Tax Sales - December 2014
Title Tips by Joe Vitullo
The after-acquired title doctrine holds that where a grantor purports to transfer ownership of real property to which he lacks legal title at the time of the transfer, but subsequently acquires title to the property, the after-acquired legal title inures to the benefit of the grantee by operation of law. The doctrine is often invoked where a buyer's mortgage is recorded before his deed. A review of the Rhode Island Title Standards reveals that the doctrine is recognized in Title Standard No. 7.5 which states that "A mortgage given by a person then having no title, but subsequently acquiring it, is valid to the extent that rights of third parties are not involved." The Standard was copied from the Model Title Standards of Professor Lewis M. Simes. There is no Rhode Island Standard regarding the similar doctrine of "estoppel by deed". The two doctrines are treated as distinct from each other. Even though a mortgage is, in fact, a warranty deed, a Comment below the original Model Standard for "After-Acquired Title" says that the covenants of warranty in a mortgage generally are not necessary for the application of the after-acquired property principle.
Surprisingly, there is a little-known Rhode Island Supreme Court case regarding estoppel by deed. The case of McCusker v. McEvey, 9 R.I. 528 (1870) is eight pages in length, followed by an eight page Dissent. The Dissent was "lost" and later "found" to be printed in a subsequent volume. The Court found itself embroiled in a national legal debate regarding the doctrine of "estoppel by deed," which raged at the time.
The case upholds the general rule that if a grantor, having no title to the land, undertakes to convey the same by warranty deed, and the grantor later acquires title to the parcel conveyed, the title will become vested in the grantee by operation of law. The grantor is "estopped" to deny his warranties under the deed.
The case involved a parcel of land on Knight Street in Providence, where two opposing chains of title were created by mistake in describing the boundaries. In 1843, one George Weeden mistakenly included the subject parcel in the conveyance of a larger lot to one Reynolds. In 1845, Weeden, having no title to the subject lot, conveyed it to Paine by warranty deed. In 1847, Paine conveyed it to Quigley, who conveyed to Kennedy in 1867. The same year Kennedy conveyed the subject lot to McCusker. In the meantime, in 1845, Reynolds had conveyed title to the subject lot back to Weeden.
Another chain of title was created, however, when Reynolds conveyed the larger lot, which included the subject lot, to Williams & Belcher. Williams & Belcher conveyed to Filmore in 1855 and Filmore conveyed it to Burrows in the same year. Burrows conveyed to Durfee in 1856 and Durfee gave a mortgage to Mehanics Bank. Mechanics Bank foreclosed in 1861 and conveyed it to McEvey.
The Court said in its Decision that, having purported to convey the title with warranty covenants, the title later acquired by Weeden under the reconveyance by Reynolds, became vested in his grantee Paine, by operation of law. The Court said that the doctrine had been so often recognized in the American Courts, and repeated in various text books, that they felt bound to follow the precedent for the security of titles.
The Dissent, on the other hand, argued that there was a general scarcity of source law in all the American cases and a wide spread misconception concerning the basis of the doctrine in England. These arguments still echo in legal treatises over a century later. Among other things, the doctrine requires purchasers to search for conveyances prior to their grantor receiving title. This is, in fact, a largely ignored rule in Massachusetts Ayer v. Boston Face Brick Co, 159 Mass 84, 34 N.E. 177 (1893). If anyone asks, however for a Rhode Island Supreme Court case upholding "estoppel by deed," McCusker v. McEvey, 9 R.I. 528 (1870) still stands for the proposition."