Petition — Stratos v. United States

Supreme Court, U. S.

FILED

OCT 14 1980

80-643

MICHAEL RODAK, JR., CLERI

IN THE SUPREME COURT OF THE UNITED STATES

October Term, 1980

No.

D. J. STRATOS and DELORES M. STRATOS,

of whom D.. J. STRATOS is,

Petitioner,

Ve

THE UNITED STATES OF AMERICA,

Respondent.

Petition for a Writ of Certiorari to the United

States Court of Appeals for the Fourth Circuit

Stan Jaskiewicz, Jr. Walter J. Kruger, III

1543. Ashley River Road David & Kruger

Charleston, S. C. 29407 157 St. Andrews Blvd.

Of Counsel P.O. Box 32115

Charleston, S. C. 29407

Counsel for Petitioner

QUESTIONS PRESENTED

This case was instituted by the Petitioner

D. J. Stratos under the provisions of 26 USC

7426 entitled "Civil Actions by Persons Other

than Taxpayers" seeking to enjoin a wrongful

tax levy, seizure, and sale of real property

in possession of the Petitioner, Although the —

Petitioner was in possession of the real pro-

perty at the time of the levy, the Petitioner

did not own the title to the real property.

The District Court found that the Petitioner's

possession of the real property was insuffi-

cient to give him standing to challenge the

levy, and therefore dismissed the Amended

Complaint for lack of subject matter jurisdic-

tion. The Court of Appeals affirmed. The

questions presented are:

1. Whether the possession by the Peti-=

tioner of the real property in question,

together with the rights appurtenant to that

possession, is sufficient to permit Petitioner

his day in Court under 26 USC 7426 to chal-

lenge the wrongful tax levy, sale, and seizure

of the real property in his possession,

2. Whether the statute 26 USC 7426 as

interpeted and applied by the Courts below

deprives the Petitioner of his Fourth and

Fifth Amendment rights by unreasonably seizing

and depriving Petitioner of his possession and

property without due process of law and with-

out just compensation,

INDEX

Opinions Below ...«eeseeevececvee 2

Jurisdiction ...2eeeeececreevecee 2

Questions Presented .....2+esee+0 23

Statutes Involved ....s-e«secececee 3

Statement . eee cece ecececce ee eo 3h

Reasons for Granting the Writ ...e+.e 411

Conclusion. 2. .se«seeseesesee cece ce Ll

Appenuix s e * ¢ oO zo) oO a a °o 2 ° oO o e oO o 12

CITATIONS

CASES ;

Alabama Exchange Bank v. United States,

373 F. Supp. 1221, De Ala., 1974) .;

Beaufort Land & Investment Co. v. Lumber

Cis We ae BEG ee, STE oe 8 8 8

Bultman v. Atlantic Coast Line R. Co.,

88 SE 279, (S.C., 1916). o oO uo . o o ° oO

Crow v. Wyoming Timber Products Co.,

424 F2d 93, (C.A. 10, 1970). « « 0 0 0

Ellen v. Ellen, 16 S.C. 132 (1881) ...

