Court Opinion

ID: 15644
Source: CourtListenerOpinion
Date Created: 2010-04-25 06:46:55+00
Date Added: 2024-06-11T09:37:24.711164
License: Public Domain

IN THE UNITED STATES COURT OF APPEALS
                        FOR THE FIFTH CIRCUIT

                             No. 97-10708

     FIRST STATE BANK-KEENE,

                                            Plaintiff-Appellee,

           versus

     METROPLEX PETROLEUM INCORPORATED, ET AL.,

                                            Defendants,

     JERRIE M. SMITH; MICHAEL HARRISON,
                                            Defendants-Appellants.

      Appeal from the United States District Court for the
                   Northern District of Texas

                          September 16, 1998

Before GARWOOD, DAVIS and EMILIO M. GARZA, Circuit Judges.

GARWOOD, Circuit Judge:

     Defendants-appellants Jerrie M. Smith (Smith) and Michael

Harrison   (Harrison)   (appellants)   appeal   the   district   court’s

judgment declaring void their interest and claim to a parcel of

land that they purchased at a tax sale, which sale the district

court held to be void in its entirety.      We reverse.

                    Facts and Proceedings Below

     On March 24, 1988, Metroplex Petroleum, Inc. (Metroplex), in
Richardson, Texas, executed and delivered to First National Bank of

Richardson (FNB) a promissory note in the principal sum of $266,400

(the Note), and a deed of trust (the Deed of Trust), on a tract of

real property located in Grand Prairie, Texas (the Property), to

secure the Note.   Because of default in payment, the Note was duly

accelerated and full payment was demanded by FNB on June 23, 1989.

Payment was not made.

     On June 30, 1989, FNB was declared insolvent and the Federal

Deposit Insurance Corporation (FDIC) was appointed as Receiver for

the failed institution.    The Note and Deed of Trust passed to the

FDIC at that time.

     In 1991, the City of Grand Prairie and the Grand Prairie

Independent School District brought suit in a Texas court (the "tax

suit") against Metroplex for delinquent ad valorem taxes and sought

to foreclose their statutory tax liens against the Property.

Dallas County intervened as a plaintiff. FNB, the Internal Revenue

Service (IRS), and     the State of Texas were named as in rem

defendants.   The FDIC was not named as a party in any capacity.

Citation on "Comerica, Formerly First National Bank of Richardson"

was served on Comerica Bank-Texas (Comerica) due, apparently, to

the impression, which was mistaken, that Comerica had succeeded to

certain of the rights and assets of FNB, including the Note and

Deed of Trust.       The FDIC, which was the actual successor-in-

interest to FNB, was not joined as a party to the tax suit and did

                                  2
not consent to the foreclosure or subsequent sale of the Property.

       On November 8, 1991, judgment in the tax suit was rendered in

favor of the plaintiffs ("the Taxing Units").1                     Judgment was

rendered against defendant Metroplex in the amount of $8,797 in

delinquent taxes, penalties, and interest for the years 1989 to

1991.2    The judgment foreclosed the tax liens and ordered sale of

the property by the Dallas County Sheriff.

       On March 5, 1992, Smith purchased the property for slightly

more than $10,000, a sum in excess of the judgment amount, at a tax

sale     conducted   by   the   sheriff       (hereinafter   the   “tax   sale”).

Appellants have been in possession of the Property since that time.

       On March 22, 1996, the FDIC filed suit in the court below

against appellants, Metroplex, and the Taxing Units seeking: 1) a

declaration that the tax suit judgment and sheriff’s sale were void

in their entirety; 2) a declaration that appellants’ claimed

ownership of the property by virtue of their purchase at the tax

sale was void and extinguished; 3) a judgment against Metroplex for

the unpaid balance of the Note; and 4) a judgment foreclosing the

Deed of Trust lien against the Property. Metroplex, though served,

did not appear or answer.           Appellants answered, asserting the

1
     The plaintiffs (Taxing Units) were the City of Grand Prairie,
Grand Prairie Independent School District, and Dallas County.
2
     As to the in rem defendants, the judgment recited that
Comerica filed an answer, but did not appear, and disclaimed any
interest in the property; Metroplex did not answer or appear; the
IRS did not answer or appear; and the State of Texas answered,
disclaiming any interest in the property.

