Miller v. Alexander
| Decision Date | 02 June 1989 |
| Docket Number | No. 62887,62887 |
| Citation | 13 Kan.App.2d 543,775 P.2d 198 |
| Parties | Ermil R. MILLER, Appellant, v. Mary E. ALEXANDER, et al., Appellees. |
| Court | Kansas Court of Appeals |
Syllabus by the Court
1. Whether a buyer of land took with constructive notice of the contents of an instrument filed with the register of deeds is a question of law.
2. Where a duly recorded contract for deed conveys one portion of a tract of land and grants a purchase option for the remaining portion of the tract, it is held that an error in the legal description of the remaining portion does not negate constructive notice of the purchase option to a subsequent purchaser of the remaining portion where the two portions necessarily had to be in the same section, the error had been corrected by affidavit, the affidavit and the contract for deed were properly indexed, and an examination of the seller's title would have disclosed both the affidavit and the contract for deed.
3. Where the contents of a recorded instrument are unclear and potentially misleading, notice of the instrument's contents will nonetheless be implied if a reasonably cautious person would have been prompted to inquire further, which further inquiry would have informed him of the instrument's true contents. In other words, if a possible cloud on the seller's title appears the prospective purchaser must either clear the cloud or proceed at his own risk.
4. A purchaser who takes with constructive notice of another person's purchase option takes subject to that option.
5. Whether equity will decree the specific performance of a contract rests in sound judicial discretion and always depends on the facts of the particular case.
6. Ordinarily there is no equity in releasing a party from a fair and reasonable contract into which he freely entered. Whether the contract is fair and reasonable is generally determined as of the time in which it is entered, and not as of the time of performance.
7. Although it is true that specific performance may not be granted where there is an adequate remedy at law, such a remedy, in order to defeat specific performance, must be as plain, adequate, complete, and efficient as the remedy of specific performance and not circuitous or doubtful.
8. A right of preemption differs from an option to purchase in that a preemption right does not give to the preemptioner the power to compel an unwilling owner to sell, but merely requires the owner to offer the land to the preemptioner on agreed-upon terms when and if the owner decides to sell.
9. When the conditions are met for the exercise of a preemptive right, that right becomes, in effect, an option, which may be specifically enforced against a subsequent purchaser with notice.
David K. Fromme, Shawnee, for appellant.
Mark V. Bodine and Rudolf H. Beese of Wallace, Saunders, Austin, Brown & Enochs, Chartered, Overland Park, for appellees Barlows.
Before DAVIS, P.J., LEWIS, J., and TERRY L. BULLOCK, District Judge, Assigned.
The plaintiff Ermil R. Miller brought this action for specific performance against the defendants, Mary E. Alexander, Warren E. Barlow, Coletha M. Barlow, Warren E. Barlow II, and Lynne K. Barlow, based upon an option to purchase five acres of land for $2,500 in Johnson County, Kansas. The trial court awarded damages against Mary E. Alexander for breach of contract but refused specific performance against the Barlows based upon its holding that the Barlows were bona fide purchasers for value without knowledge of plaintiff's real estate option. We reverse and remand with instructions to grant specific performance based upon our conclusion that the Barlows were not bona fide purchasers.
On April 8, 1970, Mac P. Alexander, who is now deceased, and Mary E. Alexander, his wife, executed a contract for deed conveying all but five acres of an approximately 80-acre tract near Olathe to Richard L. Bond and Suzanne S. Bond, William W. Chiles and Carol L. Chiles, and James R. Lippert and Connie M. Lippert for the sum of $37,500. The 75 acres they conveyed was apparently undeveloped land. The five acres they retained contained their residence and several small buildings. The 75 acres were described as follows:
"The East Half (E 1/2) of the Northwest Quarter (NW 1/4) of Section 24, Township 13, Range 22, excepting 5 acres in the Northeast Corner of said Northwest Quarter, described as: Commencing at the Northeast Corner of the above described real estate, thence West 330', thence South 660', thence East 330', thence North 660' to point of beginning, subject to easements, restrictions, zoning and rights of way of record, if any."
The contract for deed gave the buyers an option to purchase the five acres for $2,500. Specifically, it provided:
with all improvements located thereon for the sum of Two Thousand Five Hundred ($2,500.00) on the following conditions, to wit:
This contract was recorded on June 29, 1970.
On July 16, 1970, William W. Chiles, one of the buyers, filed with the register of deeds the following affidavit:
A correct legal description followed. Both the contract for deed and the affidavit were indexed under the proper description of the NW/4, Section 34, Township 13, Range 22.
On February 23, 1972, the six buyers assigned their entire right, title, and interest under the contract for deed to the plaintiff, Ermil R. Miller. Their written "Assignment of Contract for Deed" was recorded on March 6, 1972. On November 30, 1978, plaintiff paid off the balance owed on the contract for deed and received a warranty deed from Mary Alexander for the tract, excepting the five acres.
On June 8, 1983, Mary E. Alexander executed a "contract for deed" conveying an interest in the five-acre tract to Warren, Coletha, Warren II, and Lynne Barlow (hereafter the Barlows) for $15,000. On June 20, 1983, the Barlows filed with the register of deeds an "Affidavit of Equitable Interest." No notice of Mary Alexander's intent to sell any interest in the five acres was given to any third party. Plaintiff learned of the Alexander-Barlow sale shortly before April 23, 1987, when he filed suit seeking specific performance or, in the alternative, money damages. Plaintiff did not request any money damages in addition to specific performance.
On January 26, 1988, the trial court granted partial summary judgment in favor of the Barlows. The court found that the Barlows did not have any actual notice of plaintiff's option and held that, because of the section number error in the contract for deed, the Barlows could not be charged with constructive notice of plaintiff's option. The court then held that the Barlows were bona fide purchasers and that, as such, they took free of plaintiff's claim. Accordingly, the court denied plaintiff's request for specific performance.
With respect to defendant Mary Alexander, the court held that the option in the contract for deed had not merged into the subsequent warranty deed, that the option was merely a "preemptive right" which did not require consideration, and that this right did not violate the rule against perpetuities since it was personal to the Alexanders and ran for the lifetime of the survivor of Mac P. and Mary E. Alexander. Accordingly, the court held that Mary Alexander had breached her contract with plaintiff and ordered a trial on the issue of damages. Following the trial on damages, the court entered judgment against Mary Alexander for $30,000.
On appeal plaintiff seeks specific performance or, alternatively, a higher amount in damages. Because we conclude that plaintiff is entitled to specific performance, and because plaintiff did not seek money damages in addition to specific performance, none can be awarded.
K.S.A. 58-2222 provides:
"Every such instrument in writing, certified and recorded in the manner hereinbefore prescribed, shall, from the time of filing the same with the register of deeds for record, impart notice to all persons of the contents thereof; and all subsequent purchasers and mortgagees shall be deemed to purchase with notice."
It is undisputed that the Barlow defendants did not have...
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