c51f90e8-a519-45d4-b95b-97c8e5bafcb6.doc 584 Conklin (S) v. Davi (B), Supreme Court of NJ, 1978 Is title by AP marketable? Issue Reasoning Agree with appellate court that trial court erred in granting S’s motion. But should’ve remanded for new trial. K did not require that the title be perfect. B is wrong in insisting that nothing less than a good record title will suffice. The criterion for marketable title does not vary with the form of action. Rule When a seller’s title is grounded in AP or some apparent flaw, he has 2 choices: 1) take whatever steps to prefect the record title 2) Enter a K for sale hoping to convince the B or a court that his estimate of the marketability of his title is justified. a. This is only available when L does not require S to give ‘title valid of record’ but rather only requires marketable and/or insurable title. The law assures to a buyer a title free from reasonable doubt, but not from every doubt. The question is not what kind of title does the S have but what kind of title the S will receive. S is entitled to a judgment if at the end of the suit, the court holds title to be marketable even though the decision in favor of marketability rests upon facts adduced for the first time at trial or upon rulings made during the course of the proceedings. Provisions requiring title insurance as a condition precedent to acceptance of title are enforceable. Facts The buyer (Davi) changed his mind about buying a tract of land from Conklin when he found out that S claimed title a portion of it by AP. S brought an action for specific performance and B countered with rescission action. S then dropped his action but B continued with his seeking return of down payment. The contract between them said that S will deliver title that is marketable and insurable. Even though S did not prove his title by AP, a VP for an insurance company testified that his company would insure the title. VP testimony probably satisfied the insurability condition. But requires further exploration at retrial. B did not require that S to produce clear record of title without AP. S did not establish title by AP – should do that at retrail A title resting in AP, if clearly established, is marketable. Court has to be convinced 1 that: 1) Outstanding claimant could not succeed were they in fact to assert a claim, and 2) No real likelihood that any claim will ever be asserted Held Procedure P argues D argues Remanded for a new trial Trial court granted S’s motion for judgment. Appeals court reversed and entered a judgment in favor of B instead of remanding for a new trial. A title obtained by AP can be forced on me – the title should’ve been perfected before closing. Valid of title must be assessed at the specified closing date. 1 Aren’t these 2 conditions in conflict? Why require (2)? Why isn’t (1) enough?