Daily Development for
Friday, February 26, 1999

 by: Patrick A. Randolph, Jr.
 Professor of Law
 UMKC School of Law
 Of Counsel: Blackwell Sanders Peper Martin
 Kansas City, Missouri

 VENDOR/PURCHASER; SPECIFIC PERFORMANCE:  Purchase agreements are subject to North Dakota's "deed rule," under which the signature of some but not all owners of land on a deed conveys the interests of those signing, but not of those who do not sign.  Such agreements  are also subject to the exception to the deed rule, under which a deed that is granted subject to signature by all owners is ineffective until signed by all owners..

 Wachter Development, L.L.C. v. Gomke, 579 N.W.2d 209 (N.D. 1998).

 Plaintiff Wachter Development brought suit for specific performance of a purchase agreement for land owned by Arnold Gomke, Luella Gomke, Nyla Kilber and Wayne Kilber.  The purchase agreement was executed by Wachter and only three out of the four land owners.  Wachter asserted that, under the deed rule, the three signing owners were required to sell their interests in the land.  The court found that the deed rule applies to purchase agreements.  The court also found that the exception to the deed rule also applies and, because the district court found the parties intended to make the purchase agreement subject to signature by the fourth owner, the purchase agreement was not effective against any of the owners.

 Comment: This nettlesome little problem often jumps up in land contract disputes.  Sometimes the neither buyer *nor seller* are aware that there are third parties with a cotenancy interest in the land.  Sometimes the buyer believes but for no good reason that the seller speaks for all cotenants.  Sometimes the seller indeed has an implied agency to speak for all the cotenants.

 It should be noted that the more common scenario is situations such as those in the instant case is that the buyer will sue the seller for damages for failure to convey good title, rather than for specific performance of only part of the interest.  One assumes that the suit for specific performance would be a election not to pursue the damages claim.  But does the "deed rule" preclude the buyer from alternatively suing a seller for damages where the buyer expected that the seller would be able to deliver good title but can't because other cotenants won't agree?

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 six years,  these Reports have been collated, updated, indexed  and bound into an Annual Survey of Developments in Real Estate Law, volumes 1 - 6, published by the ABA Press.  The Annual Survey volumes are available for sale to the public.  For the Report or the Survey, contact Maria Tabor  at the ABA.  (312) 988 5590 or mtabor@staff.abanet.org

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