Egli v. Troy
602 N.W.2d 329, 1999 Iowa Sup. LEXIS 283, 1999 WL 1052023 (1999)
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Rule of Law:
A special warranty deed, which warrants title against claims arising 'by, through or under' the grantor, covers title defects that arise from the grantor's passive acquiescence to an encumbrance, not just those created by the grantor's affirmative acts.
Facts:
- Elmer and Rosemary Greve owned a parcel of land adjacent to property owned by the Eglis' predecessors.
- For a period of time, the Greves and their neighbors treated a fence as the boundary line between their properties.
- In 1988, the Greves sold their land to the Ransons under an installment contract.
- In 1996, to complete the sale after Elmer Greve's death, Rosemary Greve conveyed her interest to the Ransons via a special warranty deed, which warranted against claims 'by, through or under' her.
- The Ransons subsequently conveyed a portion of their land to the Troys.
- The Troys began constructing a house on a triangular piece of land they believed was theirs based on their deed.
- The Eglis, who now owned the neighboring property, discovered the construction and asserted ownership over the land, claiming the long-standing fence line was the true legal boundary.
Procedural Posture:
- The Eglis filed suit against the Troys and the Ransons in Iowa district court (trial court) to establish a boundary by acquiescence.
- The Troys and Ransons filed a third-party petition against their seller, Rosemary Greve, alleging breach of a special warranty deed.
- The district court granted Greve's motion for summary judgment, dismissing the third-party claim against her.
- The case proceeded to trial on the Eglis' original claim, where the district court ruled in favor of the Eglis, finding the fence line to be the legal boundary.
- The Troys and Ransons, as appellants, appealed both the summary judgment for Greve and the trial verdict for the Eglis to the Iowa Supreme Court.
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Issue:
Does a special warranty deed, which covenants against claims 'by, through or under' the grantor, cover a claim of title lost through the grantor's own acquiescence in an alternative boundary line?
Opinions:
Majority - Larson, J.
Yes. A special warranty deed warranting against claims 'by, through or under' the grantor covers a claim of title lost through the grantor's own acquiescence. The court reasoned that the warranty covers claims 'permitted' by the vendor, not just those affirmatively created. Acquiescence, which is consent inferred from silence or inaction, is a way a grantor can permit or 'suffer' an encumbrance to be created against their property. If Greve's inaction during her period of ownership contributed to the ten-year statutory period for establishing a boundary by acquiescence, then the Eglis' claim arose 'through' her. The court concluded that a genuine issue of material fact existed as to whether the Greves were responsible for any part of the ten-year acquiescence period, making summary judgment in Greve's favor improper. The court also affirmed the trial court's separate finding that the fence line had, in fact, been established as the true boundary by acquiescence based on substantial evidence.
Analysis:
This decision clarifies and expands the scope of liability under a special warranty deed in Iowa. It establishes that a grantor's covenant against claims 'by, through or under them' is breached not only by their affirmative acts but also by their passive inaction, such as acquiescing to a boundary change. This holding puts grantors on notice that they have a duty to defend their property boundaries, as failing to do so may lead to liability to future grantees if title is lost. The case is particularly relevant for transactions involving installment contracts, where boundary issues can ripen over the long period between the contract's execution and the deed's final delivery.
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