Elliot v. Wilson, 187 SE 825,

(S.C. 1936). . - . o . oO a o > o . oO oO

Frederick vy. Chapman, 142 SE 247,

(Poti BEER & 6 6. 00 OKb © O86 6 8

Johnson v. McIlwain, Rice 368, 375,

akin 1839) 7 « ° * oO oO oO oO oO O° oO o Qo oO

Magavern v. United States,

415 F.. Supp. 217 (N.Ye, 1976). « « 0 0 «

Morton v. Tolbert, 98 SE 199,

(S.C. % 1919) e* e e«eee?ee oO o Se FF 8 6 6

Nicholson v. Villepegue, 74 SE 506,

(S.C. $ 1912) - > J oO ° o °o oO oO oO ° oO oO oO

ii

Page

9

6,7

Page

Rosenblum vy. United States, 549 F2d 1140

C.A. 8, 1977), cert. denied,

Gop en Gee. Gaptiie @ 6 6 6 6 eo ec eae e 6 OF

State vy. Morris, 133 SE2d 744,

S.C., 1963) oO o ° o - o oe = oO . . . - ° = oO 10

Terwilliger v. Daniels, 72 SE2d 167,

S$.C., 1952) o o am * 2 . + = ° oO oO ue °o . °o oO 6

Terwilliger v. White, 72 SE2d 169,

(8.C., 1952 e * - 7 7 8 - oO 7 - . ” - + om @ 6

United States v. Doyal, 462 F.2d 1357,

C.A. Je 1972) - ee e * «e ° °o - oO °o ° oO oO . oO 8

yeas v. United States, 573 F.2d 447,

ta ts Pa bis eb & ee eb ee ee ae

Weaver v. Whilden, 11 SE 686,

(a 1890) oa e * e« . — - 2 . * . + . = . oO 6

Western Pennsylvania Nat'l. Bank v.

United States, 354 F. Supp. 373,

(W.D., Pa., 1973). ee oO Qo o * a oO 7 oO 7. oo oO 8

UNITED STATES CONSTITUTION:

Der Cee. gs 6 bk 6 8 6 e be eRe eee

Fifth Amendment OUT a ee a a a

iii

STATUTES : ~

UNITED STATES CODE

Be UGG Mae ec eceoeoeee ee ee -4,8,9

26 USC 6332 (c) eeenre3eeeteeeee 10

CODE OF LAWS OF SOUTH CAROLINA, 1976

Seettes 238-8 ccsccecsceoveve2es #

OTHER AUTHORITIES:

Blacks Law Dictionary, 4th Bhs wecceve ¥

Corpus Juris Secundum, Ejectment,

Geetien 1s cco coco se eee eeeeceosens &

1966 U.S. Code Congressional &

Administrative News, a ee ae ee a

iv

IN THE SUPREME COURT OF THE UNITED STATES

October Term, 1980

No.

D. J. STRATOS and DELORES M. STRATOS,

of whom D. J. STRATOS is,

Petitioner,

Ve

THE UNITED STATES OF AMERICA,

Respondent.

Petition for a Writ of Certiorari to the United

States Court of Appeals for the Fourth Circuit

The Petitioner, D. J. Stratos, prays that a

Writ. of Certiorari issue to review the judgment

of the United States Court of Appeals for the

Fourth Circuit entered in the above case on July

14, 1980.

QPINIOQNS BELOW

The Qrder of the District Court of South

Carolina, Charleston Division, dated March 12,

1979, dismissing the Petitioner's Amended Complaint

for lack of subject matter jurisdiction is found

in the Appendix hereto.

The Order of Court of Appeals for the Fourth

Circuit dated July 14, 1980, was decided per

curiam affirming the District Court decision, and

is also found in the Appendix hereto.

JURISDICTION

The jurisdiction of this Court is invoked

under 28 U.S.C. 1254 (1).

QUESTIONS PRESENTED

This case was instituted by the Petitioner

D. J. Stratos under the provisions of 26 USC 7426

entitled "Civil Actions by Persons Other than Tax-

payers" seeking to enjoin a wrongful tax levy,

seizure, and sale of real property in possession

of the Petitioner. Although the Petitioner was in

possession of the real property at the time of the

levy, the Petitioner did not own the title to the

real property. The District Court found that the

Petitioner's possession of the real property was

insufficient to give him standing to challenge

the levy, and therefore dismissed the Amended

Complaint for lack of subject matter jurisdiction.

The Court of Appeals affirmed. The questions pre-

sented are:

1. Whether the possession by the Petitioner

of the real property in question, together with

the rights appurtenant to that possession, is suf-

ficient to permit Petitioner his day in Court under

26 USC 7426 to challdnge the wrongful tax levy,

Sale, and seizure of the real property in his

possession.

2. Whether the statute 26 USC 7426 as inter-

peted and applied by the Courts below deprives the

Petitioner of his Fourth and Fifth Amendment rights

by unreasonably seizing and depriving Petitioner

of his possession and property without due process

of law and without just compensation.

STATUTES INVOLVED

The pertinent portions of the Fourth and

Fifth Amendments to the United States Constitution,

26 USC 7426, 26 USC 6332, and Section 15-1-30 of

the Code of Laws of South Carolina, 1976, are set

forth in the Appendix hereto.

STATEMENT

The real property which is the subject of

this action contains approximately 21.4 acres of

highland. and 2.3 acres of marshland and pond loca-

ted on the North side of Bears Bluff Road along

deep water known as Church Creek on Wadmalaw

Island, Charleston County, South Carolina.

