Titles - Special problems (including estoppel by deed and ju...

Learning Outcomes

This article explains special problems affecting title to land on the MBE, including:

• Identifying when estoppel by deed and after‑acquired title operate, and when defects or deed type prevent those doctrines from applying.
• Distinguishing warranty, special‑warranty, and quitclaim deeds for purposes of covenants of title, risk allocation, and subsequent priority disputes.
• Analyzing how quiet title, ejectment, and other prior judgments give rise to claim preclusion and issue preclusion in later title litigation.
• Determining which parties and successors in interest are bound by earlier judgments, and when new litigants remain free to contest ownership.
• Evaluating how tax liens and judgment liens are created, perfected, and prioritized relative to mortgages, other consensual liens, and subsequent purchasers.
• Applying statutory tax‑foreclosure and redemption schemes to decide whose interests survive a tax sale and whether due process defects invalidate the sale.
• Applying judgment‑lien rules and recording‑act principles to decide whether purchasers take subject to, or free of, existing money judgments against the seller.
• Integrating estoppel by deed, preclusion doctrines, and lien‑priority rules into complex, multi‑party recording and foreclosure hypotheticals in MBE‑style questions.

MBE Syllabus

For the MBE, you are required to understand how non‑recording‑act doctrines and statutory liens affect title and lien priority, with a focus on the following syllabus points:

• Application of estoppel by deed and the operation of after‑acquired title.
• The preclusive effect of prior judgments on later title litigation (claim and issue preclusion).
• The creation, attachment, and priority of tax liens and judgment liens.
• Interaction between these doctrines and recording statutes, mortgages, and foreclosure.

Test Your Knowledge

Attempt these questions before reading this article. If you find some difficult or cannot remember the answers, remember to look more closely at that area during your revision.

1. If a grantor conveys land by warranty deed before acquiring title, and later acquires title, what interest does the grantee have?
   1. No interest
   2. A voidable interest
   3. Title automatically passes to the grantee
   4. Only a right to damages
2. A court has previously ruled that a party does not own Blackacre. In a later suit over Blackacre between the same parties, can the losing party relitigate ownership?
   1. Yes, if new evidence is found
   2. Yes, if the law has changed
   3. No, if the issue was actually litigated and necessary to the judgment
   4. Only if the first case was in federal court
3. Which of the following has the highest priority in a foreclosure sale (absent special statutes)?
   1. A prior mortgage
   2. A later-recorded tax lien
   3. A judgment lien
   4. A mechanic’s lien

Introduction

Title problems on the MBE are not limited to classic recording act disputes. Even when deeds are properly recorded, title can be affected by:

• Estoppel by deed (after‑acquired title),
• The preclusive effect of prior judgments, and
• Statutory liens, especially tax liens and judgment liens.

These doctrines determine who actually owns the property, whose interests survive foreclosure or tax sales, and which parties are bound by earlier litigation.

Key Term: Estoppel by Deed
When a grantor purports to convey land by deed before holding title, and later acquires that title, the grantor is prevented (estopped) from denying the original conveyance. In many cases, the later-acquired title automatically passes to the original grantee.

Key Term: After-Acquired Title
After-acquired title is any ownership interest the grantor obtains in the property after executing a deed. Under estoppel by deed, certain deeds cause this later interest to pass automatically to the earlier grantee.

Key Term: Warranty Deed
A warranty deed (general or special) contains covenants of title, including promises that the grantor owns the estate and has the right to convey. These covenants are what trigger estoppel by deed when the grantor later acquires title.

Key Term: Quitclaim Deed
A quitclaim deed conveys whatever interest the grantor currently has, if any, with no covenants of title. It does not support estoppel by deed or after-acquired title.

Key Term: Issue Preclusion (Collateral Estoppel)
Issue preclusion bars relitigation of an issue of fact or law that was actually litigated and necessarily decided in a prior valid, final judgment between the same parties (or their privies).

Key Term: Claim Preclusion (Res Judicata)
Claim preclusion bars a party from relitigating the same claim against the same party after a valid final judgment on the merits. All claims arising from the same transaction are merged or barred.

Key Term: Judgment Lien
A judgment lien is a nonconsensual lien created by statute after a money judgment is entered and properly recorded; it attaches to the judgment debtor’s real property in the jurisdiction.

