J. Robert D. Smith and Betty Newland Smith v. United States

On Appellee’s Petition for Rehearing

PER CURIAM.

Appellee’s petition for rehearing asserts that we have “disregarded entirely the Government’s argument * * * that the Common Pleas Court of Erie County, Ohio, lacked jurisdiction over the United States” in the quiet title action pending in that court.

The argument said to have been disregarded is to the effect that § 3679(a) of the Internal Revenue Code of 1939 [26 U.S.C. § 3679(a)(1952)] requires the consent of the Commissioner under § 3679(a) (1), or the United States District Court under § 3679(a)(2) and (3), as a condition precedent to the maintenance of the state-court action to quiet title as against the claimed tax lien of the United States.

In our view the plain language of the statute itself disposes of any contention that § 3679 rules state-court jurisdiction over the person of the defendant, United States of America. For the applicability of § 3679(a)(1) is expressly limited to “Any person having a lien upon or any interest in the real estate * * * notice of which has been duly filed of record * * * prior to the filing of notice of the [tax] lien of the United States * * * or any person purchasing the real estate at a sale to satisfy such prior lien or interest * * * .” 53 Stat. 450 (1939).

With equal clarity the language of 28 U.S.C. § 2410, grants sovereign consent to the quiet-title action in the State court by declaring that “the United States may be named a party in any civil action * * * in any State Court having jurisdiction of the subject matter, to quiet title to * * * real or personal property on which the United States has or claims a mortgage or other lien.” 62 Stat. 972 (1948). Admittedly *869the Court of Common Pleas of Erie County, Ohio, is a State court of general jurisdiction, and it is equally beyond dispute that the real property in controversy is situate in Erie County. Presumably, then, the State court has jurisdiction of the subject matter. Cf. Seattle Ass’n of Credit Men v. United States, 9 Cir., 1957, 240 F.2d 906, 908; Wells v. Long, 9 Cir., 1947, 162 F.2d 842.

The petition for rehearing asks “that the opinion be modified to leave to the state court the right to determine its jurisdiction over the United States.” It is unnecessary to modify the opinion in order for the State court to be apprised that this Court does not here decide any challenge which may be made in the State court to jurisdiction “over the United States.”

The petition also urges that the judgment of the District Court should in all events be affirmed “insofar as it upheld the Government’s claim for federal taxes against J. Robert Smith.” In support of this it is argued that; “There is no inherent reason why the adjudication of the liability of the debtor in personam may not be had in some court other than that which has control of the res.” Riehle v. Margolies, 1929, 279 U.S. 218, 224, 49 S.Ct. 310, 313, 73 L.Ed. 669.

Ordinarily, that is so. But here it appears that appellant Betty Smith is the wife and grantee of, and represented by the same attorneys as appellant Robert Smith. Without intending to intimate any view as to the merits of any issue remaining to be litigated, the facts just stated suggest the possibility that a final judgment in personam against Robert might afford the basis for invoking the doctrine of res judicata to work a bar or a collateral estoppel to prevent Betty from litigating the statute of limitations issue in the light of the Attorney General’s letter of July 16, 1947. See First Nat. Bank of Chicago v. Com’r, 7 Cir., 112 F.2d 260, certiorari denied 1940, 311 U.S. 691, 61 S.Ct. 72, 85 L.Ed. 447.

To permit the District Court’s in per-sonam judgment against appellant Robert Smith to become final might well, then, convert into a hollow formality the day in court which the reversal here is intended to gain for appellant Betty Smith. Cf. Coe v. Armour Fertilizer Works, 1915, 237 U.S. 413, 424, 35 S.Ct. 625, 59 L.Ed. 1027; Hart v. United States, 8 Cir., 1953, 207 F.2d 813, certi-orari denied 1954, 347 U.S. 919, 74 S.Ct. 519, 98 L.Ed. 1074.

Appellee’s petition for rehearing is denied.