On February 1, Frost bought a building from Elgin, Inc. for
$250,000. To complete the purchase, Frost borrowed $200,000
from Independent Bank and gave Independent a mortgage for
that amount; gave Elgin a second mortgage for $25,000; and paid
$25,000 in cash. Independent recorded its mortgage on February
2 and Elgin recorded its mortgage on March 12.
The following transactions also took place:
• On March 1, Frost gave Scott a $20,000 mortgage on
the building to secure a personal loan Scott had previously
made to Frost.
• On March 10, Scott recorded this mortgage.
• On March 15, Scott learned about both prior mortgages.
• On June 1, Frost stopped making payments on all the
mortgages.
• On August 1, the mortgages were foreclosed. Frost, on
that date, owed Independent, $195,000; Elgin, $24,000;
and Scott, $19,000.
A judicial sale of the building resulted in proceeds of
$220,000 after expenses were deducted. The above transactions
took place in a notice-race jurisdiction.
What amount of the proceeds will Scott receive?