holding that, although Alabama state law would give a mortgagee who erroneously recorded a release of a mortgage an equitable right to have the mortgage retroactively reinstated, reinstatement would have resulted in relating back the perfection of the mortgage to the original recording date, in violation of Treas. Reg. § 301.6323 (h)–1(a)(2)
How later courts described this case
- holding that, although Alabama state law would give a mortgagee who erroneously recorded a release of a mortgage an equitable right to have the mortgage retroactively reinstated, reinstatement would have resulted in relating back the perfection of the mortgage to the original recording date, in violation of Treas. Reg. § 301.6323 (h)–1(a)(2)
- holding that state equitable principles would retroactively reinstate an erroneously released mortgage but that those principles were nonetheless barred by Treas. Reg. § 301.6323 (h)-1(a)(2)’s prohibition against relation back
- holding that bank’s lien was subordinate to tax liens that were filed after bank’s lien “had been released by mistake” and before bank’s lien was reinstated
- concluding that the Treasury Regulation “operates to the put the IRS in the shoes of any subsequent judgment creditor, including the most favorable shoes”
Written by the judges who cited it.
The opinion
ATKINS, Senior District Judge,
concurring:
I concur in the judgment. I believe that adopting the “hypothetical judgment lien creditor test,” as pronounced by the Seventh Circuit in Dragstem v. Obermeyer, 549 F.2d 20 (7th Cir.1977), is in keeping with both the purpose and the language of the Federal Tax Lien Act.
However, I feel compehed to comment that the facts of this case make it particularly difficult to apply that rule here. The Internal Revenue Service (“IRS”) not only knew that the mortgage had been mistakenly recorded as satisfied, but it conducted itself as if the mortgage had not been satisfied. It was merely fortuitous that the IRS tax lien was routinely filed after the mortgage was erroneously recorded as satisfied, but before the mistake could be corrected.
Nevertheless, in the interest of articulating a clear rule in this circuit regarding the status of federal tax liens, I agree that the IRS tax lien here should take priority over Secor’s mortgage. Therefore, I concur in the judgment reversing the district court.