542 P.3d 877
Okla. Civ. App.2023Background
- Butterfield moved onto property owned by Carter in Oct 2018, placed buildings, paid utilities, and occupied continuously.
- Carter and Butterfield executed a contract for deed on Jan 2, 2019 for purchase by installment; Butterfield paid monthly and completed payments in Jan 2021.
- Carter conveyed the property to the McCoy Revocable Living Trust by warranty deed on Oct 19, 2020; the Trust recorded that deed Oct 22, 2020.
- Butterfield recorded his contract for deed Oct 29, 2020; Carter signed a warranty deed to Butterfield on Jan 19, 2021, but Butterfield did not record that deed.
- Butterfield sued to quiet title (Sept 2021); the trial court granted summary judgment to the McCoy Trust and quieted title in the Trust; Butterfield appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does open, continuous possession by Butterfield give him superior title over the later-recorded deed? | Possession creates a presumption of ownership and gave constructive notice to the Trust. | Possession does not create title; the Trust was first to record and is a bona fide purchaser. | Possession raises only a presumption/notice of whatever legal interest exists; it did not overcome the Trust's prior recorded deed. |
| Did Butterfield acquire equitable or legal title under the contract for deed before the Trust recorded? | Contract and possession gave Butterfield ownership or at least an equitable interest prior to the Trust's recording. | The contract was executory; full performance (final payment) was required before equitable title transferred. | The contract did not transfer title or equitable interest before completion; no interest existed when the Trust recorded. |
| Was the McCoy Trust charged with notice of Butterfield's claim due to his improvements/occupancy? | Butterfield's open, notorious occupancy should have put the Trust on inquiry/constructive notice. | The Trust had no actual notice; similar abandoned structures existed; even constructive notice would only reveal any legal interest that actually existed. | Even if occupancy provided inquiry notice, Butterfield had no legal interest to be protected at the time the Trust recorded; recording priority controls. |
| When equities are equal between grantees of the same grantor, which party prevails? | Butterfield argues possession/equity favors him. | The Trust argues recording first gives priority to its deed as a bona fide purchaser. | Where equities are equal, title belongs to the first to record; the Trust prevailed as first recorded grantee. |
Key Cases Cited
- Foley v. Brown, 204 P. 267 (Okla. 1922) (possession presumption discussed but title rested on unbroken chain of title and actual notice)
- Williams v. McCann, 385 P.2d 788 (Okla. 1963) (first grantee to record prevails when prior deed is unrecorded and purchaser relied on records)
- Elsey v. Shaw, 190 P.2d 439 (Okla. 1947) (recording priority controls between competing grantees)
- Henslee v. Herring, 403 P.2d 511 (Okla. 1965) (open possession does not affect a purchaser if possessor lacks legal claim)
- Bartlesville Oil & Imp. Co. v. Hill, 121 P. 208 (Okla. 1911) (contracts to convey at a future time do not transfer title until conditions are satisfied)
- Stanley v. Velma A. Barnes Real Est., Inc., 571 P.2d 871 (Okla. Civ. App. 1977) (equitable title arises only upon performance required by contract)
- Bank of Wichitas v. Ledford, 151 P.3d 103 (Okla. 2006) (a mortgage is a security instrument in the nature of a contract)