## Facts

- Leo Rice and Ernestina C. Rice executed and delivered to Wade Livingston a $4,000 promissory note secured by a deed of trust on residential real property (Feb. 14, 1947).
- The deed of trust was not acknowledged or recorded at the time of execution and delivery.
- V. Sechini obtained a money judgment against the Rices (Apr. 4, 1950) and recorded an abstract of judgment in Kern County (Apr. 14, 1950).
- After default, Livingston obtained the Rices’ acknowledgment of the deed of trust and recorded it (Jan. 19, 1951).
- Livingston filed an action to foreclose the deed of trust (Dec. 4, 1951); Sechini asserted her judgment lien had priority because it was recorded first.
- The trial court decreed foreclosure, found Livingston’s deed-of-trust lien superior, and directed that any surplus proceeds be paid into court pending further order.

## Issues

1. Whether a deed of trust executed and delivered before a judgment lien arises has priority over that later judgment lien when the judgment creditor records an abstract of judgment before the deed of trust is recorded.
2. Whether recording is required for a deed-of-trust lien to take priority over a subsequent judgment lien.

## Decision

- The Court of Appeal affirmed.
- A deed of trust (treated like a mortgage for lien-priority purposes) creates a lien upon execution and delivery.
- Because Livingston’s deed of trust was executed and delivered before Sechini’s judgment lien arose, Livingston’s lien was prior, even though Sechini recorded her abstract of judgment before the deed of trust was recorded.
- The foreclosure decree’s direction to pay any surplus into court was proper, leaving subordinate lien claims to be resolved from any surplus after satisfaction of the senior lien.

## Legal Principles

- The lien of a mortgage (and similarly a deed of trust securing a loan) is created by execution and delivery of the instrument.
- A mortgage/deed-of-trust lien created by execution and delivery takes precedence over attachment or judgment liens obtained after that execution and delivery, notwithstanding later recordation of the security instrument.
- As between a prior consensual security interest and a subsequent judgment lien creditor, priority turns on the time the security interest’s lien arises (execution and delivery), not on which instrument was recorded first.
- In foreclosure of a senior lien, junior lienholders may claim only against surplus proceeds remaining after the senior obligation is satisfied.

## Conclusion

The court held that Livingston’s deed-of-trust lien arose when the instrument was executed and delivered in 1947 and therefore had priority over Sechini’s later judgment lien, even though Sechini recorded her abstract of judgment before Livingston recorded the deed of trust; the foreclosure judgment was affirmed.


Livingston v. Rice, 131 Cal. App. 2d 1 (Cal. Ct. App. 1955)