Can family farm be sold legally without Clear Title?

[Jplester]

What is the name of your state (only U.S. law)? Texas.
My son cheated my mother and her brother out of our family farm. He managed this by telling her that if she gave it to him he promised to put my granddaughter on the deed as owner and would add the stipulation that it never be sold out of the family. His words were "it would be kept in perputuity in the family". We were so proud of him for wanting to keep the farm forever that we agreed to his proposistion. However, I by chance found out he and his girlfriend had placed it on the market for sale in less than a year. I begged and pleaded for him to give the farm back to the family. Even offering to repay any monies they were out. They insisted on trying to sale it anyway. I received a phone call from a Title Company one day. The agent asked if my mom and her brother were willing to sign a document that would allow them to sale it due to the property still being in my deceased grandfather's name somehow and the title was not clear. She absolutely said no they wouldn't sign. When we heard nothing else from either the Title Company nor my son, we were overjoyed to say the least to think that he would not be able to sale it after all. And the farm would still stay in the family after all. Then one day mom and I decided to go out to the farm and pick up some of our personal items. We had been told by my son we didn't have to remove our property. That our stuff would be safe there and we could use the back of the barn as storage. When we got there it was painfully obvious that it had been sold anyway. I have since found out that the original Title company would not handle the sale due to the unclear title issue. He however found a Title Company that obviously went ahead with a sale without the required signatures. Is this legal in Texas? What are our chances of getting the farm back? And could the Title Company, my son, his girlfriend and the buyer be charged with a crime for not getting the proper release of title. This whole thing has pretty much destroyed my family. We are so hurt and devastated by his breaking of the promise to us. He had even promised that I would never have to worry because the farm would be my forever home. What recourse do we have? Is there any chance we could get it back? There is no way that at this time we could afford an attorney. Also I was wondering if this could be considered as Financial Fraud against the elderly?
Thank you for any help and advice we can be given.

 

[HRZ]

IF Mom deeded her interest to your son then that's a done deal as to her interest and she has No further claim or right to,control what happens . She seems to have made a most unwise decision ...that she now regrets...

 

[Just Blue]

What is the name of your state (only U.S. law)? Texas.
My son cheated my mother and her brother out of our family farm. He managed this by telling her that if she gave it to him he promised to put my granddaughter on the deed as owner and would add the stipulation that it never be sold out of the family. His words were "it would be kept in perputuity in the family". We were so proud of him for wanting to keep the farm forever that we agreed to his proposistion. However, I by chance found out he and his girlfriend had placed it on the market for sale in less than a year. I begged and pleaded for him to give the farm back to the family. Even offering to repay any monies they were out. They insisted on trying to sale it anyway. I received a phone call from a Title Company one day. The agent asked if my mom and her brother were willing to sign a document that would allow them to sale it due to the property still being in my deceased grandfather's name somehow and the title was not clear. She absolutely said no they wouldn't sign. When we heard nothing else from either the Title Company nor my son, we were overjoyed to say the least to think that he would not be able to sale it after all. And the farm would still stay in the family after all. Then one day mom and I decided to go out to the farm and pick up some of our personal items. We had been told by my son we didn't have to remove our property. That our stuff would be safe there and we could use the back of the barn as storage. When we got there it was painfully obvious that it had been sold anyway. I have since found out that the original Title company would not handle the sale due to the unclear title issue. He however found a Title Company that obviously went ahead with a sale without the required signatures. Is this legal in Texas? What are our chances of getting the farm back? And could the Title Company, my son, his girlfriend and the buyer be charged with a crime for not getting the proper release of title. This whole thing has pretty much destroyed my family. We are so hurt and devastated by his breaking of the promise to us. He had even promised that I would never have to worry because the farm would be my forever home. What recourse do we have? Is there any chance we could get it back? There is no way that at this time we could afford an attorney. Also I was wondering if this could be considered as Financial Fraud against the elderly?
Thank you for any help and advice we can be given.

How old was your mother at the time of deeding?

 

[adjusterjack]

There is no way that at this time we could afford an attorney.

Then you'll just have to lick your wounds and get on with your life as best as you can.

 

[HRZ]

There is no We in this equation....and oral promises as to real estate deals carry zero legal weight.

Mom seems to have totally blown what she intended to do, .and needs to move on.

