Defendants-appellants Jerrie M. Smith (Smith) and Michael Harrison (Harrison) (appellants) appeal the district court’s judgment declaring void their interest and -claim to' a parcel of land that they purchased at a tax sale, which sale the district court held to be void in its' entirety. We reverse.
Facts and Proceedings Below
On March 24, 1988, Metroplex Petroleum, Inc. (Metroplex), in Richardson, Texas, executed and delivered to First National Bank of Richardson (FNB) a promissory note in the principal sum of $266,400 (the Note), and a deed of trust (the Deed of Trust), on a tract of real property located in Grand Prairie, Texas (the Property), to secure the' Note. Because of default in payment, the Note was duly accelerated and full payment was demanded by FNB on June 23,1989. Payment was not made.
On June 30,1989, FNB was declared insolvent and the Federal Deposit Insurance Corporation (FDIC) was appointed as Receiver for the failed institution. The Note and Deed of Trust passed to the FDIC at that time.
In 1991, the City of Grand Prairie and the Grand Prairie Independent School District brought suit in a Texas court (the “tax suit”) against Metroplex for delinquent ad valorem taxes and sought to foreclose their statutory tax liens against the Property. Dallas County intervened as a plaintiff. FNB, the Internal Revenue Service (IRS), and the State of *734 Texas were named as in rem defendants. The FDIC was not named as a party in any capacity. Citation on “Comerica, Formerly First National Bank of Richardson” was served on Comerica Bank-Texas (Comerica) due, apparently, to the impression, which was mistaken, that Comerica had succeeded to certain of the rights and assets of FNB, including the Note and Deed of Trust. The FDIC, which was the actual successor-in-interest to FNB, was not joined as a party to the tax suit and did not consent to the foreclosure or subsequent sale of the Property.
On November 8, 1991, judgment in the tax suit was rendered in favor of the plaintiffs (“the Taxing Units”). 1 Judgment was rendered against defendant Metroplex in the amount of $8,797 in delinquent taxes, penalties, and interest for the years 1989 to 1991. 2 The judgment foreclosed the tax liens and ordered sale of the property by the Dallas County Sheriff.
On March 5, 1992, Smith purchased the property for slightly more than $10,000, a sum in excess of the judgment amount, at a tax sale conducted by the sheriff (hereinafter the “tax sale”). Appellants have been in possession of the Property since that time.
On March 22, 1996, the FDIC filed suit in the court below against appellants, Metro-plex, and the Taxing Units seeking: 1) a declaration that the tax suit judgment and sheriffs sale were void in their entirety; 2) a declaration that appellants’ claimed ownership of the property by virtue of their purchase at the tax sale was void and extinguished; 3) a judgment against Metroplex for the unpaid balance of the Note; and 4) a judgment foreclosing the Deed of Trust lien against the Property. Metroplex, though served, did not appear or answer. Appellants answered, asserting the affirmative defenses of the statute of limitations and adverse possession under color of title. While the suit was pending in the district court, the FDIC transferred the Note and Deed of Trust to First State Bank — Keene (“FSB”), which was substituted as plaintiff in the district court.
The case was tried to the bench on stipulated facts. The district court found that FNB and the FDIC had not been joined as parties to the tax suit. The court held that the FDIC was a necessary party and that failure to join the FDIC rendered the tax suit and subsequent tax sale entirely void. The court further held that appellants had not gained title by adverse possession because they did not claim under color of title. Additionally, although the court found that the suit had not been filed by the FDIC within the applicable limitations period, it held that appellants lacked standing to assert the limitations defense. Accordingly, judgment was rendered in favor of FSB. The judgment, inter alia, declared the sheriffs sale null and void, ordered the Taxing Units to pay Smith the amount they had received from him for the Property at the tax sale, and ordered foreclosure and sale of the Property in satisfaction of the judgment. 3
In the proceeding before the district court, the Taxing Units did not challenge the court’s holding that the tax sale was void, and they have not appealed.
