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Hood v. Webster

    Brief Fact Summary.

    Florence obtained a farm under her deceased husbands will. Florence did not have the financial means to live on the land. Thus, she executed an unrecorded deed and agreement with her brother in law, Hood. Later, Florence’s nephew moved to the farm to assist Florence. Florence devised a deed that gave the farm to her nephew and her nephew’s brother. Upon Florence’s death, Hood recorded his initial dead and brought an action to annul the nephew’s deed. The court ruled in Hood’s favor. On appeal, the parties conceded on the applicable governing law, and the nephew’s contend they are in possession of the valid deed to the property.

    Synopsis of Rule of Law.

    One who obtains property under a recorded deed and asserts ownership against another party that has a prior unrecorded deed has the burden of showing that he or she is a good faith purchaser of the property for valuable consideration.

    Facts.

    Through Florence F. Hood’s husbands will, sheobtained a farm. The will provided that if Florence predeceased her husband,the farm would pass to Florence’s brother-in-law, William J. Hood. When Florence obtained the farm, she lacked sufficient financial means to live on the farm. Hood agreed to pay Florence $200 eachyear during Florence’s lifetime for the farm. Thereafter, in 1913, Florence executed an unrecorded deed and an agreement with Hood. The agreement provided that Florence was to work on the farm, pay taxes on the farm, andmaintain the funds from the sales of the farm’s produce, in exchange for the $200 annual payment. Subsequently, Florence handed the deed to Hood’s lawyer to hold in escrow until Florence’s death. Later, Hood follow through with the agreement because he did not pay Florence. However, Howard A. Webster, Florence’s nephew, moved to the farm to assist Florence. In 1928, Florence executed and recorded a deed that gave the farm to Webster and Florence’s brother, Almon B. Farwell. Per the deed, the consideration was satisfied with “one dollar and other good and valuable consideration.” Upon Florence’s death, Hood recorded the 1913 deed and brought an action to dissolve the 1928 deed. The court held in Hood’s favor. On appeal, the parties conceded that the applicable law was § 291 of the Real Property Law, which stated unrecorded deed is void against a subsequent purchaser with a recorded deed, if the purchase was made in good faith and for valuable consideration. Therefore, Webster and Farwell asserted that their deed was valid under the statute, as they had purchased the farm without notice, in good faith, and for value.

    Issue.

    Whether one who obtains property under a recorded deed and asserts ownership against another party that has a prior unrecorded deed has the burden of showing that he or she is a good faith purchaser of the property for valuable consideration

    Held.

    Yes, one who obtains property under a recorded deed and asserts ownership against another party that has a prior unrecorded deed has the burden of showing that he or she is a good faith purchaser of the property for valuable consideration

    Dissent.

    The burden of proving the existence of valuable consideration should be on the unrecorded deed holder, unless the case involves fraud. In this case, Hood should not be entitled to recover the property because the annual payments was a condition precedent to his receipt of the deed, which Hood did not fulfill under the agreement with Florence. Thus, Hood lacked valuable consideration for the deed. Overall, the judgment should be reversed and the complaint should be dismissed.

    Discussion.

    One who obtains property under a recorded deed and asserts ownership against another party that has a prior unrecorded deed has the burden of showing that he or she is a good faith purchaser of the property for valuable consideration. In this case, neither Webster nor Farwell have presented any evidence of actual consideration for the deed. Further, the description of consideration written on the deed, “one dollar and other good and valuable consideration,” is insufficient to deem Webster and Farwell to be purchasers for valuable consideration. Therefore, Webster and Farwell failed to meet their burden, and the lower court’s judgment is affirmed.


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