Saturday, February 13, 2010

New York AG To Sue Landlord For Alleged Predatory Practices Intended To Drive Long-Term, Rent-Regulated Tenants From Their Homes

From the Office of the New York Attorney General:

  • Attorney General Andrew M. Cuomo [] announced his intent to sue Vantage Properties (“Vantage”), a major New York City landlord, to stop it from harassing tenants in rent-regulated apartments and to obtain monetary damages for tenants who have been victimized. The Attorney General has sent Vantage a five day notice letter, as required by statute, notifying the company of his intent to commence litigation against them.

  • Since March 2006, Vantage has purchased more than 125 buildings containing over 9,500 apartments – almost all of which are rent-regulated – throughout Queens, Harlem, and Upper Manhattan. The Attorney General’s legal action alleges that Vantage is taking action to force long-term, rent-regulated tenants to move out of their homes, and imposing significant rent increases on new tenants in order to increase profits. Vantage aggressively pressures long-term tenants by serving baseless legal notices and commencing frivolous Housing Court eviction proceedings.(1)(2)

For the New York AG press release, see Attorney General Cuomo Commences Legal Action Against Major New York City Landlord 'Vantage Properties' To Stop Tenant Harrassment (Cuomo Seeks Damages for Victims and Protection for Tenants in Over 9,500 Apartments).

Go here for the Five Day Letter notifying Vantage of the AG's intent to sue.

(1) According to the state AG press release, after purchasing a building, Vantage tries to evict some tenants by falsely claiming that they do not primarily live in their apartments or that they have failed to pay rent. Vantage’s actions are often based on information that is incorrect or information that Vantage should know is false. In some cases, Vantage refuses to cash rent payments from tenants, and then begins Housing Court eviction proceedings based on nonpayment of rent. Vantage’s actual business plans refer to their strategy of removing tenants from rent-regulated apartments as the company’s “Golub program.”

(2) Benjamin Dulchin, Executive Director of the Association of Neighborhood Housing Development, said, “Tenants and affordable housing across New York City are threatened as private-equity backed developers are purchasing a significant percentage of affordable, rent-regulated apartments. The Wall Street type level of competition and profit seeking of private equity financing is causing an epidemic of tenant harassment. ..."

Couple Cops Plea In Rent Skimming Scam; Agreed To Take Over Payments On Seller's Existing Loan, Then Stiffed Bank; Allowed Home To Go Into Foreclosure

In Jackson County, Michigan, The Jackson Citizen Patriot reports:

  • Jackson-area minister and State Farm Insurance agent Tony R. Jackson and his wife, Alisa Jackson, have to pay $4,113 back to a couple whom police said they defrauded. [...] The Jacksons were accused of taking money from a couple who wanted to sell their home in Blackman Township.

  • The couple believed Tony Jackson, 41, and Alisa Jackson, 42, would rent out the house; pay the mortgage, taxes and insurance; and ultimately transfer its ownership to the tenants, a Blackman Township Public Safety detective said in September. Some mortgage payments were made, but the payments stopped and the home [...] went into foreclosure, Detective Chris Boulter said.(1)

For the story, see Minister, wife must pay back money from housing scheme.

(1) Reportedly, the two also have to each pay $750 in fines and do 50 hours of community service for their roles in a housing scheme, said Jackson County District Judge Michael Klaeren, who sentenced them [...]. Both earlier pleaded no contest to larceny of more than $200 but less than $1,000, a misdemeanor. The two originally were charged with felony counts of larceny by conversion, but the greater charges were dismissed in exchange for their pleas, Klaeren reportedly said.

Now-Defunct Rogue Bank Used Cosmetic Fix-Up, Easy Rent-To-Own Terms To Unload Multi-Flipped, Multi-Foreclosed "Hellhole" On Unwitting Family

In Atlanta, Georgia, The Atlanta Journal Constitution reports:

  • Alexis Preston and her mother were thrilled last year when they found a home in Atlanta’s West End neighborhood large enough for their extended family of 13. They agreed to a lease-to-own deal to rent the neatly painted 12-bedroom house for $2,100 a month from the property’s owner through foreclosure, Omni National Bank. The renovation contractor even showed the house off to the bank’s executives and other visitors, she said.

  • But her family soon discovered the spruced up 84-year-old home wasn’t what it appeared to be. Three days after they moved in last February, the house flooded during a rainstorm, beginning a nearly yearlong battle with repeated flooding, mold, water damage, roof leaks, buckling floors and months-long power outages.

  • It went from a dream home to a hellhole,” Preston, 27, said of the house, now owned by the Federal Deposit Insurance Corp. after Omni failed in March. Mold contamination sickened many members of the family. They lived for months by candlelight, with kerosene heaters and no air conditioning, after Omni failed in March, leaving behind more than $4,000 in unpaid power bills. “I was just sick all the time. Throwing up. Cold,” said Preston, who is pregnant. They finally gave up and moved out in December.

  • What the family hadn’t seen hidden beneath the house’s neatly painted walls was a history of neglect and shoddy repairs — much of it financed with ever-escalating mortgages from Omni, which repossessed the home three times in two years. The house was a boarded-up haven for squatters and drug users for most of the past decade, said Barry Bennett, who lives across Lawton Street from the house. Contractors began working on it less than two years ago, but they clearly didn’t do a good job, he said. “It ain’t in good condition now,” said Bennett, who last year waded waist-deep through the house’s flooded basement to help rescue Preston’s children.

