Voorheesville Rod & Gun Club v. E.W. Tompkins Co.

Brief Fact Summary.

Plaintiff agreed to purchase a portion of Defendant’s land and requested Defendant to comply with the subdivision requirements for the parcel. Defendant did not seek subdivision approval, cancelled the contract, and returned Plaintiff’s deposit. Plaintiff sued for specific performance of the contract and an order to compel Defendant to seek subdivision approval. The trial court held that failure to obtain subdivision approval constituted a cloud on the title and ordered Defendant to seek subdivision approval and to complete the sale. The appellate division affirmed, holding that the failure to obtain subdivision approval rendered title unmarketable. Defendant appealed.

Synopsis of Rule of Law.

Absent an express, contrary agreement, a zoning violation does not render title unmarketable.

Facts.

Voorheesville Rod & Gun Club (Plaintiff) agreed to purchase a portion of E.W. Tompkins Company’s (Defendant) land.Defendant was to convey a warranty deed subject to all covenants, conditions, restrictions and easements of record and to zoning and environmental protection laws. Before the closing, Plaintiff requested Defendant to comply with the subdivision requirements for the parcel. Defendant did not seek subdivision approval, and Plaintiff refused to close. Defendant then cancelled the contract and returned Plaintiff’s deposit. Plaintiff sued for specific performance of the contract and an order to compel Defendant to seek subdivision approval. The trial court held that failure to obtain subdivision approval constituted a cloud on the title and ordered Defendant to seek subdivision approval and to complete the sale. The appellate division affirmed, holding that the failure to obtain subdivision approval rendered title unmarketable. Defendant appealed.

Issue.

Whether a zoning violation renders title unmarketable.

Held.

No. The court of appeals’ ruling is reversed and Defendant’s summary judgment motion should be granted.

Discussion.

A marketable title is a title free from reasonable doubt but not from every doubt. When someone agrees to purchase real estate that is restricted by laws or ordinances, she is deemed to have entered into the contract subject to those existing conditions and limitations. Marketable title entails the right to unencumbered ownership and possession, not the right to use the property for a particular purpose. A zoning ordinance existing at the time of the contract only regulates the use of property and therefore generally does not make the title unmarketable. Nevertheless, if a seller expressly warrants and represents that the property will not be in violation of any zoning provision, the seller is liable therefor. Here, Defendant made no representations about obtaining subdivision approval, and Plaintiff expressly agreed to purchase the property subject to the zoning laws.