Swanson v. Swanson, 796 N.W.2d 614

Background

Property is a 169-acre farmland in Bottineau County; Anna Swanson conveyed to William Swanson in 1963, later deeded to William and Glenn Swanson as joint tenants (1963); Lorraine Swanson signed as accommodation only to waive homestead claim.
Glenn Swanson prepared/notarized the 1963 deed, recorded in 1966; in 1969 Glenn Swanson executed and recorded a mortgage on the property in favor of his brother Arlo.
William Swanson died in 1999; Lorraine Swanson, as personal representative, conveyed the property to herself as trustee in 2000; in 2001 Glenn asserted ownership to Robert Swanson during an inurnment ceremony.
In 2003 Lorraine, as trustee, conveyed the property to her four children with a life estate for Lorraine, and the deed was recorded in 2003.
Swanson children recorded their deed in 2005; Glenn Swanson’s ownership claim led to a quiet-title action in 2008; trial court found Swanson children acted in good faith and had priority under § 47-19-41.
The appellate court held the Swanson children had actual notice creating a duty to inquire, failed to conduct a reasonable record search, and thus were not good-faith purchasers; court reversed and remanded for judgment consistent with the opinion.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Swanson children were good-faith purchasers under § 47-19-41	Swanson children acted in good faith; they relied on Lorraine’s conveyance.	Glenn’s ownership claim gave actual notice; failure to inquire forfeits good-faith status.	No; failed to inquire, not good-faith purchasers.
Whether actual notice to a prudent purchaser negates good-faith status	Actual notice of Glenn’s claim did not necessarily reveal title truth.	Glenn’s statement at 2001 inurnment put them on notice to investigate.	Actual notice imposed a duty to inquire; failure voids good-faith protection.
Whether record search and tract-index exploration were required inquiries	Inquiry unnecessary if deed unproducible; estoppel not applicable.	Duty to examine tract index and records; a prudent inquiry would have revealed Glenn’s mortgage.	Prudent inquiry required; failure to search records defeats good-faith status.
Whether the 2003 conveyance for ten dollars constituted valuable consideration	Consideration was substantial and supported by family arrangements and care.	Ten dollars and care commitments may be nominal or not substantial value.	Court did not reach this issue after reversing on good-faith grounds; but later discussion indicates need for further analysis.
Whether equitable remedies (laches/estoppel) apply	Equitable defenses may bar Glenn despite statutory basis.	Estoppel/laches not applicable when purchaser is not good faith.	Estoppel and laches not available if not bona fide purchaser; but remand possible for further consideration.

Key Cases Cited

Hunt Trust Estate v. Kiker, 269 N.W.2d 377 (N.D. 1978) (duty to inquire when aware of conflicting interests)
Pierce Tp. of Barnes County v. Ernie, 19 N.W.2d 755 (N.D. 1945) (duty to inquire when confronted with competing interests)
Nygaard v. Robinson, 341 N.W.2d 349 (N.D. 1983) (facts sufficient to put prudent person on inquiry; partial disclosure enough)
Burlington Northern, Inc. v. Hall, 322 N.W.2d 233 (N.D. 1982) (estoppel/laches doctrines; four-part test for equitable estoppel)
Diocese of Bismarck Trust v. Ramada Inc., 553 N.W.2d 760 (N.D. 1996) (notice/constructive notice framework in good-faith analysis)
Doran v. Dazey, 5 N.D. 167, 64 N.W. 1023 (ND 1895) (prudent inquiry standard in title matters)
Pierce Tp. v. Ernie, 74 N.D. 16, 19 N.W.2d 755 (ND 1945) (informational notices trigger duty to inquire)
Anderson v. Anderson, 435 N.W.2d 687 (N.D. 1989) (valuable consideration standard under recording acts)
Williston Co-op. Credit Union v. Fossum, 427 N.W.2d 804 (N.D. 1988) (recording-act protections for bona fide purchasers)
Gjerstadengen v. Hartzell, 83 N.W. 230 (ND 1900) (equitable estoppel considerations)