## Facts

- In 1968, Frederick M. Butler and others purchased real property under a real estate installment contract as vendees; the vendor retained legal title.
- In 1973, Cascade Security Bank obtained a money judgment against Butler and the other vendees.
- The vendees later assigned their contract interest to W.J. Ringwood and others.
- Cascade sought execution on its judgment and noticed a sheriff’s sale of the property, asserting its judgment created a lien on the vendees’ interest under RCW 4.56.190 and RCW 4.56.200.
- The assignees intervened, arguing a contract vendee’s interest was not “real estate” within the judgment lien statutes and therefore was not subject to a judgment lien or sheriff’s sale.

## Issues

1. Whether a real estate contract vendee’s interest constitutes “real estate” under RCW 4.56.190 and RCW 4.56.200 such that a judgment lien may attach to that interest.
2. Whether prior Washington authority treating a vendee’s interest differently should be overruled or limited.
3. If the court changes the common-law classification of the vendee’s interest, whether the change should apply retroactively to the parties or prospectively only.

## Decision

- The Washington Supreme Court held that a real estate contract vendee’s interest is “real estate” within RCW 4.56.190 and RCW 4.56.200 for judgment lien purposes.
- The court prospectively overruled prior inconsistent authority to the extent it treated the vendee’s interest as outside the statutes.
- The court declined to apply the new rule to the parties before it, limiting the change to prospective effect to avoid hardship based on reliance interests.
- The court reaffirmed that Washington does not recognize the doctrine of equitable conversion.
- The trial court’s order restraining the sheriff’s sale was affirmed as to the parties because the new rule was not applied in the case.

## Legal Principles

- A vendee’s interest under a real estate contract is “real estate” for purposes of Washington’s judgment lien statutes, RCW 4.56.190 and RCW 4.56.200.
- Washington does not recognize equitable conversion, notwithstanding classification of the vendee’s interest as real estate for creditor-lien purposes.
- An appellate court may announce a change in common law and limit it to prospective application, including withholding the benefit of the change from the parties before the court, when needed to avoid hardship and protect justified reliance and to reduce uncertainty.

## Conclusion

The court reclassified a real estate contract vendee’s interest as “real estate” subject to judgment liens under RCW 4.56.190–.200, prospectively overruling inconsistent precedent, but refused to apply the new rule to the litigants due to reliance and hardship concerns, while reaffirming rejection of equitable conversion.


Cascade Sec. Bank v. Butler, 88 Wash. 2d 777, 567 P.2d 631 (1977)