  • On paper, however, the house underwent a more dramatic transformation. Between 2006 and 2008, it nearly doubled in value, according to Fulton County tax records. During that period, Omni repossessed the house three times, at values that rose from $160,000 to $308,875. By the time the string of sales of the Lawton Street house ended in 2008, its value on Omni’s books had risen to as much as three times the value of similar houses in the neighborhood, said Brent Brewer, a civil engineer who lives two blocks away.

  • Most of that dramatic rise occurred while the house sat vacant and windowless, with huge sections of its exterior walls torn away. “No construction was happening,” said Brewer, a member of 30310 Mortgage Task Force, a neighborhood group battling property-flippers in the hard-hit area. “It just sat.”(1)

Source: 'From dream home to hellhole'.

Go here for video of "hellhole" house.

(1) Another recent Atlanta Journal Constitution story reports that there is a federal fraud probe ongoing into Omni National Bank's operations. See Bank leaves trail of flipping, fraud:

  • [T]he number of Omni-related arrests has reached four, including the bank’s co-founder, Jeffrey L. Levine, who pleaded guilty to bank fraud two weeks ago. [...] More people may be charged in the wide-ranging probe of Omni, and the charges already filed suggest fraud pervaded the bank’s operation.

  • Federal prosecutors said in court filings that bank records, for instance, were routinely doctored to hide losses, and a loan officer took kickbacks in return for doling out loans. The bank allowed people to “flip” houses three, four and even five times, artificially inflating their value, prosecutors said.

Wisconsin Woman Faces Forgery Charges For Swiping & Uttering Checks Tied To Co-Worker's HELOC Account

In Sheboygan County, Wisconsin, the Sheboygan Press reports:

  • Sheboygan County authorities have issued a warrant for a Milwaukee woman accused of stealing $4,000 in home equity from a Washington County resident. A criminal complaint issued with the warrant [...] charges Brenity A. Gayton, 24, with uttering a forgery, a felony punishable by up to three years in prison. She allegedly cashed the forged check in Sheboygan.

  • According to the complaint: The theft was reported in August when a former co-worker of Gayton’s discovered his home equity line of credit had been used up. He told Washington County authorities that five checks tied to that line had been stolen from his house around the time Gayton visited him to sign employment-related paperwork. A surveillance photo from Wells Fargo Bank, [...] shows Gayton cashing one of the five checks, made out to herself for $4,000.

Source: Woman charged with stealing home equity.

Friday, February 12, 2010

Port St. Lucie Pair Face Grand Theft Charges In Alleged Home Hijacking, Rental Scam; Police Probe Continues Into Similar Incident With Another Home

In Port St. Lucie, Florida, the South Florida Sun Sentinel reports:

  • Two men each face a grand theft charge after police linked them to a scheme in which a home was rented to a family without the homeowners' knowledge, according to recently obtained records and a detective. Robbie Jay Hughes, 36, and Issiac Rivers, 46, were arrested Monday after police accused them of renting a home in foreclosure to a family in September 2009.


  • Hughes eventually refunded nearly all of the rental money and didn't want the renters to speak with police about the matter. [... Detective Kim] Bailey said Hughes is suspected of renting out another home under similar circumstances but the homeowners in that case declined to press charges. [...] Bailey said she's investigating the men in connection with a similar incident at another home in the city.

For the story, see Two men arrested in rental of foreclosed Port St. Lucie home to family.

A Case Study In Sleazy "Tag Team" Tactics Used By Real Estate Agent & Attorney To Illegally Intimidate Family From Foreclosed Home

In New Haven, Connecticut, a recent New Haven Independent story reports on the recent action by the Connecticut Attorney General in targeting at least 30 law firms, real estate agencies and lenders with cease and desist orders in connection with sleazy practices designed to intimidate tenants out of recently foreclosed homes.

Reportedly, some foreclosure attorneys and real estate agents statewide are allegedly working in tandem to illegally force these tenants to vacate, in violation of the federal Protecting Tenants At Foreclosure Act. Their alleged conduct centers on intimidating letters being sent to the renters that create the impression that they are facing imminent eviction, coupled with "cash-for-keys" offers in amouts for less than the minimum required by Connecticut law.

The story profiles the experience of one local resident who, along with his wife and three children, have been allegedly subjected to this harassment. The contents of one threatening letter from the lender's real estate agent to the family shortly after the foreclosure reportedly contained the following text at the top of the correspondence:


The problem with this all-caps message is that it creates a false sense of urgency that suggests that the tenants have to leave immediately when, in fact, the Protecting Tenants At Foreclosure Act expressly provides that tenants have 90 days from the receipt of proper notice from the foreclosing lender or until the completion of their lease to move out, whichever is later.

Shortly thereafter, another letter was reportedly received by the family, this time from the foreclosing lender's attorney containing, in part, the following language:

  • You must vacate and surrender possession of the Premises to U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE STRUCTURED ASSET INVESTMENT LOAN TRUST, 2006-BNC3 unless you provide acceptable evidence to the undersigned law firm that you are a bona fide tenant pursuant to Section 702(a)(2)(A) of the Federal “Protecting Tenants at Foreclosure Act of 2009."

