Daily Development for Tuesday

Daily Development for Monday, March 14, 2005
by: Patrick A. Randolph, Jr.
Elmer F. Pierson Professor of Law
UMKC School of Law
Of Counsel: Blackwell Sanders Peper Martin Kansas City, Missouri dirt@umkc.edu

ADVERSE POSSESSION; PRESUMPTION OF SUBSERVIENCE; STATUTE OF REPOSE: Where grantor remains in possession of land transferred to another for a period exceeding twenty years, never acknowledging anyone’s ownership but his own, the normal presumption that the grantor is holding subservient to grantee’s title goes away, and grantor will regain title under the statute of repose. But grantor’s actions acknowledging grantee’s possession will bar the statute from running.

Salter v. Hamiter, 887 So. 2d 230 (Ala. 2004)

Salter and Knowles were long term business partners and confidantes. In 1967, Knowles made a will leaving everything she owned (which included a considerable amount of real estate) to Salter. At that time, Knowles and Salter had been friends only for about five or six years.

Later in the same year, Knowles consulted her attorney concerning the immediate transfer of at least a portion of that real estate to Salter, but told her attorney that she didn’t want her family to know of the transfer. Her attorney prepared and she executed the deeds, and told her that the deeds would have to be formally delivered, but that recording, although valuable, was not vital to their delivery. Soon thereafter Knowles was in the hospital for tests, and called in Salter and her attorney. In her attorney’s presence, Knowles handed the deeds to Salter and the attorney executed as witness (an executing witness is required in Alabama for deed delivery).

Thereafter, from 1967 until Knowles’ death in 2000, or for over 30 years, Knowles and Salter both continued to be active in the use and management of the properties. Knowles built a home on one and lived there. Salter managed timber property on some of the land, had keys to all the gates, hunted on the land and paid taxes from joint business bank accounts in the joint name of Knowles and Salter. Consistent with Knowles’ stated wishes, however, Salter did not record the deeds until after her death.

Knowles, in her own name, entered into timber and mineral transactions concerning the lands, and even deeded some parcels from those lands. But neutral witnesses testified that she always consulted Salter with respect to these transactions and that he was present whenever she indicated a decision made about them.

In 1985, Knowles executed a second will. This will did not cover the properties in question, and Knowles told her attorney that she had already deeded these properties to Salter, and that therefore it as not necessary to describe them in a will.

Upon her death, of course, her heirs contested Salter’s ownership of the lands. There seemed to be little basis to question the validity of the original physical delivery of the deeds, so the heirs focused upon Knowles’ subsequent activities inconsistent with an intent to deliver title. They argued that the deeds should be regarded as attempts to make a will, and that the instruments failed as wills due to technical problems.. The trial court held for the heirs and set aside the deeds.

On appeal, held: Reversed.

The court first addressed the question of delivery intent. It held that the knowing physical delivery of an unconditional deed establishes delivery intent, and that recording is unnecessary to establish intent. Further, extraneous evidence subsequent to the delivery suggesting that a will, rather than a deed, was intended, will not be admitted to counter the impact of the clear and knowing acts of delivery. The court emphasized that the evidence showed that Knowles was fully aware of the difference between a deed and a will, and knew what she was doing. It did allow that extraneous evidence might be permitted to show fraudulent inducement, but there was no such evidence here.

The heirs also argued that Knowles’ subsequent acts of possession on the land demonstrated that she in fact continued in her ownership, and that she reestablished such ownership by long term unconstested possession.

Salter responded that Knowles’ activities on the land were consistent with his title to the land, and undertaken in subservience to it. The heirs acknowledged that this rule is generally recognized in situations in which the ten year adverse possession statute is in play, but that a different rule applies for the longer “statute of repose” in the Alabama statutes.

The court acknowledged that under the Statute of Repose in Alabama, the general presumption that continued possession by a deed grantor is subservient to the title of the grantee does not operate. Grantor’s simple uncontested possession that is inconsistent with the title granted under the deed is sufficient to establish an adverse claim and revert the property back to the grantor. It discussed at length the case of Walker v. Coley, 88 So. 2d 868 (Ala. 1956) where a party executed a deed of his land to owners of neighboring property so that the neighbors could “clear title” to the combined parcels. He claims that upon clearing title, he expected the neighbors to convey his own land back to him. But, years later, there was no evidence corroborating this understanding other than grantor’s own testimony. On the other hand, grantor had remained in sole uncontested possession of the land for over twenty years after the deed, with claim of ownership, and the court there held that t his reestablished title under the Alabama Statute of Repose.

The court, however, refused to apply Walker here, because there was considerable evidence that Knowles in fact acknowledged that her actions on the property during the thirty three years following the delivery of the deeds to Salter were subservient to Salter’s title. As indicated, she stated to her attorney that Salter was indeed the owner, consulted with Salter on any transaction undertaken in her name, and permitted Salter uncontested physical access to most of the property during the entire time. Thus, even though Salter could not take advantage of a presumption of subservience that would have applied during the shorter adverse possession period, he didn’t need it. Knowles’ actual acknowledgement that her acts were subservient to the title she had conveyed in the deeds was sufficient.

Comment 1: The court acknowledges that Alabama takes more seriously the distinction between repose and adverse possession, and that the rules that state applies are more hard edged, even though the distinction did not in the end avail for the heirs here.

Comment 2: In discussing Hinds v. Kimbrell, 739 So.2d 25 (Ala.Civ.App. 1998), the DIRT DD for 4/20/2000, the editor commented as follows:

“The editor has seen few cases applying the Doctrine of Repose. A quick library check indicates that the concept is not listed in the American Law of Property, Thomson on Real Property, Powell on Real Property or even Patton on Titles (although the editor suspects that DIRTer Joyce Palomar the Patton revisor, will fix that in the next edition.). Thomson, which currently is in a revision by DIRTer David Thomas, won hands down the "most Doctrines in the index" contest, but didn't have this one. Is this uniquely an Alabama concept, at least as applied to title?”

The editor lacks access to his copy of the new Patton treatise. Is it in there?
Comment 3: The statute of repose appears to be more a statutory codification of the laches concept. Rather than emphasizing the adverse claim built up by the adverse possessor, the statute focuses on the failure of the true owner to do anything about the adverse possession claim.

Note that the statute might be useful to address claims of permissiveness that in some cases have “infected” otherwise valid adverse possession claims even where possession has lasted a century. See, e.g. Pioneer Mill Company, Limited v. Dow, 978 P.2d 727 (Hawaii 1999) (the DIRT DD for 2/24/00) (Possession by remote grantee of party who was presumed to possess permissively is not adverse, even if continued for over 100 years). Compare: Miller v. Anderson, 955 P.2d 846 (Wash. App. 1, 1998). (the DIRT DD for 10/12/98) (Use that is permissive at inception of a proposed adverse possession is presumed to remain permissive only until sale of servient estate to a stranger.)

All other statute of repose postings on DIRT appear to relate to application of this “statutory laches” concept to tort claims.

Items reported here and in the ABA publications are for general information purposes only and should not be relied upon in the course of representation or in the forming of decisions in legal matters. The same is true of all commentary provided by contributors to the DIRT list. Accuracy of data and opinions expressed are the sole responsibility of the DIRT editor and are in no sense the publication of the ABA.

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