Opinion ID: 2621617
Heading Depth: 2
Heading Rank: 1

Heading: utah's recording statute

Text: ¶ 12 The County argues that the court of appeals erred in holding that a purchaser is protected under Utah's Recording Statute when he is on notice that his grantor has no record title to the property conveyed. We agree. ¶ 13 Utah's Recording Statute provides as follows: Each document not recorded as provided in this title is void as against any subsequent purchaser of the same real property, or any portion of it, if: (1) the subsequent purchaser purchased the property in good faith and for a valuable consideration; and (2) the subsequent purchaser's document is first duly recorded. Utah Code Ann. § 54-3-103 (2000). [3] To be in good faith, a subsequent purchaser must take the property without notice of a prior, unrecorded interest in the property. See Ault v. Holden, 2002 UT 33, ¶ 31, 44 P.3d 781. In addition, to be in good faith a subsequent purchaser must also take the property without notice of any infirmity in his grantor's title. Pender v. Bird, 119 Utah 91, 96, 224 P.2d 1057, 1059 (1950); see also Paldevco Ltd. P'ship v. City of Auburn Hills, No. 202134, 1998 WL 1988569, , 1998 Mich.App. LEXIS 626, at  (Mich.Ct.App. Dec. 18, 1998) (unpublished per curiam decision) (noting [a] good-faith purchaser is one who purchases without notice of a defect in the vendor's title and that [n]otice need only be of the possibility of the rights of another, not positive knowledge of those rights). This notice is not confined to situations in which a subsequent purchaser has actual notice of an unrecorded interest or infirmity in the grantor's title. Rather, it includes circumstances where a purchaser has constructive notice of such information, including both (1) record notice `which results from a record or which is imputed by the recording statutes,' and (2) inquiry notice `which is presumed because of the fact that a person has knowledge of certain facts which should impart to him, or lead him to, knowledge of the ultimate fact.' First Am. Title Ins. Co. v. J.B. Ranch, Inc., 966 P.2d 834, 837 (Utah 1998) (quoting 66 C.J.S. Notice § 6 (1950)). ¶ 14 The County argues that because a search of the Utah County records revealed that the Tingeys had no record title to the Property, Metro West was necessarily on inquiry notice of a defect in the Tingeys' title. According to the County, under this inquiry notice analysis the lack of record title would have led a reasonable person to have discovered the County's recorded title to the Property in the Salt Lake County Recorder's Office. Consequently, the County asserts that Metro West cannot be a good faith purchaser without notice under the recording statute. ¶ 15 We agree that the Tingeys' lack of record title put Metro West on notice of a defect in the Tingeys' title. However, we do so not because Metro West was on inquiry notice of the defect, but because Metro West had both actual and constructive record notice of the defect, which precluded it from taking the Property in good faith. ¶ 16 Because the Tingeys had no record title to the Property when they transferred it to Metro West, the conveyance was carried out through what is commonly referred to as a wild deed. See Poladian v. Johnson, 85 So.2d 140, 140 (Fla.1955) (en banc) (A `wild deed' is one executed by a stranger to the record title....); 11 Thompson on Real Property, Thomas Edition, § 92.11(c) (David A. Thomas ed., 1994) ([A] `wild deed' [is one] executed by a grantor with no record ownership of the interest....). Few courts have addressed whether a purchaser who acquires title through a wild deed takes free of an unrecorded interest in the same property under the recording statutes. However, at least one commentator has expressly noted that a purchaser who takes title through a wild deed is not the type of purchaser that recording statutes protect. See Joyce Palomar, Patton and Palomar on Land Titles, § 10 (3d ed. 2003) ([T]he term `bona fide purchaser' as used in recording acts does not include one who buys from a stranger to the record.). And the majority of courts that have addressed the issue have held that a purchaser who receives property through a wild deed is not entitled to take free of an unrecorded interest simply by virtue of having recorded a purported conveyance of title executed by a stranger to the record title. See Holland v. Hattaway, 438 So.2d 456, 470 (Fla.Dist.Ct.App.1983) (noting that because recording statutes do not support or validate a wild deed or any conveyance of an interest that the grantor does not have, an appellant whose chain of title traced back to the sovereign had superior interest over an appellee who could only trace title to a wild deed executed by a stranger to the record); Zimmer v. Sundell, 237 Wis. 270, 296 N.W. 589, 591 (1941) (If one who has no title under the laws governing conveyances is to have a superior one under the recording acts, it should be because he has relied upon the record, and when he purchases from one who is a stranger to the record title he has no grounds for such reliance.). But see Hyland v. Kirkman, 204 N.J.Super. 345, 498 A.2d 1278, 1284, 1289, 1295-96 (Ct.Ch.Div.1985). ¶ 17 We conclude that a purchaser whose chain of title is founded on a wild deed cannot be a bona fide purchaser under Utah's Recording Statute. As previously noted, to be in good faith a purchaser must purchase the property without notice of any defect or infirmity in the grantor's title. Pender, 119 Utah at 96, 224 P.2d at 1059. Because [o]ne who deals with real property is charged with notice of what is shown by the records of the county recorder of the county in which the property is situated, Crompton v. Jenson, 78 Utah 55, 70, 1 P.2d 242, 247 (1931), and by implication charged with notice of what the records should show but do not, i.e., a lack of record title in a grantor, we hold that by definition a purchaser whose title is founded on a wild deed is on notice that his grantor had no record title to the property purportedly being conveyed. This is true in instances where, as in this case, the subsequent purchaser has obtained actual notice of this absence by searching the records. Moreover, it is also true even when the purchaser has no actual notice of the title defect, since all grantees of wild deeds are necessarily charged with constructive record notice by virtue of the recording statutes. Accordingly, a purchaser who acquires property through a wild deed will be held to have been on notice of a defect in his grantor's title and will not qualify as a subsequent purchaser in good faith for purposes of Utah's Recording Statute. ¶ 18 This is not to say that a purchaser who acquires property through a wild deed can never acquire good title. We merely hold that the recording statutes do not protect such a purchaser as against an unrecorded interest in the same. See Huntington City v. Peterson, 30 Utah 2d 408, 410, 518 P.2d 1246, 1248 (1974) (explaining that recording a deed does not pass title); Horman v. Clark, 744 P.2d 1014, 1016 (Utah Ct.App.1987) (The recording statute's purpose is not to make the transfer of property effective as between the parties....). If a purchaser can establish that his grantor possessed and conveyed valid title to the property independent of the recording statutes, a conveyance through wild deed will be effective as against any competing claims. ¶ 19 Applied in this case, because the Tingeys had no record title to the Property, Metro West was on notice of a defect in the Tingeys' record title and therefore did not purchase the Property in good faith for purposes of Utah's Recording Statute. As such, it is not a bona fide purchaser and is not entitled to quiet title to the Property as against the County's unrecorded interest simply because it recorded its purported title first. If, however, the Tingeys acquired valid title to the Property through a means not reflected by the record, such as through adverse possession, the Tingeys conveyed valid title and Metro West would be entitled to quiet title to the Property as against the County. Because the record is insufficient for us to determine whether the Tingeys had valid title to the Property, we remand for further proceedings consistent with this opinion.