This аppeal involves the enforcement of a judgment lien where, subsequent to the attachment of the judgment lien, the encumbered real property was sold to a buyer who simultaneously granted a purchase money mortgаge to a financial institution.
On October 10, 1995, ATS, Inc. (ATS) obtained a money judgment against Keith M. Canfield (Canfield) in the amount of $175,000.00. This judgment was recorded on November 17, 1995, in the Register’s Office of Shelby County, Tennessee. On
On September 10, 1996, ATS filed a complaint seeking to enforce its judgment lien by selling the real property now owned by Kent and subject to the deed of trust held by Union Planters. The trial court refused to order the sale of the real property. Instead, the trial court granted a money judgment in favor of ATS and against Kent and Union Planters in the amount of $15,674.75, the аmount of money that Canfield received from the sale to Kent after the debts of prior creditors were paid. ATS appeals. We perceive the issues before us to be:
I. Does the judgment lien of ATS have priority over the purchase money mortgage held by Union Planters?
II. If the judgment lien of ATS does have priority over the purchase money mortgage held by Union Planters, did the trial court err in granting a $15,674.75 money judgment to ATS rather than allowing ATS to enforcе its judgment lien through sale of the encumbered property?
Because the facts in this case are undisputed and the foregoing are solely questions of law, our review of the trial court’s ruling is de novo with no presumption of correctness.
See, e.g., Lucius v. City of Memphis,
ISSUE I.
The law in Tennessee with respect to the manner in which judgment liens are obtained is governed by statute. See Tenn.Code Ann. §§ 25-5-101 to -109 (1980 & Supp.1997). A judgment obtained in Tennessee becomes a lien on the debtor’s real property when the judgment is reсorded in the register’s office of the county where the land is located. See Tenn.Code Ann. § 25-5-101(b) (Supp.1997). Upon proper recordation, the judgment also becomes effective against any person having or later acquiring аn interest in the debt- or’s real property regardless of whether that person was a party to the action resulting in the judgment. See Tenn.Code Ann. § 25-5-101(c) (Supp.1997); Tenn. Code Ann. § 66-24-119 (1993). The judgment creditor must execute upon the hen within three years of the entry of the judgment. See TenmCode Ann. § 25-5-105(a) (Supp.1997).
In the instant case, it is undisputed that the judgment obtained by ATS against Canfield became a lien on Can-field’s real property on November 17,1995, the date on which the judgment was recorded. ATS argues that because the judgmеnt was recorded on November 17, 1995 while the deed of trust was not recorded until January 5, 1996, its judgment lien has priority over the mortgage held by Union Planters.
1
Union Planters, howev
In support of its position, Union Planters cites
Guffey v. Creutzinger,
While we acknowledge that the facts of Guffey are very similar to those of the case at bar, we find that the two cases are distinguishable. In Guffey, the judgment debtor was the party that acquired the real property. Before the conveyance to the judgment debtor and the execution of the deed of trust, the real property was not subject to the judgment hen. In finding that the title was encumbered by the mortgage when conveyed, we held that the mortgage interest attached before the judgment hen. This rationale is not equally apphcable to the facts of the instant case. Here, the judgment debtor sold rather than acquired the real property. ATS’s judgment hen attached before the conveyаnce to Kent and the execution of the deed of trust in favor of Union Planters. Thus, even though the conveyance and the execution of the deed of trust may have been part of “one continuous transaction,” this transaction still was not prior in time to the attachment of ATS’s judgment hen.
In
Fidelity & Deposit Co. v. Fulcher Brick Co.,
The general rule is that once a judgment hen attaches to land it remains with the land and cannot be destroyed by the debtor’s subsequent alienation of the property. If the debtor sells the property to a third party then thе purchaser would take the land subject to the judgment hen unless the judgment creditor waives or releases the hen.
In re Harbin,
Consistent with the above authority, we find that ATS’s judgment hen was not destroyed by the conveyance of the real proрerty from Canfield to Kent. Accordingly, we conclude that the mortgage held by Union Planters is subordinate to the judgment hen of ATS.
ISSUE II.
Having determined that ATS’s judgment hen has priority over Union Planters’ mortgage, we next consider whether ATS
The underlying rationale оf the trial court’s ruling appears to have been that enforcement of the judgment lien through sale of the real property would serve to unjustly enrich ATS at the expense of Kent and Union Planters. If ATS had foreclosed on thе real property before the sale to Kent, it would have had to pay $69,200.00 to prior lienholders. The debts to these prior lienholders were satisfied, however, with the proceeds of the sale from Canfield to Kent. Thus, by delаying enforcement, ATS increased its equity in the real property by $69,200.00. Kent and Union Planters argue that it would be inequitable to allow ATS to profit from its failure to promptly execute on its judgment lien.
We recognize that ATS was put in a better position as a result of the sale from Canfield to Kent. We do not, however, find that this occurred through any fault of ATS. By statute, Tennessee law allows up to three years for the enforcement of judgments.
See
Tenn.Code Ann. § 25-5-105(a) (Supp.1997). This right of enforcement is lost only through failure to exercise the right within the period of time provided under the statute.
See Hames v. Archer Paper Co.,
In the unreported case of
Tom Denton Ford, Inc. v. Stoehr,
No. 01A01-9406-CH-00288,
The plaintiff asserts baldly that it has a right to have the survivorship interest of Paul Donald Davis sold at an execution salе pursuant to Tenn.Code Ann. [25]—5—101, and that the courts should not interfere with that right. We reluctantly must agree; equity follows the law. It cannot supplant a vested legal remedy.
... we cannot, as the plaintiff argues, take away from it, or deny to it, a vested statutory right to enforce its lien in accordance with statute.
Id. at *2. Kent and Union Planters seek to distinguish Stoehr by noting the existence of actual fraud in the present case. We find this distinction unpersuasive, however, as the fraud in this case was committed not by ATS but by Canfield. The fraudulent actions of Canfield do not operate to divest ATS of its statutory right to enforce its judgment.
In the present case, ATS has a vested statutory right to enforce its judgment
Based on the forgoing, we reverse the judgment of the trial court and remand for further proceedings consistent with this opinion. Costs of this appeal are charged to the appellees in equal proportions.
Notes
. Tennessee’s raсe-notice recording statute provides as follows:
Any of such instruments first registered or noted for registration shall have preference over one of earlier date, but noted for regis-tralion afterwards; unless it is proved in a court of equity, according to the rules of the court, that the party claiming under the subsequent instrument had full notice of the previous, instrument.