Opinion ID: 1934555
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Heading Rank: 2

Heading: The Special Warranty Deed.

Text: When the Ransons purchased their property from Elmer and Rosemary Greve in 1988, part of it was purchased for cash, with a warranty deed, and the balance was purchased on an installment contract. The contract was paid off in 1996. In the meantime, Elmer Greve had died. When the Ransons paid off the contract, a court officer's deed was given to convey Elmer's share of the land to the Ransons. Rosemary Greve conveyed her interest by the special warranty deed now at issue. The deed provided in part: Grantors do Hereby Covenant with Grantees and successors in interest to Warrant and Defend the real estate against the lawful claims of all persons claiming by, through or under them, except as may be above stated. The Ransons, relying on the covenants of this deed, seek protection in the event they lose on the Eglis' claim of title by acquiescence. The district court granted Greve's motion for summary judgment, ruling that Greve could not be held liable under any covenants of the deed because the suit by the Eglis was not a claim by persons claiming by, through or under her. Special warranty deeds such as this, covenanting only against liens or encumbrances by the seller, are commonly used to convey legal title on satisfaction of an installment real estate contract. Under a contract for a deed the vendee is customarily in possession for a number of years before the deed is executed. He is thus in a position to make and suffer liens and other encumbrances upon the property. The vendor in his deed naturally does not want to warrant that the title is free from such liens. If a general deed form, and not the special form warranting only for the acts of the grantor, is used, it is recommended that a statement similar to the following be added to the deed in the space for listing encumbrances: ... that they are free from incumbrances except as to any liens or incumbrances created or suffered to be created by the acts or defaults of the grantee. 1 Marlin M. Volz, Jr., Iowa Practice § 7.32, at 163 (3d ed.1996). We have not previously considered special warranty deeds under similar circumstances. The parties cite an old Iowa case, Funk v. Creswell, 5 Iowa 62 (1857), which discussed various types of warranties in deeds but lends no help in this case. Nor do any other Iowa cases. Other courts, however, have discussed the role of special warranty deeds. The North Dakota Supreme Court has stated, under a special warranty deed a grantor is liable if the grantee's ownership is disturbed by some claim arising through an act of the grantor. Stracka v. Peterson, 377 N.W.2d 580, 583-84 (N.D.1985). In Central Life Assurance Society v. Impelmans, 13 Wash.2d 632, 126 P.2d 757, 763 (1942), the Washington Supreme Court held a special warranty deed normally warrants title only against claims held by, through, or under the grantor, or against incumbrances made or suffered by him, and it cannot be held to warrant title generally against all persons. The Arkansas Supreme Court has stated a special warranty deed simply warrants the title against all defects therein done or suffered by the grantor. Reeves v. Wisconsin & Arkansas Lumber Co., 184 Ark. 254, 42 S.W.2d 11, 12 (1931) (emphasis added). The issue before us is whether a grantor who has allegedly acquiesced in the establishment of an encumbrance on real estate is responsible for a claim by, through or under the vendor, as these third-party petitioners claim. We believe the warranty in this case covers claims permitted by the vendor as well as those affirmatively created by her. If that were not so, encumbrances such as mechanics' liens, which are imposed by others, would be excluded from the warranty. We do not believe that would be a reasonable interpretation of the warranting language. The third-party defendant, Greve, does not appear to challenge this as a legal proposition or claim an acquiescence cannot constitute a breach of warranty under such a deed. She argues principally that, even assuming acquiescence can give rise to a claim covered by the warranty, any title acquired by her neighbors across the fence through acquiescence occurred long before she and her husband acquired title in 1964. Therefore, according to her, any acquiescence in the boundary line during the time the Greves owned the property would be irrelevant. The acquiescence, if any, cannot be pinpointed in terms of time. In fact, the district court, in denying the Eglis' motion for summary judgment (in which they attempted to fix a pre-1964 acquiescence as a matter of law) stated, the court cannot find as a matter of law that the boundaries were established by acquiescence prior to the Greves' 1964 purchase of the ... property. We agree; the third-party petitioners should be permitted to show when, with respect to the Greves' ownership, the acquiescence occurred. We hold that the special warranty deed warranted against claims arising through acquiescence by the Greves as well as any affirmative acts by them. A genuine issue of material fact was generated as to whether the Greves were responsible for any part of the ten-year period of acquiescence. It was therefore error for the court to grant summary judgment in favor of Greve. We reverse and remand for further proceedings on the third-party petition.