Abstract
We now relate the fundamentals of contract and real property law discussed in the two previous chapters to the purchase of a farm. You will remember that in Chapter 4, the steps in a farm purchase transaction were listed as follows:
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1.
Negotiating the deal.
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2.
Binding the deal by written contract.
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3.
Examination of title.
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4.
Opinion on title and clearing up title defects.
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5.
Closing, which may involve:
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a.
A deed for cash, no borrowing by purchaser.
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b.
A deed for cash, part of which is borrowed by purchaser on mortgage from a third person.
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c.
A deed for some cash together with the assumption of an existing mortgage on the place.
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d.
A deed for some cash with a mortgage back to the seller to secure the balance.
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e.
An installment contract, that the buyer will pay the balance to the seller and when he does the deed will be delivered.
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a.
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References
Current Developments in the Real Estate Market (U.S.D.A., March, 1952) 9.
Horton and Larsen, Federally Sponsored Farm-Mortgage Credit Agencies: Wartime Operations and Postwar Prospects, 8 Ag. Finance Review 22, 25 (Nov. 1945).
Larsen, Sales Contracts and Real Estate Investments of Life Insurance Companies (Mimeo. U.S.D.A., Bur. Ag. Econ, 1944 ).
For strong statements that the long term land contract should be treated as a mortgage see Glenn, Mortgages (1943) section 15.1 and 3 Powell, Real Property (1952) section 450.
For a detailed discussion of the rules applicable to land contracts (the so-called law of “vendor and purchaser”) see 3 American Law of Property (1952) page 3 and following. The best recent book on the law of real estate mortgages is Osborne, Handbook on the Law of Mortgages (1951).
Land Contracts in a Real Estate Sales Program, 7 Fed. Home Loan Bank Review 112 (1941).
Sturges and Clark, Legal Theory and Real Property Mortgages, 37 Yale Law Journal 691 (1928).
Chancellor Northington said in Vernon v. Bethell, 2 Eden 110, 113 (1762): “Necessitous men are not, truly speaking, free men, but, to answer a present exigency, will submit to terms that the crafty may impose on them.” And in Spurgeon v. Collier, 1 Eden 56, 59 (1758) the chancellor said, “A man will not be suffered in conscience to better himself with a limitation or restriction of his right of redemption.”
Mortgages and Foreclosures, 4 Fed. Home Loan Bank Review 43 (1937).
Wiltsie, Mortgage Foreclosure (5th ed. 1939) section 635.
Ski1ton, Government and the Mortgage Debtor 1929–1939 ( U. of Pa. Ph. D. Thesis 1944 ).
Powell, Real Property (1952) 685.
Doctorman v. Schroeder, 92 N. J. Eq. 676, 114 Atl. 810 (1921). And consider the plight of the purchaser in this Washington case: He bought an apartment house on land contract for $32,439.62, of which he paid $5669.50 down. He assumed a mortgage of $11,192.50 and was to make payments to the seller for the balance of the price at the rate of $125.00 per month. He made 5 monthly payments. The sixth payment due June 1 was not paid. At 10:00 a.m. on June 2 the seller declared the contract forfeited. On June 4 the buyer offered the $125.00 but it was refused. At the request of the seller the court (1) quieted title declaring the buyer no longer had any interest in the land and (2) refused the buyer’s request that his money be refunded. Net result the seller had $6294.50 of the buyer’s money and the real estate too. I wonder whether the buyer was caught on that mortgage he assumed also! Alhadeff v. Van Slyke, 176 Wash. 244, 28 Pac. (2d) 797 (1934). Apparently in both New Jersey and Washington, a defaulting tenant would have some days of redemption time, but not a land contract buyer.
Installment Land Contracts, Legislative Protection Against Forfeiture, 52 Harv. L. Rev. 729 (1938).
Williston, Contracts (rev. ed. 1936) section 791; see also 40 Am. Law Reports (1926) 182; 77 Am. Law Reports (1932) 270; 94 Am. Law Reports (1935) 1239; Corbin, Restitution of Instalments Paid, 40 Yale Law Jour. 1013, 1022 (1931).
See the references at note 15.
Vanneman, Strict Foreclosure of Land Contracts, 14 Minn Law Review 342 (1930).
94 Am. Law Reports (1935) 1239, 1259.
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© 1960 Springer Science+Business Media New York
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Beuscher, J.H. (1960). Applying Contract and Real Property Law to the Purchase of a Farm. In: Law and the Farmer. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-662-37866-3_7
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DOI: https://doi.org/10.1007/978-3-662-37866-3_7
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