On January 2, 1973, Dr. Vince Mosely conveyed

title to the real property to an individual going

under the name of M. G. Miller. At the time of

said conveyance, a purchase money mortgage was

executed by the individual known as M. G. Miller

to Dr. Vince Mosely. During the course of the

ensuing year, M. G. Miller disappeared from the

property and from the Charleston area. When the

mortgage became due, Miller could not be found,

and the mortgage was assigned by Mosely to Delores

M. Stratos, the Petitioner's wife, for value. On

January 25, 1974, the Petitioner, D. J. Stratos,

took actual physical possession of the property,

and commenced on a course of adverse possession,

claiming the property as his own against all the

world. :

On June 13, 1975, a notice of federal tax

lien was filed on the public records of Charleston

3

County in the amount of Forty-six thousand ninety-

six and 11/100 ($46,096.11) Dollars against Donald

E. Miles a/k/a Michael G. Miller a/k/a Robert G.

Glore, Jr. a/k/a Robert G. Clore, Jr. The Peti-

tioner Stratos after receiving notice of said

federal tax lien contacted the United States for

information concerning Donald E. Miles, the tax-

payer, whom the government claims to be the true

owner of the property in question. After obtain-

ing information from the government concerning the

identity of the taxpayer, Donald E. Miles, and

after consulting with Dr. Mosely the seller and

with John Whaley the real estate agent in the sale

to M. G. Miller, the Petitioner Stratos determined

that M. G. Miller who purchased the property and

Donald E. Miles the taxpayer were not the same

person.

Because he was in possession and claimed an

interest in this property which did not appear to

belong to the taxpayer Miles, the Petitioner

Stratos commenced this action under 26 USC 7426

to enjoin the wrongful levy, seizure and sale.

The parties stipulated that the government would

not complete the sale of the property until after

the District Court rendered a decision. After the

District Court dismissed the case and failed to

find standing for the Petitioner under 26 USC 7426,

the government seized the property by padlocking

one of the entrances thereto, and completed the

sale for a bid of Thirty-three thousand one hundred

and No/100 ($33,100.00) Dollars.

The Court of Appeals upheld the judgment of

the District Court per curiam upon the opinion of

the District Judge.

REASONS’ FOR GRANTING THE WRIT

The decision below should be reviewed because

the erroneous interpretation of federal statute 26

USC 7426 works an egregious injustice upon the

Petitioner D. J. Stratos. That is, the lower

courts have allowed the government to levy against,

seize and sell at public auction the subject real

property of which the Petitioner is in possession,

and in which the delinquent taxpayer Miles owns no

interest whatever, without permitting the Petitioner

to have the benefit of a judicial inquiry as to

whether the government's actions are wrongful.

The decision below erroneously relies on the thesis

that the Petitioner's possession of the real pro-

perty and his adverse claim to ownership of the

real property are not a sufficient interest in

the property as required by 26 USC 7426 to permit

the Petitioner to avail himself of the mechanism

that. the Congress has created for the purpose of

checking the government's power to summarily levy

against, seize, and sell property thought by the

government to be subject to a lien for unpaid

taxes. This erroneous thesis presents the first

question as set forth above.

The second question presented to the Court

in need of its review in this case is that if the

statute 26 USC 7426 has been correctly interpre-

ted by the courts below, then the statute violates

the fundamental Fourth and Fifth Amendment rights

of the Petitioner. If, indeed, the Petitioner

does not have standing under 26 USC 7426 to chal-

lenge the government's levy upon, seizure, and

sale of the subject real property, then the

Petitioner has had his rights unreasonably seized

by the government; he has been deprived of his

property without due process of law, and has had

his property taken for public use without just

compensation. :

The determination of whether an individual

has an interest in property, or indeed of what

constitutes "property", is governed by state law.

Crow vo Wyoming Timber Products Co., 424 F2d 93,

(C.A. 10, 1970); Wagner v. U. S., 573 F2d 447,

(C.A.7> 1978); Magavern v. U. S., 415 F. Supp.