An additional false sense of urgency is created when an intimidating letter sent by a real estate agent is followed by another one from an attorney (this is an old debt collector trick that has been ruled by courts to be illegal - designed to create the impression that the process against the consumer is moving forward ("the walls are closing in on the consumer") and legal action is imminent unless the consumer succumbs to whatever demands on them have been made).

The following excerpt describes the position of local legal services attorneys, as well as the tenant's feelings about what is going on here:

  • [The letter from the attorney is] not written as if “they care about the person understanding it,” [attorney Amy] Marx said. It’s written, she argued, like a credit card disclosure statement. Not only is the form of the letter problematic, the content of it is wrong also, Marx said. The letter asks Torres to prove he is a tenant of the building. It’s obvious [the lender's attorney] knows he and his family are tenants, she said. The letter was sent to them at the apartment by certified mail.

  • The letter [also] uses the phrase “within ninety (90) days,” suggesting the Torres family may have less than the full 90 days they are allowed by law, Marx said. The letter further threatens that if the Torres family does not leave, the bank may seek “damages caused by your unlawful detention of the Premises.”

  • Get out of here immediately or you’re going to be stuck with a big legal bill,” Marx translated. She said such a threat is illegal. But Torres didn’t know that. Until Monday, when his lawyer explained his rights, he thought he could be evicted at any minute. Fearing that he was about to be evicted, and in need of money for a deposit on a new apartment, Torres signed a cash-for-keys agreement with American Home Mortgage Servicing, Inc. on Jan. 15. He agreed to move out on Jan. 31 in exchange for $1,500.

  • That was another illegal action, according to his lawyers. The law states that tenants must receive at least $2,000 under a cash-for-keys agreement, said attorney Amy Eppler-Epstein. Just days after he signed the agreement, Torres received yet another letter. This one was from legal aid, informing him of the federal law and advising him of his rights. That’s how he ended up in the offices of legal aid, with attorneys working on his case.


  • Torres’ experience is a case-study of the problem the attorney general is trying to combat, she said. “This is exactly what [Connecticut Attorney General] Richard Blumenthal is issuing cease and desist orders on today,” she said. Eppler-Epstein characterized the communications from the realtor and [the] attorney [] as “intimidating and untruthful action.” What they’re doing is scaring people, she said. “It’s just wrong.”

  • Torres, speaking in Spanish, said the letters from the realtor and the lawyer frightened him. He said he signed the cash-for-keys agreement for fear that he and his family would be evicted and left with nothing. Torres has been unemployed for several months. He said he was working for a construction company in Branford but got laid off. He’s hoping he’ll get rehired when the warmer weather comes. In the meantime he’s been looking for work and collecting unemployment, he said.

For the story, see Blumenthal Puts Bankers, Lawyers On Notice.

Violators Of New Law Prohibiting Bullying Of New Jersey Renters Out Of Foreclosed Homes Subject To Triple Damages, Payment Of Tenant's Legal Fees

In Trenton, New Jersey, reports:

  • Lost in the change of state government leadership last month was the signing by Gov. Jon Corzine of a new law designed to strengthens notification requirements for tenants living in a foreclosed property.

  • Under the new law, buyers of a foreclosed residential property are required to notify tenants of the ownership change and that they are not required to vacate.

  • Similarly, creditors engaged in an ongoing foreclosure proceeding are required to include a notice to residents that a foreclosure action has been initiated and that the ownership of the property may change, but that tenants are not required to vacate the premises in the event of a foreclosure.

  • Buyers of a foreclosed property also are prohibited from engaging in any communication designed to persuade a tenant to vacate the property unless they make a bona fide monetary offer. Any acceptance of such an offer will be contingent upon the tenant having at least five business days to review its terms in writing, and by providing a signed acceptance. Violators will subject to either triple damages or a penalty of $2,000 plus attorney fees.

For more, see New law protects New Jersey tenants from foreclosure (Renters cannot be forced out when property changes hands).

Connecticut AG Fires Warning Shot At Lawyers, Lenders, Real Estate Agents Using Sleazy Tactics To Illegally Drive Tenants From Foreclosed Homes

In Hartford, Connecticut, the Hartford Courant reports:

  • New state and federal laws passed last year are supposed to protect renters in foreclosed properties from getting tossed out with little or no notice. But the state attorney general and legal aid lawyers said Monday there is strong evidence that those laws are being violated — and hundreds, perhaps thousands, of tenants have been pressured to leave sooner than legally required. Attorney General Richard Blumenthal said he has sent warnings to 30 law firms, real estate agencies, banks and loan servicers — urging them to follow the law or face further legal action.(1)


  • The federal law [the Protecting Tenants At Foreclosure Act] gives tenants 90 days to move out of a foreclosed property or until the end of their lease, whichever is later. The tenants must be current on their rent. A state law, also passed last year, gives those doing the foreclosing the option of offering $2,000 or double the security deposit to the tenant to move out sooner, the so-called "cash for keys" program.

For more, see Blumenthal: Laws Protecting Tenants Are Violated.

