One who obtains property under a recorded deed and asserts ownership against another party that has a prior unrecorded deed has the burden of showing that he or she is a good faith purchaser of the property for valuable consideration.
According to her deceased husbands will, Florence obtained a farm. Florence did not have enough money to live on the land. Therefore, she executed an unrecorded deed and agreement with her brother in law, Hood. After that, Florence's nephew moved onto the farm to assist Florence and she devised a deed that gave the farm to the nephew and the nephew's brother. When Florence died, Hood recorded his initial deed and sought an action to stop the nephew's deed. The court ruled in Hood's favor. The nephews appealed. On appeal, the parties conceded on the applicable governing law, and the nephew’s contend they are in possession of the valid deed to the property.
Does one who obtains property under a recorded deed and asserts ownership against another party that has a prior unrecorded deed have the burden of showing that he or she is a good faith purchaser of the property for valuable consideration?
The court noted that the applicable statute, N.Y. Real Property Law § 291, the nephews were required to provide evidence that they were purchasers in good faith and for valuable consideration. The recital contained in their deed regarding consideration was not enough to have put them into the position of purchasers for valuable consideration in the sense of § 291. Therefore, the nephews failed to discharge their burden, and their deed was properly annulled.