F & S Co., Inc. v. Gentry
| Decision Date | 11 July 1985 |
| Docket Number | No. 15569,15569 |
| Citation | 702 P.2d 999,1985 NMSC 65,103 N.M. 54 |
| Parties | F & S COMPANY, INC., Plaintiff-Appellant, v. Roy GENTRY, Bobby R. Burch, Carol Burch, his wife and Ruby Middleton, Defendants-Appellees. |
| Court | New Mexico Supreme Court |
Plaintiff F & S Company (F & S) brought suit to foreclose a judgment lien against two parcels of real estate allegedly owned by defendant Gentry, F & S's judgment debtor. The district court dismissed the claim against one parcel and the matter went to trial on foreclosure against the other. Finding that Gentry had no interest in the subject realty, the court denied the foreclosure. Plaintiff appeals and we reverse.
Defendant Gentry originally acquired the subject realty as a co-tenant with Bobby and Carol Burch. The purchasers' deed was recorded with the Curry County clerk, on August 31, 1978. On September 1, 1978, Gentry and Burch formed a limited partnership called Sheridan Plaza, the purpose of which was to develop the real estate in question. On the same day, Gentry and Burch conveyed the property to the partnership, but they did not record that deed of transfer.
F & S's judgment against Gentry was entered on June 3, 1981. On October 19, 1981, plaintiff filed a transcript of judgment in the records of Curry County, and on June 7, 1982, it filed its complaint in foreclosure of the judgment lien against the subject property. Throughout this period, the deed transferring the property from Gentry and Burch to Sheridan Plaza, Ltd., remained unrecorded.
F & S asserts on appeal that, as a judgment lien creditor, it was entitled to rely on the records of Curry County. Because it conducted a title search which revealed no conveyances after Gentry obtained his interest in the property, it claims an absolute right to foreclose Gentry's interest.
F & S's position is supported by NMSA 1978, Sections 14-9-1 and 14-9-3 which require that:
[a]ll deeds, mortgages, United States patents and other writings affecting the title to real estate * * * be recorded in the office of the county clerk of the county or counties in which the real estate affected thereby is situated
(Sec. 14-9-1), and that:
[n]o deed, mortgage or other instrument in writing, not recorded in accordance with Section 14-9-1 NMSA 1978, shall affect the title or rights to, in any real estate, of any purchaser, mortgagee in good faith or judgment lien creditor, without knowledge of the existence of such unrecorded instruments.
It is uncontroverted that the deed from Gentry and Burch to Sheridan Plaza, Ltd., was not recorded until almost four years after that conveyance and nine months after this suit was filed. Sheridan Plaza's recordation of its deed on July 23, 1982, can have no effect on plaintiff's rights because "[t]he rights of the creditor are fixed by the condition of affairs as they existed at the time of the inception of [the] lien * * *." Sylvanus v. Pruett, 36 N.M. 112, 116, 9 P.2d 142, 146 (1932). Consequently, the unrecorded deed of September, 1978, could have no effect on F & S's rights.
Defendants' argument in favor of the trial court's ruling is based on the language in Section 14-9-3 denying the protection of the recording statutes to those with knowledge of an unrecorded instrument. The parties stipulated that plaintiff had no actual knowledge of the transfer, but defendants insist that F & S had constructive knowledge from the Certificate of Limited Partnership that was filed in the Miscellaneous Records of Curry County. Plaintiff, on the other hand, contends that it had no duty to search the Miscellaneous Records. With that particular...
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