Mercantile Collection Bureau v. Roach

California Court of Appeal Sep 1, 1961 No. Civ. 10112Published

Before: Warne

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Holding. The court held that a purchase-money mortgage or deed of trust, including one held by a third-party lender, takes priority over a prior recorded judgment lien against the purchaser.

Issues

Whether a judgment lien attaches to a mechanic's lien or a mere equitable interest in real property.
Whether a third-party lender who advances money for the purchase of real property and takes title as security holds a priority interest over a prior judgment lien against the purchaser.

Disposition. reversed

Quotations verified verbatim against the opinion

“The term “real property” as used in the statute concerning judgment liens is taken in its technical sense, and it has been held that such a lien will not, therefore, attach to a mere equitable interest.”

“As purchase-money mortgagee, under section 2898 of the Civil Code, Ruggiero’s interest at that time was prior to respondent’s judgment lien.”

“A fortiori after Ruggiero conveyed to Roach under the stipulated judgment, taking back a deed of trust, his lien was prior to that of respondent Mercantile Collection Bureau.”

WARNS, J. pro tem.

The respondent Mercantile Collection Bureau levied under a writ of execution issued December 24, 1959, on the real property involved in this appeal, title to the property standing in appellant’s name. Appellant then filed his “Petition for Determination of Rights,” which is in the nature of an action to quiet title. The trial court entered judgment in favor of respondent Mercantile Collection Bureau. Petitioner, Domenico Ruggiero, appeals from the judgment.

The trial court’s findings of fact are substantially as follows : “That the respondent, who is the plaintiff above named, obtained a judgment against the defendants, Arthur Roach, Sr., and Edna L. Roach, for the sum of $889.26 ... on November 10, 1951, . . . .” An abstract of the judgment was recorded at that time. (At that time the judgment debtors had no interest in the property here involved.) Thereafter, in 1955, the defendant Arthur Roach, Sr., performed work and furnished materials in the construction of a house upon the real property involved herein, which property was at that time owned by Crespo Bianchi. “ [T]hat said defendants [Arthur and Edna Roach] acquired an interest in said real property thereby, ’ ’ and that Arthur Roach, Sr., later assigned his claim in the amount of $517 to the appellant, Ruggiero. The appellant in return loaned Roach the money to buy the real property from the estate of Crespo Bianchi. “ [T]hat although the administrator’s deed by which the Estate of Crespo Bianchi granted, dated August 18, 1955, and recorded September 23,1955, . .., to D. Ruggiero, the said D. Ruggiero held said property as trustee for defendant, Arthur Roach, Sr., and said Arthur Roach, Sr., and Edna L. Roach were the true owners.”

“ [T] hereafter as a result of litigation and stipulation and the order of this Court [Superior Court in Merced] . . . Dom

[357]

enieo Ruggiero executed a grant deed of said property to said defendants who simultaneously executed a promissory note and deed of trust to secure the same, . . . , back to said Domenico Ruggiero.”

“That thereafter said petitioner, Domenico Ruggiero, in order to avoid the lien of plaintiff and respondent herein, conspired with said Arthur Roach, Sr., to become in default; that upon such spurious default the trustee deeded back to Domenico Ruggiero; that such default and foreclosure was a sham. ’ ’

Mercantile Collection Bureau v. Roach

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