Also known as: after-acquired title clause · after acquired title clause · after-acquired title
Written by attorneys — see sources below.
An equitable doctrine under which a grantor's later-acquired title to land automatically passes to the grantee when the grantor has purported to convey an interest the grantor did not then own. The doctrine prevents the grantor from denying the validity of the earlier conveyance once title is obtained. It applies most commonly to warranty deeds and determines priority against later judgment or tax liens that attach only to interests the debtor actually holds.
Marcus contracted to buy a vacant lot but had not yet closed. He executed a warranty deed conveying the lot to Apex Building Supply and Apex recorded. After Marcus acquired title at closing, subcontractors docketed judgment liens against him and the county recorded a tax lien. Because the after-acquired title passed directly to Apex under the prior deed, the liens never attached to any interest Marcus retained, leaving Apex with clear title.
Doug held only an option to purchase rural land when he executed a warranty deed conveying the parcel to River Fiber, Inc. in exchange for equity. After judgment and tax liens were recorded against Doug personally, he exercised the option and received fee title. The after-acquired title vested immediately in River Fiber, so the liens could not attach to any beneficial interest Doug held.
In the 1950s Joseph and Claire Stadler subdivided land into approximately sixty residential lots known as Skywood Acres. On June 5, 1958, they recorded a declaration expressing their desire to establish a general plan for the improvement and development of the property. The declaration subjected the property to conditions, restrictions, covenants, and reservations that would run with the land and bind all parties claiming under them, including limits to residential use only and restrictions on keeping animals. In 1977 Cowper-Hamilton Building, Inc. subdivided a four-lot tract known as the Friars subdivision. It recorded a declaration stating an intent to subject the property to mutual equitable covenants and servitudes for the protection and benefit of each property. The declaration limited use to single-family residences and prohibited commercial activities and animals other than household pets or horses. The Andersons acquired one lot from the Skywood Acres subdivision through a chain of title that began with a 1958 grant deed from the Stadlers. They acquired one lot from the Friars subdivision through a chain that began with a 1977 warranty deed from Cowper-Hamilton. No deed in either chain of title, including the original deeds, referred to the recorded declarations, although title insurance reports identified them. After purchasing the two adjacent parcels the Andersons entered a limited partnership to operate a winery under the name Chaine d'Or Vineyards. They obtained permits from the Town of Woodside to grow grapes and produce wine. The Andersons kept seven llamas on the property. Citizens for Covenant Compliance, an unincorporated association of homeowners in the two subdivisions, together with individual lot owners, filed suit against the Andersons to enforce the restrictions in both declarations. The suit alleged that the winery operation and the llamas violated the residential-use and animal limitations. The superior court entered judgment for the Andersons. The Court of Appeal affirmed. The Supreme Court of California granted review.
View caseYes. When the grantor later acquires title, the after-acquired title passes automatically to the grantee. The liens attach only to whatever interest the debtor actually holds at the time of docketing, and the instantaneous transfer leaves the debtor with no attachable interest.
Supporting sources
The doctrine applies most strongly to warranty deeds because they contain express covenants that the grantor is estopped from denying. Some jurisdictions extend it to other deeds, but the bar-exam materials emphasize warranty deeds as triggering the automatic passage of after-acquired title.
Supporting sources
The liens still cannot attach because the after-acquired title passes by operation of law the instant the grantor receives it. The unrecorded deed does not change the fact that the debtor never retains a beneficial interest to which statutory liens can fasten.
Supporting sources
…to the grantee by operation of statute. (§ 1106; Schwenn v. Kaye, supra, 155 Cal. App.3d at pp. 951-953.) "[T]he doctrine of after-acquired title applies even if the grantee had knowledge of the deficiency." ( Schwenn v. Kaye, supra, 155 Cal. App.3d at p. 953.) Because even after-acquired interests pass from the grantor to the…