See also:

(1) In coordination with legal assistance attorneys, Blumenthal has sent cease-and-desist letters to at least 30 companies that may have engaged in eviction practices that violate the Protecting Tenants At Foreclosure Act, his press release states. Blumenthal is notifying the companies of their legal obligations and requesting that they follow this federal law. Blumenthal was joined at a press conference this week by legal aid lawyers from New Haven Legal Assistance Association, Greater Hartford Legal Aid, Legal Assistance Resource Center of Connecticut, Connecticut Legal Services and Statewide Legal Services, as well as tenants who have faced unlawful evictions.

For a copy of the statute, see Protecting Tenants at Foreclosure Act of 2009.

Thursday, February 11, 2010

Ft. Myers Lawyer Hoses Couple Seeking Loan Mod Help; Accused Of Going AWOL w/ Clients' Trust Acct Cash; State Bar Obtains Emergency License Suspension

In Fort Myers, Florida, The News Press reports:

  • Last summer, it became clear to Brett and Nancy Pezzella they could no longer make the $1,900 mortgage payments on their Lehigh Acres home. Nancy had lost her job. They just couldn't afford it. After getting a referral from another law firm, Brett contacted Fort Myers attorney Joseph Troiano.

  • Troiano said that for a $3,000 fee, which Pezzella paid over three months, he could get the bank to modify the Pezzellas' mortgage. He started working on their case last June but didn't make much progress. "It seemed like (Troiano was) always losing our paperwork," Brett Pezzella said. Then the situation got worse. Troiano wouldn't respond to calls or e-mails. When the Pezzellas decided to pay Troiano an unannounced visit last week, they found the office closed and an eviction notice tacked to the door.


  • On Jan. 19, the Supreme Court of Florida suspended Joseph Anthony Troiano from the practice of law until further notice. A week earlier, the Florida Bar filed a petition for emergency suspension stating the facts "establish clearly and convincingly that (Troiano) appears to be causing great public harm by the misappropriation of client trust funds."

  • The Florida Bar presented two affidavits in support of its petition. One was from a client in Texas who said a $10,000 check Troiano wrote him Dec. 31, 2009, bounced. The account was supposed to have about $450,000 in it left over from the $1.1 million the client had entrusted to Troiano for various real estate investments. The second affidavit was from Troiano's office manager, Judith Carson. According to Carson's affidavit, the bank had returned checks totaling $197,432 for a trust account with insufficient funds. And five checks totaling $6,222 from the firm's operating account also had bounced.(1)(2)

For more, see Fort Myers lawyer goes missing, and so does money in his care.

(1) In addition to the legal trouble with the Florida Bar, Citimortgage filed foreclosure lawsuits last summer against Troiano and other co-owners of three units a high-rise luxury condominium in downtown Fort Myers, the story states.

(2) The Florida Bar's Clients' Security Fund compensates people who have been victims of acts of theft by a Florida attorney. For those ripped off by dishonest attorneys in other states and Canada, see:

Maps available courtesy of The National Client Protection Organization, Inc.

Feds Continue Probe Into Now-Defunct Closing Agent Accused Of Illegally Pocketing Real Estate Escrow Cash Intended To Pay Off Existing Mortgages

In Luzerne County, Pennsylvania, The Times Leader reports:

  • The U.S. Secret Service is still actively investigating Priority Search Inc., a defunct Kingston title search company, for allegedly keeping money owed to property sellers, according to Secret Service spokesman Bob Slama. Slama could not comment on the ongoing investigation, but an insider said charges are expected to be filed soon.

  • Dozens of victims have contacted the Secret Service to report claims against Priority Search, a Secret Service representative said in March. The U.S. Attorney’s Office also is involved in the investigation. The investigation became public in November 2008 after property sellers publicly complained that the company kept money from buyers that was supposed to be used to pay off mortgages and other outstanding property bills.

For more, see Area firm still under fed probe (Now-defunct title search company in Kingston allegedly kept cash owed to property sellers, Secret Service says).

(1) As a result of the closing agent's failure to pay an existing mortgage, the home seller in one case reportedly found itself in the position of having to sue his innocent homebuyer in order to get the buyer's title insurance underwriter to cough up the cash pursuant to the terms of the buyer's title policy.

Loan Servicer Causes Home To Be Sold In Foreclosure Sale Despite Fully Paid Off Loan & Recorded Satisfaction Of Mortgage

The Indiana Court of Appeals recently reversed a lower court ruling, and remanded the matter back to it for trial in a case where loan servicer Ocwen Bank allegedly foreclosed on a home despite the fact that:

  • the loan holder's (JPMorgan Chase) records show the loan was paid in full,
  • the homeowner/couple had proof that the mortgage was paid off - namely a recorded satisfaction of mortgage - received from JPMorgan Chase, and
  • there was evidence that they never received notification of the initiation of the foreclosure action against them and may have been improperly served with the lawsuit (ie. "sewer service").

The Indiana appeals court begins its ruling with the following brief summary of this fiasco:

  • The Kafkaesque character of this litigation is difficult to deny. Having failed to receive a summons that may have been improperly served upon them, Marilyn and Michael Elliott learned that a default judgment had been entered against them, foreclosing on their home because of a mortgage that was allegedly in default. The home was sold in a sheriff's sale to the lending bank.

