United States v. City of Philadelphia, 2609.

• Decision Date: 29 December 1942
• Docket Number: No. 2609.,2609.
• Citation: 48 F. Supp. 379
• Parties: UNITED STATES v. CITY OF PHILADELPHIA et al.
• Court: U.S. District Court — Western District of Pennsylvania

48 F. Supp. 379

UNITED STATES v. CITY OF PHILADELPHIA et al.

No. 2609.

District Court, E. D. Pennsylvania.

December 29, 1942.

Gerald A. Gleeson, U. S. Atty., of Philadelphia, Pa., and Robert S. Tarnay, of Washington, D. C., for plaintiff.

Joseph Ominsky and C. Brewster Rhoads, both of Philadelphia, Pa., for School District of Philadelphia.

Michael D. Hayes, Asst. City Sol., of Philadelphia, Pa., for City of Philadelphia, and Receiver of Taxes.

BARD, District Judge.

This is an action to quiet title to real estate and to have purported tax liens thereon declared void. The action was instituted by the United States against the City of Philadelphia, the School District of Philadelphia and the Receiver of Taxes of Philadelphia to quiet title to several hundred properties in the city of Philadelphia owned by the United States Housing Corporation by adjudicating that taxes, interest and penalties levied against them by the defendants do not constitute liens thereon.

The complaint alleges the following facts: United States Housing Corporation is a corporation organized pursuant to the Act of May 16, 1918, 40 Stat. 550, and the Act of June 4, 1918, 40 Stat. 594, to provide housing for those engaged in national defense during the first world war. In 1918 it acquired the parcels of real estate in the city of Philadelphia which are involved in these proceedings. It then entered into agreements for the sale of houses erected thereon to private persons, but the purchasers defaulted and in no instance was title transferred out of the Housing Corporation. After default the agreements were cancelled in accordance with their terms. Recently individual suits were instituted by the United States in this court to recover possession of and quiet title to each of these properties and in each case judgment was entered quieting title in the United States Housing Corporation, declaring null and void all contracts, conveyances and other instruments purporting to affect the title thereto and perpetually enjoining the defaulting purchaser from ever asserting any title or interest in the premises. Between 1920 and 1942 the defendants City of Philadelphia and School District of Philadelphia levied taxes, interest and penalties against these properties and purport to hold a lien therefor, resulting in a cloud upon the title of the Housing Corporation and rendering it unmarketable. The relief sought is that the court declare the Housing Corporation to be the owner of the properties free and clear of all claims or liens asserted by the defendants and direct the defendants to cancel the liens on their records.

The answers of the defendants admit the acquisition of title to the properties by the United States Housing Corporation and the execution of the agreements of sale to private persons. Defendants deny the cancellation of these agreements. They admit, however, that the plaintiff did institute individual actions to quiet title to each of the properties in question and did obtain judgments as averred in the complaint, but aver that they were not made party to such actions and that hence their interests are unaffected thereby. They admit the levy of taxes, interest and penalties against the properties and assert that they constitute valid liens thereon.

In addition, the answer of the defendant School District contains under a heading of "New Matter" the following allegations: Pursuant to the requirements of law, it provided school facilities for the use of the purchasers and occupants of the properties during the more than twenty years in question. Throughout that time the Housing Corporation neglected to enforce its agreements, collect rents for the occupancy of the properties or take such steps as were necessary for their prompt disposition in accordance with the mandate of Congress. Certain affirmative relief is sought, the nature of which is not material for present purposes.

Upon this state of the pleadings, the plaintiff has moved for summary judgment on the ground that there is no genuine issue as to any material fact and that it is entitled to judgment as a matter of law.

The plaintiff relies upon the established law that property owned by the United States or by an instrumentality of the United States for its use and benefit is not subject to taxation by the states or their subdivisions. Clallam County v. United States, 263 U.S. 341, 44 S. Ct. 121, 68 L.Ed. 328; United States Shipping Board Emergency Fleet Corp. v. Delaware County, Pa., 3 Cir., 17 F.2d 40. That such is the law is unchallenged by the defendants. They...