Property
A woman owned a house on a lot abutting a public street. Six months ago, the city validly revised its zoning ordinances and placed the woman's lot and the surrounding lots abutting the public street from the north in a zone limited to residential use; the lots abutting the public street on the south side were zoned for both residential and light business use. The woman asked the city's zoning appeals board to approve her proposal to operate a court-reporting service from her house. This type of use would be permitted on the south side of the public street and, in fact, one such business has existed there for several years. The board approved the woman's proposal. Why? (A) A variance was granted. (B) The revised zoning ordinance constituted a regulatory "taking" of the woman's property. (C) The doctrine of change of circumstances applied. (D) The woman's use of her house was a nonconforming use.
(A) A variance was granted.
Bill owned in fee simple Lot 1 in a properly approved subdivision, designed and zoned for industrial use. Gail owned the adjoining Lot 2 in the same subdivision. The plat of the subdivision was recorded as authorized by statute. Twelve years ago, Bill erected an industrial building wholly situated on Lot 1 but with one wall along the boundary common with Lot 2. The construction was done as authorized by a building permit, validly obtained under applicable statutes, ordinances, and regulations. Further, the construction was regularly inspected and passed as being in compliance with all building code requirements. Lot 2 remained vacant until six months ago, when Gail began excavation pursuant to a building permit authorizing the erection of an industrial building situated on Lot 2 but with one wall along the boundary common with Lot 1. The excavation caused subsidence of a portion of Lot 1 that resulted in injury to Bill's building. The excavation was not done negligently or with any malicious intent to injure. In the jurisdiction, the time to acquire title by adverse possession or rights by prescription is 10 years. Bill brought an appropriate action against Gail to recover damages resulting from the injuries to the building on Lot 1. In such lawsuit, judgment should be for (A) Bill, if, but only if, the subsidence would have occurred without the weight of the building on Lot 1. (B) Bill, because a right for support, appurtenant to Lot 1, had been acquired by adverse possession or prescription. (C) Gail, because Lots 1 and 2 are urban land, as distinguished from rural land and, therefore, under the circumstances Bill had the duty to protect any improvements on Lot 1. (D) Gail, because the construction and the use to be made of the building were both authorized by the applicable laws.
(A) Bill, if, but only if, the subsidence would have occurred without the weight of the building on Lot 1.
Test owned Blackacre, a vacant one-acre tract of land in State. Five years ago, he executed a deed conveying Blackacre to "Church for it to use as a location to build a chapel." Three years ago, Test died leaving Sonny as his sole heir at law. His duly probated will left "all my Estate, both real and personal, to my friend Fanny." Church never constructed a chapel on Blackacre and last month Church, for a valid consideration, conveyed Blackacre to Developer. Developer brought an appropriate action to quiet title against Sonny, Fanny, and Church, and joined the appropriate state official. Such official asserted that a charitable trust was created which has not terminated. In such action, the court should find that title is now in (A) Developer. (B) Sonny. (C) Fanny. (D) the state official.
(A) Developer.
A parcel of property was devised to a husband and a wife "as joint tenants with right of survivorship" through the will of the husband's mother. After title had passed to them, the husband and the wife experienced marital difficulties and legally separated. Unbeknownst to the husband, the wife quitclaimed her interest in the property to a bona fide purchaser for value. Shortly thereafter, the husband and the wife reconciled. The next month, the wife was killed in an auto accident. The purchaser of the wife's interest filed a suit for partition of the property. The husband filed an appropriate counterclaim to quiet title, asserting that he was owner of the entire parcel by right of survivorship. How should the court rule? (A) For the purchaser, because he owns an undivided one-half interest in the property. (B) For the purchaser, because the husband and the wife are presumed to have taken title from the mother as tenants in common under modern law. (C) For the purchaser because the husband and the wife were legally separated when he purchased his interest from the wife. (D) For the husband, because he succeeded to the entire ownership when the wife died.
(A) For the purchaser, because he owns an undivided one-half interest in the property.
Adam owned Blackacre. Adam entered into a written three-year lease of Blackacre with Bertha. Among other provisions, the lease prohibited Bertha from "assigning this lease, in whole or in part, and from subletting Blackacre, in whole or in part." In addition to a house, a barn and a one-car garage, Blackacre's 30 acres included several fields where first Adam and now Bertha, grazed sheep. During the following months, Bertha: I. By a written agreement allowed her neighbor Charles exclusive use of the garage for storage, under lock and key, of his antique Packard automobile for two years, charging him $240. II. Told her neighbor Doris that Doris could use the fields to practice her golf as long as she did not disturb Bertha's sheep. Which, if any, of Bertha's actions constituted a violation of the lease? (A) I Only. (B) II only. (C) Both I and II. (D) Neither I nor II.
(A) I Only.
A credit card company obtained and properly filed a judgment against a man after he failed to pay a $10,000 debt. A statute in the jurisdiction provides as follows: "Any judgment properly filed shall, for 10 years from filing, be a lien on the real property then owned or subsequently acquired by any person against whom the judgment is rendered." Two years later, the man purchased land for $200,000. He made a down payment of $20,000 and borrowed the remaining $180,000 from a bank. The bank loan was secured by a mortgage on the land. Immediately after the closing, the deed to the man was recorded first, and the bank's mortgage was recorded second. Five months later, the man defaulted on the mortgage loan and the bank initiated judicial foreclosure proceedings. After receiving notice of the proceedings, the credit card company filed a motion to have its judgment lien declared to be the first lien on the land. Is the credit card company's motion likely to be granted? (A) No, because the bank's mortgage secured a loan used to purchase the land. (B) No, because the man's down payment exceeded the amount of his debt to the credit card company. (C) Yes, because the bank had constructive notice of the judgment lien. (D) Yes, because the bank is a third-party lender and not the seller of the land.
(A) No, because the bank's mortgage secured a loan used to purchase the land.
