This summary was computer-generated without any editorial revision. It is not official, has not been checked for accuracy, and is NOT citable.
Facts
The case concerns a dispute over whether a judgment lien attached to a property redeemed by an assignee of the mortgagor's right of redemption. The original property owner, First National Realty Corporation, executed two mortgages, and the Resolution Trust Corporation (RTC), as a successor to one of the mortgagees, foreclosed on the property and filed a notice of lis pendens. The Plaintiffs obtained a judgment lien against First National after the lis pendens was filed. Subsequently, First National assigned its statutory right of redemption to the Defendants, who redeemed the property. The Plaintiffs then sought to foreclose their judgment lien on the redeemed property.
Procedural History
- District Court: Granted summary judgment in favor of the Plaintiffs, holding that the Defendants, as assignees of the right of redemption, took no better title than the original mortgagor, and the Plaintiffs' judgment lien remained valid on the property.
Parties' Submissions
- Plaintiffs-Appellees: Argued that the Defendants, as assignees of the mortgagor's right of redemption, took the property subject to the Plaintiffs' prior judgment lien, as the assignment did not extinguish the lien.
- Defendants-Appellants: Contended that their redemption of the property as assignees of the mortgagor extinguished all prior judgment liens, as the judgment lien did not attach to the assignable right of redemption, which they characterized as personal property rather than real estate.
Legal Issues
- Does the statutory redemption of foreclosed property by an assignee of the mortgagor extinguish prior judgment liens on the property?
Disposition
- The Supreme Court of New Mexico reversed the district court's award of summary judgment and remanded the case for further proceedings.
Reasons
Per Frost J. (Ransom C.J. and Franchini J. concurring):
The Court held that judgment liens attach only to the real property of the debtor and do not follow the property when it is redeemed by an assignee of the mortgagor. The Court reasoned that the judgment lien statute in New Mexico provides a lien only against the real estate of the judgment debtor, and the redeemed property, once transferred to the assignee, is no longer the property of the debtor. Therefore, the Defendants took the property free of the Plaintiffs' judgment lien.
The Court acknowledged the Plaintiffs' concerns about potential fraudulent or collusive assignments but noted that such assignments are subject to the Uniform Fraudulent Transfer Act, which provides remedies for fraudulent transfers. The Court emphasized that its interpretation was consistent with the statutory language and the principle that "the property of one man cannot be subjected to the payment of the debts of another".