Filed: January 4, 2010
Opinion by Judge Deborah S. Eyler
Held: A recorded deed of trust dated prior to a recorded judgment has priority over the judgment despite the deed of trust being recorded after the judgment.
Facts: On May 11, 2007, a judgment was obtained for $2,000,000 following a tort action involving battery. The judgment-creditor obtained a writ of execution and the sheriff levied on the debtor's real property in Baltimore County. The sheriff's sale was scheduled for October 25, 2007.
Opinion by Judge Deborah S. Eyler
Held: A recorded deed of trust dated prior to a recorded judgment has priority over the judgment despite the deed of trust being recorded after the judgment.
Facts: On May 11, 2007, a judgment was obtained for $2,000,000 following a tort action involving battery. The judgment-creditor obtained a writ of execution and the sheriff levied on the debtor's real property in Baltimore County. The sheriff's sale was scheduled for October 25, 2007.
On October 18, 2007, Aegis Funding Corporation sued the judgment-creditor and the defendant to enjoin the sheriff's sale and to establish priority of Aegis' lien against the real property.
Aegis had made a loan to the defendant secured by the real property and received a deed of trust dated before the judgment. Through "inadvertence", the deed of trust was not recorded in the land records until after the sheriff's sale was advertised.
Analysis: Section 3-201 of the Real Property Article provides that the effective date of a deed, "is the date of delivery. The delivery date is the last date of acknowledgment or the date stated on the deed, whichever is later." Both the date on the Aegis deed of trust and the date of the last acknowledgment on the deed of trust predated the judgment. Section 3-201 provides that once a deed is recorded, it takes effect from its effective date against every purchaser with notice of the deed and creditor of the grantor with or without notice. The court found the judgment-creditor to be a "creditor" of the defendant rather than a "purchaser."
Analysis: Section 3-201 of the Real Property Article provides that the effective date of a deed, "is the date of delivery. The delivery date is the last date of acknowledgment or the date stated on the deed, whichever is later." Both the date on the Aegis deed of trust and the date of the last acknowledgment on the deed of trust predated the judgment. Section 3-201 provides that once a deed is recorded, it takes effect from its effective date against every purchaser with notice of the deed and creditor of the grantor with or without notice. The court found the judgment-creditor to be a "creditor" of the defendant rather than a "purchaser."
The full opinion is available in PDF.
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