Citation. 76 N.J. 468, 388 A.2d 598, 1978 N.J.
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Plaintiffs brought suit for specific performance. Defendants claimed that the title to the land was unmerchantable because Plaintiffs claimed a portion of the land through adverse possession.
Synopsis of Rule of Law.
Owning land via adverse possession does not make title to the land unmarketable or unmerchantable.
Facts.
The Plaintiffs, the Conklins (Plaintiffs), contracted to sell to the Defendants, the Davi’s (Defendants), a piece of residential property. The Plaintiffs obtained a portion of the property through adverse possession. The Plaintiffs did not secure the deed to this portion prior to the attempted sale. The Plaintiffs sued for specific performance and the Defendants counterclaimed for rescission. The case ended up going forward solely on the Defendants’ counterclaim. The trial court found for the Plaintiffs. The appellate court reversed and the Plaintiffs appealed.
Issue.
Whether the Plaintiffs were able to offer a marketable title for sale when a portion of the property in question was claimed by adverse possession.
Held.
Reversed. The Plaintiffs must first demonstrate that the portion of the land claimed by adverse possession is lawfully theirs, prior to a determination being made on whether title is marketable.
The law will imply that a title must be marketable, even when the contract is silent upon that point. The law will not imply that the title must be perfect by record, unless the contract expressly provides for it.
Title will be marketable even if a portion of the land is claimed by adverse possession.
Discussion.
The court discussed that the primary flaw in the decisions of the lower courts was they did not make a determination, nor did the Plaintiffs offer any proof, that the tract of land in question was lawfully obtained by adverse possession. The court ruled that land held by adverse possession does not make the title unmarketable, rather the owner claiming land by adverse possession had to demonstrate that he or she had met the requirements under state law to be deemed owners by adverse possession. After the Plaintiffs made this showing, they could go forward and sue for specific performance.
