Pulaski Federal Savings & Loan Ass'n v. Carrigan

George Rose Smith, Justice. This is a suit by the appellees, Carrigan, his wife, and their mortgagee, to enjoin the appellants from levying execution upon Lot 23 of Chicot Terrace Addition to Little Rock, which is owned by the Carrigans. The chancellor granted the injunction, holding that the deficiency judgment under which the appellants were about to proceed did not constitute a lien against Lot 23. That is the issue here. All the facts are stipulated. Lot 23 was formerly owned by Roy Stillman. On December 9, 1965, Stillman and Mr. and Mrs. T. A. Hale executed a written offer-and-acceptance agreement by which Stillman agreed to sell the property to the Hales. On March 23, 1966, Pulaski Federal obtained a personal judgment against Stillman and his wife in a foreclosure suit involving other property. That property was sold pursuant to the decree on May 5, 1966, leaving a deficiency judgment for $2,644.07, which was later assigned to the other appellant, Southern Mortgage Insurance Corporation. On April 20, in the interval between the entry of the foreclosure decree and the entry of the deficiency judgment, Stillman performed his contract with the Hales by conveying Lot 23 to them by warranty deed. Later on the Hales sold the land to the Carrigans. This suit for injunctive relief was brought by the Carrigans when the appellants levied execution on Lot 23 under their deficiency judgment and served notice that the property would be sold by the sheriff. The chancellor was right. A judgment lien attaches only to the judgment debtor’s interest in the land, “and, if that interest be subject to any infirmity or condition by reason of which it is eliminated or ceases to exist, the lien attached thereto ceases with it. ... A judgment lien is subject to existing equities of third parties in the land.” Snow Bros. Hdw. Co. v. Ellis, 180 Ark. 238, 21 S. W. 2d 162 (1929). More than three months before Pulaski Federal obtained its foreclosure decree Stillman had bound himself to sell Lot 23 to the Hales. There is no contention that the Stillman-Hale contract was anything other than a good-faith transaction. Hence Pulaski Federal’s judgment lien was subject to that contract and was defeated when Stillman conveyed the lot to the Hales. The entire thrust of the appellants’ argument is that the Stillman-Hale contract was not a present sale of the land, because the agreement contemplated that various steps were to be taken in the future, such as the furnishing of an abstract of title, the obtaining of FHA financing, the execution of a deed by Stillman, the giving of a note by the Hales, and so forth. No matter. Contracts for the sale of land nearly always leave one or more steps, such as the examination of title, to be taken in the future, but the seller is nevertheless bound to perform his agreement. See McClain v. Alexander, 235 Ark. 64, 357 S. W. 2d 1 (1962); Bushmeyer v. McGarry, 112 Ark. 373, 166 S. W. 168 (1914); Meyer v. Jenkins, 80 Ark. 209, 96 S. W. 991 (1906). If Stillman had attempted to evade his obligation the Hales could have obtained specific performance. It follows that the Hales’ equitable rights were superior to Pulaski Federal’s subsequent judgment lien, because, as we have said, that lien was “subject to existing equities of third parties in the land.” Affirmed. Fogleman, J., dissents.