Legal Memorandum: Purchaser of a Stipulated Judgment

Issue: Does a bona fide purchaser of a stipulated judgment take title free of an oral promise relating to the judgment?

“Generally, a bona fide purchaser of property which was subject to a prior outstanding unrecorded interest may pass title free of the unrecorded interest to a subsequent purchaser who otherwise would not qualify as a bona fide purchaser under the recording act.”  Chergosky v. Crosstown Bell, Inc., 463 N.W.2d 522, 524 (Minn. 1990); see also Daml v. Meyers, Civ. No. 07-4384 (JRT/FLN), 2011 U.S. Dist. LEXIS 90926, at *12 (D. Minn. Aug. 15, 2011).  This bona fide purchaser filter rule protects the alienability of the purchaser’s property interest by ensuring that he can transfer good title to the property, even if the subsequent transferee takes title with notice of a prior unrecorded interest in the property.  Id. 

By statute,

Every conveyance of real estate shall be recorded in the office of the county recorder where such real estate is situated; and every such conveyance not so recorded shall be void as against any subsequent purchaser in good faith and for a valuable consideration of the same real estate, or any part thereof, whose conveyance is first duly recorded, and as against any attachment levied thereon or any judgment lawfully obtained at the suit of any party against the person in whose name the title to such land appears of record prior to the recording of such conveyance.  The fact that such first recorded conveyance is in the form, or contains the terms of a deed of quitclaim and release shall not […]

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