A businessman executed a promissory note for $200,000 to a bank, secured by a mortgage on commercial real estate owned by the businessman. The promissory note stated that the businessman was not personally liable for the mortgage debt. One week later, a finance company obtained a judgment against the businessman for $50,000 and filed the judgment in the county where the real estate was located. At the time the judgment was filed, the finance company had no actual notice of the bank's mortgage. Two weeks after that filing, the bank recorded its mortgage on the businessman's real estate. The recording act of the jurisdiction provides: "Unless the same be recorded according to law, no conveyance or mortgage of real property shall be good against subsequent purchasers for value and without notice or against judgment creditors without notice." The finance company sued to enforce its judgment lien against the businessman's real estate. The bank intervened in the action, contending that the judgment lien was a second lien on the real estate and that its mortgage was a first lien. Is the bank's contention correct? (A) No, because the judgment lien was recorded before the mortgage, and the finance company had no actual notice of the mortgage. (B) No, because the businessman was not personally liable for the mortgage debt, and the mortgage was therefore void. (C) Yes, because a mortgage prior in time has priority over a subsequent judgment lien. (D) Yes, because the recording of a mortgage relates back to the date of execution of the mortgage note.
(A) No, because the judgment lien was recorded before the mortgage, and the finance company had no actual notice of the mortgage.
To finance the purchase of a vineyard, a vintner borrowed $500,000 from a bank, secured by a mortgage on the vineyard. Due to a clerical error, the bank's mortgage was not immediately recorded. Six months later, the vintner borrowed $10,000 from a creditor, also secured by a mortgage on the vineyard. The creditor immediately recorded its mortgage. The following week, the bank discovered its error and recorded its mortgage. Subsequently, the vintner defaulted on her payments to the bank. The bank instituted foreclosure proceedings, but did not join the creditor in the action. A buyer purchased the property at the foreclosure sale. A statute of the jurisdiction provides: "No conveyance or mortgage of real property shall be good against subsequent purchasers for value without notice unless the conveyance is recorded." If a court finds that the buyer took title subject to the creditor's mortgage, it will be because: (A) The creditor's mortgage was senior to the bank's mortgage. (B) The bank did not join the creditor in the foreclosure action. (C) The vintner has not defaulted on the creditor's mortgage. (D) The buyer assumed the creditor's mortgage. -Would your answer be the same if the recording act of the jurisdiction provides: "No unrecorded conveyance or mortgage of real property shall be good against subsequent purchasers for value without notice, who shall first record"?
(A) The creditor's mortgage was senior to the bank's mortgage. -Yes, because creditor was a subsequent bona fide mortgagee who recorded first.
A landowner died, validly devising his land to his wife "for life or until remarriage, then to their daughter." Shortly after the landowner's death, his daughter executed an instrument in the proper form of a deed, purporting to convey the land to her friend. A year later, the daughter died intestate, with her mother, the original landowner's wife, as her sole heir. The following month, the wife remarried. The wife then executed an instrument in the proper form of a deed, purporting to convey the land to her new husband as a wedding gift. Who now owns what interest in the land? (A) The daughter's friend owns the fee simple. (B) The wife owns the fee simple. (C) The wife's new husband has a life estate in the land for the wife's life, with the remainder in the daughter's friend. (D) The wife's new husband owns the fee simple.
(A) The daughter's friend owns the fee simple.
Thirty years ago, a landowner conveyed land by warranty deed to a church (a charity) "so long as the land herein conveyed is used as the site for the principal religious edifice maintained by said church." Twenty years ago, the landowner died intestate, survived by a single heir. One year ago, the church dissolved and its church building situated on the land was demolished. There is no applicable statute. The common law Rule Against Perpetuities is unmodified in the jurisdiction. In an appropriate action, the landowner's heir and the attorney general, who is the appropriate official to assert public interests in charitable trusts, contest the right to the land. In this action, who will prevail? (A) The landowner's heir, as successor to the landowner's possibility of reverter. (B) The landowner's heir, because a charity cannot convey assets donated to it. (C) The attorney general, because cy pres should be applied to devote the land to religious purposes to carry out the charitable intent of the landowner. (D) The attorney general, because the landowner's attempt to restrict the church's fee simple violated the common law Rule Against Perpetuities.
(A) The landowner's heir, as successor to the landowner's possibility of reverter.
An investor purchased a tract of commercial land, financing a large part of the purchase price with a loan from a business partner that was secured by a mortgage. The investor made the installment payments on the mortgage regularly for several years. Then the investor persuaded a neighbor to buy the land, subject to the mortgage to his partner. They expressly agreed that the neighbor would not assume and agree to pay the investor's debt to the partner. The investor's mortgage to the partner contained a due-on-sale clause stating, "If Mortgagor transfers his or her interest without the written consent of Mortgagee first obtained, then at Mortgagee's option the entire principal balance of the debt secured by this Mortgage shall become immediately due and payable." However, without seeking his partner's consent, the investor conveyed the land to the neighbor, the deed stating that it was "subject to a mortgage to [the partner]" and giving details and recording data related to the mortgage. The neighbor took possession of the land and made several mortgage payments, which the partner accepted. Now, however, neither the neighbor nor the investor has made the last three mortgage payments. The partner has sued the neighbor for the amount of the delinquent payments. In this action, for whom should the court render judgment? (A) The neighbor, because she did not assume and agree to pay the investor's mortgage debt. (B) The neighbor, because she is not in privity of estate with the partner. (C) The partner, because the investor's deed to the neighbor violated the due-on-sale clause. (D) The partner, because the neighbor is in privity of estate with the partner.
(A) The neighbor, because she did not assume and agree to pay the investor's mortgage debt.
Two sisters own a single tract of land as tenants in common, each holding a one-half interest. The younger sister entered into a three-year written lease with a tenant; the lease described by metes and bounds a specified portion of the land, which consisted of about 40% of the total tract. The tenant went into sole possession of the leased portion of the land. The older sister has sued both the younger sister and the tenant to establish the older sister's right to possession of the leased portion of the land. Who is likely to prevail? (A) The older sister, because the younger sister cannot unilaterally partition the land without the older sister's consent. (B) The older sister, because the younger sister may not lease her undivided interest in the land without the older sister's consent. (C) The younger sister and the tenant, because the older sister has been excluded only from the specified portion of the land subject to the lease, which makes up less than one-half of the land's total area. (D) The younger sister and the tenant, because the younger sister's lease to the tenant was necessarily for less than a fee simple interest.
(A) The older sister, because the younger sister cannot unilaterally partition the land without the older sister's consent.
