190 A. 193 | Pa. Super. Ct. | 1936
Argued October 23, 1936. This appeal has to do with the distribution of the proceeds of sale of real estate in Philadelphia, sold by the Sheriff of Philadelphia County under a writ of levari facias issuing out of the Court of Common Pleas No. 1 of that county. The question is, whether the City and School District of Philadelphia are entitled, out of the proceeds, to the interest and penalties which accrued on the taxes for 1931 on the real estate sold in execution.
The law, as respects the levy and collection of taxes in the City of Philadelphia and the imposition of interest and penalties on taxes not paid within a certain period or periods, is summarized, as far as is necessary for this case, in PennsylvaniaCompany, Trustee, v. Zussman,
The District Court of the United States, being satisfied that the mortgage on the real estate exceeded its reasonable market value and that no equity remained for the general creditors to be protected by the receiver, authorized the trustee under the mortgage to foreclose the mortgage, which it did by scire facias proceedings in the state court (Common Pleas No. 1, Philadelphia County), resulting in the sale under writ of levari facias aforesaid.
Appellant asserts that the Circuit Court of Appeals for the Third Circuit — which includes the Eastern District of Pennsylvania, — has ruled, in McCormick v. Puritan Coal MiningCo., 41 Fed. (2) 213, — and that said ruling is binding on the District Court for the Eastern District of Pennsylvania —, that after property of an insolvent corporation has passed into the hands of receivers appointed by the District Court, interest or penalties for the non-payment of taxes are not allowable on claims against the funds in the hands of the receivers; and seeks to apply this ruling to the distribution of funds raised by execution and sale of the insolvent corporation's property under process issuing out of a state court, and in the hands of the officer of the state court, which funds never came into the possession or control of the receiver appointed by the federal court.
The appellees contend that the decision of the Circuit Court of Appeals for the Third Circuit relied on by appellant is opposed to the weight of authority in the federal courts and not in harmony with recent decisions of the Supreme Court of the United States, and there is much support for this contention in the *562 decisions,2 but we think that question is not controlling or even important in the circumstances here present.
The District Court of the United States did not authorize or approve this sheriff's sale. It had no power to do either. All it did was to relinquish its control over the subject matter, so that the trustee was at liberty to foreclose the mortgage. This the latter did by proceedings in the state court. The fund was raised by process issuing out of the state court, upon a sale by the sheriff of Philadelphia County, an officer of the state court. It is distributable by the state court in accordance with the laws of this Commonwealth. Whether the decision in McCormickv. Puritan Coal Mining Co., supra, correctly states the law as respects the distribution of funds in the hands of a federalreceiver, pursuant to the orders of a federal court, or not, it is contrary to the well established law of this State, and cannot be applied to the distribution by a state court of funds raised by state process, merely because a receiver was appointed of the defendant corporation by a federal court, where that court has relinquished control of the property by permitting the mortgage creditor to foreclose its mortgage. The latest pronouncement of the Supreme Court of the United States, in Pufahl, Receiver v.Parks' Estate,
We are, therefore, of opinion that the learned President Judge of the court below correctly ruled that the funds impounded in the custody of the sheriff were distributable to the City and School District of Philadelphia.
The orders are severally affirmed.