Key Term: Tax Lien
A tax lien is a statutory lien for unpaid taxes (often property taxes) that attaches to real property and typically enjoys very high, sometimes super‑priority, over other liens and interests.

Key Term: Bona Fide Purchaser (BFP)
A BFP is a purchaser for value who acquires an interest in property without notice (actual, record, or inquiry) of a prior adverse claim and who is protected by the applicable recording statute.

The rest of this article examines each doctrine and how it interacts with recording acts, mortgages, and foreclosure—patterns repeatedly used in MBE questions.

Estoppel by Deed and After-Acquired Title

Estoppel by deed arises most often when a seller conveys land before owning it, then later acquires title. The core question is: who ends up with title—the original grantee under the defective deed, or a later purchaser?

Under the common law estoppel by deed doctrine, if:

• The grantor purports to convey an interest in land by warranty deed (or other deed containing covenants of title), and
• The grantor has no such interest at the time, but
• Later acquires the interest described,

then the after-acquired title automatically passes to the earlier grantee as against the grantor and those in privity with the grantor (e.g., heirs, devisees).

This works because the present covenants in a warranty deed—especially the covenant of seisin and the covenant of right to convey—are treated as if the grantor promised that he already had title. When he later acquires title, equity requires him to make good on that promise.

By contrast, quitclaim deeds contain no such promises. The grantor simply transfers whatever he has at that moment, which may be nothing. If he later acquires title, that new title is his to keep or convey to someone else.

Worked Example 1.1

Seller conveys Blackacre to Buyer by general warranty deed, but Seller does not own Blackacre at the time. One year later, Seller acquires title to Blackacre from the true owner. Who owns Blackacre?

Answer:
Buyer automatically acquires title to Blackacre as soon as Seller obtains it, under estoppel by deed and after-acquired title. Seller is estopped from denying the validity of the original conveyance.

Warranty vs. Quitclaim Deeds

Because estoppel by deed depends on covenants of title, the type of deed is critical on the MBE:

• General warranty deed: Warrants against all title defects, whenever created. Supports estoppel by deed.
• Special warranty deed: Warrants only against defects caused by the grantor. Still contains present covenants and supports estoppel by deed.
• Quitclaim deed: Contains no covenants. Does not support estoppel by deed; the grantee gets only the grantor’s present interest, if any.

Worked Example 1.2

Owner conveys Greenacre (which Owner does not yet own) to Alice by quitclaim deed. A year later, Owner purchases Greenacre from the true owner. Alice sues, claiming title. Who prevails?

Answer:
Owner prevails. Because the conveyance to Alice was by quitclaim deed, there were no covenants of title and no estoppel by deed. Owner’s later-acquired title does not automatically pass to Alice.

Interaction with Recording Acts and BFPs

Estoppel by deed protects the first grantee as against the grantor and those in privity—but it does not automatically defeat a later bona fide purchaser protected by a recording statute.

Common exam pattern:

1. Grantor conveys to A by warranty deed when Grantor has no title. A does not record.
2. Grantor later acquires title.
3. Grantor then conveys to B, who pays value, has no notice of A, and records first in a notice or race‑notice jurisdiction.

In this situation:

• As between Grantor and A, after‑acquired title would pass to A.
• But B is a BFP protected by the recording act and, because A failed to record, B prevails over A.
• A’s remedy is a breach-of-warranty action against Grantor, not title to the land.

Worked Example 1.3

Grantor conveys Blueacre to A by general warranty deed while owning nothing. A does not record. Later, Grantor acquires good title to Blueacre and then conveys it to B for value. B has no notice of A and records promptly in a notice jurisdiction. Who has title to Blueacre?

Answer:
B has title. Although estoppel by deed would normally pass the after‑acquired title to A, A’s failure to record allows B to qualify as a bona fide purchaser under the notice statute. The recording act protects B, cutting off A’s equitable claim. A may sue Grantor for breach of the covenants in the warranty deed.

Limitations on Estoppel by Deed

Estoppel by deed does not apply where:

• The original deed is void (e.g., forged, executed by someone lacking capacity, or obtained by fraud in the factum). There is no valid conveyance to breathe life into.
• The grantor later acquires title by adverse possession and the jurisdiction refuses to treat that title as “after‑acquired” for estoppel purposes (this can vary by state; on the MBE, focus on the deed type unless the question squarely raises adverse possession).
• The grantor uses a quitclaim deed, as noted above.