Discussion
I. Limitations
Appellants’ principal defense to FSB’s attempted foreclosure was that the note was barred by limitations. It is clear that
if
the note was barred by limitations and
if
appellants had standing to assert limitations, that then FSB could not enforce its lien against the Property. The district court correctly ruled that the applicable limitations
*735
period was that provided by 12 U.S.C. § 1821 (d)(14) (A) (i), namely six years, or the applicable period under state law, whichever is longer. The six-year period begins to run on the date the cause of action accrues or the date the FDIC is appointed receiver, whichever is later. 12 U.S.C. § 1821(d)(14)(B).
See Davidson v. FDIC,
“The defense of limitations is generally a personal privilege of the debtor. The right to invoke the bar of limitations against a remedy passes, however, to one who lawfully acquires property or any right on which the remedy operates, such as a lien-holder or subsequent purchaser.” (Footnotes omitted).
See also Miller, Hiersche, Martens & Hayward P.C. v. Bent Tree National Bank,
The district court held that appellants lacked standing to plead limitations because they had no interest in the Property, and were not in privity with Metroplex, because the tax suit judgment and the tax sale were wholly void and transferred no interest whatever in the Property to Smith. That then is the central issue in the case.
II. Effect of Tax Sale
FSB, as the FDIC’s successor-in-interest, contends that the tax suit judgment was fatally defective because the FDIC was not made a party to the tax suit. Consequently, they argue, the subsequent tax sale was entirely void and thus had no effect whatsoever as to any of the various interests in the Property. As a result, FSB asserts that the district court was correct in holding that appellants lacked standing to assert a statute of limitations defense. Appellants argue to the contrary that, despite the omission of the FDIC as a party defendant, the tax suit and subsequent sale were valid and binding as to the parties which were properly before the court in that suit. Accordingly, they argue that they had standing as successors-in-interest to Metroplex to assert that the limitations period had run on the note and, consequently, that FSB could no longer exercise its power of sale under the deed of trust.
On appeal, FSB and appellants rely on both Texas and federal law as supporting their respective positions, proffering alternative arguments based on each.
As noted, the central issue on this appeal is whether the district court erred in holding that the appellants lacked standing to assert a limitations defense against FSB. Resolution *736 of this question, however, requires determination of whether the tax suit judgment and the subsequent tax sale were entirely void, because appellants’ principal claim to standing to assert limitations is based on their having obtained some interest in the Property at the tax sale, thereby placing them in privity with Metroplex.
A. State Law Arguments
Appellants claim that under Texas law “although a lienholder who is not made a party is not bound by the judgment rendered, the judgment is valid and operative as against those who were actually made parties.” Thus appellants argue that the tax suit judgment was valid as to Metroplex, the owner of the Property, and the tax sale conveyed such interest as Metroplex possessed. Appellants also assert that because the FDIC was not made a party to the tax suit, it is not bound by the judgment and, consequently, no action taken pursuant to the tax suit judgment had the effect of disturbing the FDIC’s lien interest. Thus, appellants claim that the tax suit judgment was dispositive of Metroplex’s interest in the Property, which was conveyed to them pursuant to the tax sale, but that because the FDIC was not party to the tax suit, the judgment did not affect its lien interest, and, accordingly, that they took the Property subject to the FDIC’s lien, just as if Metroplex had conveyed it to them subject to the lien.
FSB disputes appellants’ interpretation of the applicable Texas law, claiming that the FDIC was a “necessary party” to the tax suit and, therefore, that failure to join the FDIC renders the judgment entered pursuant to the tax suit void in its entirety. According to FSB, the Texas rule is that “as between the tax sale purchaser and the interested person who was not made a party to the tax suit, the tax sale purchaser’s interest is void.” Accordingly, FSB contends that appellants’ interest in the Property is necessarily void.
B. Federal Law Arguments
Turning to the parties’ federal law arguments, both appellants and FSB cite 12 U.S.C. § 1825(b)(2) as supporting their respective positions. Section 1825(b)(2), enacted as part of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA), Pub.L. No. 107-173, 108 Stat. 183 (1989), provides that “[n]o property of the [FDIC] shall be subject to levy, attachment, garnishment, foreclosure, or sale without the consent of the [FDIC], nor shall any involuntary lien attach to the property of the [FDIC].”