  • Feeling confused and suspicious, they turned to the Indiana Attorney General, who directed them to file a complaint with the Comptroller of the Currency. The Comptroller's investigation revealed that Chase Bank, the ostensible plaintiff herein, is entirely unaware of the foreclosure proceeding. Moreover, Chase's records show that the mortgage was paid in full in 2001. Chase, therefore, executed and recorded a satisfaction of mortgage.

  • Notwithstanding the satisfaction of mortgage, Chase's loan servicer—Ocwen Bank—continued to prosecute this action in Chase's name, attempting to force the Elliotts out of their home even though there has never been a trial and the lending bank has declared that the mortgage was paid in full. Finding this situation untenable, we reverse and remand for trial.

For the facts of the case and the rest of the ruling, see Elliott v. JPMorgan Chase Bank, No. 30A01-0907-CV-356, (Ind. Ct of App., February 3, 2010) (case also available here).

Closing Attorney Gets Back-To-Back Boot From State Bars; Accused Of Misappropriating $500K+ Of Client Cash In Rhode Island, $350K+ In Bay State

In Providence, Rhode Island, The Providence Journal reports:

  • A Needham, Mass., lawyer is the latest attorney to be disbarred by the Rhode Island Supreme Court for allegedly mishandling a mortgage refinancing. The high court on Jan. 19 barred David L. Spector from practicing in the state for allegedly misappropriating more than $500,000 that was supposed to be paid to banks in connection with four refinancings, including one for a Westerly resident, Doris Krakow, according to according to David D. Curtin, the high court’s disciplinary counsel.(1)


  • Spector was disbarred in Massachusetts on Jan. 22. His Massachusetts law license was temporarily suspended in March 2009 after three clients complained that he had wrongfully converted $350,525 to his own use instead of paying off lenders. The specifics of the Massachusetts cases have not been publicly disclosed.

For the story, see Attorney disbarred in mortgage payment case.

(1) Spector pocketed $150,369 from ING Bank that should have been forwarded to Washington Mutual Bank to pay off an existing mortgage for Krakow, Curtin reportedly said. As a result, Krakow is now struggling with two mortgages for her Westerly home, but is negotiating with her title insurance company to cover the money Spector allegedly took, Curtin reportedly said. Spector, who consented to disbarment, has not been criminally charged, Curtin said, but Krakow has filed a complaint with the Rhode Island State Police, the story states.

State police charged two disbarred lawyers in the past two weeks with misappropriating money from real estate transactions. Robert D. Natal faces 11 felony counts for mishandling $1.1 million. Todd M. Amaral, a correctional officer at the Adult Correctional Institutions who lost his license to practice law last October, too, was charged with two counts of unlawful appropriation and two counts of forgery. See Rhode Island State Cops Probe Allegations Of Lawyers w/ Sticky Fingers; Bag Two Suspected Of Swiping Client Cash, At Least Seven Others In Crosshairs.

Wednesday, February 10, 2010

Florida AG Targets California Loan Modification Operation With Civil Suit; Allegedly Used Local Notaries To Act As "Company Representatives"

From the Office of the Florida Attorney General:

  • Attorney General Bill McCollum [] announced that his office has filed a lawsuit against a California company providing loan modification services to homeowners facing foreclosure. According to the lawsuit filed [] in Orange County, 21st Century Legal Services, Inc. allegedly charges consumers up-front fees in violation of Florida’s Foreclosure Rescue Fraud Prevention Act. [...] An investigation conducted by the Attorney General’s Economic Crimes Division revealed that 21st Century Legal Services charges an up-front fee as high as $2,500 to homeowners seeking loan modification services. Additionally, consumers have complained that the company has not performed the promised services and that consumers are unable to get refunds.

  • The complaint alleges that, after initial contact is made with a homeowner, the company arranges for a "company representative" to visit the consumer at home. These representatives are, in fact, local notaries hired by the company to travel to the consumer’s home and execute the necessary sales agreements. The lawsuit states that the company instructed the notaries not to provide consumers with a copy of the written agreements, in direct violation of Florida law.

  • Other states have sued 21st Century Legal Services, and the FBI raided several of the company’s California offices in mid-September.

For the Florida AG press release, see California Company Sued for Foreclosure Rescue Fraud.

For the lawsuit, see State of Florida v. 21st Century Legal Services, Inc. et al.

FTC Proposes Rule Banning Upfront Fees For Loan Mods; Applies Nationwide, Limited Exemption For Attorneys In Consumer Bankruptcy, Other Proceedings

The Federal Trade Commission announced:

  • The Federal Trade Commission moved to protect distressed homeowners from the promoters of bogus foreclosure rescue and mortgage modification services by proposing a new rule that would forbid companies to charge up-front for these services. Instead, companies could only collect payment after providing services.


  • The proposed rules would apply to for-profit companies that, in exchange for a fee, offer to work with lenders and servicers on behalf of consumers to modify the terms of mortgage loans or to take other steps to avoid foreclosure on those loans. The proposed rules generally exempt entities that own or service mortgage loans. Attorneys would have a limited exemption from the proposed advance fee ban if they represent consumers in a bankruptcy or other legal proceeding.

