Property Law Spring 2017

Professor Marc H. Greenberg

Golden Gate University School of Law

Land Transfers Part 3

 Land Transfers Part 3
• Remedies for Breach of the Sales Contract –
– 1) Damages; 2) Seller retains the Buyers deposit, or Buyer obtains the
return of the deposit; or 3) Specific Performance . Addressed infra.
• Jones v. Lee
– In the absence of a liquidated damages clause, how should damages be
calculated if the buyer, after signing a sales contract and paying a deposit,
backs out of the deal?
– Under the “loss of the bargain” rule, the Court must determine the value
of the property at the time of breach, and compare that amount with the
contract price. The price obtained in a subsequent re-sale may also be
considered . If the result of application of the rule is that there is very little
difference in the amounts, absent a showing of special damages, usually
the forfeiture of the deposit is all the recovery available.
– Does the Court award Jones punitive damages for Lee’s breach of
contract?
 Land Transfers Part 3
• Kutzin v. Pirnie
– At common law, a buyer who breaches a contract forfeits their deposit, even
if the amount of the deposit exceeds the actual damages caused by the breach.
This court declines to apply that rule, finding that to do so gives the seller a
windfall – instead buyer is limited to owing the actual damages caused, and is
entitled to receive any excess amount in the deposit returned. This result might
be different if there is a liquidated damages clause, with a reasonable amount
set for recovery.
•Remedies Breakdown
–Damages – the measure is the difference between the contract price and the
fair market value as the time of breach.
–Retention and/or Return of Deposit – The holding in Kutzin is the minority
view – most courts treat the deposit as if it were a liquidated damage amount –
and the problem rarely comes up because most contracts contain a liquidated
damages clause.
–Specific Performance – granted if you can show that the property at issue is
unique – tough to do in condo cases
 Land Transfers Part 2
•The Deed
–Warranties of Title – General Warranty Deeds – when the legalese is
stripped away, all you need is the names of the grantor and grantee, words
of grant, description of the land involved, signatures and attestation.
–Consideration – language like “for good and valuable consideration” is
sufficient – no specific description of the consideration is necessary
–Tract Description – the boundaries of the property must be described
–Seal – generally no longer needed
–Forgery and Fraud – a forged deed is void; a deed procured by fraud is
voidable
–Indenture and Deed Poll – old ways of making copies of deeds
–Express Warranties – deeds contain an array of present and future
covenants – the present covenants make promises about the transfer that
are true and enforceable when the property is transferred; and the future
covenants promise future acts to be done by the grantor.
 Land Transfers Part 3
• Brown v. Lober
– The reservation of mineral rights in this property was not hidden, and a
simple title search would have discovered that the general warranty
deed from Bost to Brown was inaccurate, and Brown could have
brought suit against Bost for the difference in value of the property
with only 1/3d of the mineral rights available. Having blown the ten
year statute on that claim, Brown’s effort to state the claim via breach
of the warranty of quiet enjoyment is unavailing. Why?
• Frimberger v. Anzellotti
– What is the mistake fatal to his claim made by the plaintiff
attorney/land developer here?
– As we saw in the Lohmeyer case, the existence of an ordinance or
zoning rule is not an encumbrance on a land transfer – it has to rise to
the level of an actual violation to affect the marketability of the title.
Did the rule here rise to that level? Why not?
 Land Transfers Part 3

• Rockafellor v. Gray –
– Connelly’s purchase of the property via sheriff’s deed on foreclosure is
rendered void by Rockafellor’s suit; since Dixon bought the property
from Connelly, Dixon has a claim against Connelly. But since Dixon
later sold to Hanson & Gregerson, the issue is whether Dixon’s claim
against Connelly is impliedly assigned to Hanson & Gregerson. The
majority rule says no – this court follows the minority rule allowing the
covenant of seisin to run with the land.
– Does it matter that neither Connelly nor Dixon took possession? No.
– Why should Hanson & Gregerson be able to collect on Dixon’s payment
of $4000 to Connelly if the payment was never made? The Court says
Dixon might not be able to collect if Connelly proved that Dixon never
paid, but the Contract of Sale/Deed reflects the payment and Hanson &
Gregerson, as the remote grantees, are entitled to rely on that.
 Land Transfers Part 3
• Sweeney v. Sweeney –
– Maurice’s two intentions run afoul of each other in this case. He
intends to: 1) transfer his property to his brother John to cut out his
estranged wife; and 2) transfer his property back to him if John dies
before he dies.
– In fact, Maurice died first. John asserts that the first deed, transferring
the property to him, is the only delivered, and therefore, enforceable
one, because it is the only one recorded (the second deed was lost in a
fire (in his lawyer’s office, and was never recorded!). Maurice’s wife
claims that delivery of the second deed took place when Maurice took
them from the town clerk’s office and gave them to John for
safekeeping. The Court agrees with her. It finds that delivery was
intended by Maurice and John to each other, and that the delivery
wasn’t subject to a condition (John dying first) because oral conditions
cannot be attached to a delivered deed.