CaseCast™ – "What you need to know"
Brief Fact Summary. The Defendants, Anderson, Zografos and the estate of Jacula (Defendants), with no notice of the Plaintiff, Daniels’s (Plaintiff), rights to land, contracted to buy a lot. After Defendant made payments, he was informed of Plaintiff’s right of first refusal and Plaintiff sued for specific performance of his option to purchase the land.
Synopsis of Rule of Law. The pro tanto rule protects buyers to the extent of payment made prior to notice, but no further.
Issue. When does a buyer become a bona fide purchaser?
Held. Affirmed, Plaintiff will reimburse Defendant for the full purchase price and property taxes paid on the property and Defendant will convey the lot in question to Plaintiff.
A buyer, who prior to the payment of any consideration receives notice of an outstanding interest, pays the consideration at his or her peril and is not protected as a bona fide purchaser.
The pro tanto rule protects buyers to the extent of payment made prior to receiving notice, but no further.
If there are provisions in the contract which delivery of the deed does not fulfill, the contract is not merged in the deed and remains open for performance of such terms.View Full Point of Law