B-127345, DEC. 21, 1959

B-127345, DEC. 21, 1959

TO STONE, AGERTON, PARKER AND SNABARD:

REFERENCE IS MADE TO YOUR LETTER OF JUNE 10, 1959, TO MR. PHILIP MCGAHEY, JR., C/O UNITED STATES ATTORNEY'S OFFICE, FORT WORTH, TEXAS, WHICH WAS FORWARDED HERE, REGARDING THE REQUEST OF THE FROST NATIONAL BANK OF FORT WORTH, TEXAS, MADE BY YOU AS ATTORNEYS FOR THE BANK, FOR A RELEASE UNDER 28 U.S.C. 2410 (D) OF THE JUNIOR LIEN OF THE UNITED STATES ON CERTAIN PROPERTY IN PARKDALE GARDENS ADDITION TO THE CITY OF FORT WORTH, TARRANT COUNTY, TEXAS, OWNED BY JAMES R. ORR AND NELL ORR, HIS WIFE. THE GOVERNMENT LIEN ATTACHED TO THE AFOREMENTIONED PROPERTY PURSUANT TO A JUDGMENT IN THE AMOUNT OF $797.89 PLUS INTEREST AND COURT COSTS RENDERED IN FAVOR OF THE UNITED STATES ON JULY 15, 1958, BY THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF TEXAS, FORT WORTH DIVISION, IN THE CASE ENTITLED UNITED STATES V. JAMES B. ORR.

THE RECORD SHOWS THAT ON SEPTEMBER 6, 1955, ROSIE AUSTIN CONVEYED THE PROPERTY INVOLVED TO JAMES R. ORR AND WIFE, NELL ORR BY WARRANTY DEED, RESERVING IN THE DEED A VENDOR'S LIEN TO SECURE PAYMENT OF A PROMISSORY NOTE IN THE AMOUNT OF $6,500, PAYABLE TO ROSIE AUSTIN OR ORDER, WHICH JAMES R. AND NELL ORR GAVE AS PART OF THE PURCHASE PRICE FOR THE PROPERTY. THE NOTE WAS ADDITIONALLY SECURED BY A DEED OF TRUST EXECUTED BY JAMES R. AND NELL ORR IN FAVOR OF ROSIE AUSTIN. ON SEPTEMBER 13, 1955, ROSIE AUSTIN AND HUSBAND, T. M. AUSTIN, SOLD, TRANSFERRED AND ASSIGNED THE PROMISSORY NOTE AND THE VENDOR'S LIEN AND THE DEED OF TRUST LIEN SECURING THE NOTE TO APPLIANCE WHOLESALERS, INC.

THE RECORD ALSO SHOWS THAT ON SEPTEMBER 26, 1955, APPLIANCE WHOLESALERS, INC., PLEDGED THE AFOREMENTIONED PROMISSORY NOTE, VENDOR'S LIEN, AND DEED OF TRUST LIEN TO THE FROST NATIONAL BANK AS SECURITY FOR PAYMENT OF A PROMISSORY NOTE IN THE AMOUNT OF $5,000 WHICH APPLIANCE WHOLESALERS, INC. EXECUTED AND DELIVERED TO THE FROST NATIONAL BANK. APPLIANCE WHOLESALERS, INC. HAVING FAILED TO MAKE ANY PAYMENT ON ITS PROMISSORY NOTE TO THE FROST NATIONAL BANK FOR APPROXIMATELY 21 MONTHS, THE FROST NATIONAL BANK, ON MARCH 26, 1959, EXERCISED ITS OPTION AND SOLD AT PRIVATE SALE THE PROMISSORY NOTE EXECUTED BY JAMES R. AND NELL ORR DATED SEPTEMBER 6, 1955, TOGETHER WITH THE VENDOR'S LIEN AND DEED OF TRUST LIEN, TO THE BANK FOR $5,426.03, WHICH SUM WAS PAID BY THE FROST NATIONAL BANK BY THE CREDITING OF THAT AMOUNT ON THE PROMISSORY NOTE EXECUTED BY APPLIANCE WHOLESALERS, INC.