A grantor owned two tracts of land, one of 15 acres and another of 5 acres. The two tracts were a mile apart. Fifteen years ago, the grantor conveyed the smaller tract to a grantee. The grantor retained the larger tract. The deed to the grantee contained, in addition to proper legal descriptions of both properties and identifications of the parties, the following language: "I, the grantor, bind myself and my heirs and assigns that in the event that the larger tract that I now retain is ever offered for sale, I will notify the grantee and his heirs and assigns in writing, and the grantee and his heirs and assigns shall have the right to purchase the larger tract for its fair market value as determined by a board consisting of three qualified expert independent real estate appraisers." With appropriate references to the other property and the parties, there followed a reciprocal provision that conferred upon the grantor and her heirs and assigns a similar right to purchase the smaller tract, purportedly binding the grantee and his heirs and assigns. Ten years ago, a corporation acquired the larger tract from the grantor. At that time, the grantee had no interest in acquiring the larger tract and by an appropriate written document released any interest he or his heirs or assigns might have had in the larger tract. Last year, the grantee died. The smaller tract passed by the grantee's will to his daughter. She has decided to sell the smaller tract. However, because she believes that the corporation has been a very poor steward of the larger tract, she refuses to sell the smaller tract to the corporation even though she has offered it for sale in the local real estate market. The corporation has brought an appropriate action for specific performance of the right of first refusal after taking all of the necessary preliminary steps in its effort to exercise its right to purchase the smaller tract. The daughter has asserted all possible defenses. The common law Rule Against Perpetuities is unmodified in the jurisdiction, and there are no applicable statutes. If the court rules for the daughter, what will be the likely reason? (A) The provision setting out the right to purchase violates the Rule Against Perpetuities. (B) The grantee's release 10 years ago operates as a waiver regarding any right to purchase that the corporation might have. (C) The two tracts of land were not adjacent parcels of real estate, and thus the right to purchase is in gross and is therefore unenforceable. (D) Noncompliance with a right to purchase gives rise to a claim for money damages, but not for specific performance.
(A) The provision setting out the right to purchase violates the Rule Against Perpetuities.
A farmer died, devising his farm "to my wife for life, then to my son and daughter in fee simple absolute." The wife occupied the farmhouse and operated the farm herself. After expenses of operation, the wife earned about $25,000 per year from the farm. Neither the son nor the daughter did anything to assist with the farm chores or expenses. The wife has consistently failed to pay the annual $2,000 county property tax assessment and continues to refuse to pay it. With the taxes three years in arrears, the county has ordered a tax sale of the farm using proper procedures authorized by state law. What are the rights and obligations of the parties? (A) The wife is personally liable for the taxes, but a tax sale will cut off the rights of the son and daughter. (B) The son and daughter are personally liable for the taxes if the wife does not pay them. (C) The daughter will have to pay one-half of the taxes if the son pays one-half. (D) The wife is personally liable for the taxes, and the tax sale will affect only her rights and not the rights of the son and the daughter.
(A) The wife is personally liable for the taxes, but a tax sale will cut off the rights of the son and daughter.
A developer owned several acres zoned for mixed use development. The developer prepared a subdivision of his various parcels, properly filed a subdivision map showing commercial lots, obtained all the necessary approvals, and began selling the lots. Each of the deeds conveying lots sold by the developer contained the following: -It is hereby covenanted by the seller that the property conveyed shall be used for commercial or residential purposes only, that no industrial, warehouse, or other manufacturing structures shall be erected or maintained thereon, and that this covenant shall bind the buyer, his heirs and assigns, and their successors. Two years later, after all but two of the lots had been developed as small businesses, the developer sold his remaining two lots to a real estate speculation firm. The deed to the firm did not contain any language restricting the use of the property. The firm then sold the property to a giant supermarket chain, which intended to construct a warehouse and distribution center thereon. A shopkeeper who had purchased a lot from the developer located next to the proposed warehouse brings suit against the supermarket chain seeking to enjoin construction of the warehouse. Her attorney argues that the lots sold by the developer to the firm and then to the supermarket chain are bound by the same restrictions on use that are contained in the deed by which the shopkeeper took her property. The shopkeeper will likely: (A) Win, because the developer established a common development scheme for his entire subdivision and the subdivision appeared to conform to the scheme. (B) Lose, because the firm and the supermarket were not aware of the restrictions when they purchased the property. (C) Lose, because the restrictions in the shopkeeper's deed bind only the purchaser of the land. (D) Lose, because the deed by which the firm took the property from the developer did not contain any restrictions on use.
(A) Win, because the developer established a common development scheme for his entire subdivision and the subdivision appeared to conform to the scheme.
T owned Whiteacre, a vacant one-acre tract of land. Six years ago, he executed a deed conveying Whiteacre to "School for the purpose of erecting a school building thereon." Three years ago, T died leaving S as his sole heir at law. His duly probated will left "all my estate to F." School never constructed a school building on Whiteacre and last month School sold Whiteacre to X. X brought an appropriate action to quiet title against S, F, and School. In such action, the court should find that title is now in (A) X (B) S (C) F (D) School
(A) X
A rectangular parcel of undeveloped land contained three acres and had 150 feet of frontage on a public street. The applicable zoning ordinance required that a buildable lot contain at least two acres and have frontage of not less than 100 feet on a public street. A brother and sister owned the land as tenants in common, the brother owning a one-third interest and the sister owning a two-thirds interest. Neither of them owned any other real property. The sister brought an appropriate action to partition the land and proposed that a two-acre rectangular lot with 100 feet of frontage be set off to her and that a one-acre rectangular lot with 50 feet of frontage be set off to the brother. The brother's defense included a demand that the land be sold and its proceeds be divided one-third to the brother and two-thirds to the sister. Who will prevail? (A) The brother, because partition by sale is the preferred remedy, unless a fair price is not the likely result of a sale. (B) The brother, because the zoning ordinance makes it impossible to divide the land fairly. (C) The sister, because partition by sale is not appropriate if the subject property can be physically divided. (D) The sister, because the ratio of the two lots that would result from her proposal conforms exactly to the ownership ratio.
(B) The brother, because the zoning ordinance makes it impossible to divide the land fairly.
