Opinion ID: 2543629
Heading Depth: 3
Heading Rank: 3

Heading: Rights of Parties in Possession

Text: ¶ 36 The trial court concluded, The warranty deed to [the] Aults alleged in the complaint is insufficient to convey title adverse to the interest of [the] Holdens, it being subject to the rights of parties in possession and [the] Holdens being in possession on August 22, 1975, when the Ault deed was recorded. To determine whether the trial court was correct in concluding that the Ault deed was amenable to the Holdens' rights in the property, we must review the Ault deed. ¶ 37 Deeds are construed like other written legal instruments. Hartman v. Potter, 596 P.2d 653, 656 (Utah 1979). In the absence of ambiguity, construction of a deed is a question of law, Terry v. Price Mun. Corp., 784 P.2d 146, 149 (Utah 1989), that we review for correctness, Jones v. ERA Brokers Consol., 2000 UT 61, ¶ 12, 6 P.3d 1129. When we construe a deed, we are not bound by the trial court's conclusions regarding the meaning of the deed. Cornish Town, 758 P.2d at 921; Hartman, 596 P.2d at 656. ¶ 38 The paramount rule of construction of [a] deed[] is to give effect to the intent of the parties as expressed in the deed . . . . Hancock, 791 P.2d at 185; see also Cornish Town, 758 P.2d at 921; Creason v. Peterson, 24 Utah 2d 305, 309, 470 P.2d 403, 405 (1970). Specifically, we determine the parties' intent from the plain language of the four corners of the deed. Cent. Fla. Invs., Inc. v. Parkwest Assocs., 2002 UT 3, ¶ 12, 40 P.3d 599; see also Cornish Town, 758 P.2d at 921; Wood v. Ashby, 122 Utah 580, 585, 253 P.2d 351, 353 (1952). ¶ 39 The Ault deed provides that it is subject to the rights of parties in possession.  (Emphasis added.) This language is unambiguous. This clause in the Ault deed does not create any rights in the Holdens, but rather was only a recognition that parties in possession of the property may have rights in the property against which the grantor did not warrant title. Johnson v. Peck, 90 Utah 544, 550, 63 P.2d 251, 254 (1936). The words `subject to' used here are commonly associated with attempts by grantors to give notice of encumbrances .... Hancock, 791 P.2d at 186. ¶ 40 In Hancock, the trial court determined that language in a deed that stated the deed was subject to a fence line encroachment along the east line reserved in the grantor the property east of the fence line, which otherwise would have passed under the metes and bounds description. 791 P.2d at 185. However, we determined that the clause did not reserve the property to the grantor, but rather placed the grantee on notice that another may attempt to acquire the property by boundary by acquiescence in order to insulate herself from a suit by ... grantee ... in the event [that a] claim of title to the strip of land by acquiescence proved to be valid. Id. at 185-86. Thus, we concluded that the defendant could obtain title to the property only by boundary by acquiescence, not under the subject to clause of the deed. Id. at 187. ¶ 41 Here, the trial court concluded that the Ault deed did not convey title to the disputed parcels to the Aults where that deed was adverse to the right or interest of the Holdens as a party in possession. It is undisputed that the Holdens were in possession of the strip when the Aults recorded their deed on August 22, 1975. The Holdens contend that their possession of the disputed parcels placed the Aults on notice of their claim of title. ¶ 42 However, possession requires only inquiry into any rights in the property the possessor may hold. Hottinger v. Jensen, 684 P.2d 1271, 1273 (Utah 1984). Traditionally, in race-notice states like Utah, a purchaser takes subject to rights of parties in possession that are open and visible. See, e.g., Mathis v. Madsen, 1 Utah 2d 46, 57, 261 P.2d 952, 959 (1953); Neponset Land & Live-Stock Co. v. Dixon, 10 Utah 334, 336-37, 37 P. 573, 574 (1894); Ayers v. Jack, 7 Utah 249, 252-53, 26 P. 300, 300 (1891). In other words, possession by someone other than the seller engenders a duty to inquire on the part of the purchaser into the rights of the party in possession. See Webster v. Knop, 6 Utah 2d 273, 278, 312 P.2d 557, 560 (1957); Salt Lake, Garfield & W. Ry. Co. v. Allied Materials Co., 4 Utah 2d 218, 222, 291 P.2d 883, 886 (1955); Williams v. Barney, 119 Utah 61, 84-85, 224 P.2d 1042, 1053 (1950); Meagher v. Dean, 97 Utah 173, 179, 91 P.2d 454, 456 (1939). However, where a party in possession has no rights adverse to the purchaser, the property is conveyed to the purchaser free of any alleged right of the possessor. ¶ 43 Proper inquiry by the purchaser would [only] lead to actual knowledge as to the state of title. Johnson v. Bell, 666 P.2d 308, 310 (Utah 1983). In this case, inquiry into the state of the Holdens' title would have informed the Aults that the Holdens did not hold an ownership right in the disputed land contrary to the Aults' ownership under the Ault deed. The Holden deed covered neither the strip nor the western parcel, and the deeds do not conflict. ¶ 44 The only right the Holdens held in the property at the time the Aults recorded their deed was a leasehold from an agreement with the Aults, which is not contrary to the Ault deed. Between 1972 and 1977, the Holdens leased the Ault property from the Aults and were entitled to possession of the Ault property as lessees. Thus, the only rights the Holdens held as a party in possession in this case were limited to the Holdens' rights set forth in the lease agreement, and therefore, the Ault deed was, at most, subject to the rights and interests the Holdens held in connection with the lease agreement. See 66 Am.Jur.2d Records and Recording Laws § 188 (1973). Therefore, the trial court erred by concluding that the Ault deed was subject to any ownership rights in the property although the Holdens were a party in possession.