Appellants argue, inter alia, that § 1825(b)(2) relates only to the FDIC’s lien, not to Metroplex’s “equity.” Appellants also argue that, by its express terms, § 1825(b)(2) prevented foreclosure of the FDIC’s lien interest irrespective of whether the FDIC was made a party to the tax suit. Accordingly, they argue, the FDIC could not have been a “necessary party” to the tax suit because, pursuant to the prohibition of § 1825(b)(2), the state court lacked authority to extinguish the FDIC’s lien.
FSB contests appellants’ interpretation and application of § 1825(b)(2). It also argues that the tax suit may well have been invalid pursuant to § 1825(b)(2) because the FDIC did not consent to the tax sale, which purported to vest “good and perfect title” in the purchaser, extinguishing all prior lien interests pursuant to the authority of Texas state law. See Tex. Tax Code Ann. § 34.01(d) (Vernon 1992).
C.Analysis of Texas Law
With respect to the Texas law arguments, both the case law and authorities cited favor the position of the appellants. As FSB concedes, some of the relevant cases are difficult to reconcile, but the substantial majority of the cases hold that failure to join a lienholder in a tax foreclosure suit does not render a subsequent judgment void as to the parties who were joined in the suit. As stated in 69 Tex. Jur.3d, Taxation, § 461 (1989), a tax deed “vests good and perfect title” in the purchaser “to [such] interest owned by the defendant,” but is “subject to the rights of any person who had some interest in the property and therefore should have been joined as a party in the suit but was not so joined.”
The majority of relevant cases state the same rule. For example, in
Tabasco Consol. Indep. School Dist. v. Reyna’s Estate,
“provides and contemplates that all proper persons, including lienholders, shall be joined in suits for the collection of taxes against property in this state. It is likewise true that the failure on the part of the tax collecting authority to join all parties interested in the property in the suit shall be no defense or constitute any reason to delay judgment or action against those owners who may be properly before the court.” Id. at 798,
This rule was explained by the fact that “[tjhose owners who are not parties defendant are not concluded, and their rights are not injured by the judgment entered.” Id.
This appears to be essentially the same rule as is stated in the cases relied on by FSB as well. For example, in
Bussan v. Donald,
“strangers to a judgment, that is, [persons] who are not parties or privy to a proceeding, may, when their interests are adversely affected by the judgment, impeach it whenever it is attempted to be enforced against them.”244 S.W.2d at 273 (citation omitted).
As is implied by this passage, the judgment is not wholly void, but simply provides a basis upon which a lienholder may collaterally attack the judgment if it is sought to be enforced against him. As further stated in
Bussan,
“the prior lien holder ..., not being a party to [the foreclosure] suit, was not bound thereby,” and “could attack it collaterally when appellants asserted it against his title.”
In sum, “[a] judgment in a tax suit is not void because all parties who own an interest in the property are not made parties. Such judgment foreclosing the tax lien is good as against the parties in interest joined in the suit, and parties not joined are not bound by any such judgment.”
Loper v. Meshaw Lumber Co.,
D. Analysis of Federal Law
The fundamental issue implicated by the federal law arguments on appeal involves whether, and to what extent, § 1825(b)(2) is incompatible with the Texas state laws governing foreclosure of tax liens against real property and the subsequent conveyance of that property at a tax sale.
In one of our most recent pronouncements on this question,
FDIC v. Lee,
In
Trembling Prairie Land Co. v. Verspoor,
In both Lee and Verspoor, we summarized § 1825(b)(2) as requiring that the FDIC must consent to any “deprivation” of property initiated by the state. This simple articulation of the undergirding principle of § 1825(b) accurately represents the analytical thread that runs through the line of cases interpreting this provision. Obviously, the FDIC cannot be “deprived” of any property interest it never owned. Here, the FDIC never had more than a lien; it never had the right to prevent transfer of the Property (or an interest therein) subject to its lien; and it never had the right to prevent Metroplex, or apy party holding an interest in the Property under Metroplex, from pleading the statute of limitations once the statute had run.
