Full access allows:
- Solve all tests online without limits;
- Remove all advertisements on website;
- Adding questions to favorite list;
- Save learning progress;
- Save results of practice exams;
- Watching all wrong answered questions.
13. In such action, judgment should be for
The woman's son made demand upon the friend for distribution of income at the next usual time income from the trust would have distributed. The friend refused. The son brought an appropriate action against the friend for a decree requiring her to perform the trust the brother had theretofore recognized.
Five years later, the brother conveyed Goldacre in fee simple to a friend by warranty deed. The friend paid the fair market value of Goldacre, had no knowledge of the written agreement between the brother and sister, and entered into possession of Goldacre.
The brother entered into possession of Goldacre and distributed the net income from Goldacre to his sister's son at appropriate intervals.
A woman owned Goldacre, a tract of land, in fee simple. By warranty deed, she conveyed Goldacre in fee simple to her brother for a recited consideration of «$10 and other valuable consideration.» The deed was promptly and properly recorded. One week later, the woman and her brother executed a written document that stated that the conveyance of Goldacre was for the purpose of establishing a trust for the benefit of the woman's son. Her brother expressly accepted the trust and signed the document with the woman. This written agreement was not authenticated to be eligible for recordation and there never was an attempt to record it.
Comments (0)
There are no comments at the moment. If you found an error or think question is incorrect, tell everyone about it
Only signed in users can write comments
Signin
Only BFPs are entitled to prevail against a prior transferee under notice and race-notice recording act statutes. To attain this status, a person must: (i) be a purchaser or creditor; (ii) take without actual, constructive, or inquiry notice of the prior instrument; and (iii) pay valuable consideration. If these requirements are not met, the person is not protected by the recording acts, so the common law rule of first in time, first in right prevails.
The vast majority of states in the United States employ a system of recording legal instruments that affect the title of real estate as the exclusive means for publicly documenting land titles and interests. Recording acts generally apply to nearly every instrument by which an interest in land, whether legal or equitable, is created or modified.
C is correct. The brother was the record owner when the friend took title and the son was a prior transferee due to the trust document. The friend paid value for the land and had no notice of the prior transfer from the brother to the son. Therefore, the friend is a BFP and her status as a BFP entitles her to priority over the son. Consequently, the friend will be able to use the recording act to protect her interest from the son's interest.
A is incorrect. While it is generally true that the successor in title to the trustee takes title subject to the grantor's trust, the recording act allows the friend to use her status as a BFP to take free of the unrecorded interest.
B is incorrect. Trusts creating equitable interests are subject to the recording act. Because the trust was not recorded, the friend had no notice of the prior transfer and obtained BFP status with her purchase.
D is incorrect. A trust was created. While the brother may have initially had a fee simple, once he signed the trust document with the woman, he created a new interest in land for the benefit of the son. The fact that the woman did not have title at the time the trust was created is irrelevant.