In re Millette
United States Court of Appeals for the Fifth Circuit
186 F.3d 638 (1999)
The Millettes (defendants) owned a commercial building subject to a deed of trust containing an assignment of rents to Security National. The deed of trust containing Security National’s interest was properly recorded. The Millettes rented the building to Jackson County. O’Neal Steel (O’Neal) (defendant) obtained a judgment against the Millettes and filed a garnishment action, seeking to use the Millettes’ rental income to satisfy the judgment. Subsequently, Security National (plaintiff) commenced foreclosure proceedings on the building. In the interim, Thomas Millette filed for bankruptcy, staying the garnishment and foreclosure proceedings. The bankruptcy court ruled Security National’s interest in the rents was superior to O’Neal’s. The district court affirmed. O’Neal appealed, arguing Security National failed to take additional steps required to perfect its interest, and thus its interest could not be superior to that of O’Neal.
Rule of Law
Holding and Reasoning (Jones, J.)
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