Three years ago Adam conveyed Blackacre to Betty for $50,000 by a deed that provided: "By accepting this deed, Betty covenants for herself, her heirs and assigns, that the premises herein conveyed shall be used solely for residential purposes and, if the premises are used for nonresidential purposes, Adam, his heirs and assigns, shall have the right to repurchase the premises for the sum of one thousand dollars ($1,000)." In order to pay the $50,000 purchase price for Blackacre, Betty obtained a $35,000 mortgage loan from the bank. Adam had full knowledge of the mortgage transaction. The deed and mortgage were promptly and properly recorded in proper sequence. The mortgage, however, made no reference to the quoted language in the deed. Two years ago Betty converted her use of Blackacre from residential to commercial without the knowledge or consent of Adam or of the bank. Betty's commercial venture failed, and Betty defaulted on her mortgage payments to the bank. Blackacre now has a fair market value of $25,000. The bank began appropriate foreclosure proceedings against Betty. Adam properly intervened, tendered $1,000, and sought judgment that Betty and the bank be ordered to convey Blackacre to Adam, free and clear of the mortgage. The common law Rule Against Perpetuities is unmodified by statute. If the court rules against Adam, it will be because (A) the provision quoted from the deed violates the Rule Against Perpetuities. (B) the bank had no actual knowledge of, and did not consent to, the violation of the covenant. (C) the rights reserved by Adam were subordinated, by necessary implication, to the rights of the bank as the lender of the purchase money. (D) the consideration of $1,000 was inadequate.
(A) the provision quoted from the deed violates the Rule Against Perpetuities.
Janet had a season ticket for the Scorpions' hockey games at Central Arena (Section B, Row 12, Seat 16). During the intermission between the first and second periods of a game between the Scorpions and the visiting Hornets, Janet solicited signatures for a petition urging that the coach of the Scorpions be fired. Central Arena and the Scorpions are owned by ABC, Inc., a privately owned entity. As evidenced by many prominently displayed signs, ABC prohibits all solicitations anywhere within Central Arena at any time and in any manner. ABC notified Janet to cease her solicitation of signatures. Janet continued to seek signatures on her petition during the Scorpions' next three home games at Central Arena. Each time, ABC notified Janet to cease such solicitation. Janet announced her intention to seek signatures on her petition again during the Scorpions' next home game at Central Arena. ABC wrote a letter informing Janet that her season ticket was canceled and tendering a refund for the unused portion. Janet refused the tender and brought an appropriate action to establish the right to attend all home games. In this action, the court will decide for (A) ABC, because it has a right and obligation to control activities on realty it owns and has invited the public to visit. (B) ABC, because Janet's ticket to hockey games created only a license. (C) Janet, because, having paid value for the ticket, her right to be present cannot be revoked. (D) Janet, because she was not committing a nuisance by her activities.
(B) ABC, because Janet's ticket to hockey games created only a license.
Six years ago, Oscar, owner of Blackacre in fee simple, executed and delivered to Albert an instrument in the proper form of a warranty deed, purporting to convey Blackacre to "Albert and his heirs." At that time Albert was a widower who had one child, Donna. Three years ago, Albert executed and delivered to Bea an instrument in the proper form of a warranty deed, purporting to convey Blackacre to "Bea." Donna did not join in the deed. Bea was and still is unmarried and childless. The only possibly applicable statute in the jurisdiction states that any deed will be construed to convey the grantor's entire estate, unless expressly limited. Last month, Albert died, never having remarried. Donna is his only heir. Blackacre is now owned by (A) Donna, because Albert's death ended Bea's life estate pur autre vie. (B) Bea in fee simple pursuant to Albert's deed. (C) Donna and Bea as tenants in common of equal shares. (D) Donna and Bea as joint tenants, because both survived Albert.
(B) Bea in fee simple pursuant to Albert's deed.
Chase, as seller, and Scott, as buyer, enter into a written contract for the sale and purchase of land that is complete in all respects except that no reference is made to the quality of title to be conveyed. Which of the following will result? (A) The contract will be unenforceable. (B) Chase will be required to convey a marketable title. (C) Chase will be required to convey only what he owned on the date of the contract. (D) Chase will be required to convey only what he owned on the date of the contract plus whatever additional title rights he may acquire prior to the closing date.
(B) Chase will be required to convey a marketable title.
Olivia, owner in fee simple of Richacre, a large parcel of vacant land, executed a deed purporting to convey Richacre to her nephew, Grant. She told Grant, who was then 19, about the deed and said that she would give it to him when he reached 21 and had received his undergraduate college degree. Shortly afterward Grant searched Olivia's desk, found and removed the deed, and recorded it. A month later, Grant executed an instrument in the proper form of a warranty deed purporting to convey Richacre to his fiancée, Bonnie. He delivered the deed to Bonnie, pointing out that the deed recited that it was given in exchange for "$1 and other good and valuable consideration," and that to make it valid Bonnie must pay him $1. Bonnie, impressed and grateful, did so. Together, they went to the recording office and recorded the deed. Bonnie assumed Grant had owned Richacre, and knew nothing about Grant's dealing with Olivia. Neither Olivia's deed to Grant nor Grant's deed to Bonnie said anything about any conditions. The recording act of the jurisdiction provides: "No conveyance or mortgage of real property shall be good against subsequent purchasers for value and without notice unless the same be recorded according to law." Two years passed. Grant turned 21, then graduated from college. At the graduation party, Olivia was chatting with Bonnie and for the first time learned the foregoing facts. The age of majority in the jurisdiction is 18 years. Olivia brought an appropriate action against Bonnie to quiet title to Richacre. The court will decide for (A) Olivia, because Grant's deed to Bonnie before Grant satisfied Olivia's conditions was void, as Bonnie had paid only nominal consideration. (B) Olivia, because her deed to Grant was not delivered. (C) Bonnie, because Grant has satisfied Olivia's oral conditions. (D) Bonnie, because the deed to her was recorded.
(B) Olivia, because her deed to Grant was not delivered.
A businesswoman owned two adjoining tracts of land, one that was improved with a commercial rental building and another that was vacant and abutted a river. Twenty years ago, the businesswoman conveyed the vacant tract to a grantee by a warranty deed that the businesswoman signed but the grantee did not. The deed contained a covenant by the grantee as owner of the vacant tract that neither he nor his heirs or assigns would "erect any building" on the vacant tract, in order to preserve the view of the river from the commercial building on the improved tract. The grantee intended to use the vacant tract as a nature preserve. The grantee promptly and properly recorded the deed. Last year, the businesswoman conveyed the improved tract to a businessman. A month later, the grantee died, devising all of his property, including the vacant land, to his cousin. Six weeks ago, the cousin began construction of a building on the vacant tract. The businessman objected and sued to enjoin construction of the building. Who is likely to prevail? (A) The businessman, because the commercial rental building was constructed before the cousin began his construction project. (B) The businessman, because the cousin is bound by the covenant made by the grantee. (C) The cousin, because an equitable servitude does not survive the death of the promisor. (D) The cousin, because the grantee did not sign the deed. -Could the businessman sue the cousin for money damages?