                                          3
affirmative defenses of the statute of limitations and adverse

possession under color of title.       While the suit was pending in the

district court, the FDIC transferred the Note and Deed of Trust to

First State Bank--Keene (“FSB”), which was substituted as plaintiff

in the district court.

     The case was tried to the bench on stipulated facts.           The

district court found that FNB and the FDIC had not been joined as

parties to the tax suit.     The court held that the FDIC was a

necessary party and that failure to join the FDIC rendered the tax

suit and subsequent tax sale entirely void. The court further held

that appellants had not gained title by adverse possession because

they did not claim under color of title.         Additionally, although

the court found that the suit had not been filed by the FDIC within

the applicable limitations period, it held that appellants lacked

standing to assert the limitations defense.       Accordingly, judgment

was rendered in favor of FSB.    The judgment, inter alia, declared

the sheriff’s sale null and void, ordered the Taxing Units to pay

Smith the amount they had received from him for the Property at the

tax sale, and ordered foreclosure and sale of the Property in

satisfaction of the judgment.3

     In the proceeding before the district court, the Taxing Units

3
     The district court’s judgment ordered that Metroplex pay FSB
$491,769.96; that the Taxing Units reimburse Smith the amount they
received from him for the Property at the tax sale; that FSB have
foreclosure on its lien; and that the Property be sold at a
sheriff’s sale in satisfaction of the judgment.

                                   4
did not challenge the court’s holding that the tax sale was void,

and they have not appealed.

                              Discussion

I.   Limitations

     Appellants’ principal defense to FSB’s attempted foreclosure

was that the note was barred by limitations.          It is clear that if

the note was barred by limitations and if appellants had standing

to assert limitations, that then FSB could not enforce its lien

against the Property.   The district court correctly ruled that the

applicable limitations period was that provided by 12 U.S.C. §

1821(d)(14)(A)(i), namely six years, or the applicable period under

state law, whichever is longer.     The six-year period begins to run

on the date the cause of action accrues or the date the FDIC is

appointed   receiver,   whichever      is    later.       12   U.S.C.   §

1821(d)(14)(B). See Davidson v. FDIC, 44 F.3d 246 (5th Cir. 1995).

Here the stipulated facts reflect that the cause of action accrued

not later than June 24, 1989, and the FDIC was appointed receiver

June 30, 1989, so the six-year period had run by July 1, 1995, but

the FDIC’s suit was not filed until March 1996, more than eight

months after limitations had run.           FSB does not challenge the

district court’s determination that the applicable limitations

period is six years, and does not assert that any longer period is

provided under state law; nor does FSB claim that the running of

limitations was interrupted or tolled, and the district court did

                                   5
not so   find   (nor   do   we   see   any   basis   for   such   a   finding).

Consequently, the debt was plainly barred by limitations.                It is

settled under Texas law, which is controlling for these purposes

here, that if the debt is barred by limitations, the deed of trust

lien is likewise invalid, as the lien is a mere incident of the

debt.    Davidson at 252-253.          The question then becomes whether

appellants had standing to plead limitations.              The district court

ruled that appellants lacked the required standing. The Texas rule

is correctly stated in 50 Tex. Jur. 3d, Limitation of Actions, § 18

(1986), as follows:

          “The defense of limitations is generally            a personal
     privilege of the debtor. The right to invoke             the bar of
     limitations against a remedy passes, however,            to one who
     lawfully acquires property or any right on                which the
     remedy operates, such as a lienholder or                 subsequent
     purchaser.” (Footnotes omitted).