For the entire press release, see FTC Proposes Rule That Would Bar Mortgage Relief Companies From Charging Up-Front Fees.

For the text of the Federal Register Notice, see Notice of Proposed Rulemaking: Mortgage Assistance Relief Services.

Ohio AG Says Two Calif. Loan Modification Outfits Bilked Homeowners, Failed To Deliver Services In Separate Suits; Scores $81K+ Judgment Against 3rd

From the Office of the Ohio Attorney General:

  • Ohio Attorney General Richard Cordray this week named United Law Group, Inc. (ULG), a California law firm founded by California attorney Sean Alan Rutledge, in a lawsuit for bilking Ohioans who faced foreclosure out of thousands of dollars.(1) The lawsuit alleges that the law firm promised foreclosure rescue and legal services to save homes and collected upfront fees but failed to deliver. In at least one instance a consumer was forced into foreclosure. ULG’s attorneys are not licensed to practice law in Ohio and never filed any court documents or provided legal representation on behalf of their clients.


  • In a separate action [], Cordray filed a lawsuit against Guardian Services Group, also based in California, for promising foreclosure rescue services to Ohioans, accepting upfront fees and never delivering. The suit, filed in Montgomery County Common Pleas Court, accuses the company of charging consumers thousands of dollars and refusing to provide refunds even though the services were never provided.


  • In early January, Cordray secured a judgment of $81,894 against Michael Brotherton, who operated Financial Emergency, Inc., a rescue business in Greene County. The judgment, filed in the Common Pleas Court of Greene County, stemmed from a lawsuit filed in June charging Brotherton with promising to negotiate debt settlements and loan modifications, collecting upfront fees for up to $1,269 and then failing to deliver. The court ordered full reimbursement to the five victims named in the case.

For the Ohio AG press release, see Cordray Sues two California Rescue Operations for Scamming Ohioans Facing Foreclosure.

For the lawsuits, see:

(1) According to the press release, in November 2009, the State Bar Court of California ruled that ULG founder Sean Alan Rutledge was to be involuntarily enrolled as an inactive member of the State Bar of California for his conduct, which was found by the court to pose “a substantial threat of harm to his clients or the public.”

California Sets New Records For Real Estate License Revocations, Surrenders As Illegal Foreclosure Rescue & Loan Modification Rackets Rage On

The California Department of Real Estate recently announced in a press release:

  • The California State Department of Real Estate (DRE), the state department that issues licenses to real estate professionals and protects consumers in real estate transactions, revoked a record number of real estate licenses for cause in 2009. The DRE also accepted another record number of license surrenders from licensees facing disciplinary action. All told, over 775 licensees had their license revoked or simply surrendered their licenses while facing accusations.


  • The down turn in the real estate market is a big reason disciplinary actions are up. “With so many people struggling to stay in their homes, foreclosure rescue and loan modification scams have risen dramatically,” DRE Commissioner Jeff Davi said. "And what is even more unsettling, a majority of offenders involved in loan modification scams are not even licensed, which limits a consumer’s ability to obtain restitution or verify the legitimacy of a business,” Davi added.


  • [A] consumer who is defrauded by a licensee and obtains a fraud judgment in civil court, but is unable to collect on the judgment, may be able to receive restitution from the DRE. The DRE administers a recovery account for fraud victims that can pay a victim up to $50,000 for a transaction. The payout from the recovery account is capped at $250,000 for each licensee. Those victims who have been defrauded by unlicensed perpetrators cannot make a claim against the department’s recovery account.(2)

For the press release, see California Department of Real Estate Revokes Record Number of Real Estate Licenses.

(1) In 2009, the DRE initiated over 2,000 investigations involving loan modification complaints, which represents 25% of all cases set-up. The DRE issued over 180 Desist and Refrain orders to nearly 348 different respondents performing loan modification services, ordering them to stop or change their business practices. Of the 348 Desist and Refrain order respondents, approximately 60% were not licensed and ordered to cease licensed activity - which included offering loan modification services. In addition, nearly 100 real estate licensees have been accused of violating the real estate law in connection with loan modification complaints. Many of the completed cases have been referred to law enforcement agencies for criminal prosecution. In order to help inform consumers to stay away from the bad actors, the DRE posts on its website all the recipients of Desist and Refrain orders and Accusations in loan modification complaints along with a copy of the order.

(2) For more on the California Dept. of Real Estate victim's fund, which enables a person who has been defrauded or had trust funds converted by a California licensed real estate broker or salesperson in a transaction requiring that license, and who satisfies specified requirements (California Business and Professions Code Section 10471 et seq.) to recover at least some of his or her actual loss when the licensee has insufficient personal assets to pay for that loss, see:

Tuesday, February 9, 2010

NYC Judge: "Rubber Stamp" Method Out-Of-Bounds When Granting Judgment To Zombie Debt Buyers Against Unwitting Consumers; Calls Racket "A Game Of Odds"

In a 2007 court ruling, New York City Civil Court Judge Philip S. Straniere expresses a concern with the growing number of creditors appearing before him seeking judgments against consumers who have allegedly defaulted on credit card debt, and who have failed to make an appearance during the proceedings.