(B) The businessman, because the cousin is bound by the covenant made by the grantee. -Yes, because there was horizontal privity between the businesswoman and the grantee (i.e., vendor/vendee) at the time the covenant was created, there is vertical privity on both sides, and the cousin had constructive notice of the covenant.
An elderly landowner executed a will that devised the land to "my widow for life, then to my children for life, then to my grandchildren for life, then to my great-grand-children for life, then to my first-born great-great-grand-child in fee simple." When the landowner died, he was survived by his wife, a son and a daughter, five grandchildren, and two great-grandchildren. The jurisdiction has a Rule Against Perpetuities unmodified by statute. Which of the following statements is correct regarding the effect of the Rule Against Perpetuities? (A) The dispositions to the grandchildren, the great-grandchildren, and the first-born great-great-grandchild are invalid, and the residuary beneficiaries of the landowner's will have a reversion. (B) The dispositions to the great-grandchildren and the first-born great-great grandchild are invalid, and the residuary beneficiaries of the landowner's will have a reversion. (C) The disposition to the first-born great-great-grandchild is invalid, and the residuary beneficiaries of the landowner's will have a reversion. (D) None of the dispositions in the will are invalidated.
(B) The dispositions to the great-grandchildren and the first-born great-great grandchild are invalid, and the residuary beneficiaries of the landowner's will have a reversion.
A county initiated a tax foreclosure action against a landowner for delinquent taxes. The landowner executed and delivered to the county a quitclaim deed to his land. The county recorded its deed. Due to a clerical error, the land was not removed from the foreclosure action. The following month, the land was sold at the foreclosure sale and a sheriff's deed was delivered to the buyer. The buyer then sold the land to a friend and delivered to her a general warranty deed. The county initiated a quiet title action and obtained a judgment in its favor, and then began ejectment proceedings against the friend. If the friend brings an appropriate action for damages against the buyer, the court should rule for: (A) The friend, because the buyer's title was unmarketable. (B) The friend, because the covenants of quiet enjoyment and warranty were breached. (C) The buyer, because he had title to the land at the time he conveyed it to the friend. (D) The buyer, because a sheriff's deed has priority over a quitclaim deed.
(B) The friend, because the covenants of quiet enjoyment and warranty were breached.
A landowner leased a store to a grocer for a term of five years at $10,000 per year, payable in monthly installments. The lease permitted assignments and subleases. After occupying the premises for two years and paying the rent, the grocer transferred the remaining three years of the term to a florist. The florist occupied the premises for two years but paid rent only for the first year. With one year left on the original lease, the florist transferred her remaining leasehold interest to a barber. The barber occupied the premises for one year but did not pay any rent. The landowner brought an appropriate action against the grocer, the florist, and the barber to recover the rent. Against whom may the landowner recover? (A) The grocer and the florist jointly and severally for $10,000, and the grocer individually for $10,000. (B) The grocer and the florist jointly and severally for $10,000, and the grocer and the barber jointly and severally for $10,000. (C) The grocer and the florist jointly and severally for $10,000, and the grocer, the florist, and the barber jointly and severally for $10,000. (D) The grocer and the florist jointly and severally for $20,000.
(B) The grocer and the florist jointly and severally for $10,000, and the grocer and the barber jointly and severally for $10,000.
A landlord and a tenant orally agreed to a commercial tenancy for a term of six months beginning on July 1. Rent was to be paid by the first day of each month, and the tenant paid the first month's rent at the time of the agreement. When the tenant arrived at the leased premises on July 1, the tenant learned that the previous tenant had not vacated the premises at the end of her lease term on May 31 and did not intend to vacate. The tenant then successfully sued the previous tenant for possession. The tenant did not inform the landlord of the eviction action until after the tenant received possession. The tenant then sued the landlord, claiming damages for that portion of the lease period during which the tenant was not in possession. If the court finds for the landlord, what will be the most likely explanation? (A) By suing the previous tenant for possession, the tenant elected that remedy in lieu of a suit against the landlord. (B) The landlord had delivered the legal right of possession to the tenant. (C) The tenant failed to timely vacate as required to sue for constructive eviction. (D) The tenant had not notified the landlord before bringing the eviction action.
(B) The landlord had delivered the legal right of possession to the tenant.
Six years ago, a landlord and a tenant entered into a 10-year commercial lease of land. The written lease provided that if a public entity under the power of eminent domain condemned any part of the land but not all of it, the lease would terminate and the landlord would receive the entire condemnation award. Thereafter, the city condemned approximately two-thirds of the land. The tenant notified the city and the landlord that an independent appraisal of the value of the tenant's possessory interest established that it substantially exceeded the tenant's obligation under the lease and that the tenant was entitled to share the award. The appraisal was accurate. In an appropriate action among the landlord, the tenant, and the city as to the right of the tenant to a portion of the condemnation award, for whom will the court likely find? (A) The landlord, because the condemnation superseded and canceled the lease. (B) The landlord, because the parties specifically agreed as to the consequences of a partial condemnation. (C) The tenant, because the landlord breached the landlord's implied warranty of quiet enjoyment. (D) The tenant, because otherwise the landlord would be unjustly enriched.
(B) The landlord, because the parties specifically agreed as to the consequences of a partial condemnation.
Alice conveyed Twinoaks Farm "to Barbara, her heirs and assigns, so long as the premises are used for residential and farm purposes, then to Charles and his heirs and assigns." The jurisdiction in which Twinoaks Farm is located has adopted the common law Rule Against Perpetuities unmodified by statute. As a consequence of the conveyance, Alice's interest in Twinoaks Farm is (A) nothing. (B) a possibility of reverter. (C) a right of entry for condition broken. (D) a reversion in fee simple absolute.
(B) a possibility of reverter.
Five years ago, Sally acquired Blackacre, improved with a 15-year-old dwelling. This year Sally listed Blackacre for sale with Bill, a licensed real estate broker. Sally informed Bill of several defects in the house that were not readily discoverable by a reasonable inspection, including a leaky basement, an inadequate water supply, and a roof that leaked. Paul responded to Bill's advertisement, was taken by Bill to view Blackacre, and decided to buy it. Bill saw to it that the contract specified the property to be "as is" but neither Bill nor Sally pointed out the defects to Paul, who did not ask about the condition of the dwelling. After closing and taking possession, Paul discovered the defects, had them repaired, and demanded that Sally reimburse him for the cost of the repairs. Sally refused and Paul brought an appropriate action against Sally for damages. If Sally wins, it will be because (A) Sally fulfilled the duty to disclose defects by disclosure to Bill. (B) the contract's "as is" provision controls the rights of the parties. (C) Bill became the agent of both Paul and Sally and thus knowledge of the defects was imputed to Paul. (D) the seller of a used dwelling that has been viewed by the buyer has no responsibility toward the buyer.
