Court Opinion

ID: 6816789
Source: CourtListenerOpinion
Date Created: 2022-07-23 19:02:21.664302+00
Date Added: 2024-06-11T16:03:54.937809
License: Public Domain

Prentis, P.,
dissenting;
I am constrained to dissent in this case, and to express my reasons therefor.
The majority hold that the lien of the judgment of Neff’s administrator, which is the junior lien of all of those here involved, is not only paramount to the unrecorded deed of trust in favor of Martha J. Tusing, and with this I agree, but, as a result of this priority, they also hold that this judgment lien is prior to the liens of the recorded deeds of trust — that is, the deeds of trust securing the debts of Lohr and Hildreth and the general assignment for the benefit of all the creditors of the debtor, both of which deeds were recorded before the judgment was obtained. To this latter conclusion I cannot assent.
The question has been the subject of an interesting debate, found in 12 Va. L. Journal, pages 360, 424, 487, 488, and in the article by the Honorable John Randolph Tucker, 1 Va. L. Reg., page 4, and the reply thereto of the Honorable John B. Moon, at page 254. It would weary the flesh to undertake to repeat or to analyze these arguments. Some of them are elusive and difficult to grasp. Mr. Tucker calls the question a puzzle — a legal paradox — and one of the definitions of a “paradox” is, that it is “contradictory, seemingly opposed to common sense.” I wish primarily to utter an emphatic dissent from the soundness of that logic which so construes the Virginia recording acts as to lead to a paradox — to a contradictory conclusion which is seemingly opposed to common sense. It should certainly be presumed that the General Assembly never intended the recording statutes to be construed to produce such a result.
The puzzle must be sought for before it can be perceived, and the question is answered without any *214intimation that its solution is difficult in 15 R. C. L., •section 283, page 817, in this language: “For example, if between a judgment and an unrecorded mortgage there is a second mortgage which is entitled to priority over such judgment, but which must be postponed as to the prior unrecorded mortgage by reason of the second mortgagee having notice thereof, such unrecorded mortgage will also be entitled to priority over such subsequent judgment.” Citing Manufacturers, etc., Bank v. Bank of Pennsylvania, 7 Watts & S. (Pa.) 335, 42 Am. Dec. 240.
This is the language of Gibson, C. J., in that case, upon which the statement just quoted is based: “The succeeding liens stand clear of exception; but though the lien of the Manufacturers’' and Mechanics’ Bank is bad against them, it is good against the Bank of Pennsylvania, which had actual notice, and whose lien is good against all the rest. On the principle of Wilcocks v. Waln, 10 Serg. & R. [Pa.] 380, the result is that the Manufacturers’ and Mechanics’ Bank is •entitled in the first instance. The creditors subsequent to the Bank of Pennsylvania cannot come in till it has been satisfied, which cannot be till the prior lien of the Manufacturers’ and Mechanics’ Bank has also been satisfied, and as they are not in the field, inasmuch as they are not to be paid, the fund being insufficient to reach them in any event, the contest which is between that bank and the Bank of Pennsylvania is settled by what has already been said.”
Expressed differently, the judgment there was that the unrecorded lien of the Manufacturers’ and Mechanics’ Bank, though void as to subsequent lienors without notice, was nevertheless good as against the Bank of Pennsylvania, which though it had a recorded lien, also had actual notice; but the lien of the Bank of *215Pennsylvania which, was recorded was also held good against all the rest of the subsequent lienors.
It is properly held in this case that the unrecorded lien of Martha J. Tusing is a nullity as against the-subsequent judgment creditor, Neff’s administrator, but nevertheless that invalid lien (nullity) is immediately revivified sufficiently to advance and establish the-subsequent judgment creditor to the place of a first lienor. Such a holding is to me inconsistent and irreconcilable. If it be a nullity as to the judgment creditor (as it is), how can it be immediately validated for his benefit? As to the judgment, the unrecorded lien is invalid, i. e., just as if it had never existed, but how can it be logically concluded, solely because that unrecorded lien is subordinate to the judgment, that therefore the other liens by deeds of trust which are duly recorded are also subordinate to and inferior liens to this subsequent judgment? While the statute expressly avoids the unrecorded lien as to the judgment, it certainly does not, in express terms, either substitute the judgment to the place of the invalid lien, or advance the judgment over any other liens, or change its relation to any other liens. The judgment creditor is here relying upon the recording acts, and these statutes, in express terms, postpone the lien of a judgment to the-liens of deeds of trust which are duly recorded before the judgment was recovered. By the recording acts, they should all stand or fall..
