Muhlenberg Township Authority v. Fisher

Opinion by

Senior Judge Kalish,

In the spring of 1980 Muhlenberg Township Authority (Authority) installed sewer mains along certain-streets -abutting lot's presently owned by Larry D. Karpenko -and Donna J. Karpenko (.'appellees).

'■ On October 17, 1980 and on January 8, 1981, sewer liens were filed against the above lots.

Prior thereto, pursuant to isicire facias proceedings, rules were issued on Authority to show cause Why the lots should not be sold free 'and clear of the -sewer lien claims .at a tax sale'for .unpaid real estate tax-e-s.

The properties were not sold because the upset prices were not reached. The trial court authorized rules to -show cause why -the lots should not be sold at a -public sale to the highest bidder free -and clear of -all taxes and municipal claims, mortgages, Mens, charges and ©states whatsoever including Authority’s sewer claims.¹ Thus, 'the trial qourjt discharged all liens.

These rules giving noitice of the sale were served upon Muhlenberg Township, rather than upon Muhlenberg Township Authority.

The lots were sold to the Karpenkos.

In its findings the trial court indicated that Authority did not receive notice.

Authority contends that since it did not receive notice of the tax .sales its hens were not discharged.

We vacate the decision of the trial court .and remand.

The narrow issue raised in these appeals is the adequacy of notice to the .lienholder upon the sale of a parcel of land at a tax sale under the provisions of the Real Estate Tax Law, Act of July 7, 1947, P.L. 1368, as amended, 72 P.S. §5860.602.

Our Supreme Court has made it clear 'that an Authority of a municipality shall in no way be deemed to be an instrumentality of .such municipality in the performance of a municipal function. Belovsky v. Redevelopment Authority of Philadelphia, 357 Pa. 329, 54 A.2d 277 (1947).

They are independent agencies of the .Commonwealth ,and part of its sovereignty. Commonwealth v. Erie Metropolitan Transit Authority, 444 Pa. 345, 281 A.2d 882 (1971).

The .purpose of the'issuance of a writ of scire facias is to warn a lienholder of the existence of a claim so that he may make known any defenses he may have and to show why the property should not be under judicial subjection of a municipal lien. Notice provisions must be complied with. Otherwise, it becomes a deprivation of property /without due process. Chester County Tax Claim Bureau Appeal, 208 Pa. Superior Ct. 384, 222 A.2d 602 (1966).

In First Pennsylvania Bank, N.A. v. Lancaster County Tax Claim Bureau, 504 Pa. 179, 470 A.2d 938 (1983), our Supreme Court, pursuant to a remand from the U.S. Supreme Court (First Pennsylvania Bank, N.A. v. Lancaster County Tax Claim Bureau, 463 U.S. 1201 (1983)), held .that the notice provision contained in the Real Estate Tax Law, which did not require either personal service or notice by mail to a second mortgagee of impending tax sale, violated due process rights of such mortgagee. In In Re Upset Sale, Tax Claim Bureau of Berks, 505 Pa. 327, 479 A.2d 940 (1984), our Supreme Court extended the due process protections to lienholders generally. “[Hjoware lien-holders to exercise their statutory rights, redeem the property, or timely object to the tax sale, when they are not given notice Í” Id. at 337, 479 A.2d at 945. Furthermore, the tax sale immediately and drastically diminished .the value of 'the lien by granting the purchaser title free of 'all liens without an opportunity to be heard by the lienholder because of no notice.

Failure to give notice does not discharge the lien and purchasers take the property subject thereto. Thomas Tax Sale Petition, 10 Pa. D. & C. 2d 686 (1957).

Therefore, .the orders of 'the trial court are vacated and ithe records remanded for proceedings consistent with this opinion. • • •-

Order

The order of the Court of Common Pleas of Berks County, Nos. 80 March, 1983, A.D. and 70 January, 1981, M.L.D., dated November 15,1984, is vacated. The record is remanded to the Court of Common Pleas of Berks County far further proceedings consistent with .this opinion.

Order,

Now, February 3, 1986, the Order entered January 24,1986, is amended to read as foilowts:

Amended Order

The orders of the Court of Common Pleas of Berks County, Nos. 81 March, 1983, A.D. and 130 October, 1980, M.L.D., dated November 15, 1984; and Nos. 80 March, 1983, A.D. and 70 January, 1981, M.L.D., dated November 15, 1984, are vacated. The records are remanded to the Court of Common Pleas of Berks County for further proceeding's consistent with ¡this opinion.

Judge Palladino concurs in the result only.

1 Section 1 of the Beal Estate Tax Law, Act of July 10, 1969, P.L. 146, as amended, 72 P.S. §5860.610, provides that “[i]n all cases where the upset price shall not be bid . . . the court shall grant a rule upon all .panties ... to show cause why a decree should not be made that said property be sold, freed and cleared of their respective claims. ...”