(B) the contract's "as is" provision controls the rights of the parties.
Two adjacent, two-story, commercial buildings were owned by Simon. The first floors of both buildings were occupied by various retail establishments. The second floors were rented to various other tenants. Access to the second floor of each building was reached by a common stairway located entirely in Building 1. While the buildings were being used in this manner, Simon sold Building 1 to Edward by warranty deed which made no mention of any rights concerning the stairway. About two years later Simon sold Building 2 to Dennis. The stairway continued to be used by the occupants of both buildings. The stairway became unsafe as a consequence of regular wear and tear. Dennis entered upon Edward's building and began the work of repairing the stairway. Edward demanded that Dennis discontinue the repair work and vacate Edward's building. When Dennis refused, Edward brought an action to enjoin Dennis from continuing the work. Judgment should be for (A) Edward, because Dennis has no rights in the stairway. (B) Edward, because Dennis's rights in the stairway do not extend beyond the normal life of the existing structure. (C) Dennis, because Dennis has an easement in the stairway and an implied right to keep the stairway in repair. (D) Dennis, because Dennis has a right to take whatever action is necessary to protect himself from possible tort liability to persons using the stairway.
(C) Dennis, because Dennis has an easement in the stairway and an implied right to keep the stairway in repair.
Alex and Betty, who were cousins, acquired title in fee simple to Blackacre, as equal tenants in common, by inheritance from Angela, their aunt. During the last 15 years of her lifetime, Angela allowed Alex to occupy an apartment in the house on Blackacre, to rent the other apartment in the house to various tenants, and to retain the rent. Alex made no payments to Angela; and since Angela's death 7 years ago, he has made no payments to Betty. For those 22 years, Alex has paid the real estate taxes on Blackacre, kept the building on Blackacre insured, and maintained the building. At all times, Betty has lived in a distant city and has never had anything to do with Angela, Alex, or Blackacre. Recently, Betty needed money for the operation of her business and demanded that Alex join her in selling Blackacre. Alex refused. The period of time to acquire title by adverse possession in the jurisdiction is 10 years. There is no other applicable statute. Betty brought an appropriate action against Alex for partition. Alex asserted all available defenses and counterclaims. In that action, the court should (A) Deny partition and find that title has vested in Alex by adverse possession. (B) Deny partition, confirm the tenancy in common, but require an accounting to determine if either Betty or Alex is indebted to the other on account of the rental payment, taxes, insurance premiums, and maintenance costs. (C) Grant partition and require, as an adjustment, an accounting to determine if either Betty or Alex is indebted to the other on account of the rental payments, taxes, insurance premiums, and maintenance costs. (D) Grant partition to Betty and Alex as equal owners, but without an accounting
(C) Grant partition and require, as an adjustment, an accounting to determine if either Betty or Alex is indebted to the other on account of the rental payments, taxes, insurance premiums, and maintenance costs.
An aunt executed and delivered a valid warranty deed conveying her home to her niece as a gift. The niece did not record the deed. Two years later, the aunt was involved in an auto accident. She had allowed her auto insurance to lapse and the other driver's insurance company obtained a judgment against her for $100,000, which it recorded. A statute in the jurisdiction provides: "Any judgment properly filed shall, for 10 years from filing, be a lien on the real property then owned or subsequently acquired by any person against whom the judgment is rendered." When the aunt died five years later, her will left all other property to the niece. The insurance company filed a claim in probate against the estate for $100,000. The niece, as executor, seeks a determination from the probate court that the home is not part of the aunt's estate, having already been conveyed to the niece. The court should rule that the home is: (A) Part of the estate and must be utilized to satisfy the $100,000 claim. (B) Part of the estate, but is not subject to the $100,000 claim. (C) Not part of the estate and thus is not subject to the claim. (D) Not part of the estate, but is nevertheless subject to a $100,000 lien in favor of the insurance company.
(C) Not part of the estate and thus is not subject to the claim.
Olive owned Blackacre, a single-family residence. Fifteen years ago, Olive conveyed a life estate in Blackacre to Lois. Fourteen years ago, Lois, who had taken possession of Blackacre, leased Blackacre to Trent for a term of 15 years at the monthly rental of $500. Eleven years ago, Lois died intestate leaving Ron as her sole heir. Trent regularly paid rent to Lois and, after Lois's death, to Ron until last month. The period in which to acquire title by adverse possession in the jurisdiction is 10 years. In an appropriate action, Trent, Olive, and Ron each asserted ownership of Blackacre. The court should hold that title in fee simple is in (A) Olive, because Olive held a reversion and Lois has died. (B) Ron, because Lois asserted a claim adverse to Olive when Lois executed a lease to Trent. (C) Ron, because Trent's occupation was attributable to Ron, and Lois died 11 years ago. (D) Trent, because of Trent's physical occupancy and because Trent's term ended with Lois's death.
(C) Ron, because Trent's occupation was attributable to Ron, and Lois died 11 years ago.
A man contacted his lawyer regarding his right to use a path that was on his neighbor's vacant land. Fifteen years ago, after part of a path located on his land and connecting his cabin to the public highway washed out, the man cleared a small part of his neighbor's land and rerouted a section of the path through the neighbor's land. Twelve years ago, the neighbor leased her land to some hunters. For the next 12 years, the hunters and the man who had rerouted the path used the path for access to the highway. A month ago, the neighbor discovered that part of the path was on her land. The neighbor told the man that she had not given him permission to cross her land and that she would be closing the rerouted path after 90 days. The man's land and the neighbor's land have never been in common ownership. The period of time necessary to acquire rights by prescription in the jurisdiction is 10 years. The period of time necessary to acquire title by adverse possession in the jurisdiction is 10 years. What should the lawyer tell the man concerning his right to use the rerouted path on the neighbor's land? (A) The man has fee title by adverse possession of the land included in the path. (B) The man has an easement by necessity to use the path. (C) The man has an easement by prescription to use the path. (D) The man has no right to use the path.
(C) The man has an easement by prescription to use the path.
