Before LUMBARD, Circuit Judge, and GALSTON and ANDERSON, District Judges.
This is an appeal by a receiver, appointed by the district court, from a judgment entered below on October 17, 1958, dismissing the receiver's action to recover certain real estate taxes paid to the City of New York during the time that the receiver was in possession of the property taxed. The non-suit was, however, without prejudice and based upon the prematurity of the action.
There appears to be no dispute as to the material facts herein; indeed the action was submitted to the court below upon an agreed statement of facts. In brief, appellant-receiver was appointed in an income tax foreclosure proceeding against one Fred Voges, individually, Voges Manufacturing Co., Inc., the Estate of Frederick Voges and Radar Holding Corporation. The receiver took possession of the taxpayers' assets on November 2, 1953. Included among the assets were a factory building and two garage buildings located in the Borough of Queens, City and State of New York, in which the Voges corporation conducted its manufacturing business as a tenant. At the time the receiver was appointed, the premises were owned by Radar Holding Corporation.It is not disputed that the government never asserted a claim for unpaid taxes against this corporation. Fred Voges was the sole stockholder of Radar holding Corporation; he also owned fifty percent of the stock of Voges Manufacturing Co., Inc. The remaining fifty percent of said stock was owned by the Estate of Frederick Voges. The real estate taxes on the above property are the subject matter of the within appeal.
The background of the receivership and of the action brought by the receiver against the City of New York is briefly as follows:
In 1951 assessments for unpaid income taxes were filed by the government against Fred Voges, Voges Manufacturing Co., Inc. and the Estate of Frederick Voges. In November of that year Fred Voges delivered to the Collector of Internal Revenue a stock certificate endorsed in blank, representing all the authorized and outstanding stock of Radar Holding Corporation. He also delivered a stock certificate representing his half interest in Voges Manufacturing Co., Inc.
In April of 1952, as further security of the payment of income taxes, the Collector of Internal Revenue obtained a mortgage on the property of Radar Holding Corporation in the sum of $300,000. The value of the property covered by the mortgage is concededly not in excess of that amount.
Later, in November of 1953, the government commenced an action to foreclose its tax liens. The receiver was appointed as aforesaid and the receivership has continued since with the receiver remaining in possession of the assets up to the time of this appeal.
Pursuant to a judgment entered in the government's action in April of 1955, the tax liabilities of the defendants were fixed as follows: Fred W. Voges, $155,735; Voges Manufacturing Co., Inc., $68,928; Estate of Frederick Voges, $159,911; Radar Holding Corporation was not found to owe any taxes.
None of the assets was sold to satisfy the judgment.
Pursuant to a decree of the District Court entered in November of 1956, a quit claim deed was executed and delivered to the appellant as receiver of Radar Holding Corporation, which deed was never recorded, and other plans were embodied looking to the liquidation of the tax liabilities.
Further, pursuant to the decree, in April of 1957, a first mortgage was placed against the real estate in question in the amount of $255,798.07. The net proceeds of the loan were paid to the government in full liquidation of the tax indebtedness of Fred W. Voges, and in part liquidation of the Estate of Frederick Voges, Deceased. The tax liability of Voges Manufacturing Co. was paid out of its own assets.
At the time of the obtaining of the mortgage referred to, the Collector subordinated the $300,000 mortgage which he had obtained on this property in 1952 to the lien of the new mortgage. The Collector also subordinated the government's tax liens to the lien of the new mortgage. Additionally, and in order to enable the new mortgage to be obtained, the receiver applied to the district court for instructions concerning the payment of real estate taxes against the property inasmuch as the real estate tax lien had to be discharged of record before the mortgage transaction could be consummated.
Responsive to such request for instructions, the district court, by order entered on March 6, 1957, authorized the receiver to pay the real estate tax amounting to $25,629, and such payment was made by the receiver under protest. Thereafter the receiver commenced the action against the City on June 13, 1957, which was ...