In denying judgment to a creditor in one case, Judge Straniere provides a thorough examination of the procedure that should be applied by judges in New York (and possibly outside New York as well) when scrutinizing creditors in the determination of whether or not to grant judgments on account of the allegedly delinquent debts. His examination may be useful to those consumers (and the attorneys who represent them) being sued by creditors (especially those who are less-than-affectionately referred to as "zombie debt buyers") in attempts to thwart their efforts.(1)

Straniere begins his ruling by providing the following background [all bold text is my emphasis, not in the original; text broken up and enumerated for ease of reading; all citations omitted]:

  • Over the past several years this Court has received a plethora of confirmation of arbitration award petitions. These special proceedings commenced by a variety of creditors or their assignees seek judgments validating previously issued arbitration awards against parties who allegedly defaulted on credit card debt payments. In most of these cases the respondents have failed to answer.

  • It is almost never apparent, from the filings, (1) what type of process was effectuated on the debtor to notify them of the arbitration proceedings, (2) whether the debtor participated at all in the underlying arbitration, (3) what evidence, if any, the arbitrator considered, (4) what claims the arbitrator ruled upon, and (5) what figures the arbitrator used in calculating each award.

  • While the modern day creditor seeks no pound of flesh as did Shakespeare's Shylock in the "Merchant of Venice," the judiciary continues to provide an important role in safeguarding consumer rights and in overseeing the fairness of the debt collection process. As such, this Court does not consider its function to merely rubber stamp confirmation of arbitration petitions.

  • A trial court does not have a "mandatory, ministerial duty to grant motion[s] for default judgment on every properly verified complaint on which there has been default; [the] court retains [the] discretionary obligation to determine whether [the] applicant has met th[eir] burden of stating [a] prima facie cause of action," and the same is true for arbitration confirmations pursuant to CPLR Article 75.

  • Specifically, "an arbitration award may be confirmed upon nonappearance of the respondent only when the petitioner makes a prima facie showing with admissible evidence that the award is entitled to confirmation." If petitioner fails to establish a prima facie case the confirmation petition must be denied.

  • Despite the absence of objections by most of the defaulting respondents, in the interest of justice, this Court chooses to analyze the prima facie showing of each of the petitioners' applications. As a result of such undertaking, the Court often discovers fatal procedural and substantive defects inherent within the petitions.

  • The Court is aware of how the market for the sale of debt currently works, where large sums of defaulted debt are purchased, by a small number of firms, for between .04 and .06 cents on the dollar. The incentive therefore, for the firm purchasing the debt, is to herd these cases into arbitration and churn out papers seeking their confirmation as quickly as possible. The entire industry is a game of odds, and in the end as long as enough awards are confirmed to make up for the initial sale and costs of operation the purchase is deemed a successful business venture.

  • However, during this process mistakes are made, mistakes that may seriously impact consumers and their credit. The petition at bar is a specimen replete with such defects and the Court takes this opportunity to analyze the filing in detail, in hopes to persuade creditors, not simply to take more care in dotting their "i"s and crossing their "t"s in their filings, but to assure a minimum level of due process to the respondents.

  • Why is this debt sold for such a cheap price? Certainly part of the reason is the poor prospects of payment these creditors expect from the defaulting individuals given their past delinquent payment history, while another part is undoubtably to avoid additional costs associated with debt collection. Further yet, is the simple fact that the proof required to obtain a judgment in the creditor's favor is lacking, usually as a result of poor record keeping on the part of the creditor.

  • This decision reviews applicable New York cases on confirmation of arbitration awards, and provides additional principles to guide the process. In doing so, it is expected that judicial economy will be served, and more importantly, that the rights, particularly due process, of all parties will be adequately addressed and protected.(2)

For the specific facts of this case, Judge Starniere's examination of the applicable Federal and state law, and his application of the law to the facts in this case, see MBNA Am. Bank, N.A. v Nelson, 2007 NY Slip Op 51200(U), 15 Misc 3d 1148(A) (Civ. Ct. City of New York, Richmond Cty. 2007).

Go here for other posts on zombie debt.

(1) Keep in mind that once a creditor obtains a judgment against a consumer, the recording of the judgment will usually operate to create a lien against any real estate owned by the alleged debtor, and which could result in a forced sale of the property (subject to applicable homestead exemptions under state and Federal bankruptcy law). See Ohio Woman Concerned Over Claim Of Lien On Home For "Zombie" Debt That's Not Hers. For those without real estate, the judgment creditor can still go after wages, bank accounts, and other assets (again, subject to any applicable exemptions under state or Federal bankruptcy law).

(2) Attempts at tightening up the law in this area are being made. See NYC Lawmakers Move To Toughen Regs On Debt Scavengers Buying Up, Filing Lawsuits To Collect "Zombie Debt"

For a post regarding the use of "sewer service" in connection with the filing of lawsuits by zombie debt buyers, see 35 Law Firms Named In Suit Seeking To Void 100,000+ Money Judgments; 20+ Add'l Firms Currently In NY AG's Crosshairs In Ongoing "Sewer Service" Probe.

See also, Justice Disserved, a 2008 report by MFY Legal Services (a nonprofit provider of free legal services in New York) that documents statistics of victims of improper service who had judgments unknowingly entered against them, often to devastating effect.

