Question

Mary bought a house from John on May 2. Since Mary had arranged the purchase of this

house while living abroad, she did not bother to record the deed. Taking advantage of this failure

by Mary, John secretly sold this same house to Peter on June 2. Peter eventually recorded

the deed on August 2. Note that Peter did not learn that John had previously sold the house

to Mary until July 2 (one month before Peter recorded the deed). Also, as of August 2, Mary had not yet recorded the deed.

(a) Under a race statute, which buyer will gain title of the house?

(b) Under a race-notice statute, which buyer will gain title of the house?

(c) Under a notice statute, which buyer will gain title of the house?

Answer 1

A) Under a race statue, the person who registered the property first will get the ownership. Thus, Peter will get the ownership.

B) Under a race-notice statue, Mary will get the ownership because Peter is not a bonafide purchaser as he already knew of the prior transaction before doing the registration. Thus, Peter will not get claim on the property.

C) Under a notice statue, Mary will get the ownership because Peter already knew of the unregistered transaction before doing the registration, thus, he is not a bonafide purchaser. Hence, Peter will get no claim and ownership will lie with Mary.