See also Miller, Hiersche, Martens & Hayward P.C. v. Bent Tree

National Bank, 894 S.W.2d 828, 829 (Tex. App.-Dallas, 1995); Skaer

v. First National Bank of Paris, 293 S.W. 228, 229 (Tex. Civ. App.-

Texarkana 1927, writ ref’d); Levy v. Williams, 49 S.W. 930, 931

(Tex. Civ. App., 1899).      This is also the general rule.           See Boys

Town, USA, Inc. v. World Church, 349 F.2d 576, 579 (9th Cir. 1965),

cert. denied, 86 S. Ct. 894 (1966); 51 Am. Jur. 2d, Limitation of

Actions, § 392 (1970).4

4
                “Since the statute of limitations is a
           plea personal to the debtor, it follows that
           the statute of limitations may not be availed
           of by one who is a stranger to the debtor,

                                        6
      The district court held that appellants lacked standing to

plead limitations because they had no interest in the Property, and

were not in privity with Metroplex, because the tax suit judgment

and the tax sale were wholly void and transferred no interest

whatever in the Property to Smith.    That then is the central issue

in the case.

II.   Effect of Tax Sale

      FSB, as the FDIC’s successor-in-interest, contends that the

tax suit judgment was fatally defective because the FDIC was not

made a party to the tax suit.         Consequently, they argue, the

subsequent tax sale was entirely void and thus had no effect

whatsoever as to any of the various interests in the Property.   As

a result, FSB asserts that the district court was correct in

holding that appellants lacked standing to assert a statute of

limitations defense.       Appellants argue to the contrary that,

despite the omission of the FDIC as a party defendant, the tax suit

and subsequent sale were valid and binding as to the parties which

were properly before the court in that suit.      Accordingly, they

argue that they had standing as successors-in-interest to Metroplex

           standing in no relation of privity of estate
           with him. On the other hand, where there is a
           privity between a person who could, if sued,
           plead the statute and the party offering to
           plead it, the latter may plead it to save his
           property.    Such is the case with heirs,
           mortgagees, cotenants joining in a mortgage,
           and transferees of mortgaged property.” Id.
           (footnotes omitted).

                                  7
to assert that the limitations period had run on the note and,

consequently, that FSB could no longer exercise its power of sale

under the deed of trust.

      On appeal, FSB and appellants rely on both Texas and federal

law     as    supporting     their     respective   positions,       proffering

alternative arguments based on each.

      As noted, the central issue on this appeal is whether the

district court erred in holding that the appellants lacked standing

to assert a limitations defense against FSB.              Resolution of this

question, however, requires determination of whether the tax suit

judgment and the subsequent tax sale were entirely void, because

appellants’ principal claim to standing to assert limitations is

based on their having obtained some interest in the Property at the

tax sale, thereby placing them in privity with Metroplex.

      A.     State Law Arguments

      Appellants claim that under Texas law “although a lienholder

who is not made a party is not bound by the judgment rendered, the

judgment is valid and operative as against those who were actually

made parties.”      Thus appellants argue that the tax suit judgment

was valid as to Metroplex, the owner of the Property, and the tax

sale conveyed such interest as Metroplex possessed.                  Appellants

also assert that because the FDIC was not made a party to the tax

suit, it is not bound by the judgment and, consequently, no action

taken    pursuant   to     the   tax   suit   judgment   had   the   effect   of

                                         8
disturbing the FDIC’s lien interest.               Thus, appellants claim that

the tax suit judgment was dispositive of Metroplex’s interest in

the Property, which was conveyed to them pursuant to the tax sale,

but that because the FDIC was not party to the tax suit, the

judgment did not affect its lien interest, and, accordingly, that

they took the Property subject to the FDIC’s lien, just as if

Metroplex had conveyed it to them subject to the lien.