217 (N. Y. , 1976). The Petitioner Stratos has,

in this case, property which is subject to consti-

tutional protections. He has property by virtue

of his possession of the premises and of the

rights which South Carolina law bestows on him as

a result of that possession. Under South Carolina

law, a possessory interest is pratected in various

circumstances by the awarding of damages in tort

under common law or by statute for an infringement

of the possessory interest. Bultman 'v. Atlantic

Coast Line R. Co., 88 SE 279, (S.C., 1916);

Elliot v. Wilson, 187 SE 825, (S.C., 1936);

Johnson v. McIlwain, Rice 368, 375, (S.C., 1839);

Beaufort Land & Investment Co. v. Lumber Co., 68

SE 637, (3.C., 19 iF S. C. Code, 1976, Section

58-17-3920. More importantly, under South Carolina

law, the holder of a possessory interest in real

estate is protected from being ousted from posses-

sion except by one with superior title. "One in

possession of a tract of land has the right to

retain the possession against all the world,

except the true owner." Morton v. Tolbert, 98 SE

199, (S.C., 1919); Nicholson v. Villepegue, 74 SE

506, (S.C., 1912). This is in keeping with the

majority rule on the subject, as Corpus Juris

Secundum is cited for the proposition that by the

"greater weight of authority", prior possession wi

alone is sufficient. to maintain ejéctment against

the defendant who has no better right or title,

even though the possession has not yet ripened

into title by adverse possession. CJS Ejectment,

Section 18; Weaver v. Whilden, 11 SE 686, (S.C.,

1890); Frederick v. Chapman, 142 SE 247, (S.C.,

1928).

Aside from the property rights given to the

Petitioner by state law based on his possession

of the real property, he also has a property right

in terms of his uninterrupted adverse possession

and claim to adverse ownership of the premises,

Under South Carolina law, adverse possession for

less than the statutory period required to ripen

into title is transferable between individuals by

tacking. Tacking of lengths of adverse possession

is permitted between living individuals under the

state's twenty (20) year statute, and is permitted

between ancestor and heir under the state's ten

(10) year statute. Terwilliger v. Daniels, 72 SE

2d 167, (S.C., 1952); Terwilliger v. White, 72 SE

2d 169, (S.C., 1952). This is in direct contra-

diction to the case of Ellen v. Ellen, 16 SC 132,

(1881), which is relied upon in the decision of

the District Court.

According to South Carolina statutory defini-

tion, the term real property is "“co-extensive with

lands, tenements, and hereditaments." Code of

Laws of South Carolina, 1976, Section 15-1-30.

Hereditaments is a term "used as the widest ex-

pression for real property of all kinds, and is

therefore employed in conveyances after the words

"lands' and ‘tenements’ to include everything of

the nature of realty which they do not cover."

Blacks Law Dictionary, 4th Edition. "The term

[property] includes every right, title, estate,

or interest, whether legal or equitable, perfect

or imperfect, inchoate or complete, and rights

which lie in contract, whether executory or ex-

ecuted." Bultman v. Atlantic Coast Line R. Co.,

Supra.

Clearly, then, the Petitioner has property

rights in the real property in question. These

property rights are damaged when the government

levies upon, seizes, and sells the real property.

The levy itself put the Petitioner to great ex-

pense and effort to ascertain whether the taxpayer

Donald E. ! .les was actually M. G. Miller who had

purchased and then abandoned the property. The

seizure was effected by padlocking an entry gate

to the premises, forcing the Petitioner to find

other means of access. The sale has caused the

Petitioner to have to physically turn away tres-

passers and defend his possessory interest in

litigation against purchasers from the government.

Yet the courts below have refused the Petitioner

Standing to challenge the wrongful levy, and have

refused to render a judgment as to the wrongful

nature of the government's actions. A reading of

the testimony will show however, that the levy,

seizure, and sale were wrongful, in that Donald E.

Miles was not the same person as M. G. Miller who

purchased the property. Further evidence gathered

since the trial date underscores the wrongful

nature of the government's actions, but Mr. Stratos

is denied his day in court as to same because of

the lower court's erroneous interpretation of the

statute 26 USC 7426.

The language of the statute is clear. Under

the headings "Civil Actions By Persons Other Than

Taxpayers, Actions Permitted, Wrongful Levy," the

statute provides:

If a levy has been made...any

person... who claims an interest

in...such property and that such

property was wrongfully levied

upon may bring a civil action

against the United States...

(italics added). 26 USC 7426 (a) (1).

