Haner v. Bruce

499 A.2d 792, 146 Vt. 262, 1985 Vt. LEXIS 352

• Court: Supreme Court of Vermont
• Decided: September 6, 1985
• Docket: 84-319
• Status: Published

Opinions

Gibson, J.

The question raised by this appeal is whether a real estate attachment that is misindexed by the city clerk is valid against a subsequent bona fide purchaser who had no actual notice of the attachment. The trial court dismissed the attaching party’s claim. We reverse and remand.

On March 23, 1979, having obtained a writ of attachment in a pending suit against defendant Wendall Bruce, plaintiff filed the attachment with the St. Albans city clerk. At that time, a recorded land contract gave Bruce the right to purchase property at 58-60 Fairfield Street in St. Albans. Although the city clerk recorded and indexed the attachment in an “attachment book,” she did not index it in the general index of land records, as required by 24 V.S.A. § 1161. The record does not disclose whether the “attachment book” was the volume in which attachments of personalty only are to be recorded pursuant to 24 V.S.A. § 1163, or a different volume.

On May 29, 1979, Bruce purchased the Fairfield Street property, and one day later, he conveyed the property by warranty deed to defendants David and Gloria Fosgate, whose purchase was financed by defendant-mortgagee Peoples Trust Company of St. Albans. In early 1982, plaintiff obtained a final judgment in his suit against Bruce, which he duly filed and recorded with the city clerk.

It is not disputed that the title search conducted for defendants Fosgate and Peoples Trust in preparation for their purchase did not disclose the misindexed writ of attachment; it is also undisputed that they did not learn of the attachment until May 1982.

Recognizing defendants as bona fide purchasers without notice of the misindexed attachment, and observing that prospective real estate purchasers should not be required to search personal property records, the trial court dismissed plaintiff’s claim, with prejudice, on the authority of Burchard, Wilson & Co. v. Town of Fair Haven, 48 Vt. 327 (1875). In that case, a writ of attachment was left at the town clerk’s office for recording, but the writ was lost or removed before the town clerk could either record or index it; this Court held that no lien had been established against subsequent bona fide purchasers who had no notice of the attachment.

Subsequent to Burchard, this Court was presented with a slightly different case. In Barrett v. Prentiss, 57 Vt. 297, 300 (1884), a mortgage deed was duly recorded but not indexed, despite a statute, R.L. § 2680 (now 24 V.S.A. § 1161), that required the town clerk to keep a general index. Thereafter, a second mortgage was executed and assigned to a person who purchased it without actual knowledge of the first mortgage. Under these facts, the Court held that the first mortgage was superior to the second and could be foreclosed. The Court in Barrett followed Curtis v. Lyman, 24 Vt. 338 (1849), a case decided before the enactment of the indexing statute. Curtis also had held that the clerk’s failure to index a mortgage did not invalidate the effect of its recordation. In a more recent case, Hunn v. Koerber, 129 Vt. 490, 282 A.2d 831 (1971), this Court ruled that an attaching creditor had standing to defend a mortgage foreclosure action although the town clerk had failed to record the attachment. The Court stated:

The attachment was effected when the officer lodged the copy of the writ, with the endorsement of his return, in the office of the town clerk. The actual recording of the entries respecting the writ was the duty of the town clerk, but such record, or the want of it, does not constitute any part of the attachment itself. The defendant’s lien is unaffected by the neglect of the town clerk to enter it in the town records.

Id. at 493, 282 A.2d at 833. Thus, for over a century, it has been the law of Vermont that the proper recording of an instrument has served as constructive notice to the public, notwithstanding clerical errors in indexing.

An early Vermont statute, enacted in 1823, imposed a duty on the officer serving the writ “to cause to be recorded by the town clerk, in a book to be kept for that purpose, the substantial part of the writ . . . .” Braley v. French, 28 Vt. 546, 550 (1856). No constructive notice of an attachment was given “unless the substance of the writ was recorded,” and it was the officer’s duty to see that it was recorded. Id. at 550-51. The law was changed in 1839 when the legislature removed the provision that imposed a duty on the officer to cause the attachment to be recorded. Thereafter, there was “nothing required of the officer, in order to create a lien, by attachment, on real estate, but to leave a copy of the writ, with his return, with the town clerk . . . .” Id. at 551. The conclusion drawn by this Court was that “it was not the intention of the legislature to make [the] entry by the town clerk essential for the purpose of creating a lien . . . .” Id. The legislature has never reenacted the provisions of the 1823 statute; rather, the language of the present-day version (12 V.S.A. § 3292) is virtually the same as that of the 1839 act.

Although the result reached by Vermont (and most other states) has been criticized, e.g., 4 A. Casner, American Law of Property § 17.25, at 604-05 (1952), “the rule appears to be well established that in the absence of statutory provision to that effect, an index is not an essential part of the record.” Id. at 604 (footnote omitted, citing, inter alia, Barrett, supra).

Similarly, under Vermont’s system for the recording of security interests, the filer “does not bear the risk that the filing officer will not properly perform his duties . . . .” 9A V.S.A. § 9-407, Comment 1; see also 9A V.S.A. § 9-403(1) (presentation constitutes filing); 1A P. Coogan, W. Hogan, D. Vagts & J. McDonnell, Secured Transactions Under the Uniform Commercial Code § 6C.05[2][e], at 6C-63 (1985) (“facilitation interest” of filer preferred over “disclosure interest”).

The recently developed Uniform Simplification of Land Transfers Act (not as yet enacted in Vermont) gives priority to the attaching party when his interests conflict with those of subsequent purchasers. Although the Uniform Act imposes responsibility upon a filer to provide detailed indexing information, and makes indexing an essential part of recordation, the filer need not undertake to verify the correctness of indexation after the recording officer has accepted a properly completed submission. See Uniform Simplification of Land Transfers Act §§ 2-302 to 2-304, 3-202(b), 14 U.L.A. 234-37, 244-45 (1980).

As between the parties, the filer can not be held to be more blameworthy than the title searcher. Although the filer could return to the clerk’s office to make certain that the instrument was properly recorded, he should not have to do so; he should be entitled to rely on the clerk to do his or her job in a proper manner. Further, a requirement that the filer double-check the clerk would be impractical — the clerk might not complete the recording and indexing promptly, for one reason or another, forcing the filer to make one or more additional visits to the clerk’s office, to the inconvenience and annoyance of both individuals. An out-of-state filer would be particularly disadvantaged by such a requirement. The title searcher, on the other hand, is in a position to protect himself by simply asking the clerk about search procedures and whether there are particular volumes or indexing records he or she should check.

The trial court’s dismissal of plaintiff’s claim was erroneous.

Reversed and remanded.