42. If the woman sues to eject the friend, will the woman be likely to succeed?

There are three types of recording acts. Under a notice statute, a subsequent bona fide purchaser prevails over a prior grantee who failed to record. The important fact under a notice statute is that the subsequent purchaser had no actual or constructive notice at the time of the conveyance. Under a race-notice statute, a subsequent BFP is protected only if she records before the prior grantee. Under a pure race statute, whoever records first wins and actual notice is irrelevant.

Only bona fide purchasers 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.

Under the Shelter Rule, a person who takes from a BFP will prevail against any interest that transferor-BFP would have prevailed against. This is true even where the transferee had actual knowledge of the prior unrecorded interest. If the rule were otherwise, a BFP might not be able to convey an interest in the land. The transferee is not protected for her own sake, but rather for the sake of the BFP from who she received title.

B is correct. In a notice statute jurisdiction, a subsequent bona fide purchaser, who had neither actual nor constructive notice, prevails over a prior purchaser who did not record. Additionally, the Shelter Rule states that a person who takes from a bona fide purchaser will prevail against any interest that the transferor bona fide purchaser would have prevailed against, even if the transferee had actual knowledge of the prior unrecorded interest. Here, the neighbor had no actual notice because the woman did not record her deed; the neighbor appears to not have constructive notice either, as the woman never took possession. Although the neighbor's friend knew of the original (unrecorded) conveyance from the man to the woman, he will prevail against the woman because of the Shelter Rule.

A is incorrect. The conclusion is correct but the reasoning is not. In a notice recording jurisdiction, to prevail against a prior purchaser who did not record, a bona fide purchaser with neither actual nor constructive notice, must record. Possession is not required. Here, the woman did not record her deed but the neighbor did, making the neighbor's chain of title legitimate.

C is incorrect. The Shelter Rule states that a person who takes from a bona fide purchaser will prevail against any interest that the transferor bona fide purchaser would have prevailed against, even if the transferee had actual knowledge of the prior unrecorded interest. Therefore, the friend would prevail even if he had notice of the conveyance from the man to the woman.

D is incorrect. Although the woman took title under a warranty deed, a conveyance will not be valid unless it is done in accordance with the jurisdiction's recording system. Here, this jurisdiction is a notice jurisdiction, and the neighbor recorded the conveyance while the woman did not. Therefore, the woman's warranty deed is not valid.