A man borrowed money from a bank and executed a promissory note for the amount secured by a mortgage on an office building that he owned. Several years later, the man sold the building. As specified in the contract of sale, the deed to the buyer provided that the buyer agreed "to assume the existing mortgage debt" on the building. Subsequently, the buyer defaulted on the mortgage loan to the bank, and appropriate foreclosure proceedings were initiated. The foreclosure sale resulted in a deficiency. There is no applicable statute. Is the buyer liable for the deficiency? (A) No, because even if the buyer assumed the mortgage, the man is solely responsible for any deficiency. (B) No, because the buyer did not sign a promissory note to the bank and therefore has no personal liability. (C) Yes, because the buyer assumed the mortgage and therefore became personally liable for the mortgage loan and any deficiency. (D) Yes, because the transfer of the mortgage debt to the buyer resulted in a novation of the original mortgage and loan and rendered the buyer solely responsible for any deficiency.
(C) Yes, because the buyer assumed the mortgage and therefore became personally liable for the mortgage loan and any deficiency.
A and B owned Blackacre as joint tenants with the right of survivorship. A executed a mortgage on Blackacre to Lender in order to secure a loan. Subsequently, but before the indebtedness was paid to Lender, A died intestate, with S as her only heir at law. The jurisdiction in which Blackacre is located recognizes the title theory of mortgages. In an appropriate action, the court should determine that title to Blackacre is vested (A) in B, with the entire interest subject to the mortgage. (B) in B, free and clear of the mortgage. (C) half in B, free of the mortgage, and half in S, subject to the mortgage. (D) half in B and half in S, with both subject to the mortgage. -Which answer would be correct if the jurisdiction recognizes the lien theory of mortgages?
(C) half in B, free of the mortgage, and half in S, subject to the mortgage. -(B)
Olivia owned Blackacre, her home. Her daughter, Dawn, lived with her and always referred to Blackacre as "my property." Two years ago, Dawn, for a valuable consideration, executed and delivered to Bruce an instrument in the proper form of a warranty deed purporting to convey Blackacre to Bruce in fee simple, reserving to herself an estate for two years in Blackacre. Bruce promptly and properly recorded his deed. One year ago, Olivia died and by will, duly admitted to probate, left her entire estate to Dawn. One month ago, Dawn, for a valuable consideration, executed and delivered to Carl an instrument in the proper form of a warranty deed purporting to convey Blackacre to Carl, who promptly and properly recorded the deed. Dawn was then in possession of Blackacre and Carl had no actual knowledge of the deed to Bruce. Immediately thereafter, Dawn gave possession to Carl. The recording act of the jurisdiction provides: "No conveyance or mortgage of real property shall be good against subsequent purchasers for value and without notice unless the same be recorded according to law." Last week, Dawn fled the jurisdiction. Upon learning the facts, Carl brought an appropriate action against Bruce to quiet title to Blackacre. If Carl wins, it will be because (A) Dawn had nothing to convey to Bruce two years ago. (B) Dawn's deed to Bruce was not to take effect until after Dawn's deed to Carl. (C) Carl was first in possession. (D) Dawn's deed to Bruce was not in Carl's chain of title.
(D) Dawn's deed to Bruce was not in Carl's chain of title.
Oliver, owner of Blackacre, needed money. Blackacre was fairly worth $100,000, so Oliver tried to Borrow $60,000 from Len on the security of Blackacre. Len agreed, but only if Oliver would convey Blackacre to Len outright by warranty deed, with Len agreeing orally to reconvey to Oliver once the loan was paid according to its terms. Oliver agreed, conveyed Blackacre to Len by warranty deed, and Len paid Oliver $60,000 cash. Len promptly and properly recorded Oliver's deed. Now, Oliver has defaulted on repayment with $55,000 still due on the loan. Oliver is still in possession. Which of the following best states the parties' rights in Blackacre? (A) Len's oral agreement to reconvey is invalid under the Statute of Frauds, so Len owns Blackacre outright. (B) Oliver, having defaulted, has no further rights in Blackacre, so Len may obtain summary eviction. (C) The attempted security arrangement is a creature unknown to the law, hence a nullity; Len has only a personal right to $55,000 from Oliver. (D) Len may bring whatever foreclosure proceeding is appropriate under the laws of the jurisdiction.
(D) Len may bring whatever foreclosure proceeding is appropriate under the laws of the jurisdiction.
A homeowner and her neighbor purchased adjoining parcels of property 20 years ago. During the summer months, the homeowner ran electrical wires from her home to a guest house across land she knew belonged to the neighbor. The neighbor orally consented to the wires crossing his land. Two years ago, the neighbor sold his property to a purchaser. The following summer, the homeowner tried to run the wires across the purchaser's land, but the purchaser objected. The statute of limitations for ejectment and the prescriptive easement period is 15 years. With respect to the land over which the electrical wires were laid: (A) The homeowner has acquired title by adverse possession. (B) The homeowner has acquired a prescriptive easement. (C) The homeowner cannot claim any right or title because her use of the land in question was not continuous. (D) The homeowner cannot claim any right or title because the neighbor consented to her use of the land for the wires.
(D) The homeowner cannot claim any right or title because the neighbor consented to her use of the land for the wires.
A landowner owned an undeveloped parcel of land, through which a creek ran. The creek also ran through his neighbor's downstream parcel. The neighbor drew off water from the creek to irrigate her crops and for her large-scale livestock operation. The neighbor's use of her parcel and the creek water has been continuous and uninterrupted for 18 years. Two years ago, the landowner constructed a residence on his parcel and began to draw water from the creek for his domestic use. The following summer, there was adequate water in the creek for all of the landowner's domestic purposes and for all of the neighbor's agricultural purposes. However, the flow of the creek is irregular and the water level dropped dramatically this summer. The amount of water in the creek is sufficient to meet either all of the neighbor's needs and none of the landowner's or all of the landowner's needs and one-half of the neighbor's. Both the landowner and the neighbor file suit, claiming they are entitled to sufficient water from the creek to meet all their respective needs. The jurisdiction in which the parcels are located has a statutory 10-year prescription and adverse possession period, and follows the riparian doctrine of reasonable use. In the resulting trial of the case, who will prevail? (A) The neighbor, because she has a prior reasonable use of the water. (B) The neighbor, because she is entitled to the water by prescription. (C) The landowner, because his use of the water does not totally deprive the neighbor of water for her needs. (D) The landowner, because the neighbor's use of the water is not a natural use.
(D) The landowner, because the neighbor's use of the water is not a natural use.
