Daily Development for
Wednesday, April 3, 1996

by: Patrick A. Randolph, Jr.
Professor of Law
UMKC School of Law

RECORDING ACTS; BONA FIDE PURCHASER; INQUIRY NOTICE: Existence of a visible chain link fence encroaching up to five feet onto property purchased is not sufficient to put purchaser of such property on inquiry notice of fence builder's unrecorded deed to property thus enclosed. Levien v. Fiala, 902 P.2d 170 (Wash. Ct. App. 1995). A built a wood fence on A's lot. The fence was not on A's line with B, but somewhat inside that line. Later, B built a chain fence on B's side of A's fence, thereby inclosing a triangular strip of A's property of about 175 square feet - five feet wide at its widest point. A later quitclaimed the triangular strip to B, and very shortly thereafter sold the property to C. B did not record the quitclaim deed, and C had no actual or constructive knowledge that the B's fence enclosed portion of the property described on A's deed to C.

In a quiet title action by C, the court held that the fence was in fact visible to C upon a reasonable visual inspection of the property. Based upon prior Washington cases, the court held that such observation was sufficient to put a buyer on notice in cases applying the "common grantor" doctrine. This doctrine holds that when one party owns a large tract, and builds a visible barrier separating the tract into separate lots which the common grantor then sells, the purchasers are held to have accepted title as defined by the barrier, rather than as defined by a contrary description in the deeds. The trial court applied the doctrine in this case, and found for B.

On appeal, held: reversed.

The court acknowledged that C was on inquiry notice of facts giving rise to the common grantor doctrine, if such doctrine applied. But the court concluded that the common grantor doctrine should not apply here, since A had not divided a singly own tract into separate lots, but accomodated an existing neighbor. Therefore, the court held, B, the neighbor, could prevail only if C had actual or constructive knowledge of the A-B deed.

The court concluded that the existence of a visible fence close to the boundary is not sufficient to place a purchaser on notice of an intruding physical possession by the fence builder that would drive the purchaser to inquire as to the basis of the builder's claim.

Comment: Although, taken one step at a time, the case has logic, it leads to a conclusion that may be uncomfortable for persons interested in the security of title. The reasoning in this case is certainly transportable to adverse possession cases. Recent law school graduates will recognize the "noticeable incursion" exception to normal adverse possession rules adopted by the "potboiler" New Jersey case of Manillo v. Gorski. Many are critical of the Manillo rule, because it leads to uncertainty of result in an area in which certainty is a distinct virtue, and does so for no particularly good reason.

We should remember that in this case B was the owner of that triangular strip following receipt of the deed. To apply recording act doctrine to displace B's title is to alter private ownership because of an identified public interest in the primacy of the recording acts. But the public purpose is to insure greater certainty of title, not to permit careless purchasers to assert ownership of land that their seller did not own.

Formal surveys are available to any land purchaser. If purchasers choose not to spend the necessary funds to insure that there are no overlaps or encroachments, why should we reward them for their carelessness? If, as may be the case here, the real party in interest was C's title insurer, who had agreed to insure against encroachments without requiring a survey, then all the more reason to deny the claim, since the insurer took a risk that it knew existed and knew how to avoid it.

Unless we decide that recordation of a deed is necessary to establish good title, we should permit parties to defend their title by possessing their land, and not permit others to plead ignorance of an actual, observable physical possession discoverable by survey as in this case.

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 five years, these Reports annually have been collated, updated, indexed and bound into the Annual Survey of Developments in Real Estate Law, volumes 1-5, published by the ABA Press. The Annual Survey volumes are available for sale to the public. For the Report or the Survey, contact Laprica Mims at the ABA. (312) 988 6233.

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. Accuracy of data and opinions expressed are the sole responsibility of the DIRT editor and are in no sense the publication of the ABA.