Volume 7 Number 1

 

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Title Tips by Tute

Volume 7, Number 1

Dear Tute: 

    We recently examined a title to property which had been annexed from a county into a city. Since the present owner was also the owner at the time the annexation occurred (less than twenty years ago), I was going to check the present owner for judgments in both the county and city records. Somebody told me I didn't need to check the City judgment lien indices prior to the annexation. Were they right?

                                                    Sign me as,

                                                    How can I be in two places at one time?
                                                    (without a station wagon?)

Dear Two-fer:

    What an interesting question! And one that to my knowledge has not been addressed by statute or court decision (at least not recently!). Let's start with what we do know.

    The first place to look is 8.01-458, which is titled "From what time judgment to be a lien on real estate; docketing revived judgment." It states that "Every judgment for money rendered in this Commonwealth . . . , shall be a lien on all the real estate of or to which the defendant in the judgment is or becomes possessed or entitled, from the time such judgment is recorded on the judgment lien docket of the clerk's office of the county or city where such land is situated; . . . Any judgment or decree properly docketed under the provisions of this section shall, if the real estate subject to the lien of such judgment has been annexed to or merged with an adjoining city subsequent to such docketing, be deemed to have been docketed in the proper clerk's office of such city." See also 8.01-431 and -434 for similar language regarding the place of docketing.

    Clearly, a judgment docketed in the county prior to annexation was docketed in the records "of the clerk's office of the county or city where such land is situated" and will follow the property into the city under the last sentence of the statute. A judgment docketed in the city after annexation will attach to the property because, again, it is docketed in the records "of the clerk's office of the county or city where such land is situated." The statute does not appear to specifically address your question, whether or not a judgment docketed in the city prior to annexation will attach to the property.

    An argument could be made that the statute states the judgment is a lien from the time such judgment is recorded on the judgment lien docket of the clerk's office of the county or city where such land is situated. This reads into the last sentence of the statute the phrase "at the time of docketing." Under this reading, since the land was not "in the city" when docketed, it was not a lien when docketed, and since it was not a lien when docketed, it could never attach to the real estate. The annexation date would set both a final date to check the county records and a beginning date to check the city records. As noted below, there are circumstances in which a lien attaches later in time than its date of docketing, and Tute does not find this line of reasoning terribly persuasive. The land records exist to provide constructive notice. Not to examine certain records because of the sovereign's actions seems shortsighted. As one expert noted, "the mere fact that it might be a nuisance to title searchers wouldn't make any difference to the court."

    The legislature is presumed to be solving problems by enacting legislation. The likely issue during annexation would have been "what happens to the existing liens upon annexation?" and the legislature appears to have addressed that by stating the lien evidenced by the docketing is "deemed" to be in the "proper" clerk's office after the annexation. This "inclusionary" interpretation of the statute preserves the "status quo ante annexation" and would seem to imply that the "county" records are the "wrong" records after annexation. No parallel statement would be necessary involving the "city" records since, after annexation, they are the records "in" the jurisdiction in which the land is located. An "exclusionary" interpretation suggests the legislature was prohibiting enforcement by "annexing" creditors while the inclusionary approach would prevent arguments resulting in the unjust enrichment of "annexed" debtors. 

    The general recording act, 55-96, has language similar to that found is 8.01-458. That statute notes that contracts and deeds are void as to purchasers for value and without knowledge until they are recorded "in the county or city wherein the property embraced in such contract, deed or bill of sale may be." The statute goes on to say " A recordation under the provisions of this section shall, when any real estate subject to the lien of any such contract has been annexed to or merged with an adjoining city subsequent to such docketing, be deemed to have been recorded in the proper clerk's office of such city." Again, the plain meaning appears to be that property once encumbered, remains encumbered, even if annexed into another jurisdiction. Later, in 55-97, the General Assembly states "Notwithstanding any such writing shall be duly admitted to record in one county or corporation wherein there is real estate or goods or chattels, it shall nevertheless be void as to such creditors and purchasers in respect to other real estate or goods or chattels without the same, until it is duly admitted to record in the county or corporation wherein such other real estate or goods or chattels may be . . . " The General Assembly again does not condition effectiveness of the statute on the recording and the property being in the same place at the same time, only that it be recorded in the jurisdiction in which the property is located.

    Tute is aware of several circumstances in which a docketed judgment becomes a lien against real estate at a point later in time than its docketing. The most common example is one in which the defendant does not own property at the time the judgment is obtained, but later acquires or inherits property. Closely related is the manner in which a judgment against only one spouse would attach to a tenants by the entirety estate upon entry of a decree of divorce. Occasionally, less experienced title examiners will apply a "first in time" rule in such cases, and report the judgment lien as having priority from its date of docketing, rather than from the date it attached to the property. Tute has always liked the image presented at a title examination seminar attended years ago in which the presenter likened a judgment debtor without real estate to one of the characters in the L'il Abner cartoon strip, Joe Bfstplk, world's most loving friend and worst jinx who always travels with a dark cloud over his head. (Copyright 2000, 2001 Capp Enterprises, Inc. All rights reserved.) (http://www.lil-abner.com) The judgment never settles down, never goes away, it just follows you around waiting for you to acquire real estate, so it can rain on your parade. 

    There is no statute or case authorizing the omission of an examination of the records in the name of an owner simply because they don't live in the jurisdiction. In your fact pattern, it was not the judgment debtor who moved; it was the boundaries of the jurisdiction which changed. While not the usual pattern, Tute thinks the creditor could make a credible case to enforce its lien because the judgment is docketed in the records "of the clerk's office of the county or city where such land is situated." That would be true when the creditor's suit was brought. The creditor would also allege the lien would attach at the time the land was first located in the jurisdiction in which the records were located.

