Court Opinion

ID: 8267612
Source: CourtListenerOpinion
Date Created: 2022-10-16 19:12:28.455878+00
Date Added: 2024-06-11T16:43:25.280865
License: Public Domain

DixoN, J.
dissenting.
I agree with the conclusions which the vice-chancellor has reached upon the facts.
But I dissent from the legal rule by which he fixes the order of priority, for I do not think it necessary to advance the complainant Sayre to the front against everybody, in order to give him the full benefit of his superiority to Hoag. '
Nor do I assent to the rule laid down in the opinion just read, since I see no reason for regarding the complainant as substituted in the stead and rights of Hoag as against Fisher, merely because Hoag failed to comply with the registry laws. The effect of non-compliance with those laws is declared by themselves to-be, not that the rights of him in default shall be transferred to the subsequent encumbrancers, but that his claim shall be void as to them.
Therefore, if there be three encumbrancers, A, B and C, in the order of time, and A’s lien be prior to B’s, and B’s to C’s, but, for A’s omission to properly register his lien, it is void as to C’s, then the fund should be disposed of as follows:
1. Deduct from the whole fund the amount of B’s lien, and apply the balance to pay C. This gives C just what he would have if A had no existence.
2. Deduct from the whole fund the amount of A’s lien, and *563apply the balance to pay B. This gives B what he is entitled to.
3. The balance remaining after these payments are made to B and C is to be applied to A’s lieu.
To illustrate : Suppose the fund to be $5,000; A’s lien to be $3,000; B’s lien to be $4,000, and C’s lien to be $2,000. Then, C receives $5,000, less $4,000=$1,000; B receives $5,000, less $3,000=$2,000; A receives $5,000, less ($l,000-j-$2,000),=: $2,000.
Or suppose the fund to be $5,000, and each of these encumbrances to be $5,000 ; then it will appear that A, the first in time, will take it all; since, except for the registry laws, he would clearly be entitled to it, and the registry laws simply prevent his taking anything by which C’s security may be lessened. But C’s security was nothing at the beginning, for B’s prior lien covered the whole fund; and C, therefore, has no right by which A’s claim can be impaired.
Where B’s and C’s claims are concurrent. in time and lien, but A is prior to B, and void as to C (as in the present case), the distribution should be as follows:
1. Divide the whole fund in the proportion of B’s and C’s
claims, and give to C his proportion. Thus is A ignored in fixing C’s rights. *
2. Deduct from the whole fund the amount of A’s lien, and apply the balance to B’s claim.
3. The balance remaining after both payments goes to A.
By applying these rules to the case before us, it will be seen that, in my judgment, Fisher alone is injured by the decree below ; but as he is not a party to this appeal, the decree cannot be changed here for his sake, and therefore, I think, should be affirmed.
Eor affirmance — DixoN—1.
For reversal — Beasley, C. J., Depue, Knapp, Magie, PauKer, Reed, Scudder, Van Syckel, Clement, Cole, Dodd Green — 12.