## Facts

- A divorce decree approved and incorporated a written property settlement concerning a residence owned by spouses as tenants by the entireties, converting their interests to one-half each as tenants in common.
- The settlement provided that if the former husband remarried or died, his one-half interest would pass to the parties’ son; the former wife and son were to have possession of the home.
- The decree and incorporated agreement were recorded in the county’s public records.
- After the divorce, the former husband remarried and, with his new wife, executed a promissory note and mortgage on the residence to a savings and loan association.
- At the time the mortgage was executed, the former wife and the son were in open, actual possession of the residence.
- The mortgagee foreclosed, purchased at the foreclosure sale, and received a deed.
- In a later enforcement proceeding, the court ordered the former husband and his new wife to convey the property to the son; they executed a deed to the son.
- The son sued to quiet title, asserting the mortgagee took subject to his prior equitable interest created by the recorded decree and agreement; the trial court canceled the mortgagee’s foreclosure deed as a cloud and quieted title in the son.
- The mortgagee appealed.

## Issues

1. Whether the recorded divorce decree and incorporated property settlement provided constructive notice of the son’s equitable interest to a later mortgagee and foreclosure purchaser.
2. Whether the former wife’s and son’s open possession at the time of the mortgage charged the mortgagee with inquiry notice of their rights, defeating bona fide purchaser status.

## Decision

- The Florida Supreme Court affirmed the decree quieting title in the son.
- The recorded decree and incorporated agreement were in the public records and charged later purchasers and encumbrancers with notice of the interests they disclosed.
- The former wife’s and son’s open possession when the mortgage was made imposed a duty on the mortgagee to investigate their claims; failure to inquire left the mortgagee charged with whatever diligent inquiry would have revealed.
- Because the mortgagee had constructive notice from the records and inquiry notice from possession, its mortgage and foreclosure title were subordinate to the son’s interest, and cancellation of the foreclosure deed as a cloud was proper.

## Legal Principles

- Instruments affecting real property that are recorded in the chain of title provide constructive notice of the interests and limitations they disclose to subsequent purchasers and encumbrancers.
- Open, visible possession by persons other than the apparent owner puts a purchaser or mortgagee on inquiry notice and requires reasonable investigation into the occupants’ rights.
- A party who takes with constructive or inquiry notice cannot claim bona fide purchaser (or mortgagee) protection against prior equitable interests enforceable in equity.

## Conclusion

The court held that a recorded divorce decree incorporating a property settlement, combined with the occupants’ open possession, charged a later mortgagee with notice of a child’s equitable interest, so the mortgagee’s foreclosure deed could be canceled and title quieted in the child.


First Fed. Sav. & Loan Ass'n of Miami v. Fisher, 60 So. 2d 496 (Fla. 1952)