Exam Warning (Estoppel by Deed)
Always identify the type of deed and whether a BFP protected by a recording act has entered the picture. Estoppel by deed is powerful against the grantor, but it does not override a recording statute in favor of a later BFP who records.

Prior Judgments: Claim and Issue Preclusion and Title

Judgments about title—especially quiet title actions and ejectment judgments—can settle ownership once and for all. Later litigants may be barred from relitigating the same questions.

Claim Preclusion (Res Judicata)

If Party A sues Party B about title to Blackacre and the court enters a valid, final judgment on the merits, then:

• Any later suit between A and B arising from the same transaction (the dispute over ownership of Blackacre) is barred.
• A cannot sue B again over the same title claim, even under a different theory (e.g., switching from ejectment to quiet title).

Issue Preclusion (Collateral Estoppel)

Even if a later suit involves a different claim (for example, damages for trespass rather than quiet title), issue preclusion may apply if:

• The earlier judgment was valid and final.
• The identical issue (e.g., who owned Blackacre on a particular date) was actually litigated and necessarily decided.
• The party against whom preclusion is asserted was a party (or in privity) in the earlier case.

Worked Example 1.4

A quiet title action between Owner and Rival results in a judgment that Rival, not Owner, has title to Blackacre. Later, Owner sues Rival again, this time seeking damages for trespass, claiming that Rival’s entry on Blackacre was wrongful. Can Owner relitigate who owns Blackacre?

Answer:
No. Issue preclusion bars relitigation of ownership between Owner and Rival. The question of who held title was actually litigated and necessary to the quiet title judgment, so Owner cannot contest that issue again in a later trespass action.

Revision Tip

Distinguish claim preclusion (same parties, same claim or transaction) from issue preclusion (specific issue decided earlier). In title questions, the fact of ownership is often the “issue” that cannot be relitigated.

Privity and Successors in Interest

Judgments about title bind not only the parties, but also those in privity with them, such as:

• Heirs and devisees,
• Grantees who take the property after the judgment and with notice,
• Successor owners who stand in the shoes of the original litigant.

A later grantee from a party who lost a title dispute generally cannot reopen ownership; the grantee’s remedy is against the grantor.

State vs. Federal Judgments and Full Faith and Credit

For MBE purposes:

• A state court judgment about title must be given full faith and credit in other state and federal courts, so long as the rendering court had jurisdiction and afforded due process.
• A federal court judgment about title (e.g., deciding title under diversity jurisdiction) similarly has preclusive effect in later state proceedings, under federal full‑faith‑and‑credit statutes.

Exam Warning (Prior Judgments)
Before applying preclusion, confirm:

• There was a valid final judgment,
• The same parties (or privies) are involved, and
• The same claim or issue is at stake. New parties are ordinarily not bound, even if they know about the earlier judgment.

Tax Liens and Title

Tax liens, especially property tax liens, are statutory and often enjoy super‑priority over mortgages and other private liens. They can drastically alter who ends up with unencumbered title.

Most jurisdictions impose an annual property tax lien that:

• Attaches automatically to the property as of a statutory date, and
• Is enforceable by tax foreclosure, often after notice and a statutory redemption period.

Because tax liens are created and ordered by statute, careful reading of the problem’s statutory language is essential.

Exam Warning (Tax Liens)
Do not assume the common‑law rule. The MBE will usually quote or summarize a statute; the given statute controls priority and redemption, even if it departs from “typical” rules.

Worked Example 1.5

Homeowner fails to pay property taxes for three years. A bank holds an earlier‑recorded purchase‑money mortgage on the property. The county perfects a tax lien and conducts a tax foreclosure sale, complying with the statute. Purchaser buys at the sale. What happens to the bank’s mortgage?

Answer:
In many jurisdictions, the tax lien has super‑priority. A properly conducted tax foreclosure sale extinguishes junior interests and often even senior mortgages, unless the statute expressly protects them. The bank’s mortgage is therefore typically wiped out, leaving Purchaser with title free of the mortgage.

Notice and Due Process

Tax foreclosures are often in rem or quasi in rem proceedings against the property itself, but due process still requires adequate notice to interested parties:

• If the taxing authority knows, or reasonably should know, the owner’s address, ordinary mail (not just publication) is required.
• If mailed notice is returned unclaimed and more practicable means exist (e.g., regular mail, posting on the property), failure to take additional steps can render the tax sale constitutionally defective.