Obviously, the Petitioner not only claims an ad-

verse ownership interest, but he has a possessory

interest which he can protect in state courts and

which he can transfer to others.

The legislative history supports granting the

Petitioner standing, also:

Your committee believes where the

government levies an property

which, in part at least, a

third person considers to be

his, he is entitled to have

his case heard in court. 1966,

US Congressional Code &

Administrative News, 3750.

In Western Pennsylvania National Bank v.

United States, 354 F. Supp. 373, (W.D., Pa., 1973),

the court's analysis (p. 375) said that four com-

ponents were necessary for 26 USC 7426 (a)(1) to

apply: there must be "(1) a levy or (2) a sale

and that a claim must be made by (3) one ‘who

claims an interest in or lien on such property'

and (4) that such property was wrongfully levied

upon." In United States v. Doyal, 462 F.2d 1357,

(C.A. 5, 1972), the court only requires that the

person seeking relief be one "who claims an in-

terest in or lien upon or lien on the levied pro-

perty." In Rosenblum v. United States, 549 F2d

1140. (C.A. 8, 1977), cert. denied, 434 US 818,

(1977), the court said that the purpose of stat-

utes such as 26 USC 7426 was to give a judicial

remedy to a person whase property was seized

wrongfully to satisfy the tax liability of some-

one else. The "wrong" contemplated, according to

the Rosenblum Court, is that wrong "suffered by

the third person when his property is taken to

satisfy the tax obligations of another."

The language of the statute and the foregoing

cases describe the situation of the Petitioner with

exactitute: Stratos claims an interest and has

possessory rights to the property, but the govern-

ment has levied, seized, and sold that property to

satisfy the tax obligation of Donald E. Miles who

has no interest at all in the premises. Unless

the Supreme Court grants a writ of certiorari on

the questions of the lower court's interpretation

of the statute, the Petitioner will have suffered

great damages to his rights at the hands of the

government, and will be deprived of a hearing in

regards to the government's actions.

On the other hand, if the court below was not

erroneous in application and construction of the

statute, then the question of constitutionality of

the statute requires the attention of the Supreme

Court as a statute which violates the Fourth and

Fifth Amendment rights of the Petitioner. In the

case of Alabama Exchange Bank v. United States,

373 F. Supp. 1221, (M.D. Ala., 1974), the court

decided that holders of security interests were

protected under the statute from having their

security interests wrongfully levied upon; if

they were not protected and permitted to argue

their case under 26 USC 7426, then their Fifth

Amendment rights would be violated by a taking

without due process. Again in the Rosenblum v.

U. S. case cited supra., the court reasoned that

such summary collection procedures of the govern-

ment as Internal Revenue Levy, Seizure, and Sales,

were not violative of due process guarantees in

the Fifth Amendment, so long as there was a post-

collection judicial remedy. In the case at hand,

the Petitioner Stratos was not only denied an in-

quiry into the wrongfulness.of the levy by the

trial court when he requested an injunction prior

to the seizure and sale; but he has also been

refused his day in court by the Court of Appeals

after the seizure and sale took place. Denial of

his rights to a hearing prior to the government's

levy, seizure, and sale of the property which he

possessed: violates the Petitioner's Fifth Amend-

ment right to due process. T.2 fact that the pro-

ceeds of the government's sale of the property in

which Stratos had rights which were damaged, went

to fill the public coffers, constitutes a taking

for the public use without just compensation in

further violation of the Fifth Amendment.

The forceful seizure of the property by pad-

locking the entry gate fits the definition of

State v. Morris, 133 SE2d 744, (S.C., 1963): "a

seizure contemplates a forceful dispossession of

the owner." The government likewise contemplated

a forceful dispossession of the Petitioner when

the entry gate was padlocked. In addition to

having to find new access to his property, Stratos

faces the penalties prescribed by 26 USC 6332 (c)

for refusing to yield the property of which he

rightfully remains in possession. The lower

court's application of the statute 26 USC 7426

has violated the Petitioner's Fourth Amendment

right to be secure from unreasonable seizures in

that the government has seized his property and

has never had to answer before a judicial officer

to. acquire so much as a warrart.

