Before BIGGS, Chief Judge, and MCLAUGHLIN and HASTIE, Circuit Judges.
MCLAUGHLIN, Circuit Judge.
On January 28, 1948, Martha M. Berg and her husband, J. D. Berg, conveyed to George H. and Gladys M. Parkman 175 acres in Moon Township, Pennsylvania. The Parkmans gave back a purchase money mortgage in the sum of $45,000 which was duly recorded and a mortgage bond in the sum of $90,000. Thereafter the property was conveyed a number of times back and forth between the Parkmans and Mountain Engineering Company, a corporation controlled by the Parkmans; these conveyances were all subject to the purchase money mortgage.
During a period when the corporation owned the property certain federal tax liens attached to it and were recorded. Thereafter an additional federal tax lien arising from a tax liability of the Parkmans attached to the property and was recorded at a time when the Parkmans held the property. The tax liens were all junior to the mortgage.
Payment of the mortgage was defaulted and the surviving mortgagee on June 7, 1955 caused a confession of judgment to be entered on the bond. The judgment was for $43,135 plus interest from June 1, 1955. Subsequently a writ of fieri facias for the sale of the property issued to the sheriff; upon application, however, the sale was postponed and the surviving mortgagee petitioned the Pennsylvania Court of Common Pleas for a rule upon the United States to show cause why it should not be made a party to the foreclosure proceedings. The rule was granted and served upon the United States. No answer was filed, so eighty-nine days after service the United States was made a party to the proceedings. During the intervening time William J. Brosnan and Francis H. Jacob had acquired the surviving mortgagee's interest.
The sheriff held the sale of the property on January 3, 1956; it was bid in by Brosnan and Jacob for $6,203 and, it is presumed, the discharge of the mortgage indebtedness. The amount of the bid went to satisfy costs of the sale, and for various outstanding local taxes.
On January 3, 1957, one year after the sale the government attempted to redeem the property*fn1 through the tender by an agent to Brosnan of a check for $6,575.42, which represented the amount bid at the sheriff's sale, plus interest. Brosnan refused it as totally inadequate to effect a redemption. Brosnan and Jacob have since claimed that an effective redemption would have required a tender of $55,591.28, the amount of their asserted interest in the property.
The United States subsequently brought this action under § 7403, Internal Revenue Code of 1954,*fn2 to enforce its lien. The district court thus was presented with the question of whether the government lien was still enforcible.
The court held, D.C.W.D. Pa. 1958, 164 F. Supp. 357, that the United States had not been made a party to the foreclosure proceedings in the state court by the attempted invocation in that proceeding of 28 U.S.C. § 2410 (1952) because no attempt was made to bring in the United States until after judgment had been entered on the confession of judgment. But the court went on to hold that the lien had nonetheless been divested simply by reason of its being a junior lien.
The government argues that § 7403, Internal Revenue Code 1954, footnote 2 supra, directs and requires that a decree for sale of the property in question be entered here. It is plain, however, that a sale may be decreed only "* * * where a claim or interest of the United States * * * is established." Thus the issue presented is whether after the sale on execution following the confession of judgment the United States still held any interest in the property.
For its claim that it continued to hold an interest in the property, the government's basic premise is that once a lien has been established by federal law it remains until it is satisfied or becomes unenforcible by lapse of time.*fn3 The government asserts that the lien can be satisfied other than by payment only by compliance with one of a number of other federal statutes.*fn4 It is urged that when these statutes are taken together a plain intent on the part of the Congress to furnish exclusive means for removal of federal liens is made out. Since assertedly none of these provisions has previously been complied with, the government concludes that the lien remains for enforcement in this proceeding.
The claim advanced by the government that state law in no way controls federal tax liens which have attached to property is too broad,*fn5 the cases cited for this proposition stand more narrowly for the tenet that the priority of a lien of the United States for unpaid taxes relative to other liens always involves a federal question.*fn6 In this case there is no question of priority, it being conceded that the liens of the United States were junior.
For its conclusion that the federal statutes make out a scheme by which Congress intended to furnish the only means for extinguishing even junior liens held by the United States, the government has relied heavily on the legislative history of what is now 28 U.S.C. § 2410 (1952).*fn7 The House Report*fn8 states that without the legislation involved there is no way in which a cloud upon title caused by a junior lien held by the United States can be removed when a prior mortgage is being foreclosed, since there is no statute to authorize making the United States a party to such a proceeding. The government would conclude from this that a junior lien in favor of the United States remains unaffected when foreclosure of the senior lien is had without making the United States party thereto.
But this court has already held that the purpose of § 2410 was to permit the joining of the United States in foreclosure proceedings on a more senior lien in jurisdictions where joinder would be necessary for estopping the junior lienor from thereafter asserting his claim. United States v. Cless, 3 Cir., 1958, 254 F.2d 590. The Cless case decided that where, as in Pennsylvania, such joinder was not necessary to divest a junior lien, the United States did not have to be joined in order to divest its junior lien. We conclude that the government's position is not convincing and that Congress never intended government-held junior liens not to be subject to divestment by foreclosure proceedings carried out in the state courts without joinder of the United States.*fn9 Thus state law must be looked to in order ...