A developer purchased a 45-acre tract of land and obtained a…

A developer purchased a 45-acre tract of land and obtained approval of, filed, and recorded a subdivision map dividing the land into 80 half-acre lots with a five-acre “city park.” The developer sold 70 of the lots over the next two years to individual purchasers; each deed referred to the recorded subdivision map. When the last 10 lots—located adjacent to the area originally designated as a city park—did not move, the developer sold the lots and the park in a single 10-acre package to a real estate corporation. The deed from the developer to the corporation omitted any reference to the subdivision map. The corporation sold the half-acre lots to individual purchasers and the five-acre “park” to a church via deeds also not mentioning the subdivision map. Before the church began construction of its worship center, the city announced that it was soliciting bids from local landscaping firms to prepare the five-acre parcel for use as a park by the public. When the church learned of the city’s plans, it brought an action to quiet title to the five-acre parcel it purchased from the corporation. How should the trial court rule?

The owner in fee simple of a tract of land sold it to a farm…

The owner in fee simple of a tract of land sold it to a farmer for $850,000. To finance the purchase, the farmer obtained a mortgage loan from a financing company for $600,000. The deed from the owner to the farmer was promptly and properly recorded, but due to an oversight the mortgage from the financing company was not immediately recorded. A few months later, the farmer approached the financing company about getting a second mortgage. The financing company turned him down, so he contacted a bank. Not having knowledge of the previous mortgage on the property, the bank agreed to loan the farmer $300,000 secured by a mortgage on the land, which it promptly and properly recorded. One day later, the financing company, having discovered that its original mortgage had not been recorded, properly recorded it. The jurisdiction’s recording statute provides: “Any conveyance or mortgage of an interest in land, other than a lease for less than a year, shall not be valid against any subsequent purchaser for value, without notice thereof, whose conveyance is first recorded.” The farmer struggled to keep up with his mortgage payments, and finally stopped making payments altogether on both mortgages. The bank began foreclosure proceedings, but did not include the financing company as a party. At the foreclosure sale, a buyer purchased the land, having no actual knowledge of the mortgage with the financing company. Soon after, the financing company declared its loan in default and sought to foreclose on the land. May the financing company foreclose against the buyer?

An owner of a parcel of land instructed his lawyer to draw u…

An owner of a parcel of land instructed his lawyer to draw up an instrument deeding the land to his friend’s “nieces.” The owner acknowledged the deed before a notary and signed it. As directed by the owner, the lawyer recorded the deed and then returned it to the owner. The owner put the deed in the drawer of his desk, intending to present it to the friend’s nieces when they came to visit him next month. The following week, however, the owner died, leaving his daughter as his sole heir at law. The daughter discovered the deed to the land in the owner’s desk. She filed an appropriate action to quiet title in the land, naming the friend’s only two nieces as defendants. The only evidence presented at the trial was the deed itself, the evidence of recordation, and the lawyer’s testimony regarding the owner’s intent. Who should the court rule owns the land?

A father purchased a tract of land, financing a large part o…

A father purchased a tract of land, financing a large part of the purchase price by a loan from a bank that was secured by a mortgage on the land. A provision in the mortgage agreement, which had an acceleration clause, provided that a defaulting borrower waives his right to redeem once foreclosure proceedings have started. The bank properly recorded its mortgage. Several years later, the father needed money to send his twin daughters to college, so he obtained a loan from a credit union, also secured by a mortgage on the land. The credit union properly recorded its mortgage. The following year, the father became ill and was unable to make payments to either the bank or the credit union due to his high medical bills. The balance on the loan from the bank was $75,000, and the balance on the credit union loan was $25,000. The bank instituted foreclosure proceedings in a jurisdiction that provides a statutory right of redemption. The day before the judicial sale, the father inherited $100,000 from his aunt. He quickly contacted the bank and offered to pay off both loans in full. The bank refused because it was hoping to buy the now valuable property at the judicial sale. If the father seeks to force the bank to accept his offer, will he likely prevail?