Because the statute should °e construed in

such a manner as to uphold its constitutionality,

and because the Petitioner's constitutional rights

have been trampled under the statute's application

to his case thus far, the Petitioner prays that

this Supreme Court grant the requested writ of

certiorari. Because the Petitioner is in need of

the Supreme Court's protection of his constitu-

tional rights, the Petitioner urges that the

Court's discretionary jurisdiction might be ex-

ercised in this case in a manner peculiarly

appropriate to the ends of justice.

10

The Petitioner respectfully requests that

this court review his need for a chance to be

heard on the merits of this action.

CONCLUSION .

For the reasons set forth above, it is

respectfully submitted that this petition for a

writ of certiorari be granted.

DAVID AND KRUGER

Wake V Livée///

Walter J. Kruger, III

11

APPENDIX

page

Order, District Court . . «6 «6 «+«eeeeece 13

Order, Fourth Circuit Court of Appeals ... 17

Fourth Amendment, U. S. Constitution .... 19

Fifth Amendment, U. S. Constitution. .... 19

S. C. Code, 151-30 «2. 2 ee ee ee wo @ 20

26 USC 7426 we eo ee eee eeeeeeenee 2

26 USC 6332 . ee. h6° , fo fF © s 5 °@ Q . ° oO 2 o 21

12

IN THE DISTRICT COURT OF THE UNITED STATES

FOR THE DISTRICT OF SOUTH CAROLINA

CHARLESTON DIVISION

Civil Action No. 76-1890

D. J. STRATOS and DELORES

M. STRATOS,

Plaintiffs,

-—versus- ORDER

UNITED STATES OF AMERICA,

Defendant.

Ss NY OY NY Oe OS Oe 8

Plaintiffs instituted this wrongful

levy action seeking to enjoin the United States

from selling a certain taxpayer's interest in a

parcel of real property on which Plaintiff Delores

Stratos holds a mortgage. Plaintiffs each claimed

to have an interest in the subject real property

sufficient to maintain this action under 26 U.S.C.

Section 7426(a)(1) (1976). Delores Stratos claim-

ed a lien on the subject real property by virtue

of her mortgage, and D. J. Stratos claimed an in-

terest by adverse possession. Plaintiffs further

claimed that the levy was wrongful as to each of

them under Section 7426(a)(1) because the taxpayer,

Donald E. Miles, was not the owner of the real pro-

perty in question. The court makes no decision as

to the ownership of the real property in question,

because Plaintiffs each lack the requisite interest

in the subject real property to maintain this

action.

13

This non-jury matter came before the

court on January 23, 1979. Upon consideration of

the evidence, the arguments, and the memoranda of

counsel, the court makes the following Findings of

Fact and Conclusions of Law:

FINDINGS OF FACT

1. This is an action by Plaintiffs

seeking to enjoin the sale pursuant to levy by the

United States of America of a federal taxpayer's

right, title, and interest in and to certain real

property on which Plaintiff Delores Stratos has a

mortgage.

2. The real property in question was

conveyed by Dr. Vince Moseley to one M. G. Miller

by deed dated January 2, 1973, recorded in the

Office of the Register of Mesne Conveyance,

Charleston County, South Carolina, in Book W100,

at Page 213. A mortgage dated January 2, 1973, in

the original amount of $23,600.00 was executed in

the name of M. G. Miller to Vince Moseley, and was

recorded in Book W100, at Page 185.

3. The mortgage described in Finding

No. 4 was assigned by Vince Moseley to Plaintiff

Delores Stratos on January 25, 1974, and the

assignment was recorded December 3, 1975, in Book

F108, at Page 259.

4. A Notice of Federal Tax Lien was

filed in the RMC Office for Charleston County on

June 13, 1975, in the amount of $46,096.11 against

Donald E. Miles, a/k/a Michael G. Miller, a/k/a

Robert G. Glore, Jr., a/k/a Robert G. Clore, Jr.

5. Plaintiff D. J. Stratos testified

at trial that he claimed an interest in the sub-

ject real property by adverse possession. He

testified that his attempt at adverse possession

of the property commenced on January 25, 1974.

CONCLUSIONS OF LAW

1. In order to maintain an action

under 26 U.S.C. Section 7426(a) (1) (1976), each of

14

the Plaintiffs must establish ownership of an in-

terest. in or lien upon the parcel of real property

levied upon and seized by the United States of

America; and that such property was wrongfully

levied upon and seized by the United States.

