Daily Development for Wednesday, September
Patrick A. Randolph, Jr.
Professor of Law
UMKC School of Law
Of Counsel: Blackwell Sanders Peper Martin
Kansas City, Missouri
PURCHASER; QUIETING TITLE; EQUITABLE CONVERSION: A vendor of property cannot
sustain a quiet title action even after a ten year delay in closing on the sale
of the property so long as the purchaser can prove a real interest in the
property, such as equitable title that is conveyed by the parties' entering into
a purchase agreement.
Krotz v. Sattler, 586 N.W.2d 336 (Iowa 1998).
Seller and buyer entered into a purchase agreement to convey
three parcels of property. The parties closed on the larger parcels, but did not
close on the last, an abandoned railroad right of way, due to title problems. Although
seller's counsel proposed amendments to the title opinion that she thought would
satisfy buyer's counsel, buyer's counsel never responded. Ten years passed,
during which nothing happened and no one cancelled the agreement. Then the
sellers observed buyers building a sewer line in the third parcel and brought a
quiet title action with respect to the third parcel.
The trial court quieted title in the buyer.
On appeal: Held: Reversed.
An action to quiet title assumes that the
plaintiff possesses complete title to the property in question. The plaintiff's
action will fail if the defendant proves some real interest, as opposed to an
apparent or asserted right, in the property. The buyer in this case was able to
establish equitable title to the property, thus defeating the seller's quiet
When the parties entered into the purchase
agreement, equitable title passed to the buyer, while legal title remained in
the seller pending the payment of the purchase price. This doctrine of equitable
conversion treats the purchaser as the owner of the property and views the
seller as holding legal title to the property as trustee for the buyer. Because
the seller had a bona fide interest in the property, the mere passage of time
without a closing was insufficient to defeat the buyer's title, and the seller's
quiet title action failed.
Comment: Apparently the buyers thought that
they had already paid for the right of way parcel when they delivered
consideration for the balance of the property (the size of the property priced
on a per acre basis was estimated, not surveyed.) Further, perhaps because of a
potential dispute over that issue, they argued that the right of way was
conveyed to them as part of the transfer of the adjacent parcels (which well
might be the case if the record was otherwise silent). But here the evidence
convinced the court that the parties treated the third parcel as separate and as
not conveyed, although the court was not certain about whether the price had
In short, there were lots of issues to work
out concerning the contract, and a quiet title action, which only determined
whether title was in the seller, did not accomplish this, at least in the eyes
of the court.
Comment 2: The editor doubts that we're back
to the rigid "forms of action" practice in Iowa. Although a trial
court, on its own motion, or by "steering" the parties, probably could
have brought the contract issues into the dispute, apparently this trial court
did not due so. Consequently, the appeals court had no choice but to send the
Comment 3: The court notes that the statute of limitations had no impact
here. The seller had not repudiated the contract, so there was no cause of
action by the buyer to be barred. Apparently neither side possessed the
property, so adverse possession was not an issue.
in the Daily Development section generally are extracted from the Quarterly
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Property, Probate & Trust Law. Subscriptions to the Quarterly Report are
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Survey of Developments in Real Estate Law, volumes 16, published by the ABA
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Report or the Survey, contact Maria Tabor at the ABA. (312) 988 5590 or
reported here and in the ABA publications are for general information purposes
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