Lee Lackey and W. Lackey, Savannah, for Dan J. Curtis for benefit of Citizens Bank. This appeal from the decree of the Chancery Court of Hardin County, Tennessee, involves: 1 priority of judgment liens as between two judgment creditors, 2 allocation of proceeds of court sale as between Trustee under prior deeds of trust and the subsequent judgment creditors, and 3 allowance of attorney fee to Trustee.
Early History of Hardin County
On July 17, , appellant, Billy W. Kelley, d. On March 6, , an execution was issued by the judgment creditor with teste date fourth Monday in October On April 28, , return was made, "No property to be found of the defendants. On May 13, , suit was filed by the Tennessee Creditor in the Chancery Court for Hardin County seeking equity to satisfy its judgment by subjecting McLemore's equity in three tracts of land to court sale in satisfaction of the judgment.
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On January 16, , a certified copy of the judgment was filed of record in the Register's Office of Hardin County, Tennessee. Execution was issued on that judgment on May 8, , and returned nulla bona on May 9, Coincidentally, the Texas Creditor filed suit seeking satisfaction of its judgment from McLemore's equity in the same real property on the same day and in the same Court as had the Tennessee Creditor. Writs of attachment were issued by the Clerk and Master in both cases at p.
In Memorandum Opinion filed by the learned Chancellor, he commented on the fact that both judgment creditors filed suit for attachment on the same day May 13, , and that attachments were levied on the property within one minute of each other on May 15, He then made the further observation:.
The attorneys had no control over this act.
Hardin County, Tennessee
This is the function of the Court, therefore server of process must treat this sale and distribution of the funds as if it were a suit by general creditors, and prorata the assets of the insolvent debtor. The land was brought before the Court at the same time the land was sold for both creditors, both attorneys performed in an excellent manner and the Court therefore is of the opinion that the judgment creditors should share in the goods and losses on a prorata basis.
The Chancellor accordingly decreed distribution of the proceeds of sale on a prorata basis. The Chancellor further held that the judgment creditors, through their attorneys of record, had entered into an agreement with the Trustee for the Citizens Bank of Savannah, Tennessee, which Bank held first liens on the property, that the property could be sold free of such liens, and that the Bank's indebtednesses would first be paid out of the proceeds of sale, and the Court so held in the distribution of the proceeds of sale. To the decree of the Trial Court, Tennessee Creditor has assigned error as follows:.
That the Chancellor erred in decreeing a pro rata distribution of the proceeds of sale as between the two judgment creditors, and failing to hold that the judgment lien of Billy W.
That the Chancellor erred in allowing full recovery to the Trustee for the Citizens Bank of Savannah, Tennessee, rather than limiting recovery to the proceeds of sale of each separate tract of land covered by the respective deed of trust. That the Chancellor erred in allowing a fee to the Trustee's attorney. With respect to Assignment I, it would appear from conclusions expressed in the Memorandum Opinion herein referred to the Chancellor in decreeing a pro rata distribution of the proceeds of sale as between the Tennessee and Texas Creditors was apparently of opinion the issuance of attachments and levying of the same by the Sheriff was determinative of the question of priority of liens.
In this we cannot agree. It is conceded, of course, that a judgment, in and of itself, does not create a lien against an equitable interest in real property. Huffaker v. Bowman , 36 Tenn. Carrick , Tenn. But Section Tennessee Code Annotated very specifically outlines the procedure to be followed in order to successfully establish a judgment lien against an equitable interest in real estate. We quote the Code Section, as amended:.
Section then proceeds to set forth the procedure to be followed in preserving and enforcing the lien thus created:.
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It seems apparent, therefore, that it is the filing of a certified copy of the judgment, or memorandum thereof, in the Register's Office, as required by T. And it seems significant that reference is made to the fact that the lien shall cease, unless the provisions of Section are complied with.
Hardin County Courthouse and Government Records
It is stipulated that the Tennessee Creditor has complied with each of these provisions of the Code by filing a certified copy of his judgment in the Register's Office; that he filed suit to subject the equitable interest to satisfaction of his judgment lien within thirty 30 days from return of execution unsatisfied, and attachment was levied on the land for sale on May 15, , within twelve 12 months after rendition of his judgment.
On the other hand, the Texas Creditor obtained judgment first in Texas on May 30, , and in Tennessee on January 14, , but it was not until January 16, , that a certified copy of his judgment was filed of record in the Office of the Register of Hardin County. In point of time this was some five months following the filing of judgment by the Tennessee Creditor.
If the registering of judgment in the Register's Office, as provided in T. This assignment is accordingly sustained, and the Chancellor's holding in this particular is reversed. Assignment of Error II complains of the action of the Chancellor in allowing full recovery to the Trustee for the Citizens Bank of Savannah out of the proceeds of sale of the two tracts of land upon which the Bank held separate deeds of trust. In doing so, it appears the Chancellor relies upon what he found to be an agreement between counsel for the two judgment creditors and counsel for the Trustee to the effect that the property could be sold free of encumbrances, and that the indebtednesses owing the Bank would be first paid in full out of the total proceeds of sale, rather than limiting recovery to the proceeds of sale of each particular tract covered by the particular deed of trust.
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