## Facts

- In 1971, Dr. Ned O. Gregerson and Dixie Gregerson agreed with James L. Jensen to buy about one-third acre of unimproved land in Gunnison, Utah, after discussing and measuring the parcel and making an oral deal.
- Dr. Gregerson gave Mr. Jensen a check for \$350 with the notation: “1/2 payment on land as agreed other 1/2 paid when deed delivered.”
- Mr. Jensen endorsed the check and deposited it into a joint bank account shared with his wife, Edra Jensen.
- An unsigned deed was later prepared for the Jensens’ signatures describing the intended conveyance, but it was not executed.
- The Gregersons’ attempted purchase was never recorded.
- Although Mr. Jensen was the record owner during the events at issue, he had deeded the property to Mrs. Jensen in 1950 by warranty deed; that deed remained unrecorded.
- Mrs. Jensen took part in some of the discussions leading up to delivery of the \$350 check, but she signed no writing agreeing to sell and consistently maintained she owned an interest in the property and never agreed to sell it.
- The Gregersons sued for specific performance and, in the alternative, for damages.
- In the first trial, the district court dismissed the specific-performance claim for failure to prove a legal description; on the first appeal (617 P.2d 369 (Utah 1980)), the Utah Supreme Court reversed and remanded based on newly discovered evidence (the unsigned deed) and held that, together with the check, it could satisfy the statute of frauds as to Mr. Jensen.
- On remand, the district court again denied specific performance but awarded the Gregersons \$350 plus interest on their damages claim; only the denial of specific performance was appealed in this second appeal.

## Issues

1. Whether the Gregersons could obtain specific performance of the land sale when Mrs. Jensen held prior legal title under an earlier unrecorded deed and never signed any agreement to sell.
2. Whether the Gregersons qualified as bona fide purchasers for value without notice so as to take priority over Mrs. Jensen’s earlier unrecorded deed.

## Decision

- The Utah Supreme Court affirmed the district court’s denial of specific performance.
- The Court assumed (for purposes of its analysis) that the Gregersons had an enforceable contract against Mr. Jensen that satisfied the statute of frauds and could support specific performance as to him.
- The Court held that specific performance was properly denied because Mrs. Jensen was not bound: she signed nothing agreeing to sell and continued to deny any agreement to convey her interest.
- The Court agreed with the trial court that the Gregersons were not bona fide purchasers for value without notice and therefore could not cut off Mrs. Jensen’s earlier legal interest created by the 1950 unrecorded deed.
- The separate damages award of \$350 plus interest was not disturbed because it was not appealed.

## Legal Principles

- Specific performance is an equitable remedy and will not be granted when it would divest or impair the rights of a person who is not bound by the contract and holds a superior legal interest.
- A statute-of-frauds writing that binds one spouse (or one claimed owner) does not bind another owner who did not sign and did not agree to convey.
- A buyer cannot rely on the recording system to defeat an earlier unrecorded deed unless the buyer qualifies as a bona fide purchaser for value without notice; notice (actual or legally imputed) defeats bona fide purchaser status.
- When a prior unrecorded deed gives a third party legal title and the later buyer is not protected as a bona fide purchaser, the later buyer takes subject to the earlier interest, and a court may refuse specific performance that would require transfer of that earlier owner’s interest.

## Conclusion

Because Mrs. Jensen held prior legal title under an unrecorded 1950 deed and never signed any agreement to sell, and because the Gregersons were not bona fide purchasers without notice, the Utah Supreme Court affirmed the denial of specific performance even while assuming the Gregersons had an enforceable contract against Mr. Jensen.


Gregerson v. Jensen, 669 P.2d 396 (1983)