      FSB disputes appellants’ interpretation of the applicable

Texas law, claiming that the FDIC was a “necessary party” to the

tax suit and, therefore, that failure to join the FDIC renders the

judgment entered pursuant to the tax suit void in its entirety.

According to FSB, the Texas rule is that “as between the tax sale

purchaser and the interested person who was not made a party to the

tax suit, the tax sale purchaser’s interest is void.” Accordingly,

FSB   contends    that     appellants’       interest    in   the    Property    is

necessarily void.

      B.   Federal Law Arguments

      Turning to the parties’ federal law arguments, both appellants

and FSB cite 12 U.S.C. § 1825(b)(2) as supporting their respective

positions.     Section 1825(b)(2), enacted as part of the Financial

Institutions     Reform,     Recovery,       and    Enforcement     Act   of    1989

(FIRREA), Pub.L. No. 107-173, 103 Stat. 183 (1989), provides that

“[n]o property of the [FDIC] shall be subject to levy, attachment,

garnishment, foreclosure, or sale without the consent of the

[FDIC], nor shall any involuntary lien attach to the property of

                                         9
the [FDIC].”

     Appellants argue, inter alia, that section 1825(b)(2) relates

only to the FDIC’s lien, not to Metroplex’s “equity.”    Appellants

also argue that, by its express terms, section 1825(b)(2) prevented

foreclosure of the FDIC’s lien interest irrespective of whether the

FDIC was made a party to the tax suit.    Accordingly, they argue,

the FDIC could not have been a “necessary party” to the tax suit

because, pursuant to the prohibition of section 1825(b)(2), the

state court lacked authority to extinguish the FDIC’s lien.

     FSB contests appellants’ interpretation and application of

section 1825(b)(2).   It also argues that the tax suit may well have

been invalid pursuant to section 1825(b)(2) because the FDIC did

not consent to the tax sale, which purported to vest “good and

perfect title” in the purchaser, extinguishing all prior lien

interests pursuant to the authority of Texas state law.    See Tex.

Tax Code Ann. § 34.01(d) (Vernon 1992).

     C.   Analysis of Texas Law

     With respect to the Texas law arguments, both the case law and

authorities cited favor the position of the appellants.      As FSB

concedes, some of the relevant cases are difficult to reconcile,

but the substantial majority of the cases hold that failure to join

a lienholder in a tax foreclosure suit does not render a subsequent

judgment void as to the parties who were joined in the suit.     As

stated in 69 Tex. Jur. 3d, Taxation, § 461 (1989), a tax deed

                                  10
“vests good and perfect title” in the purchaser “to [such] interest

owned by the defendant,” but is “subject to the rights of any

person who had some interest in the property and therefore should

have been joined as a party in the suit but was not so joined.”

     The majority of relevant cases state the same rule.         For

example, in Tabasco Consol. Indep. School Dist. v. Reyna’s Estate,

93 S.W.2d 796 (Tex. Civ. App.--San Antonio 1936), the court held

that although both Texas statutory and decisional authority

     “provides and contemplates that all proper persons,
     including lienholders, shall be joined in suits for the
     collection of taxes against property in this state. It
     is likewise true that the failure on the part of the tax
     collecting authority to join all parties interested in
     the property in the suit shall be no defense or
     constitute any reason to delay judgment or action against
     those owners who may be properly before the court.” Id.
     at 798.

This rule was explained by the fact that “[t]hose owners who are

not parties defendant are not concluded, and their rights are not

injured by the judgment entered.”    Id.

     This appears to be essentially the same rule as is stated in

the cases relied on by FSB as well.        For example, in Bussan v.

Donald, 244 S.W.2d 271 (Tex. Civ. App.--Fort Worth 1951, writ ref’d

n.r.e.), one of three cases relied upon by FSB, the court explained

that,

     “strangers to a judgment, that is, [persons] who are not
     parties or privy to a proceeding, may, when their
     interests are adversely affected by the judgment, impeach
     it whenever it is attempted to be enforced against them.”
244 S.W.2d at 273 (citation omitted).

