Aaron owns a farm. Aaron has given First Bank and Trust a mortgage on the farm. Aaron
Question:
Aaron owns a farm. Aaron has given First Bank and Trust a mortgage on the farm. Aaron transfers ownership of the farm to Bob and gives Bob a general warranty deed. The general warranty deed to Bob warrants that there are no encumbrances on the farm and does not mention the mortgage to First Bank and Trust. Bob owns the farm only a short time and sells the farm by limited warranty deed to Caren. Caren decides that farm life is not for her and sells the farm by general warranty deed to David. The general warranty deed does not mention the mortgage to First Bank and Trust. One week after David purchased the farm, First Bank and Trust notifies David of the mortgage. Consider this question: "Is there a breach of any deed warranty or covenant and, if so, which deed(s) (identify the grantor and grantee) and which covenant(s)?" Now answer the questions following with a "yes" or "no" and then provide your reasoning.
1. At this stage, does David have a viable claim against Caren? Explain. (5 points)
2. Does David have a viable claim against Bob? Explain. (5 points)
3. Does David have a viable claim against Aaron? Explain. (5 points)
4. Other than anyone you named previously, does anyone else have a viable claim against someone in this hypothetical? Explain. (5 points)
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill