McLaughlin

Defendants and appellants, Mary P. McLaughlin and Barbara Nicholls (McLaughlin) appeal from a summary judgment granted in favor of plaintiff and respondent Far West Savings and Loan Association (Far West). Far West claims priority for its deed of trust over an earlier recorded encumbrance given to McLaughlin by an unrecorded grantee whose deed placing him in the chain of title was not recorded until the same date as Far West’s deed of trust. As we hold (1) that in order for such earlier recorded encumbrance to impart constructive notice to a subsequent bona fide encumbrancer for value it must be rerecorded after its trustor is in the chain of title and (2) that Far West did not have actual knowledge or notice of the earlier encumbrance, we affirm the judgment.

Factual Background

On June 1, 1982, Frederick Geiger (Geiger) acquired record title to real property in Sylmar located at 13553 Polk Street. A purchase money deed of trust from Geiger to Hancock Savings and Loan Association for $92,000 was also recorded that same day.

On July 8, 1982, Geiger executed a grant deed transferring the property to GTB Properties (GTB). However, that document was not recorded until July…