Blalak v. Mid Valley Transportation, Inc
In Blalak v. Mid Valley Transportation, Inc., 175 Ariz. 538, 858 P.2d 683 (App. 1993), after a third party had purchased real property with Blalak's funds, a judgment creditor of the third party placed a lien on the property.
Blalak sought to quiet title to the property in himself and to have the lien declared invalid on the ground that he had always been the equitable owner of the property notwithstanding 33-412(A), which provides that unrecorded conveyances of property are void as to creditors, and 33-404, which requires the disclosure of beneficiaries of property held in trust.
Section 33-412, A.R.S., specifically provides:
A. All bargains, sales and other conveyances whatever of lands, tenements and hereditaments, whether made for passing an estate of freehold or inheritance or an estate for a term of years, and deeds of settlement upon marriage, whether of land, money or other personal property, and deeds of trust and mortgages of whatever kind, shall be void as to creditors and subsequent purchasers for valuable consideration without notice, unless they are acknowledged and recorded in the office of the county recorder as required by law.
B. Unrecorded instruments, as between the parties and their heirs, and as to all subsequent purchasers with notice thereof, or without valuable consideration, shall be valid and binding.
The Court granted Blalak the relief he sought, holding that " A.R.S. 33-412(A) does not, standing alone, affect the validity of unrecorded equitable liens as against creditors . . . without notice of the liens." 175 Ariz. at 541, 858 P.2d at 686.
The Blalak court further found that the only relief provided by 33-404 is avoidance of the transaction by the grantor.