A. Lien of Money Verdict:
Any judgment or other order of a court of common pleas for the payment of money shall be a lien upon real property on the conditions, to the extent and with the priority provided by statute or prescribed by General Rule adopted pursuant to section 1722(b) . . . when it is entered of record in the office of the clerk in the court of common pleas of the county where the real property is situated, or in the office of the clerk of the branch of the court of common pleas embracing such county.
42 Pa. C.S.A. § 4303(a) (Supp. 1996). See 42 Pa. C.S.A. §1722(b) (1981) (granting governing authority of judicial system power to prescribe and modify general rules concerning enforcement and effect judgments and other orders).
B. Compulsory Arbitration: Pa. R.C.P. 1306 provides that “the [arbitration] board shall make an award promptly upon the termination of the [arbitration] hearing. Pursuant to a 2008 amendment, an arbitration award is not a lien on real estate until thirty days have passed with no appeal filed.
C. Partnerships: Pa. R.C.P. 2132(a) provides that “a judgment entered against a defendant partnership sued in its firm name only shall support execution upon the partnership property only." Pa. R.C.P. 2132(b) provides as follows:
A judgment entered against a defendant partnership sued in the name or names of the partners as individuals trading in the firm name shall support execution upon the partnership property and upon the individual property of any partner named as a party if jurisdiction has been validly obtained as provided by Rule 2131 . . . .
Pa. R.C.P. 2132 (b).
D. Unincorporated Association: Pa. R.C.P. 2158 provides that “a judgment entered against an association sued in the name of the association or in the name of the trustee ad litem, or sued alone or together with a member of the association or other person, shall support execution upon the property of the association."
E. Priority of Judgment Liens Against Real Property: The priority of the various types of liens against real property, including judgments, is set forth at 42 Pa. C.S.A. §8141 as follows:
Liens against real property shall have priority over each other on the following basis:
(1) Purchase money mortgages, from the time they are delivered to the mortgagee, if they are recorded within ten days after their date; otherwise, from the time they are left for record. A mortgage is a “purchase money mortgage" to the extent that it is:
(i) taken by the seller of the mortgaged property to secure the payment of all or part of the purchase price; or
(ii) taken by a mortgagee other than the seller to secure the repayment of money actually advanced by such person to or on behalf of the mortgagor at the time the mortgagor acquires title to the property and used by the mortgagor at that time to pay all or part of the purchase price, except that a mortgage other than to the seller of the property shall not be a purchase money mortgage within the meaning of this section unless expressly stated so to be.
(2) Other mortgages and defeasible deeds in the nature of mortgages, from the time they are left for record.
(3) Verdicts for a specific sum of money, from the time they are recorded by the court.
(4) Adverse judgments and other orders, from the time they are rendered.
(5) Amicable judgments, from the time the instruments on which they are entered are left for entry.
(6) Writs which when issued and indexed by the office of the clerk of the court of common pleas create liens against real property, from the time they are issued.
(7) Other instruments which when entered or filed and indexed in the office of the clerk of the court of common pleas create liens against real property, from the time they are left for entry or filing.
42 Pa. C.S.A. § 8141.
NOTE: 42 Pa.C.S.A. sec. 8141 involves the relationship of judgment liens for priority purposes, but always be careful to ascertain the effect of other types of liens and their effect on priority. See the sections in these materials covering federal tax liens, state and municipal liens, corporate taxes, real estate taxes and mechanics liens.
F. Confession of Judgment on Bond Accompanying Mortgage: A confession of judgment proceeding on the bond accompanying a mortgage is a proceeding in personam. Bank of Pennsylvania v. G/N Enterprises Inc., 316 Pa. Super. 367, 463 A.2d 4, 6 (1983). The object of the proceeding is to obtain judgment against the obligor of the bond. Id. Unlike a judgment in mortgage foreclosure, a judgment confessed on the bond accompanying a mortgage is not limited to the mortgaged premises. Id. Rather, a judgment confessed on the bond is a general lien on any real property owned by the obligor at the time of the judgment. Id. In relation to the mortgaged premises, the lien of the judgment relates back to the date that the mortgage was recorded. Id. (citing First Federal Savings & Loan Ass’n of Greene County v. Porter, 408 Pa. 236, 243, 183 A.2d 318, 323 (1962)).
G. The Federal Priority Statute, 31 U.S.C. § 3713(a) This statute provides that a claim of the United States Government "shall be paid first" when a decedent's estate cannot pay all of its debts. The government has often alleged that this law gives it priority over perfected liens unless there has been a levy and execution on property.
a. The Supreme Court of the United States acknowledged that it “ has never definitively resolved the basic question whether the federal priority statute gives the United States a preference only over other unsecured creditors, or whether it also applies to the antecedent perfected liens of secured creditors." United States v. Estate of Francis J. Romani, 523 U.S. 517, 118 S.Ct. 1478, 140 L.Ed.2d 710 (1998)
b. The Romani Court held first that “the 1966 amendments to the Tax Lien Act bespeak a strong condemnation of secret liens, which unfairly defeat the expectations of innocent creditors and frustrate "the needs of our citizens for certainty and convenience in the legal rules governing their commercial dealings" and then went on to affirm the Pennsylvania Supreme Court stating “nothing in the text or the long history of interpreting the federal priority statute justifies the conclusion that it authorizes the equivalent of a secret lien as a substitute for the expressly authorized tax lien that Congress has said "shall not be valid" in a case of this kind