A woman died, devising land that she owned in another state to her daughter, who was then 17 years old. A neighbor who owned the property immediately adjacent to the land wrongfully began to possess the land at that time. For 24 of the next 25 years, the neighbor planted and harvested crops on the land, hunted on it, and parked cars on it. However, in the sixth year after he first took possession of the land, the neighbor neither planted crops nor hunted nor parked cars on the land because he spent that entire year living in Europe. The neighbor built a small gardening shed on the land, but he never built a residence on it. When the daughter was 28, she was declared mentally incompetent and had a conservator appointed to oversee her affairs. Since then, she has continuously resided in a care facility. The applicable statute of limitations provides as follows: "An ejectment action shall be brought within 21 years after the cause of action accrues, but if the person entitled to bring the cause of action is under age 18 or mentally incompetent at the time the cause of action accrues, it may be brought by such person within 10 years after attaining age 18 or after the person becomes competent." If the daughter's conservator wins an ejectment action against the neighbor, what will be the most likely explanation? (A) The daughter was age 17 when the neighbor first took possession of the land. (B) Because the daughter is mentally incompetent, the statute of limitations has been tolled. (C) The neighbor never built a residence on the land. (D) The neighbor was not in continuous possession of the land for 21 years.
(D) The neighbor was not in continuous possession of the land for 21 years.
In the most recent deed in the chain of title to a tract of land, a man conveyed the land as follows: "To my niece and her heirs and assigns in fee simple until my niece's daughter marries, and then to my niece's daughter and her heirs and assigns in fee simple." At the time the deed was executed and delivered, the niece and the niece's daughter were alive. There is no applicable statute, and the common law Rule Against Perpetuities has not been modified in the jurisdiction. Which of the following is the most accurate statement concerning the title to the land? (A) The niece has a life estate and the daughter has a contingent remainder. (B) The niece has a fee simple and the daughter has no interest, because after the grant of a fee simple there can be no gift over. (C) The niece has a fee simple and the daughter has no interest, because she might not marry within 21 years after the date of the deed. (D) The niece has a defeasible fee simple determinable and the daughter has an executory interest.
(D) The niece has a defeasible fee simple determinable and the daughter has an executory interest.
A seller owned a single-family house. A buyer gave the seller a signed handwritten offer to purchase the house. The offer was unconditional and sufficient to satisfy the statute of frauds, and when the seller signed an acceptance, an enforceable contract resulted. The house had been the seller's home, but he had moved to an apartment, so the house was vacant at all times relevant to the proposed transaction. Two weeks after the parties had entered into their contract, one week after the buyer had obtained a written mortgage lending commitment from a lender, and one week before the agreed-upon closing date, the house was struck by lightning and burned to the ground. The loss was not insured, because three years earlier, the seller had let his homeowner's insurance policy lapse after he had paid his mortgage debt in full. The handwritten contract was wholly silent as to matters of financing, risk of loss, and insurance. The buyer declared the contract voided by the fire, but the seller asserted a right to enforce the contract despite the loss. There is no applicable statute. If a court finds for the seller, what will be the likely reason? (A) The contract was construed against the buyer, who drafted it. (B) The lender's written commitment to make a mortgage loan to the buyer made the contract of sale fully binding on the buyer. (C) The risk of loss falls on the party in possession, and constructive possession passed to the buyer on the contract date. (D) The risk of loss passed to the buyer on the contract date under the doctrine of equitable conversion.
(D) The risk of loss passed to the buyer on the contract date under the doctrine of equitable conversion.
Anna owned Blackacre, which was improved with a dwelling. Beth owned Whiteacre, an adjoining unimproved lot suitable for constructing a dwelling. Beth executed and delivered a deed granting to Anna an easement over the westerly 15 feet of Whiteacre for convenient ingress and egress to a public street, although Anna's lot did abut another public street. Anna did not then record Beth's deed. After Anna constructed and started using a driveway within the described 15-foot strip in a clearly visible manner, Beth borrowed $10,000 cash from Bank and gave Bank a mortgage on Whiteacre. The mortgage was promptly and properly recorded. Anna then recorded Beth's deed granting the easement. Beth subsequently defaulted on her loan payments to Bank. The recording act of the jurisdiction provides: "No conveyance or mortgage of real property shall be good against subsequent purchasers for value and without notice unless the same be recorded according to law." In an appropriate foreclosure action as to Whiteacre, brought against Anna and Beth, Bank seeks among other things, to have Anna's easement declared subordinate to Bank's mortgage, so that the easement will be terminated by completion of the foreclosure. If Anna's easement is NOT terminated, it will be because (A) The recording of the deed granting the easement prior to the foreclosure action protects Anna's rights. (B) The easement provides access from Blackacre to a public street. (C) Anna's easement is appurtenant to Blackacre and thus cannot be separated from Blackacre. (D) Visible use of the easement by Anna put Bank on notice of the easement.
(D) Visible use of the easement by Anna put Bank on notice of the easement.
Art, who owned Blackacre in fee simple, conveyed Blackacre to Bea by warranty deed. Celia, an adjoining owner, asserted title to Blackacre and brought an appropriate action against Bea to quiet title to Blackacre. Bea demanded that Art defend Bea's title under the deed's covenant of warranty, but Art refused. Bea then successfully defended at her own expense. Bea brought an appropriate action against Art to recover Bea's expenses incurred in defending against Celia's action to quiet title to Blackacre. In this action, the court should decide for A. Bea, because in effect it was Art's title that was being challenged. B. Bea, because Art's deed to her included the covenant of warranty. C. Art, because the title Art conveyed was not defective. D. Art, because Celia may elect which of Art or Bea to sue.
C. Art, because the title Art conveyed was not defective.
A seller and a buyer signed a contract of sale for improved real property. The contract contained a financing contingency for a certain percentage of the purchase price. The buyer obtained the requisite financing from a bank. At the closing, the buyer executed a note to the seller for a portion of the purchase price, which note was not secured by a mortgage. The buyer then executed a second note, secured by a mortgage to the bank, applying the bank loan proceeds to the purchase price of the property. The bank had actual knowledge of the prior note to the seller. The bank promptly recorded its mortgage. The buyer is now in default on both notes. There is no applicable statute. Which party has priority? A. The bank, because its loan satisfied the financing contingency in the contract of sale. B. The bank, because its note is secured by a purchase money mortgage. C. The seller, because the bank had actual knowledge of the seller's note. D. The seller, because he retained a vendor's lien that was first in time.
B. The bank, because its note is secured by a purchase money mortgage.