2. Although the United States concedes

that the mortgage of Plaintiff Delores Stratos is

entitled to priority over the federal tax lien,

the seizure by the United States of the taxpayer's

interest in the real property did not affect the

interest in the real property of Delores Stratos

as a mortgagee. Therefore, as to her, the levy

cannot be wrongful. See Western Pennsylvania

National Bank v. United States, 354 F. Supp. 373

(W.D. Pa. 1973); American Oil Co. v. United States,

383 F. Supp. 1281 (N.D.. Okl. 1974).

3. The real property is still subject

to the mortgage and any sale of the taxpayer's in-

terest in such real property would not affect the

legal efficacy of the mortgage. Accordingly, under

26 U.S.C. Section 7426(1976), the court lacks

jurisdiction as to the claim of Plaintiff Delores

Stratos.

4. Plaintiff D. J. Stratos claims an

interest in the subject real property by adverse

possession. However, under South Carolina law,

the first time that one can claim an interest in

real property by adverse possession is after such

possession has continued for a period of ten years.

“Adverse possession gives no right until the ex-

piration of ten years." Ellen v. Ellen, 16 S.C.

132 (1881). Plaintiff D. J. Stratos admitted at

trial that he has not been in possession of the

property for ten years, and therefore, he has no

interest in the real property. Accordingly, the

court lacks jurisdiction of the claim of D. J.

Stratos under 26 U.S.C. Section 7426(1976).

Plaintiff D. J. Stratos is an attorney.

He represented an individual using the name Michael

G. Miller in Miller's acquisition of the subject

real property. In this action, D. J. Stratos has

sought to adversely possess that same property

15

against the client. he represented in its acquisi-

tion. However, because Plaintiff D. J. Stratos

has not satisfied the threshold duration require-

ment for adverse possession, this court does not

reach the serious question of whether, even if the

durational requirement were satisfied, professional

ethics and South Carolina law would allow an

attorney under these circumstances to establish

title by adverse possession.

5. One in possession of real property

can maintain or defend an action for ejectment

against all but the true owner. Morton v. Tolbert,

111 S.C. 442, 98 S.E. 199 (1919). However, the

right to maintain or defend such an action does

not confer on such person an interest in the real

property. The law favors peaceful resolution of

disputes over the right to possession of property

and, therefore, allows one in possession to main-

tain or defend such an action. Consequently,

possession alone does not give one title to real

property or an interest in property under South

Carolina law. Therefore, mere possession of real

property is not an interest in property sufficient

to maintain an action against the United States

under 26 U.S.C. Section 7426(1976).

Based upon the Findings of Fact and

Conclusions of Law set out above, this court con-

cludes that it lacks subject matter jurisdiction

over this action. Accordingly, Plaintiffs' Com-

plaint is dismissed.

AND IT IS SO ORDERED.

Charles E.. Simons, Jr.

United States District Judge

Aiken, South Carolina

March 12, 1979.

16

UNITED STATES COURT OF APPEALS

For The Fourth Circuit

No. 79-1280

D. J. Stratos and Delores M. Stratos,

Appellants,

Vo

United States of America,

Appellee.

Appeal from the United States District Court for

the District of South Carolina, at Charleston.

Charles E. Simons, Jr., District Judge.

Argued: June 2, 1980 Decided: July 14, 1980

Before BRYAN, Senior Circuit Judge, RUSSELL and

HALL, Circuit Judges.

Walter J. Kruger, III (David and Kruger on brief)

and Stan Jaskiewicz, Jr. for Appellants; Richard

W. Perkins, Tax Division, Dept. of Justice (M.

Carx Ferguson, Assistant Attorney General; Thomas

E. Lydon, Jr., United States Attorney; Gilbert E.

Aadrews and Kristina E. Harrigan, Tax Division,

Dept. of Justice on brief) for Appellee.

17

PER. CURLAM:

Plaintiffs, D. J. Stratos and his wife,

Delores, sued to enjoin the United States from

selling, under its levy for taxes, certain real

property located in Charleston County, South

Carolina, upon which Delores Stratos holds a mort~-

gage and to which D. J. Stratas claims a possessory

interest that has not yet ripened into adverse pos-

session. Each asserted that the levy for back

taxes was wrongful as to them because the taxpayer

Donald Miles, was not the true owner. I.R.C.

