## Facts

- In 1969, Warren’s Realty, Inc. conveyed to Raymond and Beatrice Gagner, by warranty deed, property abutting U.S. Route 1 in Kittery, Maine.
- After the purchase, the Gagners discovered a large underground water main owned by the Kittery Water District crossing their property and serving the Portsmouth Naval Shipyard.
- The District asserted it held an easement for the water main, but the easement was not recorded in the registry of deeds.
- The deed contained a covenant against encumbrances, and the attorney involved in the transaction certified title as free and clear of encumbrances.
- In 1971, the Gagners sued the grantor for breach of the covenant against encumbrances and later joined the District to obtain a determination that the claimed easement was invalid as against them.
- The Superior Court severed and heard only the easement-validity issue and ruled there was no valid easement against the Gagners.

## Issues

1. Whether, under Maine’s recording statute, an unrecorded easement is enforceable against subsequent purchasers who qualify as “persons having actual notice thereof.”
2. Whether visible conditions on the land created a duty of reasonable inquiry such that the Gagners were charged with “actual notice” (inquiry notice) of the District’s easement.

## Decision

- The Supreme Judicial Court of Maine reversed the Superior Court’s judgment and sustained the District’s appeal.
- The court held the Gagners were “persons having actual notice” within the meaning of 33 M.R.S.A. § 201.
- Because the Gagners were on notice sufficient to require reasonable inquiry, the District’s unrecorded easement was valid and enforceable against them.

## Legal Principles

- Under 33 M.R.S.A. § 201, an unrecorded conveyance or easement is ineffective against subsequent purchasers unless they have “actual notice” of it.
- In the recording-statute context, “actual notice” is not limited to proven subjective knowledge; it includes notice arising from facts that would lead a reasonable purchaser to inquire further.
- When physical conditions or other observable circumstances suggest an unrecorded property interest, a purchaser is charged with the notice a reasonably diligent inquiry would disclose.
- A purchaser with inquiry-based “actual notice” cannot avoid an unrecorded easement solely because it was not recorded.

## Conclusion

The court held that Maine’s recording statute does not protect purchasers who, based on observable conditions, were obligated to investigate and would have discovered an unrecorded easement; accordingly, the District’s unrecorded water-main easement remained enforceable against the Gagners.


Gagner v. Kittery Water Dist., 385 A.2d 206 (Me. 1978)