Daily Development for Wednesday, December 12, 2001

By: Patrick A. Randolph, Jr.
Elmer F. Pierson Professor of Law
UMKC School of Law
Of Counsel: Blackwell Sanders Peper Martin
Kansas City, Missouri
prandolph@cctr.umkc.edu

ADVERSE POSSESSION; REQUIREMENT OF COLOR OF TITLE: Adverse possession is under good faith color of title where the claimant enters into a purchase agreement in good faith with the known owners of the property and it does not discover until later that a third party also held an interest in the property. It does not matter that this discovery occurs prior to the running of the adverse possession period.

Snook v. Bowers, 12 P. 3d 771 (Alaska 2000).

A native corporation conveyed Lot 82 to the heirs and devisees of James Snook. Snook had two sisters, Edith and Mary. Mary affied they were James's only heirs. Based thereon, after the sisters died, the corporation wrote to Edith's son Peter, and Mary's daughter, Marilyn, regarding the sale of the lot. Peter had affied he was Edith's only heir. Marilyn and Peter entered into a contract to sell the lot to the Bowerses. The contract allowed the Bowerses to begin to develop the lot upon payment of the earnest money deposit, which they did.

However, the title company discovered that James Snook had a brother, Russell, who had predeceased James, and the title company refused to insure against the rights of his heirs. An interpleader action was brought to determine the owners of the lot, and Russell's son, Russell Snook, Jr. ("Russell Jr."), was made a party to the action. The trial court adjudged that Russell Jr. was also an heir. After Russell Jr. bought the interests of the other heirs, he sued the Bowerses to have himself declared the owner of the property. The trial court granted the Bowerses' motion for summary judgment. Russell Jr. appealed.

As to the interests of the heirs that Snook had acquired, the court held that these heirs were bound by the terms of their prior agreements with the Bowers.' Although one of the heirs had not delivered title to the Bowers, the Bowers had acquired equitable title through the execution of an executory land contract. Thus, upon final payment of the balance of the price, they were entitled to have the interests of the heirs who had agreed to sell to them. These heirs, absent the contract to the Bowers, would have been cotenants with Snook. So in essence the Bowers contract gave them an equitable title in a cotenancy with Snook as well.

As to Snook himself, The Alaska Supreme Court held that the Bowers had established adverse possession under color of title. The fact that there is a presumption against ouster among cotenants did not avail Snook, since the Bowers claim of ownership as against all the cotenants was quite clear. Further, they clearly had possession of the property and made improvements to which Snook vigorously objected. Although Alaska law prevents adverse possession against native land, there is a statutory exemption for "developed" land, and the Bowers' parcel was in a tribal-sponsored subdivision, which satisfied the "development" test.

The primary problem for the Bowers was the length of time to be applied. The court utilized the special seven year statute of limitations provided under Alaska law for claims under good faith color of title. The Bowers title claim was in good faith, the court held, where they did not learn, until after they had signed the earnest money agreement and taken possession of the property, that heirs of the decedent, other than the vendors, had an interest in the property. It did not matter that a significant period of their adverse possession was in fact with knowledge of competing claims. The relevant time for identifying good faith color of title is the moment of acquisition of such color of title.

Comment: Another interesting problem was the fact that the agreement under which Bowers claimed title was not a deed, but simply an executory contract. Was this contract sufficient to establish "color of title?" The court seems to be saying "yes," emphasizing the fact that the contract established an equitable title claim. But then the court dodges the issue by saying that Snook did not preserve it on appeal.

We'll have to wait for a later case to resolve this little dilemma.

Readers are urged to respond, comment, and argue with the daily development or the editor's comments about it.

Items in the Daily Development section generally are extracted from the Quarterly Report on Developments in Real Estate Law, published by the ABA Section on Real Property, Probate & Trust Law. Subscriptions to the Quarterly Report are available to Section members only. The cost is nominal. For the last six years, these Reports have been collated, updated, indexed and bound into an Annual Survey of Developments in Real Estate Law, volumes 1‑6, published by the ABA Press. The Annual Survey volumes are available for sale to the public. For the Report or the Survey, contact Maria Tabor at the ABA. (312) 988 5590 or mtabor@staff.abanet.org

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