Tomlinson v. Clarke

803 P.2d 828, 60 Wash. App. 344, 1991 Wash. App. LEXIS 37
CourtCourt of Appeals of Washington
DecidedJanuary 22, 1991
DocketNo. 24504-0-I
StatusPublished
Cited by4 cases

This text of 803 P.2d 828 (Tomlinson v. Clarke) is published on Counsel Stack Legal Research, covering Court of Appeals of Washington primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Tomlinson v. Clarke, 803 P.2d 828, 60 Wash. App. 344, 1991 Wash. App. LEXIS 37 (Wash. Ct. App. 1991).

Opinion

Coleman, J.

David and Cynthia Clarke appeal from the trial court's ruling that they are not bona fide purchasers of the parcel of land in dispute and that the respondents, Gayle and Annie Whitsell, have a superior interest in that land subject to the provisions of the real estate contract between the Whitsells and H.D. Tomlinson. We reverse.

[346]*346In 1979, Tomlinson owned the Snohomish County real estate involved in this case and legally described in the trial court's findings of fact. On March 23, 1979, Tomlinson sold one parcel of land to Gayle and Annie Whitsell through an executory real estate contract. At that time, the state recording act included RCW 65.08.080. That provision, repealed by the 1984 amendments to the act, read as follows:

An executory contract for the sale or purchase of real property or an instrument granting a power to convey real property as the agent or attorney for the owner of the property, when acknowledged (with the acknowledgment certified) in the manner to entitle a conveyance to be recorded, may be recorded in the office of the recording officer of any county in which any of the real property to which it relates is situated, and when so recorded shall be notice to all persons of the rights of the vendee under the contract.

Former RCW 65.08.080.1

The Whitsell contract was recorded in the office of the auditor of Snohomish County on October 19, 1982, more than 3V2 years after the sale. Included in the legal description of that contract was 125 linear feet of land situated south of Vernon Road, along the shore of Lake Stevens. The Whitsells had intended to purchase only the western 50 linear feet of that shoreland, but the error in the legal description initially went unnoticed.

On December 26,1979, Tomlinson sold a second parcel of land to David and Cynthia Clarke, also through a real estate contract. The Clarkes recorded their contract in the office of the auditor of Snohomish County on February 7, 1980, pursuant to former RCW 65.08.080. The Clarke contract included the same 125 linear feet of the shoreland south of Vernon Road that was also described in the Whit-sell contract. When the Clarkes purchased the land [347]*347described above, they had no knowledge that the Whitsells previously had entered into a contract with Tomlinson or that the Whitsell contract included the same 125 linear feet of shoreland.2 At some point in 1985, the parties discovered the conflict concerning the 50 feet of shoreland that the Whitsells originally intended to purchase.

On February 4, 1987, the Whitsells and Tomlinson initiated legal proceedings in order to resolve the matter. The Whitsells asked the court to find that their interest was superior to the Clarkes' interest in the disputed 50 linear feet of land, while Tomlinson asked the court to reform the two contracts to reflect that the Whitsells had purchased the western 50 linear feet and the Clarkes had purchased the remaining 75 linear feet. Tomlinson claimed that a mutual mistake justified such reformation.

The trial court held that no such mutual mistake had occurred, and it concluded that the Whitsells' equitable interest in the disputed 50 feet of land was superior to the Clarkes' interest in that land because the Whitsells purchased the land first. According to the court, the fact that the Clarkes recorded their contract before the Whitsells recorded theirs was irrelevant because, as vendees to an executory contract, the Clarkes had not acquired legal title and thus could not be bona fide purchasers for value.

We first decide whether a vendee may acquire the status of a bona fide purchaser after purchasing real property through an executory contract and recording the contract, but before acquiring legal title by making all of the installment payments.

One of the earliest Washington cases purporting to settle the law on the matter was Ashford v. Reese, 132 Wash. 649, 233 P. 29 (1925), overruled in Cascade Sec. Bank v. Butler, 88 Wn.2d 777, 567 P.2d 631 (1977). In Ashford, the court held that a vendee to an executory contract for the sale of [348]*348real property did not bear the risk of loss for that property. Ashford, at 650-51. That court relied on precedent which had held that an executory contract of sale in Washington conveyed no title or interest, either legal or equitable, to the vendee. Ashford, at 650-51 (citing Schaefer v. E.F. Gregory Co., 112 Wash. 408, 192 P. 968 (1920)). Significantly, one of the dissenting judges in Ashford maintained that the majority erroneously interpreted the precedent it relied upon, which had only intended to enforce valid forfeiture clauses fairly negotiated by the parties to executory contracts of sale. Ashford, at 662 (Tolman, J., dissenting).

A long line of cases ensued, whittling away the broad Ashford holding and granting the vendees of executory contracts of sale a wide variety of rights and interests, including the recognition that such vendees have '"substantial rights'", a "'valid and subsisting interest in property'", and a "'claim or lien' on the land[.]" Cascade, at 781. In addition, the Washington Supreme Court has acknowledged in various decisions that such vendees have the right to possess, control, and cultivate the land; that their interest in the land is mortgageable; and that their interest is personal property for purposes of inheritance taxes, succession, and administration. See Cascade, at 782.

Cascade prospectively overruled Ashford and held that "a real estate contract vendee's interest is 'real estate' within the meaning of the judgment lien statute.” Cascade, at 782. In so holding, the court emphasized that the cases decided after Ashford determined the rights and interests of vendors and vendees "based upon a realistic examination of the nature of the interest in a particular context." Cascade, at 784. In the present case, the Clarkes argue that in the context of a properly recorded executory contract, a vendee's rights should include the status of bona fide purchaser for value regardless of the executory nature of the contract or the fact that legal title would not vest in the vendee until the contract was fulfilled.

To support their argument, the Clarkes cite In re McDaniel, 89 Bankr. 861 (E.D. Wash. 1988), a bankruptcy [349]*349case that thoroughly analyzed the Washington law regarding the interests created by an executory real estate contract. That court concluded that under such a contract, a vendee acquires a property interest in the real estate, while the vendor possesses a lien-type security device. McDaniel, at 869.

Moreover, the Clarkes note that executory real estate contracts were deemed to be conveyances in Terry v. Born, 24 Wn. App. 652, 653-54, 604 P.2d 504 (1979). Terry, like McDaniel,

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Bluebook (online)
803 P.2d 828, 60 Wash. App. 344, 1991 Wash. App. LEXIS 37, Counsel Stack Legal Research, https://law.counselstack.com/opinion/tomlinson-v-clarke-washctapp-1991.