In Coco v. Jaskunas, the Cocos purchased land from Jaskunas, and some seventeen years later were involved in a dispute with a third party about title to the land. The deed of purchase was a “warranty deed,” meaning that the seller (grantor) promised to warrant and defend the quality of the title and the amount of land sold to the buyer (grantee) against the lawful claims and demands of all persons. When the title dispute arose, the Cocos advised the seller of the claim immediately, and asked Jaskunas to defend the title in accordance with the terms of the deed. Jaskunas refused to defend the title, and eventually the Cocos settled the dispute with the third party. As a result of the settlement, the Cocos lost nearly half of the land to the third party, and had to pay more than $40,000 in legal fees. The Cocos then sued Jaskunas to recover what had been lost.
Both the trial court and the Supreme Court found that Jaskunas had been kept informed of the title dispute from the beginning, and by failing to defend the title had breached the warranty covenant given in the deed. Therefore, Jaskunas was liable for the full amount of damages and attorneys fees suffered by the Cocos. The amount awarded was nearly four times what Jaskunas had received when the land was originally sold. The case reinforces the basic rule that the promises contained in the covenant section of a deed are meaningful, and that these promises may require action by a seller even many years after land has been sold. Municipal officials should exercise care when executing deeds of land, and should always obtain assistance from the municipal attorney before signing such conveyances.
In Burke v. Pierro, the dispute centered around access to the shore of Ossipee Lake. For municipalities, the importance of the case is the discussion of legal consequences flowing from the tax lien and deeding procedure of RSA 80.
When a tax collector executes a deed in favor of the municipality in accordance with the statutory procedure, the previous owner’s interest in the real estate is terminated. The land is then held in a governmental capacity for public use. If the statute has been followed precisely, the collector’s deed extinguishes the previous title, and creates a new title. Under our statute, the tax lien enjoys a “super priority” that has the ability to completely wipe out all other claims against the real property.
The collector’s deed extinguished a claim to use the land to access the shore of the lake that may have arisen by adverse possession. As the Court noted, the title against which the adverse possession claim was running no longer existed, so the claim was extinguished. The tax lien statute is a powerful tool that can have severe consequences to a property owner who fails to heed the many warnings and opportunities to redeem the property through the payment of outstanding tax obligations. A collector’s deed cleanses the title of encumbrances and adverse claims, and allows the municipality to either use the property, or sell it to a person who will return it to a productive and tax-paying use.