    There is some authority, but again, not direct authority, for this position. In October 1980 and January 1981, the Attorney General's office issued two opinions. These opinions dealt with a request that was formatted in the reverse of your fact pattern . . . would a judgment docketed in the county prior to annexation be a lien against property purchased by the judgment debtor in the city after annexation? While the headnotes of both opinions say "no," the text of 80-81 Va.A.G. 289A appears to answer the question in the affirmative, while the text of 80-81 Va.A.G. 233, issued three months later, appears to say no. In the latter opinion, the author relies partially upon the case of Wicks v. Scull, 102 Va. 290, 46 S.E. 297 (1904), and stated "There the court considered 3570 of the 1887 Code of Virginia, a statute which preceded 8.01-458 and which provided in part: 'No judgment shall be a lien on real estate.. .unless it be docketed...in the county or corporation wherein such real estate is....' The court held that a judgment docketed in a county out of which a city was subsequently carved was not a lien against land acquired by the judgment debtor several years after the incorporation of the city."

Tute is forced to quote (quite out of context) the headnote from another Supreme Court ruling: While an Attorney General's opinion is entitled to due consideration, it is not binding on appeal. Twietmeyer v. City of Hampton, 255 Va. 387, 388, 497 S.E.2d 858 (1998) quoting from City of Virginia Beach v. Virginia Restaurant Assoc., 231 Va. 130, 341 S.E.2d 198, (1986). Or, as the court noted on another occasion: "Opinions of the Attorney General are no more than guidelines for the benefit of public officials where the Court has made no definitive interpretation of the law. In Re: Dept. of Corrections, 222 Va. 454, 281 S.E.2d 857 (1981).


    At the time you performed your title examination, the property was located in the city. Nothing in your examination suggests the judgment was "improperly" docketed. Although the statute could be said to be ambiguous, given your particular facts, Tute thinks that it is better to be safe than sorry, and would also examine the judgment lien docket in the city for judgments docketed against the owners of the property at the time of and since annexation for the full twenty years. 

    The liens docketed in the county records prior to annexation would attach to the real estate prior to the annexation date in the order in which they attached prior to annexation. The lien of the judgments, if any, docketed in the city records prior to annexation should not attach to the real estate until the annexation date. The general recording act ( 55-96) or the nature of the lien, and its enabling legislation would most likely govern the order of priority. (Reclamation lien in favor of Commonwealth, second only to lien for real estate taxes ( 45.1-267); (homeowner's association liens, prior to everything except real estate taxes, liens prior to the declaration, or unpaid mortgages (55-516); (purchase money security interest in fixtures (8.9A-334); (mechanics lien for subcontractor preferred to that for general contractor ( 43-23); (refinance and subordinate deeds of trust (55-58.3) (weed cutting liens, 15.2-903, ranking on a parity with lien for unpaid real estate taxes)

                                                        Tute


Dear Tute:

    Who needs to sign a subdivision plat? What happens if they don't?

                                                        Inquiring minds want to know



Dear Enquirer:

    Having run on entirely too long on the prior topic, I am compelled to give short shrift to your question. I should not do so, because the subdivision of land is an essential event in the evolution of a general property description such as "from sea to shining sea" to one as specific as Lot 1, Block A, Shire I, Subtier City of Aragorn, Borough of Warwick, County of Fairfax, Commonwealth of Virginia, United States of America, North American Co-Prosperity Sphere, Western Hemisphere, Planet Earth, . . . . I'm sure I've taken that more than far enough.

    Tute was recently shown a circuit court opinion which ruled that a 1996 subdivision plat was deficient as a matter of law because it did not contain the statements required by 15.1-477 and was recorded without the consent of either of the trustees under the deeds of trust which encumbered the property. The court said such consent was required as a matter of law.

    The code section referenced was repealed during the recodification of Title 15.1 in 1997. Prior to repeal it read: 

"Every such plat, or deed of dedication to which the plat is attached, shall contain in addition to the professional engineer's or land surveyor's certificate a statement as follows: The platting or dedication of the following described land (here insert a correct description of the land subdivided) is with the free consent and in accordance with the desire of the undersigned owners, proprietors, and trustees, if any. The statement shall be signed by such persons and duly acknowledged before some officer authorized to take acknowledgment of deeds."

Following repeal and reenactment as 15.2-2264, the statute reads: 

"Every plat, or deed of dedication to which the plat is attached, shall contain in addition to the professional engineer's or land surveyor's certificate a statement as follows: 'The platting or dedication of the following described land (here insert a correct description of the land subdivided) is with the free consent and in accordance with the desire of the undersigned owners, proprietors, and trustees, if any.' The statement shall be signed and duly acknowledged before an officer authorized to take acknowledgment of deeds."

    Not being a professional parser of syllables, Tute is not qualified to say if the omission of the phrase "such persons" from the sentence dealing with signing and acknowledgment indicates the desire of the General Assembly to remove the lender or trustees from the list of parties required to sign a subdivision plat, or if some grammarian pointed out that if the first sentence required the certification by certain persons, the second sentence about signature and acknowledgment would, in all likelihood, refer to the same persons. Absent some indication of consent to the subdivision, Tute would be reluctant to pronounce the title as "completely without blemish."

                                                            Tute


 

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