Sam owned a condominium unit with a stunning ocean view. Sam…

Sam owned a condominium unit with a stunning ocean view. Sam listed the unit for sale at a price of $625,000. Beth, an appraiser, toured the unit and concluded that it was worth $600,000. Beth loved the unit so much that she happily would have paid $625,000 if necessary. But when Beth made an offer to buy it, she offered only $500,000; Sam accepted the offer because he had financial problems and was desperate to sell it as soon as possible. The sales contract provided that escrow would close in 90 days. During this period, a bequest from an uncle solved Sam’s financial problems. By the day set for close of escrow, the fair market value of the unit had fallen to $575,000. Regretting that he had agreed to sell for a low price, Sam told Beth: “Sorry, but I won’t sell.” Beth sued Sam for damages based on breach of the sales contract. Due to court congestion, it took over a year for the case to come to trial. By this time, the fair market value of the unit had increased to $650,000. Beth won the case at trial.  What amount of damages did the court award?

A homeowner borrowed $50,000 from a bank, secured by a mortg…

A homeowner borrowed $50,000 from a bank, secured by a mortgage on his home. Shortly thereafter, the homeowner sold his home to a buyer for $70,000 by a deed containing a recital signed by both parties that title passed “subject to” the bank’s mortgage, “which obligation grantee expressly assumes.” The buyer paid the homeowner $20,000, took possession of the house, and began making monthly payments of principal and interest to the bank. A few years later, a chemical manufacturing firm built a huge sulfur processing plant just down the road from the home, which caused the house to immediately decline in value to $35,000. Subsequently, the buyer stopped making the monthly payments to the bank. The bank exercised its contractual right of nonjudicial foreclosure and sold the house at a public auction for $34,000. The bank then brought suit against the homeowner and the buyer for $14,000, the difference between the proceeds of the foreclosure sale and the $48,000 principal remaining due on the original loan to the homeowner. The jurisdiction does not bar deficiency judgments. Against whom should the bank be granted a judgment for $14,000?

A seller entered into a written contract with a vintner on A…

A seller entered into a written contract with a vintner on April 4, whereby the seller agreed to convey a vineyard to the vintner for $2 million. The terms of the contract set the closing date as June 1. At the time the seller entered into the agreement with the vintner, the seller had no interest in the vineyard. On April 15, the seller entered into a written agreement with a landowner, whom the seller believed to be the owner of the vineyard. According to the terms of the agreement, the landowner was to convey the vineyard to the seller on or before May 25. Another term of the agreement stated “time is of the essence.” On May 24, the landowner conveyed his interest in the vineyard to the seller. When the seller went to record the deed, she discovered from records in the recorder’s office that the landowner held clear title to only seven-eighths of the vineyard. It took some time for the seller to remove the cloud from the title and procure ownership in full of the vineyard. She finally did so on August 1, and on that day she tendered a warranty deed to the vineyard to the vintner. The vintner refused to tender $2 million or any other sum to the seller, asserting that the seller had broken her agreement by failing to close on June 1. The seller then sued the vintner for specific performance. If the vintner prevails, what is the likely reason?

A rancher entered into a written contract to buy a farm from…

A rancher entered into a written contract to buy a farm from a farmer for $100,000. The contract stipulated for closing on September 30. In addition, the contract contained the following provision: “The taxes shall be prorated as agreed to by the parties at a later date.” Upon the signing of the contract, the rancher gave the farmer a check for $10,000 as a down payment. On September 28, the rancher notified the farmer that he would not be able to close on the farm until October 2, because the closing on his current home, the proceeds from which were to be applied to his purchase of the farm, was unavoidably delayed due to his buyer’s illness. Meanwhile, the farmer had difficulty finding a home she liked as well as the farm. She decided that she would rather not sell the farm and wished to avoid the contract with the rancher. On October 2, the rancher showed up at the closing with the $90,000 to tender to the farmer. The farmer did not show up. The rancher sues for specific performance. In whose favor will the court most likely rule?