Volume 11 Number 1

 

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Title Tips by Tute

Volume 11, Number 1

 

Dear Tute:

Would you please consider another part to your discussion in Volume 2, Number 4? The (state) tax department filed a Memorandum of Lien two years or two months or two days before the "defaulting deadbeat" purchased the home and secured it with a deed of trust.  Doesn't the tax department's lien take priority over the Deed of Trust as an operation of Virginia Code Section 8.01-458 without the necessity of a statutory speeding bullet in favor of Virginia?

"Every judgment for money rendered in this Commonwealth by any state or federal court or by confession of judgment, as provided by law, 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 n the judgment lien docket of the clerk's office of the county or city where such land is situated; . . ."

                                                                                      Newer in Town

 

 
Dear Newer:

Thank you for your e-mail.  I am delighted to learn that my website (pause for a crass commercial break:  www.tute.us) came to your attention.  I hope you enjoyed your visit. 

For those readers who may not have read that issue of the Examiner recently, I noted that a purchase money deed of trust would have priority over a judgment recorded before the property was purchased.  Newer in Town, employed at the Commonwealth's Department of Taxation, inquires if a notice of lien filed by that agency would defeat the traditional rules of lien priority. 

My first answer is the Commonwealth does not have the benefit of a different set of rules. When the Commonwealth docketed its lien, deadbeat didn't own the land. If deadbeat and wife take title as tenants by the entirety, the Commonwealth's lien does not attach. Taking title as tenants by the entirety is still a defense to a claim of the creditor of a single spouse, and the Commonwealth (unlike its federal Uncle - see U.S. vs. Craft, 535 U.S. 274 (2002) has not changed the law on this issue. If deadbeat takes title alone, the Commonwealth is like all the other judgment creditors, and has to fall behind the lender whose financing made the purchase possible. But, before I declare that is my "final" answer, and Regis sends me off to Disney World, I'll check the Code.

I believe the answer is contained in Virginia Code 58.1-1805, which states:

 . . . A copy of such memorandum may also be filed in the clerk's office of all counties and cities in which the taxpayer owns real estate. Such memorandum shall be recorded in the judgment docket book and shall have the effect of a judgment in favor of the Commonwealth, to be enforced as provided in [ 8.01-196 et seq.] . . .  The lien on real estate shall become effective at the time the memorandum is filed in the jurisdiction in which the real estate is located.  . . .  Virginia Code  58.1-1805

              The general statute on judgments ( 8.01-458) makes no distinction between judgments in favor of ordinary creditors and the Commonwealth.  Tute has been unable to find a statute declaring a judgment in favor of the Commonwealth will be treated differently.  Absent such a legislative declaration, the general rule should be applicable.

            Sections 8.01-196, et seq., referenced in the general statute, spell out how the Commonwealth can bring and enforce an action.  Later in that chapter, is the notation that the Commonwealth can decline to levy on an asset because of a prior encumbrance.

In any case in which an officer, having an execution on behalf of the Commonwealth, shall decline levying it because of any previous conveyance, execution, or encumbrance, a return shall be made setting forth the nature of such conveyance, execution or encumbrance, in whose favor, and for what amount, and the court in which the conveyance or encumbrance is recorded, or from which the execution issued. Virginia Code  8.01-215.

This suggests to this humble title examiner that the Commonwealth recognizes encumbrances can have priority over its lien and has not changed the customary rules in order to enhance its revenues.  

            And that, Regis, is my "final" answer.

                                                                                    Tute

 


Dear Tute:  

My name is Ilex Sand and I need to outwit my professor. He has given us an assignment and I think I have the answer but want to see what you think, is this a trick?  In his example, Jack and Jill are brother and sister.  They buy some land in Virginia and have it titled "Jack Smith and Jill Smith, joint tenants." Jill is killed in a car accident and Jill's son Sonny, claims he (as Jill's sole heir) inherits her half. Jack argues the property is all his because when a joint tenant dies, the other joint tenant gets complete title because that is the way joint tenancy ownership works.

I have been researching this for two days and have come back to the same answers. We have to find the statute which covers the above situation, and its citation.  I have found statute 55-20 which has been abolished and maybe 55-20.1. Would be interested to hear your point of view and expertise on this. 

Ilex

 

Dear Ilex,

The search engines must be working overtime as this question is the result of another Internet inquiry.  I am so pleased.  Jack, however, is not going to be a happy camper under these facts. 

