The Courts may impose an Equitable Lien upon real property where a duty or obligation is owed by one person to another, there is a readily identifiable res to which that obligation attaches, and an intent that the property serve as security for the debt or obligation. Situations where the remedy of an equitable lien has been expressly recognized include: defectively executed mortgages or deeds of trust or an imperfect attempt to create a mortgage or deed of trust.
The remedy of Equitable Subrogation may be available to a lender, permitting it to step into the “shoes” or lien position held by a prior lien holder, when its loan discharges the prior lien or debt under circumstances which would indicate that the new lender succeeds to the rights of the prior lender or creditor. In Missouri, equitable subrogation is generally considered to be a drastic remedy and has been limited to situations involving fraud or cases bordering on fraud. Illinois courts, however, have more liberally granted the remedy of equitable subrogation where, based on an evaluation of the equities of the particular case, they find that an equitable result will be reached and no injustice will be accomplished.
The nuances and complexity of equitable remedies requires artful presentation of evidence and argument to a court, and highlights the importance of selecting the right counsel to handle your most complex and sensitive real property priority matters.
The experienced attorneys of Sauerwein Simon P.C. have successfully defended numerous priority disputes for lenders on equitable theories in courts throughout Missouri and Illinois.