The contrary view undertakes by logic to transform that which is a nullity (Tusing’s unrecorded deed) as to Neff’s administrator, into a first lien, or its equivalent for his benefit. This would be the effect, it is true, if we had here only to consider the unrecorded lien of Tusing and the judgment of Neff’s administrator— Neff would have priority under the recording acts, and *216Tusing could, not claim against the judgment; but the logic is faulty which ignores any of the pertinent facts, and this is faulty because it ignores and displaces the subsequent valid recorded liens, which are manifestly superior, under the recording acts, to the judgment subsequently recorded which is manifestly inferior. Those who take this view seem to satisfy themselves with the statement, that the valid subsequent lienors having had notice of the Tusing deed of trust get just as much of the fund because their debts are postponed to the Tusing debt. But is not this statement offset by the statement that the judgment creditor should not, for that reason alone, be entitled to more than he would have received if there had never been any Tusing debt or lien? He certainly should not receive any less, but why on that account merely should he receive more? Is he not entitled, and only entitled, to precisely what he would have received if there had never been any such prior invalid lien? Passing strange to me it is that the mere fault of Tusing in not recording her deed of trust is held not only to have destroyed the priority of those others who did record their liens, but also to have advanced the junior lien, the judgment, to the first place. Moreover, as a result of this fault of another, the judgment debtor himself is deprived of the privilege of creating any voluntary subsequent liens upon his property which would not inevitably be displaced by a later judgment. The reasoning which has thus irrevocably transformed a junior lien, clearly inferior to other valid liens, into a first lien upon the fund, and this only because the holder of the prior deed of trust failed to record it, seems to me to be both illogical and violative of the dominating purpose of the recording statutes.
*217There are a number of other considerations — among them, the perfectly well settled proposition that, as a general rule, the lien of a judgment attaches only to the interest of the judgment debtor in the property; and also that haying the opportunity to adopt the view in previous cases that a junior lienor could be so advanced over senior lienors, it has never before occurred to the judges of this court that it would be proper to do so. This court has in fact, in cases like this, previously followed the generally accepted rule, enforcing the true general intent and purpose of the recording acts, that the priority of liens depends upon when they were obtained, and that junior liens are always postponed to prior liens. Hill v. Rixey, 26 Gratt. (67 Va.) 72; Eidson v. Huff, 29 Gratt. (70 Va.) 342, are such cases.
These then are all the facts and the conclusion drawn therefrom by the majority: Here is the unrecorded deed of Tusing, which is invalid as to the judgment; here are two later liens, in every aspect valid, (a) Lohr’s and Hildreth’s and (b) debts of the creditors secured in the general assignment; ergo, this judgment lien, obtained after both of these valid liens attached to the property, is preferred in the distribution! To me this appears to be a non sequitur.
My view is that as between the valid specific liens and the general lien of the subsequent judgment, the specific recorded liens have priority; and because the fund for distribution is insufficient to pay these valid prior liens, the judgment lienor has no interest in the fund. There is nothing belonging to his debtor to which his lien can attach, because the fund is less than these valid prior liens. If there had been a surplus, the judgment creditor would have been entitled to satisfaction therefrom in preference to Mrs. Tusing, *218the holder of the unrecorded deed of' trust, because her lien is invalid as to the judgment. In effect, the decree appealed from directs the payment to Mrs. Tusing out of funds of the other lienors, because they had express notice of Mrs. Tusing’s lien, and not out of funds from which the judgment could in any event be satisfied. Therefore, I think the decree is substantially right and .should be affirmed.
West, J., concurs in the dissenting opinion of Prentis, P.