65. Ten years ago, a seller sold land to a buyer, who financed the purchase price with a
loan from a bank that was secured by a mortgage on the land. The buyer purchased a title
insurance policy running to both the buyer and the bank, showing no liens on the property other
than the buyer's mortgage to the bank. Eight years ago, the buyer paid the mortgage in full.
Seven years ago, the buyer sold the land to an investor by a full covenant and warranty
deed without exceptions.
Six years ago, the investor gave the land to a donee by a quitclaim deed.
Last year, the donee discovered an outstanding mortgage on the land that predated all of
these conveyances. As a result of a title examiner’s negligence, this mortgage was not
disclosed in the title insurance policy issued to the buyer and the bank.
Following this discovery, the donee successfully sued the buyer to recover the amount of
the outstanding mortgage.
If the buyer sues the title insurance company to recover the amount he paid to the donee,
is he likely to prevail?
A. No, because the buyer conveyed the land to an investor.
B. No, because the title insurance policy lapsed when the buyer paid off the bank, s
C. Yes, because the buyer is protected by the title insurance policy even though he no
longer owns the land.
D. Yes, because the buyer was successfully sued by a donee and not by a bona fide
purchaser for value.
66. A woman owned a house on a lot abutting a public street. Six month ago, the city
validly revised its zoning ordinances and placed the woman’s lot and the surrounding lots
abutting the public street from the north in a zone limited to residential uses; the lots abutting
the public street on the south side were zoned for both residential and light business use.
The woman asked the city's zoning appeals board to approve her proposal to operate a
court-reporting service from her house. This type of use would be permitted on the south side
of the public street and, in fact, one such business has existed there for several years.
The board approved the woman’s proposal.
A. A variance was granted.
B. The doctrine of amortization applied.
C. The doctrine of change of circumstances applied.
D. The woman’s use of her house was a nonconforming use.
67. A woman acquired title to a four-acre lot. Several years later, she executed a
mortgage on the lot to a bank to secure repayment of a $100,000 loan. Subsequently, the
woman executed a mortgage on the same four-acre lot to a finance company to secure
repayment of a $50,000 loan. Both mortgages were promptly recorded.
The woman recently defaulted on both loans. The bank promptly initiated foreclosure
proceedings and sent proper notice to all necessary parties. The current fair market value of
the four-acre lot is $250,000.
The finance company has filed a timely motion in the foreclosure proceeding asking the
court to require the bank to first foreclose on two of the four acres in the four-acre lot. The
bank opposes this motion and insists that it has the right to subject the entire four-acre lot to
the foreclosure sale.
Will the court grant the finance company's motion?
A. No, because the bank holds a purchase-money mortgage.
B. No, because the entire four-acre lot is subject to the bank's senior mortgage.
C. Yes, because a pro rata foreclosure of the lot will not prejudice the rights of the
D. Yes, because of the ' two funds' rule of marshalling.
68. Last year, a buyer and a seller entered into a valid contract for the sale of a parcel of
real property. The contract contained no contingencies. The seller was killed in a car accident
before the parcel was conveyed, but the closing eventually took place with the conveyance by
a deed from the personal representative of the seller’s estate.
The personal representative of the seller’s estate wants to distribute the proceeds of the
real property sale. The seller's will was executed many years ago and was duly admitted to
probate. Paragraph 5 of his will leaves all of the seller’s real property to his son, and
Paragraph 6 leaves the residue of the estate to the seller’s daughter. No other provisions of
the will are pertinent to the question regarding to whom the proceeds of the sale should be
What will determine who receives the proceeds?
A. Whether paragraph 5 refers specifically to the parcel of real property that was sold or
simply to ' all of my real property ’, .
B. Whether the closing date originally specified in the contract was a date before or
after the seller’s death.
C. Whether the jurisdiction has adopted the doctrine of equitable conversion.
D. Whether the sale was completed in accordance with a court order.