IN ADDITION, THE RECORD SHOWS THAT THE FROST NATIONAL BANK, ON JUNE 2, 1959, FILED SUIT FOR DEBT AND FORECLOSURE AGAINST JAMES R. ORR AND WIFE, NELL ORR, INTERNATIONAL TELEPHONE AND TELEGRAPH CORPORATION, AND THE UNITED STATES OF AMERICA, IN THE DISTRICT COURT OF TARRANT COUNTY, TEXAS, CAUSE NO. 1277-C, TO RECOVER THE AMOUNT OWING ON THE PROMISSORY NOTE AND FOR FORECLOSURE OF THE VENDOR'S LIEN AND THE DEED OF TRUST LIEN ON THE PROPERTY INVOLVED. ON AUGUST 25, 1959, THE DISTRICT COURT RENDERED FINAL JUDGMENT IN FAVOR OF THE FROST NATIONAL BANK IN THE AMOUNT OF $8,316.30, AND ORDERED THAT THE BANK HAVE FORECLOSURE OF THE VENDOR'S LIEN AND THE DEED OF TRUST LIEN. THE RECORD ALSO SHOWS THAT ON NOVEMBER 3, 1959, THE FROST NATIONAL BANK PURCHASED THE PROPERTY INVOLVED AT FORECLOSURE SALE FOR $3,000 AND TITLE TO THE PROPERTY IS NOW VESTED IN THE FROST NATIONAL BANK.

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

"WHENEVER ANY PERSON HAS A LIEN UPON ANY REAL OR PERSONAL PROPERTY, DULY 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.'

OUR OFFICE HAS NO AUTHORITY TO ISSUE A CERTIFICATE OF RELEASE OF LIENS OF THE UNITED STATES UNDER THE ABOVE-QUOTED STATUTORY PROVISION EXCEPT UPON THE CONDITIONS EXPRESSLY STIPULATED THEREIN. THE STATUTE DOES NOT VEST IN APPLICANTS A RIGHT TO A CERTIFICATE OF RELEASE BUT PROVIDES THAT THE COMPTROLLER GENERAL "MAY" ISSUE SUCH A CERTIFICATE OF RELEASE UPON A SHOWING OF CERTAIN CONDITIONS. THE STATUTE WOULD CLEARLY SEEM TO CONTEMPLATE THAT SUCH CONDITIONS WILL CONTINUE TO EXIST DOWN TO THE TIME THE CERTIFICATE OF RELEASE IS ISSUED, AND IT MAY NOT BE VIEWED AS AUTHORIZING A RELEASE WHERE THE STIPULATED CONDITIONS CHANGE BEFORE A RELEASE IS ISSUED, SO THAT THE SITUATION WHICH THE STATUTE WAS INTENDED TO REMEDY NO LONGER EXISTS.

ONE OF THE CONDITIONS EXPRESSLY STIPULATED IS THAT THE APPLICANT "HAS A LIEN" UPON THE PROPERTY. WHERE, AS IN THE PRESENT CASE, THE APPLICANT BECOMES THE OWNER OF THE PROPERTY BEFORE THE ISSUANCE OF THE RELEASE, BY VIRTUE OF A FORECLOSURE SALE UNDER A SENIOR LIEN, THE APPLICANT NO LONGER HAS A LIEN UPON THE PROPERTY, BUT IS THE OWNER, AND, GENERALLY, ANY JUNIOR LIENS OF THE UNITED STATES ARE EXTINGUISHED BY THE FORECLOSURE UNDER THE SENIOR LIEN, AND NO LONGER ATTACH TO THE PROPERTY. IN THE INSTANT CASE THE AFOREMENTIONED CONDITION STIPULATED IN THE STATUTE NO LONGER EXISTS, AND, IN THE ABSENCE OF SUCH CONDITION, OUR OFFICE IS WITHOUT AUTHORITY TO ISSUE A CERTIFICATE OF RELEASE.

THEREFORE, THE REQUEST OF THE FROST NATIONAL BANK FOR A CERTIFICATE OF RELEASE IN THE INSTANT CASE MUST BE, AND IS, DENIED.