Opinion ID: 3005324
Heading Depth: 2
Heading Rank: 1

Heading: Delaware’s Pure Race Recording Statute

Text: In Delaware, the priority of mortgages is governed by 25 Del. C. § 2106. Section 2106 is a pure race statute, providing that the time of recording is determinative of the priority of competing creditors.10 “The rule is first in time, first in right.”11 Specifically, § 2106 provides that: A mortgage, or a conveyance in the nature of a mortgage, of lands or tenements shall have priority according to the time of recording it in the proper office, without respect to the time of its being sealed and delivered, and shall be a lien from the time of recording it and not before.12 In the case at bar, CACH recorded its judgment lien against Johnson on December 21, 2006, eight days before the Eastern Savings mortgage was recorded. Thus, the CACH judgment has priority over the Eastern Savings Mortgage under the race recording statute. Eastern Savings, however, contends that the doctrine of equitable subrogation should be applied to allow it to take priority over the CACH judgment. Eastern Savings argues that the doctrine of equitable subrogation is applicable to a mortgage refinancing, and that it has satisfied the elements required to be subrogated in this case. Eastern Savings contends that because it paid the preexisting mortgages and 10 First Mortg. Co. v. Fed. Leasing Corp., 456 A.2d 794, 795 (Del. 1982). 11 Id. 12 25 Del. C. § 2106. 7 judgments on the Johnsons’ property, it stepped into the shoes of those previous lien-holders for purposes of being first in priority to receive the proceeds from the foreclosure sale. CACH responds that Eastern Savings cannot jump ahead in priority, both because equitable subrogation does not apply to mortgage refinances in Delaware, and because Eastern Savings has not satisfied the requirements to be subrogated on the facts of this case.