                                11
As is implied by this passage, the judgment is not wholly void, but

simply provides a basis upon which a lienholder may collaterally

attack the judgment if it is sought to be enforced against him.     As

further stated in Bussan, “the prior lien holder . . . , not being

a party to [the foreclosure] suit, was not bound thereby,” and

“could attack it collaterally when appellants asserted it against

his title.” 244 S.W.2d at 274.   All of the cases either called to

our attention by the parties or revealed by our review of Texas

case law indicate that the cases are in substantial accord and

support the rule as stated by the appellants.5

     In sum, “[a] judgment in a tax suit is not void because all

parties who own an interest in the property are not made parties.

Such judgment foreclosing the tax lien is good as against the

parties in interest joined in the suit, and parties not joined are

not bound by any such judgment.”        Loper v. Meshaw Lumber Co., 104
S.W.2d 597, 599-600 (Tex. Civ. App.--Eastland 1937, writ dism’d).

5
     See Whitehead v. Garbury Indep. School Dist., 45 S.W.2d 421
(Tex. Civ. App.--Fort Worth 1931), in which the court stated that
lienholders are proper parties, but, “that the failure to implead
one or more of the interested parties did not deprive the trial
court of power to render a valid judgment as to those actually
impleaded.” Id. at 423 (citation omitted). Cf. Coakley v. Reising,
436 S.W.2d 315, 318 (Tex. 1968) (“[A] judgment by a taxing agency
is not binding upon a person who is not a party to the suit, when
his ownership is evidenced by an unrecorded document, if the taxing
authority has actual or constructive notice of his title or
ownership.”).    Thus, while the cases state that a lienholder
should, or sometimes “must,” be joined, the cases uniformly hold
that failure to do so does not wholly invalidate the judgment, but
rather renders it “non-binding” upon the omitted lienholder.

                                   12
Accordingly, we hold that the 1991 tax suit was not wholly void,

but because the FDIC was not made a party to the suit, its lien

interest was not disposed of and appellants took the Property

subject to the FDIC’s lien, just as they would have had Metroplex

convey it to them subject to the FDIC’s lien but without the FDIC’s

knowledge or consent.

     D.    Analysis of Federal Law

     The fundamental issue implicated by the federal law arguments

on appeal involves whether, and to what extent, section 1825(b)(2)

is incompatible with the Texas state laws governing foreclosure of

tax liens against real property and the subsequent conveyance of

that property at a tax sale.

     In one of our most recent pronouncements on this question,

FDIC v. Lee, 130 F.3d 1139 (5th Cir. 1997), we held that a tax sale

under Louisiana law violated section 1825(b)(2). In Lee, the FDIC,

in its capacity as receiver for a failed bank, succeeded to a

mortgage   on    a   parcel    of   land    located   in   Jefferson   Parish,

Louisiana.      The owner of the land failed to pay the taxes due,

resulting in the transfer of the property at a tax sale.               Because

the FDIC’s lien interest in the land was not properly recorded, and

because it had failed to request a notice of tax delinquency

pursuant to Louisiana statute, the FDIC was not informed of the

sale of the property.         Soon after the sale, however, the tax sale

purchaser contacted the FDIC to inquire whether it intended to file

                                       13
for redemption of the property.            The FDIC took no action for

approximately three years, but eventually filed a writ of mandamus

in state court seeking to compel the issuance of a redemption deed.

