Haner v. Bruce
499 A.2d 792, 1985 Vt. LEXIS 352, 146 Vt. 262 (1985)
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Rule of Law:
An instrument of attachment on real estate that is properly filed with the appropriate clerk is valid and provides constructive notice to subsequent purchasers, even if the clerk fails to properly index the instrument in the general land records.
Facts:
- A plaintiff obtained a writ of attachment in a lawsuit against Wendall Bruce, who had a right to purchase property at 58-60 Fairfield Street in St. Albans.
- On March 23, 1979, the plaintiff filed the attachment with the St. Albans city clerk.
- The city clerk recorded the attachment in an 'attachment book' but failed to index it in the general index of land records as required by statute.
- On May 29, 1979, Wendall Bruce purchased the Fairfield Street property.
- One day later, Bruce conveyed the property by warranty deed to David and Gloria Fosgate.
- The Fosgates' purchase was financed by Peoples Trust Company of St. Albans.
- A title search conducted for the Fosgates and Peoples Trust did not reveal the plaintiff's misindexed writ of attachment.
- The Fosgates and Peoples Trust had no actual knowledge of the attachment at the time of their purchase.
Procedural Posture:
- Plaintiff initiated a lawsuit against Wendall Bruce and obtained a writ of attachment.
- Plaintiff filed a claim (presumably to enforce the attachment lien) against subsequent purchasers David and Gloria Fosgate and their mortgagee, Peoples Trust Company.
- The trial court dismissed the plaintiff's claim with prejudice, ruling in favor of the defendants as bona fide purchasers without notice.
- The plaintiff appealed the trial court's dismissal to the Supreme Court of Vermont.
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Issue:
Does a real estate attachment, properly filed with the city clerk but misindexed and not discoverable in the general land records index, provide constructive notice to and thus remain valid against a subsequent bona fide purchaser who had no actual notice of the attachment?
Opinions:
Majority - Gibson, J.
Yes. A real estate attachment that is properly filed is valid against a subsequent bona fide purchaser, even if the clerk misindexes it. The court's reasoning is that Vermont law, established for over a century in cases like Barrett v. Prentiss, places the duty on the filer merely to lodge the instrument with the clerk's office. Once filed, the attachment is perfected and serves as constructive notice. The court notes that the legislature in 1839 removed the duty of the filing officer to ensure recordation, shifting the process to simply lodging the writ. The risk of a clerk's error falls on the subsequent purchaser, not the party who fulfilled their statutory duty by filing. This approach is consistent with the majority rule in other states, the UCC's treatment of security interests, and is more practical than requiring a filer to repeatedly check the clerk's work.
Dissenting - Allen, C.J.
No. A misindexed attachment should be invalid against a subsequent bona fide purchaser who lacks notice. The dissent argues that the very purpose of recording acts, particularly the statutory requirement for a general index, is to provide a reliable method for purchasers to ascertain the condition of a title. To hold otherwise renders the index useless and places an unduly burdensome task on title searchers in an era of voluminous records. The dissent contends that the filer is in the best position to ensure the instrument is properly indexed and should bear the consequences of a clerk's error. The majority's reliance on precedents like Barrett is misplaced, as the legislature enacted the indexing statute specifically to remedy the problems created by those older cases.
Analysis:
This decision solidifies the legal principle that filing an instrument is sufficient to provide constructive notice, regardless of subsequent indexing errors by the recording officer. It firmly places the risk of a clerk's mistake on the subsequent purchaser, thereby protecting the party who properly filed the document. This holding reinforces the importance of the act of filing itself as the legally operative event and compels title searchers to conduct more diligent inquiries, potentially looking beyond the general index to ensure a clear title. The ruling significantly impacts title examination standards and liability for title defects.