 

[Jplester]

IF Mom deeded her interest to your son then that's a done deal as to her interest and she has No further claim or right to,control what happens . She seems to have made a most unwise decision ...that she now regrets...

If the title wasn't clear to begin with wouldn't that make the original gift from my mom to my son null and void?

 

[Zigner]

If the title wasn't clear to begin with wouldn't that make the original gift from my mom to my son null and void?

It sounds to me like your mom gave away her interest in the farm. That would not be invalid. Your situation is a mess and you're going to need professional help if you want to have any hope of fixing it.

 

[Taxing Matters]

If the title wasn't clear to begin with wouldn't that make the original gift from my mom to my son null and void?

No. And the fact that title is not “clear” does not prevent it from being sold. It just means the buyer takes a risk in buying it that he or she will have some problem with the title. Here, if your mother and uncle gave your son a deed transferring their interests in the property to your son as a gift then they no longer have any interest in the property. The fact that your grandfather's name was the last recorded name on the deed records would leave a gap in the title chain if title was never passed from your grandfather to your mother and uncle in probate, but assuming that they were the rightful heirs to the property that would not present a terribly great problem in the buyer getting clear title later in a suit to quiet title.

Your mother and brother might sue your son for breaching his agreement not to sell it. But even if that is successful (and without more facts I cannot hazard a guess as to the likelihood of success) it wouldn’t get the property back. All it would get them is money. They can talk to a civil litigation attorney about that.

You should understand something important. There is no such thing as “family property.” Property belongs to whomever owns it and they are free to sell it, give it away, or whatever they regardless of what other family members might want. In giving the property to your son they gave up any control they had and gave to him all the rights to do whatever he wanted with it. If they wanted your granddaughter as a co-owner they should have set up the transfer that way themselves. Or they could have used a trust to ensure it stays within the family, at least for as long as whatever Texas uses for a rule against perpetuties (an old rule of English law adopted in most states that prevents property from being locked up forever and, while modified now in a number of states to make the rule easier to apply, still exists in most states).

 

[Zigner]

Your mother and brother might sue your son for breaching his agreement not to sell it. But even if that is successful (and without more facts I cannot hazard a guess as to the likelihood of success) it wouldn’t get the property back. All it would get them is money. They can talk to a civil litigation attorney about that.

How would a verbal agreement have any validity in a real-estate matter?

 

[Taxing Matters]

How would a verbal agreement have any validity in a real-estate matter?

Because the statute of frauds that sets the rule that contracts involving real estate are not enforceable is in many states not absolute. It has some exceptions. In many states part or full performance by one party to the contract will take the contract outside of the statute of frauds. Such is the case in Texas, the state indicated by the OP in his post for this situation:

We hold that the oral installment agreement, although payable in 300 monthly installments, was not barred by the Statute of Frauds, because the deceased lender had made full performance under the agreement, thereby taking the oral agreement out of the prohibition of the statute.​

Estate of Kaiser v. Gifford, 692 S.W.2d 525, 525 (Tex. App. 1985), writ refused NRE (Nov. 6, 1985).

In that case, the Gifford bought land from Kaiser (who later died) on terms requiring 300 monthly installment payments. Thus, two types of contracts that are subject to the statute of frauds are potentially applicable here: contracts involving real estate and contracts for which performance will take longer than one year. Gifford stopped paying after Kaiser died and Kaiser sued to enforce payment. Gifford relied on the statute of frauds, and the trial court agreed with him. But the appeals court reversed, with the holding quoted above. The full performance involved was, of course, Kaiser's transfer of the real estate to Gifford. The court in its opinon also noted that:

A great majority of jurisdictions agree with the rule that full performance by one party to an oral contract removes the contract from the prohibitions of the Statute. See 3 S. Williston, A Treatise on the Law of Contracts, sec. 504 (3d ed. 1970 and Supp.1983); 2 A. Corbin, Contracts sec. 457 (1962 and Supp.1984).​

Id. at 527. The Texas Courts do, however, put a limit on the full performance rule in sales of real estate that other states do not. Where it is the buyer suing for breach of an oral contract to sell real estate, full performance by paying the money by itself may not be sufficient to remove it from the statute of frauds. The Texas Supreme Court discusses that in a footnote to a 2015 case:

On the few occasions that this Court has discussed this equitable exception to the statute of frauds, we have made it clear that it requires more than just one party's performance of some obligation under the alleged oral contract. See, e.g., Chevalier v. Lane's, Inc., 147 Tex. 106, 213 S.W.2d 530, 533 (1948) (noting that even “ ‘full performance,’ in the sense of full payment of the consideration by the purchaser, is held not to make the contract enforceable unless accompanied by other circumstances, such as change of possession and erection of valuable improvements”). For example, we explained that “to relieve a parol sale of land from the operation of the statute of frauds, three things were necessary: 1. Payment of the consideration, whether it be in money or services. 2. Possession by the vendee. And 3. The making by the vendee of valuable and permanent improvements upon the land with the consent of the vendor; or, without such improvements, the presence of such facts as would make the transaction a fraud upon the purchaser if it were not enforced. Payment of the consideration, though it be a payment in full, is not sufficient.” Hooks v. Bridgewater, 111 Tex. 122, 229 S.W. 1114, 1116 (1921). In light of Westergren's failure to establish that Plank's $500,000 payment was “unequivocally referable” to the oral contract, we need not and do not provide a complete explanation of all of the partial performance exception's requirements here.​

Nat'l Prop. Holdings, L.P. v. Westergren, 453 S.W.3d 419, FN 2.

 

[Jplester]

How old was your mother at the time of deeding?

She was 76

 

[Jplester]

Because the statute of frauds that sets the rule that contracts involving real estate are not enforceable is in many states not absolute. It has some exceptions. In many states part or full performance by one party to the contract will take the contract outside of the statute of frauds. Such is the case in Texas, the state indicated by the OP in his post for this situation:

We hold that the oral installment agreement, although payable in 300 monthly installments, was not barred by the Statute of Frauds, because the deceased lender had made full performance under the agreement, thereby taking the oral agreement out of the prohibition of the statute.​

Estate of Kaiser v. Gifford, 692 S.W.2d 525, 525 (Tex. App. 1985), writ refused NRE (Nov. 6, 1985).

In that case, the Gifford bought land from Kaiser (who later died) on terms requiring 300 monthly installment payments. Thus, two types of contracts that are subject to the statute of frauds are potentially applicable here: contracts involving real estate and contracts for which performance will take longer than one year. Gifford stopped paying after Kaiser died and Kaiser sued to enforce payment. Gifford relied on the statute of frauds, and the trial court agreed with him. But the appeals court reversed, with the holding quoted above. The full performance involved was, of course, Kaiser's transfer of the real estate to Gifford. The court in its opinon also noted that:

A great majority of jurisdictions agree with the rule that full performance by one party to an oral contract removes the contract from the prohibitions of the Statute. See 3 S. Williston, A Treatise on the Law of Contracts, sec. 504 (3d ed. 1970 and Supp.1983); 2 A. Corbin, Contracts sec. 457 (1962 and Supp.1984).​

Id. at 527. The Texas Courts do, however, put a limit on the full performance rule in sales of real estate that other states do not. Where it is the buyer suing for breach of an oral contract to sell real estate, full performance by paying the money by itself may not be sufficient to remove it from the statute of frauds. The Texas Supreme Court discusses that in a footnote to a 2015 case:

On the few occasions that this Court has discussed this equitable exception to the statute of frauds, we have made it clear that it requires more than just one party's performance of some obligation under the alleged oral contract. See, e.g., Chevalier v. Lane's, Inc., 147 Tex. 106, 213 S.W.2d 530, 533 (1948) (noting that even “ ‘full performance,’ in the sense of full payment of the consideration by the purchaser, is held not to make the contract enforceable unless accompanied by other circumstances, such as change of possession and erection of valuable improvements”). For example, we explained that “to relieve a parol sale of land from the operation of the statute of frauds, three things were necessary: 1. Payment of the consideration, whether it be in money or services. 2. Possession by the vendee. And 3. The making by the vendee of valuable and permanent improvements upon the land with the consent of the vendor; or, without such improvements, the presence of such facts as would make the transaction a fraud upon the purchaser if it were not enforced. Payment of the consideration, though it be a payment in full, is not sufficient.” Hooks v. Bridgewater, 111 Tex. 122, 229 S.W. 1114, 1116 (1921). In light of Westergren's failure to establish that Plank's $500,000 payment was “unequivocally referable” to the oral contract, we need not and do not provide a complete explanation of all of the partial performance exception's requirements here.​

Nat'l Prop. Holdings, L.P. v. Westergren, 453 S.W.3d 419, FN 2.

