Lott v. Muldoon Road Baptist Church, Inc.
466 P.2d 815, 1970 Alas. LEXIS 146 (1970)
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Rule of Law:
A written instrument, such as a deed of reconveyance, that purports on its face to pass title can establish "color of title" for adverse possession under a shortened statute of limitations. Good faith is a required element for a color of title claim but is presumed absent an allegation and showing of bad faith.
Facts:
- In 1952, Leo Lott acquired the northernmost 75 feet of a parcel known as Lot 92.
- In 1955, upon divorcing Burnie Garland, Lott received an additional 60 feet of Lot 92 from him, giving her ownership of the northern 135 feet while Garland retained the southern 195 feet.
- After Lott left Alaska, Burnie Garland had a plat prepared in 1958 for a subdivision that included 75 feet of Lott's property, and he certified that he owned all the land in the plat.
- On August 8, 1958, Garland executed a deed of trust, conveying the entire platted property (including the 75 feet he did not own) to Title Insurance and Trust Company to secure a loan.
- On September 12, 1959, the Title Insurance and Trust Company executed a deed of reconveyance, transferring the same property back to Burnie Garland.
- On July 7, 1960, Garland entered into a lease with an option to purchase the property with the Eagle River First Baptist Church, which immediately took possession.
- After Garland's death in 1961, his estate's administrator executed a deed conveying the property to the Muldoon Road Baptist Church, Inc., the successor to the Eagle River church, on February 27, 1962.
Procedural Posture:
- On July 27, 1967, Leo Lott (appellant) filed suit in the superior court (trial court) against Muldoon Road Baptist Church, Inc. (appellee) to eject the church and quiet title to the disputed property.
- Following a trial without a jury, the superior court entered a judgment decreeing that appellant Lott had no right to or interest in the property.
- Leo Lott appealed the superior court's judgment to the Supreme Court of Alaska.
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Issue:
Does a deed of reconveyance, which returns property to a grantor who never held valid title to a portion of that property, constitute a written instrument which purports to pass title sufficient to establish color of title for adverse possession under Alaska Statute 09.25.050?
Opinions:
Majority - Boney, Justice
Yes. A deed of reconveyance that purports to pass title is sufficient to establish color of title for adverse possession. The court defines color of title as a written instrument that purports to pass title but may be ineffective in actually doing so. While adopting a good faith requirement for such claims, the court also establishes a presumption of good faith in the absence of evidence to the contrary. Here, the deed of reconveyance from the title company back to Burnie Garland, although part of a transaction where Garland never held valid title to the disputed portion, was a written instrument that purported to convey title. This deed created color of title in Garland as of September 12, 1959, starting the seven-year statutory period for adverse possession. The court reasons that the policy behind the color of title doctrine is to protect those who rely on such instruments, and a person unversed in property law might reasonably believe their claim was strengthened by such a deed, thus encouraging their commitment to the land.
Concurring in part and dissenting in part - Rabinowitz, Justice
No. Allowing an adverse claimant to create color of title through a conveyance to a third person and an immediate reconveyance is a 'bootstrap' transaction that is contrary to the policy underlying the shorter limitations period. The purpose of the statute is to reward a claimant's reliance on an instrument they believe grants them title. It is inconceivable that Burnie Garland relied on a deed of reconveyance from a transaction he orchestrated to further commit himself to the land. This holding allows a claimant to manufacture color of title through a sham 'strawman' transaction, and the newly adopted presumption of good faith will be difficult to administer and will weaken the good faith requirement. The seven-year period should have commenced only when the church exercised its option to purchase, not from Garland's self-created color of title.
Analysis:
This decision clarifies Alaska's adverse possession law by formally adopting a good faith requirement for claims under color of title, while simultaneously creating a strong presumption that good faith exists unless proven otherwise. By broadly interpreting what constitutes an instrument 'purporting to pass title,' the court allows even a deed of reconveyance from a self-initiated transaction to serve as color of title. This holding arguably lowers the barrier for claimants seeking to use the shortened seven-year statute of limitations, shifting the burden onto the true owner to demonstrate the claimant's bad faith in the transaction that created the color of title.
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