You start in the same part of the Code where I would start.  Section 55-20 abolishes survivorship (unless, as required by 55-21, you show that you really mean it) including survivorship among "joint tenants."  (Contrary to the phrasing of your question, the statute has not been abolished; the statute abolishes the common law interpretation.)  At common law, survivorship was implied from the use of the words, but the legislature preferred a different result.  Section 55-21 added the concept that survivorship was still available if that intent "manifestly appears from the tenor of the instrument."  Those sections have been the law for many many years.  The combination of these two removes "implied" survivorship from the title examiner's toolbox. 

Jack was apparently not the only one confused, as 55-20.1 goes on to elaborate: 

When any person causes any real or personal property, or any written memorial of a chose in action, to be titled, registered, or endorsed in the name of two or more persons "jointly," as "joint tenants," in a "joint tenancy," or other similar language, such persons shall own the property in a joint tenancy without survivorship as provided in 55-20. If, in addition, the expression "with survivorship," or any equivalent language, is employed in such titling, registering or endorsing, it shall be presumed that such persons are intended to own the property as joint tenants with the right of survivorship as at common law.

Since your professor said Jack and Jill took title as "joint tenants" without any language "manifesting" their intent for survivorship, they actually end up as tenants in common, as if they hadn't used the words "joint tenants" at all. 

To be just a tiny bit heretical, it's like learning a magic spell.  Not only do you need to know the words, but you also have to have the rhythm, the incantation, the right number of syllables . . . you've got to say the spell correctly.  If you use the words "joint tenants with right of survivorship as at common law, the title examiners of Virginia will read the language you implied ("and ignoring the General Assembly's effort to interfere in our freedom to contract and own property as we wish, our God-given right under the Constitution of the United States and all the best versions of natural law").  Another incantation that works is:  "it is the intent of the parties that upon the death of one of the joint tenants, the interest of the deceased joint tenant shall pass by virtue of the principle of survivorship to the surviving joint tenant."

When Jill died, her interest was transferable by will, or absent a will, under the statute of descent and distribution. 

The follow-up question here is when did Jill die?  Did she have a will?  If she had a child, did she have more than one?     How about a spouse?  Was that spouse also the parent of her children?   Depending on the answers to those questions, Sonny may not end up a happy camper either.

I hope that helps.

                                                                                    Tute  

 

ps  If you have to sign an honor pledge on this assignment, remember to tell the truth . . . you received assistance from "THE unknown title examiner" . . . not just any title examiner whose name you've forgotten!

 

pps  As with all technical questions, and professor's trick questions always qualify, your mileage may vary . . . Balance of standard five page disclaimer omitted here in the interest of bandwidth

 

Dear Tute: 

            I am an SBA attorney trying to prepare deed of trust documents for disaster loans in Virginia.  I have a deed similar to that discussed by the Virginia Supreme Court in Camp v. Camp - Mom to Mom and Son, tenants-in-common with the common law right of survivorship.  Mom dies.  Does survivorship clause get knocked-out, or does Jr. own it?  Or will this be a lengthy research trip into Virginia case law for me?

            Thank you for any help you may be able to offer.

Ceallach Connacht

 

Dear Ms. Connacht: 

Camp v. Camp was pretty definitive.  One of the headnotes said "Since the two clauses are absolutely incapable of being reconciled, the rule of repugnant clauses must be applied. The first clause controls and the mother and son take as tenants in common."  Of course, the dissent said the majority was mistaken.

If the language in your deed is substantially identical to that in the case (and your e-mail suggests it is very similar), then I would be reporting title vested in the son and the heirs or devisees of the mother (which, if he were an only child, might get you to the same place they thought they would be - one half by deed, one half by intestate succession).

The Court does review when "intent" of the parties is applicable and perhaps the son can fashion a complaint for declaratory judgment which will permit the introduction of the evidence regarding intent.  In other cases of which I am aware regarding facts "conflicting" with tenancy (Gant v. Gant (a claim of tenants by the entirety of a divorced couple exploring reconciliation) and Funches v. Funches (a claim of tenants by the entirety of a bigamous spouse), the court did allow evidence of intent.  The son has to persuade the Court that those cases are more controlling than Camp.

I am sorry if this answer is disastrous to the son's efforts to renovate the property.

                                                                                    Tute  

 

 

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