Court Opinion

ID: 9607839
Source: CourtListenerOpinion
Date Created: 2023-08-22 03:02:25.033772+00
Date Added: 2024-06-11T18:02:40.764780
License: Public Domain

CARDINE, Justice,
dissenting.
I would affirm the decision of the trial judge. The court was here sitting as a court in equity. The critical question presented for determination is: what are the equities between the parties, i.e. should the bank have the benefit of the unpaid balance on the Reed family property or should that benefit go to the Reed family or their designees? Let us examine the equities.
This vacation home on a forest service lease had been in the Reed family since the 1930s. J. Franklin Reed sold the home to Tom Worden. There was a principal balance of $50,000 still due upon the purchase. Before his death, J. Franklin Reed assigned his right to the balance of the purchase price to Ben Saffren and his mother, Adeline Reed. The parties stipulated at trial that the balance of the purchase price was owed to Saffren and Mrs. Reed.
For the bank, it is undisputed that it extended loans to Worden without relying upon or even knowing about the Reed cabin; that upon learning about Worden’s purchase of the cabin, the bank obtained a transfer of Worden’s “right, title and interest” in payment of his preexisting debt to the bank. Worden took bankruptcy. The court found:
“That the Defendant Tri-State National Bank had actual, as well as constructive, knowledge of Plaintiffs or their predecessors’ interest in said property, to wit: that Wordens still owed money on their agreement for sale.
“That Defendant Bank had actual knowledge through the so called Loan Agreement that all that the bank was purchasing from Wordens was whatever interest Wordens had.
“That Defendant Bank is not a bona fide purchaser for value.”
The findings of the court are amply supported by the evidence. The equities weigh *1087heavily in favor of the Reed family and their designees. The court’s opinion quotes 10A Thompson on Real Property § 5261 (1957) at p. 545:
“Generally, in the United States, the lien is considered personal to the vendor, and not assignable except under peculiarly equitable circumstances. ” (Emphasis added.)
I would find the circumstances in this case to be “peculiarly equitable” and recognize the assignment of the equitable lien. This lien did not exist only in the mind of the equity court. The bank knew of the unpaid purchase price, as did all parties. The bank was not a bona fide purchaser nor did it rely upon a record examination for clear title. Therefore, I would affirm the trial court.