Section 7426(a)(1)(1976). Refraining from adjui-

cating the ownership issue, the District Court

dismissed the suit for lack of subject matter

jurisdiction. It reasoned that the seizure and

sale did not adversely affect the interest of the

mortgagee in the property and mere possession did

not confer a sufficient interest in D. J. Stratos

to enable him to bring a wrongful levy action.

Stratos v. United States, No. 76-1890 (D.S.C. Mar.

12, 1979).

The judgment now on appeal will oe

upheld upon the opinion of the District Judge.

Affirmed.

18

ARTICLE IV

SEARCHES AND SEIZURES

The right of the people to be secure

in their persons, houses, papers, and effects,

against. unreasonable searches and seizures, shall

not be violated, and no warrants shall issue, but

upon probably cause, supported by oath or affirma-

tion, and particularly describing the place to be

search, and the persons or things to be seized.

ARTICLE V

RIGHTS OF ACCUSED IN CRIMINAL

PROCEEDINGS; DUE PROCESS: EMINENT

DOMAIN

No person shall be held to answer for

a capital, or otherwise infamous crime, unless on

a presentment or indictment of a grand jury, ex-

cept in cases arising in the land or naval forces,

or in the militia, when in actual service in time

of war or public danger; nor shall any person be

subject for the same offence to be twice put in

jeopardy of life or limb; nor shall be compelled

in any criminal case to be a witness against hin-

self, nor be deprived of life, liberty, or property,

without due process of law; nor shall private pro-

perty be taken for public use, without just com-

pensation.

19

South Carolina Code of Laws, 1976, as amended

Section 15=1-30 CIVIL REMEDIES AND PROCEDURES

Section 15-1-30 "Real property" and "real estate"

defined.

The words "real property" and "real

estate" as used in this Title are coextensive with

lands, tenements and hereditaments.

HISTORY: 1962 Code Section 10-3; 1952 Code Section

10-3; 1942 Code Section 897; 1932 Code Section 897;

Civ. P. '22 Section 845; Civ. P. '12 Section 482;

Civ. P. "02 Section 444; 1870. (14) Section 466.

CASE NOTES

Cited in McDonald v. Welborn, 220

SC 10, 66 SE2d 327 (1951).

United States Code

26 USC 7426 Civil actions by persons other than

taxpayers

(a) Actions permitted. —

(1) Wrongful levy. - If a levy has been made

on property or property has been sold pursuant to

a levy, any person. (other than the person against

whom is assessed the tax out of which such levy

arose) who claims an interest in or lien on such

20

property and that such property was wrongfully

levied upon may bring a civil action againat the

United States in a district court of the United

States. Such action may be brought without regard

to whether such property has been surrendered to or

sold by the Secretary or his delegate.

* * *

(b) Adjudication. - The district shall have

jurisdiction to grant only such of the following

forms of relief as may be appropriate in the cir-

cumstances;

(1) Injunction. - If a levy or sale

would irreparably injure rights in property

which the court determines to be superior

to rights of the United States in such

property, the court may grant an injunction

to prohibit the enforcement of such levy or

to prohibit such sale.

(2) Recovery of property. - If the

court determines that such property has

been wrongfully levied upon, the court

(A) order the return of specific

property if the United States in in

possession of such property;

(B) grant a judgment for the amount

of money levied upon; or

(C) grant a judgment for an amount

not exceeding the amount received by

the United States from the sale of

such property.

26 USC 6332 Surrender of property subject to

levy

(c) Enforcement of levy. —

(1) Extent of personal liability. Any person

who fails or refuses to surrender any property or

rights to property, subject to levy, upon demand by

the Secretary, shall be liable in his own person

21

and estate to the United States in a sum equal to

the value.of the property or rights not so

surrendered, but. not exceeding the amount of taxes

for the collection of which such levy has been

made, together with costs and interest on such

sum at an annual rate established under section

6621 from the date of such levy (or, in the case

of a levy described in section 6331(d)(3), from

the date such person could otherwise have been .

obligated to pay over such amounts to the taxpayer).

Any amount (other than costs) recovered under this

paragraph shall be credited against the tax, lia-

bility for the collection of which such levy was

made.

22