Board of Education of Minneapolis v. Hughes

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Brief Fact Summary. Plaintiffs filed suit to quiet title to land they bought from real estate brokers. The real estate brokers acquired land after the Defendant and recorded the deed after the Defendant. However, by the time the real estate brokers had recorded, they had already conveyed title to Plaintiff, who had recorded their deed after the Defendant.

Synopsis of Rule of Law. It was necessary not only that the deed to the Plaintiff be recorded, but that the deed to Plaintiff’s grantor should first be recorded.

Facts. The Hoergers first owned the property in question. In 1906, the Defendant was the first to approach the Hoergers about purchasing the property. The Defendant sent a check for the price of land to the Hoergers along with a deed to be signed by them with the name of the grantee left blank. Later that same year, the Hoergers signed the deed without filling in the grantee space on the deed and sent it back to the Defendant via mail. Defendant recorded the deed years later on December 16, 1910. However, prior to the Defendant’s recording in 1909, real estate brokers approached the Hoergers and obtained a warranty deed to the same land as Defendant and recorded their interest on December 21, 1910. Plaintiffs obtained title from the real estate brokers and recorded on January 10, 1910. Plaintiffs filed suit and the trial court found for the Plaintiff. Defendant appealed.

Issue. The court addressed the following issues:
Did the deed from the Hoergers to the Defendant become operative?
If so, is the Defendant a subsequent purchaser whose deed was first duly recorded?

Held. Reversed. Defendant was the subsequent purchaser in good faith and is protected by the recording of his deed before the prior deed was recorded.
A deed that does not name a grantee is a nullity and wholly inoperative as a conveyance until the name of the grantee is legally inserted. Therefore, Defendant’s deed was legally inoperative until his name was inserted.
When the grantor receives and retains the consideration for the property and delivers the deed to the purchaser, authority to insert one’s own name as the grantee is presumed.
The deed of the first grantee must be recorded before the deed to a subsequent grantee is recorded.

Discussion. The discussion focused on two separate lines of analysis:
First, that the Defendant was given implied authority to insert the name of the grantee to this deed, thus giving him a legally operative document.
Second, that the real estate brokers should have recorded their deed to the lot prior to conveying the lot to the Plaintiffs. Because they failed to do this, the chain of title was flawed and although the Defendant had purchased the land first, under the recording laws, the Defendant became the subsequent purchaser for value and was protected by the recording laws.