## Facts

- A buyer contracted to purchase a residential lot and dwelling in Emporia, Kansas, to be conveyed “free and clear of all encumbrances,” except “restrictions and easements of record.”
- After contracting, the buyer’s title examination revealed two existing nonconformities tied to the improvements:
  - The house was about 18 inches from a lot line, violating a municipal ordinance requiring a three-foot setback for frame buildings.
  - A recorded subdivision dedication restricted construction on the lot to a two-story house, but the existing house was one story.
- The buyer alleged the violations were unknown at contracting and that he would not have agreed to purchase had he known of them.
- The sellers offered to cure only the setback issue by acquiring and conveying additional adjacent land to create setback compliance.
- The buyer rejected the proposal and sought rescission and return of payments, asserting the defects made title unmerchantable.

## Issues

1. Whether existing violations of a municipal setback ordinance and a recorded private restriction rendered the sellers’ title unmarketable under a contract requiring conveyance free of encumbrances (except recorded restrictions and easements).
2. Whether the buyer’s agreement to take subject to recorded restrictions barred rescission based on an existing violation of a recorded restriction.
3. Whether equity could grant the sellers specific performance when the promised marketable title could not be tendered at closing.

## Decision

- The Kansas Supreme Court reversed the decree ordering the buyer to specifically perform.
- The court held that the existing ordinance violation and the existing violation of the recorded restriction were substantial encumbrances that made the title unmarketable.
- The buyer was entitled to rescind the contract rather than be compelled to complete the purchase.
- The case was remanded for proceedings consistent with rescission and restoration of the parties to their pre-contract positions.

## Legal Principles

- A marketable title is free from reasonable doubt; a title is doubtful and unmarketable if it exposes the purchaser to the hazard of litigation.
- Restrictions or ordinances, standing alone, generally do not make title unmarketable; present violations of them tied to existing improvements can.
- An existing violation that may lead to enforcement actions or require removal or alteration of improvements is a substantial defect affecting marketability.
- “Subject to restrictions of record” language does not waive objections to existing violations of those restrictions when the violations operate as additional burdens on title.
- Specific performance requires the seller to be able to perform the contract as promised, including tender of marketable title; inability to do so defeats equitable compulsion of the buyer.

## Conclusion

Because the property’s existing improvements violated both a setback ordinance and a recorded subdivision restriction, the buyer faced a realistic risk of enforcement and litigation, making the title unmarketable under the contract; the buyer could rescind, and the sellers could not obtain specific performance.


Lohmeyer v. Bower, 170 Kan. 442, 227 P.2d 102 (Kan. 1951)