For example, in
Irving Indep. School Dist. v. Packard Properties,
Because the term “property” has come to be somewhat broadly construed in the context of § 1825(b)(2), there exists a vast number of potential interests sufficient to constitute “property” under that provision. This makes the requirement that there be an actual “deprivation” crucial in analyzing whether a particular action taken under state law violates § 1825(b)(2). The reasoning of
*739
Irving
illustrates our point as well as the distinction we seek to make. Absent some actual devaluation of, or loss of rights in, FDIC “property,” there is no “deprivation of property” and § 1825(b)(2) is not violated under
Lee.
In
Lee,
the state court held that under Louisiana law, redemption of the property by the FDIC would only be allowed if the FDIC reimbursed the tax sale purchaser for repairs and maintenance of the property.
Similarly, in
Verspoor
the FDIC succeeded to a right of redemption, which a tax sale purchaser sought to extinguish by means of a suit to quiet title.
In addition, we note that in the two cases in which we have considered tax sales under Texas law,
Matagorda County v. Russell Law,
In the case at bar, the FDIC’s “property” in question consists of the FDIC’s mortgage on the Property. Unlike the actions taken pursuant to state law in Lee and Verspoor, the foreclosure and tax sale under Texas law did not extinguish the FDIC’s lien because the FDIC was not joined in the tax suit. The FDIC’s lien was not devalued, extinguished, or disturbed in any manner. The appellants took the Property subject to the FDIC lien, and the FDIC’s ability to enforce its rights under the lien were not prejudiced thereby. It had all the same rights following the judgment in the tax suit and the consequent tax sale as it did before the tax suit was filed. The FDIC could then have exercised its power of sale under the deed of trust against appellants just as easily as it could have prior to the tax suit judgment and tax sale. The FDIC was in no different position following the tax suit and tax sale than it would have been had there been no such tax suit and tax sale and Metroplex had in March 1992 conveyed the Property (without the knowledge or consent of the FDIC) to Smith subject to the FDIC’s lien. Consequently, we hold that the tax sale did not constitute a deprivation of the FDIC’s property, and thus did not violate § 1825(b)(2). Accordingly, we conclude that the tax sale was not “null and void” in its entirety and did effectively convey such interest in the Property as was held by Metroplex, the mortgagor-owner, to the appellants, subject to the FDIC’s lien.
Conclusion
Having concluded that the tax sale which transferred title from Metroplex to the appellants was not void in its entirety, either under Texas state law or pursuant to the restrictions of 12 U.S.C. § 1825(b)(2), we hold that the district court erred in holding that appellants lacked standing to assert that the six-year statute of limitations provided by FIRREA had run. As the stipulated facts clearly demonstrate that the six-year limitations period had run months prior to the filing of this suit, the FDIC’s lien against the Property likewise had become unenforceable *740 and was barred when the suit was filed. Accordingly, the judgment of the district court is reversed and the cause is remanded for entry of judgment consistent with this opinion.
REVERSED and REMANDED.
Notes
. The plaintiffs (Taxing Units) were the City of Grand Prairie, Grand Prairie Independent School District, and Dallas County.
. As to the in rem defendants, the judgment recited that Comerica filed an answer, but did not appear, and disclaimed any interest in the property; Metroplex did not answer or appear; the IRS did not answer or appear; and the State of Texas answered, disclaiming any interest in the property.
.The district court's judgment ordered that Me-troplex pay FSB $491,769.96; that the Taxing Units reimburse Smith the amount they received from him for the Property at the tax sale; that FSB have foreclosure on its lien; and that the Property be sold at a sheriff's sale in satisfaction of the judgment.
. “Since the statute of limitations is a plea personal to the debtor, it follows that the statute of limitations may not be availed of by one who is a stranger to the debtor, standing in no relation of privity of estate with him. On the other hand, where there is a privity between a person who could, if sued, plead the statute and the party offering to plead it, the latter may plead it to save his property. Such is the case with heirs, mortgagees, cotenants joining in a mortgage, and transferees of mortgaged property.’’ Id. (footnotes omitted).
.
See Whitehead v. Granbury Indep. School Dist.,
45 S.W.2d421 (Tex.Civ.App.—Fort Worth 1931), in which the court stated that lienholders are proper parties, but, "that the failure to implead one or more of the interested parties did not deprive the trial court of power to render a valid judgment as to those actually impleaded.”
Id.
at 423 (citation omitted).
Cf. Coakley v. Reising,