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Muzzy v. Uttamchandani

Summarized by: 

Date Filed: 05-31-2012
Case #: A146219
Hadlock, J. for the Court; Ortega, P.J.; and Sercombe, J.
Full Text Opinion: http://www.publications.ojd.state.or.us/Publications/A146219.pdf

Property Law: An unrecorded deed is void as against a subsequent bona fide purchaser for value unless the purchaser can prove that he bought in good faith, for valuable consideration, and filed first for record.

The Court of Appeals affirmed the trial court’s entry of judgment in favor of plaintiff in quiet-title action. Muzzy deeded property to Runk in 1999, reserving a life estate for himself. In 2003, Runk executed a quitclaim deed to plaintiff, but the deed was never recorded. In 2004, Runk executed a sale deed to Rowlands who understood that plaintiff had a life estate. Two weeks after that deed was recorded, a promissory note was executed that would pay Runk when free and clear title was received. Uttamchandani obtained a warranty deed from Rowlands, and gave a check and a promissory note to Runk for a quitclaim deed. Muzzy sued to quiet title and claimed priority by virtue of his 2003 deed, and the Court agreed. Under ORS 93.640 an unrecorded deed is valid between grantor and grantee, but void against a subsequent bona fide purchaser for value. A subsequent purchaser must prove that (1) he bought in good faith; (2) paid valuable consideration; and (3) filed first for record. Here Uttamchandani did not pay valuable consideration because the 2004 deed was recorded, and two weeks later a promissory note was executed contingent on free title. Because that contingency never occurred, nothing of value changed hands. Therefore, Uttamchandani failed to satisfy the second element. Affirmed.