Shappirio v. Goldberg

Background

A man who bought a city lot sued to get a small strip of ground conveyed to him or, alternatively, to cancel the sale and recover the $6,000 purchase money. The buyer relied on statements by the seller and on how the property was used, while his broker had been given thirty days to examine the deed and title.

Reasoning

The Court first found it had the right to hear the appeal because the buyer’s alternate claim sought $6,000. The judges accepted the lower courts’ factual findings. The deed and recorded title gave an accurate description that excluded part of the rear lot. The buyer’s broker was the buyer’s agent and had the chance to inspect the deed and the recorded plat. Because the buyer’s agent could have discovered the true boundaries, the buyer is charged with that knowledge. The Court also held that after the buyer learned of the missing piece he acted like the owner—collecting rent, making repairs, and corresponding about future rentals—and so he lost the right to undo the sale.

Real world impact

This ruling makes clear that buyers who have a reasonable opportunity to examine a deed or whose agent does so will be treated as having notice of title details. A buyer who delays and then uses the property as owner risks losing the right to cancel the contract. The judgment of the lower courts was affirmed, leaving the sale and the recorded title in place.