Cash under the mattress not as reliable as a receipt for real property purchases

In an unpublished opinion dated November 15, 2012 in Bennett v Bugbee, the Michigan Court of Appeals affirmed the Saginaw Circuit Court’s order denying plaintiff Robert Bennett’s request to quiet title to real property in his favor because there was no evidence that consideration was paid.

Bennett maintains that he purchased 80 acres of vacant land in Saginaw County from Donald Kerr on June 1, 2003 for $10,000 in cash. Bennett says that he met Donald when Bennett asked to hunt on Donald’s property. Bennett says that the two agreed that Bennett would purchase the property and Donald would retain a life estate and pay property taxes. The alleged closing occurred at Bennett’s half-sister’s house and was witnessed by Bennett’s mother and then-wife. Donald testified that he did not sell the property, had not seen the deed before, paid $25,000 for the property, and never received $10,000 from Kerr. Donald also testified that while the signature did look like his, the final r in Kerr had too long of a tail, which his sister confirmed.

Bennett recorded a quitclaim deed on September 25, 2009, stating that Donald asked him not to record the deed until after the life estate expired. Edith Bugbee, Donald’s sister, guardian, and conservator, filed a notice of lis pendens and claim of ownership on October 6, 2009. Bennett initiated this lawsuit in 2010. The trial court ruled against Bennett, finding that there was no evidence the $10,000 had been paid.

On appeal, Bennett argued that because the deed was admitted into evidence without objection, and the deed states that $10,000 was paid, that he established the consideration was paid. However, at trial Bennett admitted that there was no physical evidence of the money transfer since he did not use a bank and did not accept a receipt and that the court would have to “take his word for it.”

This case shows the importance of being able to provide a paper trail, especially when money and real property is involved. Attorneys at the Gallagher Law Firm frequently represent parties with title disputes. Contact us today.