To be totally honest I don't understand your reply. Will you please post it in extreme layman's terms? I have one other question in regards to my original post.

When it comes to the loss of the personal items we were told we could store in the barn indefinitely, we lost things that can never be replaced. What type or kind of compensation might we be eligible for?

 

[Taxing Matters]

To be totally honest I don't understand your reply. Will you please post it in extreme layman's terms? I have one other question in regards to my original post.

Ok, here you go, in (hopefully) plain English. First, a little background. There is a rule in the law of pretty much every state, including Texas, called the Statute of Frauds. This law has a very old origin; it became law in England in 1677 and the new American states kept it (and new states adopted it) after the revolution. What that statute says is that certain types of contracts must be in writing to be enforceable. One of the types of contracts covered are those involving interests in land. Your mother and uncle evidently did not have a written contract with your son committing him to giving a share of the property to your granddaughter and requiring him not to sell it. Thus, under the general rule in the Texas Statute of Frauds the fact that there was no written contract would mean that your mother and uncle would be out-of-luck in suing your son to enforce the agreement they had.

My post that you asked about discussed an exception that the Texas courts (and the courts of a number of other states) have made to soften the harsh results that can otherwise occur from the Statute of Frauds. That exception allows a person to sue for breach of an oral contract that the Statute of Frauds says must be writing if the party filing the suit has provided full performance of his/her end of the alleged contract. Your mother and uncle fully performed their end of the deal — they transferred the land to your son. Because of that, it might be possible for your mother and uncle to sue to enforce the contract even though the contract was not in writing. I can’t guarantee that, though. They need to see an experienced contract litigator for help with that and, if they can get around the statute of frauds, they need to discuss with the lawyer how likely it is that they could win and what it would cost.

When it comes to the loss of the personal items we were told we could store in the barn indefinitely, we lost things that can never be replaced. What type or kind of compensation might we be eligible for?

The best you could there is the value of the stuff at the time your son (or whomever) got rid of it. You get nothing for any sentimental value nor do you get the cost to replace it new.

 

[quincy]

... They [mother, uncle] need to see an experienced contract litigator for help with that and, if they can get around the statute of frauds ...

Taxing Matters' post in plain English:

Your mother and uncle will need to see an attorney in Texas.

Contracts for the sale of land and contracts which cannot be performed within a year must be in writing (in legalese, this is called the "statute of frauds"). There are a few exceptions. Taxing was speaking to one of these exceptions.

As to the property you stored in the barn, you can sue to recover the value. Pictures, receipts and appraisals will help you support your claim.

 

[Jplester]

Ok, here you go, in (hopefully) plain English. First, a little background. There is a rule in the law of pretty much every state, including Texas, called the Statute of Frauds. This law has a very old origin; it became law in England in 1677 and the new American states kept it (and new states adopted it) after the revolution. What that statute says is that certain types of contracts must be in writing to be enforceable. One of the types of contracts covered are those involving interests in land. Your mother and uncle evidently did not have a written contract with your son committing him to giving a share of the property to your granddaughter and requiring him not to sell it. Thus, under the general rule in the Texas Statute of Frauds the fact that there was no written contract would mean that your mother and uncle would be out-of-luck in suing your son to enforce the agreement they had.

My post that you asked about discussed an exception that the Texas courts (and the courts of a number of other states) have made to soften the harsh results that can otherwise occur from the Statute of Frauds. That exception allows a person to sue for breach of an oral contract that the Statute of Frauds says must be writing if the party filing the suit has provided full performance of his/her end of the alleged contract. Your mother and uncle fully performed their end of the deal — they transferred the land to your son. Because of that, it might be possible for your mother and uncle to sue to enforce the contract even though the contract was not in writing. I can’t guarantee that, though. They need to see an experienced contract litigator for help with that and, if they can get around the statute of frauds, they need to discuss with the lawyer how likely it is that they could win and what it would cost.



The best you could there is the value of the stuff at the time your son (or whomever) got rid of it. You get nothing for any sentimental value nor do you get the cost to replace it new.

Thank you for your answer. Looks like the days of a man's word being is bond are truly over. I hopeour unfortunate experience helps someone else to not make the same mistake of trusting that a contract isn't necessary just because someone is family. A very hard lesson learned indeed.