Tomlinson v. Clarke
1991 Wash. App. LEXIS 37, 803 P.2d 828, 60 Wash. App. 344 (1991)
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Rule of Law:
A vendee to an executory real estate contract who is first to record their conveyance and purchased without notice of a prior unrecorded interest qualifies as a bona fide purchaser for value, even before acquiring full legal title.
Facts:
- In 1979, H.D. Tomlinson owned a parcel of real estate in Snohomish County.
- On March 23, 1979, Tomlinson sold a portion of the land to Gayle and Annie Whitsell via an executory real estate contract. The contract's legal description mistakenly included 125 linear feet of shoreland.
- On December 26, 1979, Tomlinson sold a second parcel of land to David and Cynthia Clarke via an executory real estate contract. This contract included the same 125 linear feet of shoreland described in the Whitsell contract.
- At the time of their purchase, the Clarkes had no knowledge of the prior sale to the Whitsells or of the Whitsells' claim to the shoreland.
- The Clarkes recorded their contract in the county auditor's office on February 7, 1980.
- The Whitsells recorded their contract on October 19, 1982, more than two and a half years after the Clarkes recorded theirs.
- In 1985, the parties discovered the conflicting claims to the same 50 feet of shoreland.
Procedural Posture:
- The Whitsells and Tomlinson initiated a legal action in the Snohomish County trial court to resolve the conflicting property claims.
- The Whitsells sought a declaration that their interest in the disputed land was superior to the Clarkes' interest.
- The trial court found that the Whitsells' equitable interest was superior because they purchased the land first.
- The trial court ruled that the Clarkes could not be bona fide purchasers because, as vendees to an executory contract, they had not yet acquired legal title.
- David and Cynthia Clarke (appellants) appealed the trial court's judgment to the Court of Appeals of Washington.
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Issue:
Does a vendee under an executory real estate contract, who records their contract first without notice of a prior unrecorded sale from the same vendor, qualify as a bona fide purchaser with rights superior to the prior unrecorded purchaser?
Opinions:
Majority - Coleman, J.
Yes. A vendee of an executory real estate contract who properly records the contract without notice of competing interests may acquire the status of a bona fide purchaser. The court rejected the older rule from cases like Peterson v. Paulson, which required a purchaser to have paid the full purchase price and acquired legal title to be a bona fide purchaser. Instead, the court followed the modern trend established in Cascade Sec. Bank v. Butler, which calls for a 'realistic examination of the nature of the interest in a particular context.' The court found that an executory contract for the sale of real estate is a 'conveyance' fully protected by the recording act. The Legislature's 1984 amendments to the recording act, which explicitly defined executory contracts as conveyances, were a curative measure intended to clarify this point and overrule a contrary holding in Reed v. Eller. Therefore, under the recording statute, the Clarkes, as subsequent purchasers in good faith who recorded first, have an interest superior to the Whitsells, who failed to provide constructive notice by timely recording their contract.
Analysis:
This decision modernized Washington's property law by aligning the treatment of executory contract vendees with that of other purchasers under the state's recording act. It rejects the formalistic requirement of full legal title for bona fide purchaser status, recognizing the substantial equitable interest a contract vendee holds. This ruling strengthens the public policy favoring reliance on recorded land titles and clarifies that the 'race-notice' system applies to executory contracts. It places the burden on all purchasers, regardless of financing method, to promptly record their interests to protect them against subsequent good-faith purchasers.
