Opinion ID: 1144948
Heading Depth: 1
Heading Rank: 6

Heading: Price's and Sedam's Obligations:

Text: It was  under the agreement to buy and sell  the purchasers', Price's and Sedam's, obligation to deliver the note and mortgage and to thereafter make the payments. The note and mortgage were delivered on July 1, 1977, but the payments provided for therein were never made because Price and Sedam undertook a rescission of the contract when they found the warranty deed could not be recorded. In essence, then, the sellers are forced into the position of contending that the executory contract of sale did not obligate them to deliver a recordable deed  only a warranty deed warranting the title in the grantors and, as between grantors and grantees, conveying fee title to the grantees. This obligation  say the sellers  was fulfilled. The purchasers  on the other hand  urge that it was the sellers' obligation to furnish  not just a warranty deed  but also a title insurance policy showing merchantable title in the sellers, subject only to contract exceptions. Purchasers also contend that the sellers were to furnish a title insurance commitment to later issue a policy showing fee title in the buyers. These obligations  contend the buyers  were not discharged by the sellers and therefore the contract should be rescinded and their moneys returned. The buyers were successful in urging this position before the trial court. Based upon the facts recited above, this much can be concluded: Had the sellers complied with their contractual obligation to furnish a title insurance policy showing merchantable fee title in themselves, subject to the contract of sale exceptions (contract Paragraph 8 requirement), the second obligation, which was to furnish a title insurance company's commitment evidencing a willingness to issue a title insurance policy showing fee title in the buyers would have been dischargeable without problem or incident. The reason is that a title insurance policy showing merchantable fee title in SELLER carries with it the certification that the seller's deed is recordable  otherwise it could not be regarded as a merchantable fee title. It was the unrecordability of the sellers' deed that prevented the title insurance company from issuing a title insurance policy showing merchantable fee title in the sellers and its ultimate commitment to issue an insurance policy showing title in the buyers. We conclude, as did the trial court, that the breach which precluded the fulfillment of the executory contract for the sale of the property in question here, was the Bakkens' failure to provide the purchasers  Price and Sedam  with the policy showing merchantable fee title in SELLER.  (Emphasis supplied.) [3] An unrecordable warranty deed is not what the bargain calls for. A title insurance commitment showing title in the purchasers, predicated upon merchantable fee title in SELLER, is what the contract calls for and the sellers did not discharge this obligation because their warranty deed was not recordable.