Id. at 1140.   The state court denied and dismissed the writ because

the FDIC refused to reimburse the tax sale purchaser for repairs

and maintenance of the property as was required under the Louisiana

statute governing redemption.        Id.    The FDIC subsequently filed

suit in federal court seeking to have the tax sale declared void,

arguing that the sale had violated its constitutional due process

right to notice.    Id.   We based our holding on the ground that the

tax sale violated section 1825(b)(2) because the FDIC had not

consented to the sale.          Id. at 1143.       We reasoned that the

provision’s prohibition on “foreclosures” applied to tax sales as

conducted   under   Louisiana     state   law,   and   stated   that   “[t]he

controlling principle of this case is that 12 U.S.C. § 1825(b)(2)

represents the express will of Congress that the FDIC must consent

to any deprivation of property initiated by the state.”                Id. at

1143. We held “that the tax sale was conducted without the consent

of the FDIC” and, accordingly, “violated 12 U.S.C. § 1825(b)(2) and

thus is null and void.”     Id.

     In Trembling Prairie Land Co. v. Verspoor, 145 F.3d 686 (5th

Cir. 1998), we applied the reasoning of Lee to a case in which the

FDIC sought to redeem property subject to an FDIC lien that had

been sold at a tax sale without its consent.             We held that the

                                     14
FDIC’s right of redemption constituted “property” within section

1825(b)(2). Id. at 690.       Concluding that tax sales under Louisiana

law   were    functionally    equivalent       to   the   Texas   foreclosure

procedures, we held the tax sale “null and void” because it had

been conducted in violation of section 1825(b)(2).            Id. at 690-91.

In summarizing the rationale of our holding, we quoted our previous

statement in Lee that section 1825(b)(2) “represents the express

will of Congress that the FDIC must consent to any deprivation of

property initiated by a state.”        Id. at 691 (citation omitted).

      In both Lee and Verspoor, we summarized section 1825(b)(2) as

requiring that the FDIC must consent to any “deprivation” of

property initiated by the state.           This simple articulation of the

undergirding principle of section 1825(b) accurately represents the

analytical thread that runs through the line of cases interpreting

this provision.     Obviously, the FDIC cannot be “deprived” of any

property interest it never owned.           Here, the FDIC never had more

than a lien; it never had the right to prevent transfer of the

Property (or an interest therein) subject to its lien; and it never

had the right to prevent Metroplex, or any party holding an

interest in the Property under Metroplex, from pleading the statute

of limitations once the statute had run.

      For    example,   in   Irving   Indep.    School    Dist.   v.   Packard

Properties, 970 F.2d 58, 62 (5th Cir. 1992), we rejected an

argument by the FDIC that certain preexisting liens securing

                                      15
previously-assessed          penalties   had    “the   same    effect     as   the

imposition of a direct liability” and therefore violated 12 U.S.C.

§ 1825(b)(2) and (3).          We concluded that allowing enforcement of

these preexisting liens subsequent to sale of the assets by the

FDIC did not constitute a deprivation of the FDIC’s “property.” We

reasoned that because the liens had been in place when the FDIC

acquired the assets, the “liens have not caused a reduction in the

value of the receivership’s assets,” explaining that the “assets

have the same value today that they had when the FDIC obtained

them.”   Id.     Because of this, we held that section 1825(b)(2) did

not apply and that the preexisting liens could be enforced upon the

FDIC’s sale or disposal of the encumbered assets.              Id.   Although we

did not expressly state our conclusions in those terms, the key to

our holding was that allowing future enforcement of the liens did

not constitute a deprivation of the FDIC’s property.

     Because the term “property” has come to be somewhat broadly

construed in the context of section 1825(b)(2), there exists a vast

number of potential interests sufficient to constitute “property”

under that provision.         This makes the requirement that there be an

actual “deprivation” crucial in analyzing whether a particular

action taken under state law violates section 1825(b)(2).                      The

reasoning      of   Irving    illustrates      our   point    as   well   as   the

distinction we seek to make. Absent some actual devaluation of, or

loss of rights in, FDIC “property,” there is no “deprivation of

                                         16
property” and section 1825(b)(2) is not violated under Lee.             In

Lee, the state court held that under Louisiana law, redemption of

the property by the FDIC would only be allowed if the FDIC

reimbursed the tax sale purchaser for repairs and maintenance of

the property. 130 F.3d at 1140.       Thus, the application of state

law would have subjected the FDIC to payment of an additional,

nonconsensual fee before it could exercise its rights under the

mortgage as they had existed prior to the tax sale.              In other

words,   the   “deprivation”   in   Lee    appears   to   have   been   the

requirement that the FDIC pay to redeem the property, rather than

the mere transfer of title pursuant to the tax sale.

