Daily Development for Wednesday, June 6, 2007
by: Patrick A. Randolph, Jr.
Elmer F. Pierson Professor of Law
UMKC School of Law
Of Counsel: Blackwell Sanders Peper Martin
Kansas City, Missouri

TITLE; ESTOPPEL BY DEED: If a grantor conveys land by warranty deed, but does not at the time of transfer have good title, the common law doctrine of estoppel by deed provides that title that is subsequently acquired by the grantor automatically inures to the benefit of his or her grantee, and he grantor and any later claiming under grantor are estopped from contesting that title.

Rendleman v. Heinley, 140 N.M. 912, 149 P.3d 1009 (2006).

Two chains of title leading from Guadalupe T. Lujan created an issue of whether Heinley's easement on the disputed property was valid or whether Rendleman owned the disputed property

The second chain of title indicated that in 1967 Domitilia Montoya conveyed the disputed property to Guadalupe T. Lujan. Then Guadalupe T. Lujan conveyed the disputed property to her daughter Margaret T. Lujan. This chain of title led to title in Rendleman.

The district court applied the after-acquired title doctrine in favor of Fassler and held that Fassler owned the disputed property at the time she granted the easement to Heinley. The New Mexico Court of Appeals affirmed the district court's opinion and concluded that Heinley's easement was valid and did not constitute a trespass.

In reaching its conclusion that the district court properly applied the after-acquired title doctrine, the Court of Appeals noted that "[c]ases from other jurisdictions show that, since early on, the after-acquired title doctrine was applied to vest title in the first grantee and those holding under him [or her] where there were two chains of title from one initial grantor. 

Rendlemans lawyer made a spirited argument that the court should instead decide the case based on the strength of the two titles.  He argued that since Rendlemans title came straight from the U.S. Government patent, it was the strongest.  The court pointed out that, under the after-acquired title doctrine, Rendlemans title lacked strength, noting that when good title was eventually granted to Ms. Lujan, it immediately vested by operation of law in the first grantee, who was Mr. Heinleys predecessor in title, not in Mr. Rendlemans predecessor in title.  Further, after making the original conveyance to Mr. Heinleys predecessor in title, Guadalupe Lujan had nothing more to convey to Mr. Rendlemans predecessor in title.

Comment 1: Note that this estoppel is an equitable concept and depends upon the subsequent grantee having actual or constructive knowledge of the first deed by the common grantor.  The court doesnt discuss the notice issue here, but it frequently is a big deal in these kinds of cases.  The question is whether the prior deed, which typically was executed and recorded before the grantor passed into title to the property, is inchain of title for subsequent title searchers, so as to impart constructive notice to them.  Some jurisdictions conclude that any recorded deed from a grantor in the chain of title provides constructive notice, even if made and recorded before he grantor ever got title.  These jurisdictions we law professors calllong up jurisdictions, and we criticize them as based upon a hypothetical title search that is wholly unreasonable.  A title searcher would have to run back every title in the chain back, back, back.  Here he would even have to run back before

the patent from the government was issued.  But there you are. 

If the jurisdiction maintained a tract index, this issue might be moot, as a tract index might pick up all deeds recorded against this property, whenever recorded.  (Note there was a side dispute about the validity of the description, which made this issue a bit more dicey.)  Further, if there was a title insurance company involved in the second transfer, and it maintained a tract index, it might have picked up the competing title.

Obviously no one viewed the recording acts as making a difference in this case, so the second taker must have indisputably had constructive or actual notice of the prior deed.  Or perhaps it had actual notice of the easement from evidence of it on the land, which put it on inquiry to discover the prior deed. 

Comment 2: The editor once learned (cant say from where) thatestoppel by deed is the term used to describe the common law version of the rule in question, involved here, and to useafter acquired title to describe the statutory version that exists in many states.  The court here uses th latter term to describe the common law version.  Well, whats in a name?

Comment 3: In the statutory version in Missouri, there is no statement that the first deed must be a warranty deed - only that the grantor represents ownership.  The editor has felt that getting a statement, made clearly without warranty, that the grantor believes himself to be the owner and so represents, might estop the grantor and his successors even in a quitclaim deed, and he bargains for it when he can.

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