Dapper Dan's Deed

Knoxville, Tennessee

Almost all land titles will take some strange twists and turns over the years. Take, for example, this property on 2.7 acres overlooking the Tennessee River In 1889 the land was subdivided into 10 lots which were given away by a men’s clothing store in Knoxville. If you bought an expensive man’s suit, you got a free lot.

So it was that in 1889 one such lot, designated as “Lot 204,” was conveyed to a Daniel R. Baxter. The transfer was duly noted on the company ledger.

By 1987 someone assembled the 10 lots to create the aforementioned 2.7 acres, and a new home was built over former lot 204.

In 1999 a first mortgage against the 2.7 acres was insured for $200,000.00. By 2002 the loan had defaulted and the lender foreclosed.

The lender found an interested buyer who, in turn, hired an attorney to examine the title.

The attorney has a problem with old lot 204: There is no deed of record out of Daniel R. Baxter and therefore, no chain of title linking Baxter with the supposed owner in 1987.

Even though no one else claims ownership, the prospective buyer won’t go forward until the lender can provide marketable title, free of cloud or defect.

The title insurance company attorneys file a lawsuit to quite title. It turns out that there were three Daniel Baxters in memphis in 1894. The task now was to identify the true past owner and join in this suit all of his living descendants, to eliminate their interests as a matter of record.

Midway in the court action, legal expenses were in excess of $40,000.00.

MORAL

Marketability of the title is a covered risk on title insurance policies. Without an Owners Title Insurance Policy, the expense of clearing the title would probably exceed the ability of the seller or the purchaser to pay and would have cost the sale.