     Similarly, in Verspoor the FDIC succeeded to a right of

redemption, which a tax sale purchaser sought to extinguish by

means of a suit to quiet title. 145 F.3d at 690.      We held that the

“property” involved in Verspoor was the right to redeem the land

that had been sold at the tax sale.        Id.   The suit to quiet title

sought, by operation of state law, to extinguish this right,

thereby depriving the FDIC of “property” without its consent.           As

in Lee, we assume that the FDIC had no particular interest in who

held legal title to the property in question as long as the FDIC’s

equitable rights in the property were not prejudiced and could be

exercised at the discretion of the FDIC without additional cost.

     In addition, we note that in the two cases in which we have

considered tax sales under Texas law, Matagorda County v. Russell

                                    17
Law, 19 F.3d 215 (5th Cir. 1994), and Donna Indep. School Dist. v.

Balli, 21 F.3d 100 (5th Cir. 1994), we held that the tax liens

could be foreclosed as long as the FDIC’s interests were preserved.

In Matagorda, we stated that, although this was a permissible

solution, it was not a realistic one under the circumstances of

that case. 19 F.3d at 225 n.11.     We also acknowledged that the

FDIC itself had endorsed this general position.     Id. at 223 n.7.

In Balli, we affirmed the district court’s judgment, which held

that the taxing units were permitted to foreclose their liens, but

“decreed that foreclosure on the tax liens would be subject to the

FDIC’s deed of trust liens.”   Id. at 101.

     In the case at bar, the FDIC’s “property” in question consists

of the FDIC’s mortgage on the Property.    Unlike the actions taken

pursuant to state law in Lee and Verspoor, the foreclosure and tax

sale under Texas law did not extinguish the FDIC’s lien because the

FDIC was not joined in the tax suit.       The FDIC’s lien was not

devalued, extinguished, or disturbed in any manner. The appellants

took the Property subject to the FDIC lien, and the FDIC’s ability

to enforce its rights under the lien were not prejudiced thereby.

It had all the same rights following the judgment in the tax suit

and the consequent tax sale as it did before the tax suit was

filed.   The FDIC could then have exercised its power of sale under

the deed of trust against appellants just as easily as it could

have prior to the tax suit judgment and tax sale.   The FDIC was in

                                 18
no different position following the tax suit and tax sale than it

would have been had there been no such tax suit and tax sale and

Metroplex had in March 1992 conveyed the Property (without the

knowledge or consent of the FDIC) to Smith subject to the FDIC’s

lien.   Consequently, we hold that the tax sale did not constitute

a deprivation of the FDIC’s property, and thus did not violate

section 1825(b)(2). Accordingly, we conclude that the tax sale was

not “null and void” in its entirety and did effectively convey such

interest in the Property as was held by Metroplex, the mortgagor-

owner, to the appellants, subject to the FDIC’s lien.

                              Conclusion

     Having concluded that the tax sale which transferred title

from Metroplex to the appellants was not void in its entirety,

either under Texas state law or pursuant to the restrictions of 12

U.S.C. § 1825(b)(2), we hold that the district court erred in

holding that appellants lacked standing to assert that the six-year

statute   of   limitations   provided   by   FIRREA   had   run.   As   the

stipulated facts clearly demonstrate that the six-year limitations

period had run months prior to the filing of this suit, the FDIC’s

lien against the Property likewise had become unenforceable and was

barred when the suit was filed.     Accordingly, the judgment of the

district court is reversed and the cause is remanded for entry of

judgment consistent with this opinion.

                                   19
     REVERSED and REMANDED

20