A defective tax sale may leave the former owner’s title intact and the purchaser with no valid title, a classic MBE trap.

Redemption Rights

Many statutes give the delinquent taxpayer a right of redemption:

• Equitable redemption: Right to pay off the taxes (and costs) before the sale to stop foreclosure.
• Statutory redemption: Sometimes, a period after the sale during which the former owner can pay the sale price (plus fees) and recover title.

Whether the right of redemption survives the sale is purely statutory; follow the fact pattern.

Judgment Liens and Title

Judgment liens, like tax liens, are statutory. They arise when a creditor obtains a money judgment and follows the required steps (often recording the judgment) to create a lien on the debtor’s real property.

In many states:

• Once properly recorded, the judgment lien attaches to all real property the debtor currently owns in that county (and sometimes to property he later acquires).
• The lien is generally junior to previously recorded mortgages and prior tax liens.
• The lienholder can foreclose the lien (or have it paid from foreclosure proceeds on a senior lien, if surplus exists).

Worked Example 1.6

Lender records a mortgage on Debtor’s home in 2015. In 2018, Creditor sues Debtor, obtains a money judgment, and records the judgment, creating a judgment lien. In 2019, Debtor defaults on the mortgage and Lender forecloses. The sale proceeds are insufficient to pay both the mortgage and the judgment lien. What happens to the judgment lien?

Answer:
The mortgage has priority because it was recorded first. In the foreclosure, sale proceeds go first to costs of sale, then to pay the mortgage. Because there are no surplus proceeds, the judgment lien is extinguished with respect to the property. Creditor still has a personal judgment and may seek other assets, but the lien on this property is gone.

Priority and Recording Acts

Judgment liens are subject to recording act principles:

• If Buyer purchases property before a judgment is recorded, and has no notice, Buyer generally takes free of the later judgment lien.
• If Buyer purchases after a judgment lien is recorded, Buyer takes subject to the lien unless the statute provides otherwise.

Worked Example 1.7

Owner owns Redacre. Creditor obtains and records a judgment against Owner on January 1, creating a lien on Redacre. On March 1, Owner conveys Redacre to Purchaser for value. Purchaser knows nothing about the judgment, and the judgment lien is properly indexed. Who takes subject to the judgment lien?

Answer:
Purchaser takes subject to the judgment lien. The recorded judgment gives record notice. Purchaser is not a BFP as against the judgment lien and cannot claim priority over it. The lien encumbers Redacre in Purchaser’s hands until paid or foreclosed.

Exam Warning (Judgment Liens)
Watch the timeline:

1. A judgment recorded before the debtor’s conveyance burdens the property in the hands of later purchasers with notice.
2. A judgment recorded after a conveyance generally does not attach to property the debtor no longer owns.

Key Point Checklist

This article has covered the following key knowledge points:

• Estoppel by deed arises when a grantor conveys by warranty (or other covenant) deed before owning the property and later acquires title; after-acquired title passes automatically to the earlier grantee as against the grantor and those in privity.
• Quitclaim deeds do not contain covenants of title and therefore do not support estoppel by deed or after-acquired title.
• Recording acts can protect a later bona fide purchaser who records against an earlier grantee who failed to record, even where estoppel by deed would otherwise favor the earlier grantee.
• Claim preclusion bars relitigation of the same title claim between the same parties after a final judgment on the merits.
• Issue preclusion bars relitigation of specific issues—such as ownership of a parcel—that were actually litigated and necessary to a prior judgment between the same parties or their privies.
• Property tax liens arise by statute, typically have super‑priority, and a properly conducted tax foreclosure sale can extinguish even earlier mortgages, subject to redemption and due process requirements.
• Judgment liens attach to the debtor’s real property following proper recording, are generally junior to prior mortgages and tax liens, and are subject to foreclosure and recording‑act‑based priority rules.
• Later purchasers must consider both the chain of recorded deeds and any recorded tax or judgment liens when evaluating title; these liens can survive transfers and foreclosures depending on their priority.

Key Terms and Concepts

• Estoppel by Deed
• After-Acquired Title
• Warranty Deed
• Quitclaim Deed
• Issue Preclusion (Collateral Estoppel)
• Claim Preclusion (Res Judicata)
• Judgment Lien
• Tax Lien
• Bona Fide Purchaser (BFP)