There's a little puzzle question in the comments here, right at the end

Daily Development for Thursday, July 18, 2002

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

DEEDS; CORRECTION: Grantor could not "correct" deed delivered and recorded five years earlier, and grantees were not barred by laches from quieting title in themselves.

Hilterbrand v. Carter, 27 P.3d 1086 (Or. App. 2001).

In 1978, the mother of two of the plaintiffs executed a deed conveying her interest in certain realty to her children and their spouses (the other plaintiffs) "not as tenants in common but with the right of survivorship." In 1983, the mother unilaterally recorded a "Correction Deed" purporting to clarify that each couple received undivided 1/4 interests as tenants by the entirety.

In 1995, mother died, and a property dispute erupted based on the defendants' interpretation of the rights created by the "Correction Deed." Plaintiffs sued to quiet title in themselves. After a trial, judgment quieting title was entered in plaintiffs' favor.

The Oregon Court of Appeals affirmed. The 1978 deed clearly created rights of survivorship as to all of the mother's property, and the mother could not by recording the "Correction Deed" unilaterally revoke the contingent remainders created by the 1978 deed. Defendants were also wrong in contending that under the doctrine of laches, the plaintiffs had to justify their delay in seeking to quiet title after learning of the 1983 "Correction Deed." Laches did not begin to run until someone "actually repudiated or challenged" the plaintiffs' interest, and the plaintiffs' filing of the quiet title action was timely by analogy to the 10 year statute of limitations under Oregon law for actions to determine claims to real property.

Commnent 1: The case is logical and correct, but does raise a slightly uncomfortable specter Frequently parties file correction deeds to address description errors or errors in the title of the grantee. In some cases, third party interests may have been gratuitously created by the misdescription. For instance, a deed recites that property is transferred to Brown Screw Company, Inc. In fact, the intended grantee was Brown Widget Screw Company. The Brown Widget Screw Company attended the closing, accepted the deed, paid the money, and took possession of the property.

Three years later, the error is discovered. There is in fact a Brown Screw Company, Inc., located elsewhere in the state, having no knowledge or interest in this property. Is it necessary to obtain their consent to the correction deed? If not, in light of the above case, why not? Is the answer simply that the title company takes the risk of any problem and has a claim over against the parties seeking insurance of the corrected title?

Comment 2: The case demonstrates the limitations of the laches doctrine, but perhaps the problem is not as great as is implied. To be barred by laches, a party must delay in asserting a claim when that party becomes aware that third parties are construing the claim differently. To say that there must be a "repudiation" or a "challenge" is a little strong. Equity will stretch to cover the situation when there is good faith reliance upon an apparent state of facts and a party with the power to correct a misunderstanding as to that state of facts becomes aware of the misunderstanding and the reliance and says nothing.

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

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