAL (1) THAT A WRITTEN APPLICATION THEREFOR BY A SENIOR LIEN HOLDER BE MADE TO THE OFFICER CHARGED WITH THE ADMINISTRATION OF THE LAWS IN RESPECT OF WHICH THE LIEN OF THE UNITED STATES ARISES, (2) THAT THE LIEN OF THE UNITED STATES ON SUCH PROPERTY BE JUNIOR AND OTHER THAN A TAX LIEN, AND (3) THAT A FINDING AND REPORT THEREOF BE MADE BY THE OFFICER OF THE UNITED STATES TO WHOM THE APPLICATION IS MADE THAT THE PROCEEDS FROM THE SALE OF PROPERTY WOULD BE INSUFFICIENT TO WHOLLY OR PARTLY SATISFY THE LIEN OF THE UNITED STATES, OR THAT THE CLAIM OF THE UNITED STATES HAS BEEN SATISFIED, OR BY LAPSE OF TIME OR OTHERWISE HAS BECOME UNENFORCEABLE.

THUS, BEFORE A CERTIFICATE OF RELEASE MAY BE EXECUTED UNDER THE STATUTE, IT IS NECESSARY THAT THE OFFICER CHARGED WITH THE ADMINISTRATION OF THE LAWS, IN RESPECT OF WHICH THE LIEN OF THE UNITED STATES ARISES, REPORT TO US THAT HE HAS FOUND THAT THE PROCEEDS FROM THE SALE OF THE PROPERTY WOULD BE INSUFFICIENT TO WHOLLY OR PARTLY SATISFY THE LIEN OF THE UNITED STATES, OR THAT THE CLAIM OF THE UNITED STATES HAS BEEN SATISFIED, OR BY LAPSE OF TIME OR OTHERWISE HAS BECOME UNENFORCEABLE. IN THIS INSTANCE, THE OFFICER CHARGED WITH THE ADMINISTRATION OF THE LAWS, IN RESPECT OF WHICH THE LIEN OF THE UNITED STATES AROSE, WHO IS NOT IDENTIFIED IN YOUR LETTER, HAS MADE NO SUCH FINDING. IT GOES WITHOUT SAYING, OF COURSE, THAT IF THE APPLICANT SHOULD BECOME THE OWNER OF THE PROPERTY THROUGH FORECLOSURE PROCEEDINGS OR OTHERWISE IT WOULD THEN NO LONGER BE THE SENIOR LIENHOLDER AND, IN SUCH EVENT, WE WOULD NOT BE JUSTIFIED IN EXECUTING THE REQUESTED CERTIFICATE OF RELEASE EVEN IF THE OTHER STATUTORY REQUIREMENTS SHOULD BE SATISFIED.

ACCORDINGLY, SINCE THE STATUTORY CONDITIONS HAVE NOT BEEN COMPLIED WITH, WE ARE WITHOUT AUTHORITY TO EXECUTE THE REQUESTED CERTIFICATE. 17 COMP. GEN. 180.

IN VIEW OF THE FOREGOING, ANY FURTHER CORRESPONDENCE IN THE MATTER SHOULD BE DIRECTED TO THE AGENCY UNDER WHICH THE GOVERNMENT'S LIEN AROSE.