Memorandum of Disapproval of Bill for Relief of Sam J. Buzzanca

I am withholding my approval from H.K. 6712, a bill "for the relief of Sam J. Buzzanca."

Mr. Buzzanca, at a federal tax sale in 1954, purchased certain real estate which had an estimated market value of $21,000, but which was subject to a mortgage prior in time to the federal tax lien. It was announced at the tax sale that principal and interest in the amount of $8,320 was due under this prior mortgage. The real estate was sold to Mr. Buzzanca for $8,100--far less than the amount of the Federal tax lien which exceeded the market value of the property.

Two months later the holder of the first mortgage, who also had acquired whatever rights the heirs of the delinquent taxpayer and former owner had in the property, successfully sued Mr. Buzzanca to obtain possession of the property. Although the United States was not a party to this action, the District Director for the area did render informal assistance to Mr. Buzzanca. On appeal, the Supreme Court of Alabama affirmed.

Mr. Buzzanca's claim for relief appears to rest on the contention that the first mortgagee obtained a judgment for possession of the property because the tax sale to Mr. Buzzanca was defective and did not convey to Mr. Buzzanca the former owner's interest.

Internal Revenue Service records reveal no defect in the seizure and sale. This being so, Mr. Buzzanca has no ground for complaint against the United States. Because the existence of the first mortgage was made known at the time, the tax sale did not purport to convey rights superior to a valid first mortgage.

The United States cannot and does not attempt to warrant or defend title to property seized and sold under the internal revenue laws. No warranty is available to a purchaser at a tax sale and a deed is not a warranty of the title conveyed. The right, title, and interest conveyed is derivative, and the purchaser acquires only the interest of the delinquent taxpayer. To compel the United States to warrant and defend the title to all property sold by it for taxes would be costly and inadvisable.

For these reasons I cannot, on the facts at hand, approve this bill for it would create a precedent that would encourage dissatisfied purchasers at federal tax sales to ask Congress to underwrite their losses and guarantee their titles.

Were Mr. Buzzanca, however, to adduce direct evidence establishing incontrovertibly that the tax deed in question was defective, I would of course be willing to sign a similar bill subsequently enacted.

DWIGHT D. EISENHOWER