Oregon Regulator Issues C&D Order, $250K Fine Against Foreclosure Rescue Operator For Alleged Securities Violations Tied To Sale Leasebacks

From the Oregon Department of Consumer and Business Services:

  • The Oregon Department of Consumer and Business Services (DCBS) issued a cease-and-desist order and assessed $250,000 in fines against Anthony "Tony" Schwartz and two businesses he controlled for selling interests in foreclosed homes he seized in a complex foreclosure rescue scheme.

  • Schwartz, who owned REI Exchange, LLC and TMG Ventures, Inc. in the Portland area, raised nearly $850,000 by convincing buyers to purchase fractional interests in real estate ―land trusts from the sale of homes seized from owners unable to repay their loans. Schwartz, who was not licensed to sell securities, falsely represented that the unusual, unsecured investments were safe. In addition to the fines, Schwartz is prohibited from raising capital, formally or informally, from other individuals for use or investment on their behalf.


  • Under a series of complex legal documents, Schwartz lent money to struggling homeowners – some facing imminent foreclosure. In exchange for the home’s title, Schwartz made payments on behalf of the homeowner but would take the home when the homeowner failed to repay the loan. Schwartz claimed the right to seize and sell a house and then pocket – in some cases – significant equity.(1)

For the DCBS press release, see State sanctions promoter of "foreclosure rescue" scheme (Tony Schwartz promised to help distressed homeowners, then illegally sold interests in homes).

(1) According to the story, the Oregon Mortgage Rescue Fraud Protection Act of 2008 protects homeowners from such foreclosure rescue schemes by requiring those who purchase a homeowner’s equity in order to avoid foreclosure to ensure the homeowner has the ability to buy back the home and entitling the homeowner to a share of the proceeds if the home is resold quickly. Schwartz’s activities reportedly occurred before the law took effect.

Mortgage Voided As Lender Fails To Make Inquiries Of Persons In Possession; Unrecorded Rights Of Occupants Take Priority Over Lender's Recorded Lien

In the United Kingdom, reports on a British court case involving the application of the bona fide purchaser doctrine in which a mortgage lender found itself left holding the bag due to its failure to inquire into the rights and equities of persons in possession of a home who were not the record owners/borrowers before making a secured loan to the latter:

  • A lender that does not make enquiries of persons known to be in occupation of a property runs the risk that such persons' interests in the property, if any, may override that of the lender.

  • This was the position in HSBC Bank Plc v Dyche & Anor. The Dyches bought Mrs Dyche's parents' property for £25,000 (which was less than its market value) with the benefit of a loan from Lloyds Bank for £17,000. The reason for the transaction was to avoid the property being sold by Mrs Dyche's father's trustee in bankruptcy. The parents continued to reside in the property as their home and paid the loan sum, plus interest to the Dyches so that the Lloyds' mortgage was redeemed.

  • Contrary to the agreement between the parties, the property was not transferred back to the parents following payment but, following her divorce, was transferred into Mrs Dyche's sole name. She took out a loan with HSBC providing HSBC with a forged assured shorthold tenancy agreement showing her father as tenant. Mrs Dyche became bankrupt and HSBC sought possession of the property.

  • The court dismissed HSBC's claim holding that the Dyches had held the property on constructive trust for the parents and that Mrs Dyche's father (the surviving parent) was solely beneficially entitled to the property. His interest overrode HSBC's interest as he was in actual occupation throughout. He was entitled to a transfer of the property to him free of the mortgage.

  • Things to Consider: Lender's solicitors [ie. attorneys] should make enquiry of any one known to be in occupation of a property. As per the CML Handbook, a signed deed or form of consent to the lender's interest taking priority should be obtained from any occupier aged 17 or over who is not a party to the mortgage. Failure to make such enquiry here meant HSBC assumed the risk of the tenancy agreement turning out to be forged, so losing their security.

Source: Make enquiries of occupiers (requires subscription; if no subscription, go here - then click link for the story).

For some of the U.S. case law on this issue, see Bona Fide Purchaser Doctrine, Possession Of Property By Occupants Other Than The Vendor & The Duty To Inquire.

For some of the basics on the bona fide purchaser doctrine, see The Bona Fide Purchaser for Value of a Legal Estate Without Notice.

Illinois Bona Fide Purchaser, Possession, Duty Of Inquiry

The following compilation of cases is an extended version of the list of Illinois cases contained in the February 1, 2009 post, Bona Fide Purchaser Doctrine, Possession Of Property By Occupants Other Than The Vendor & The Duty To Inquire, that address the issue of the effect of possession by an occupant of real property by one other than the seller/vendor on a prospective purchaser's status as a bona fide purchaser.

As stated in my February 1 post, these cases are presented here to remind the reader of the importance of giving this issue the serious consideration it deserves when attempting to undo/unwind/void an abusive real estate transaction (ie. foreclosure rescue sale leasebacks, fraudulent inducement in the execution of a deed, forgeries, other real estate swindles) where, after scamming or otherwise abusively relieving an unwitting homeowner of his/her title, the scammer either sells the property to an unwitting third party, or encumbers the property with a loan from an unwitting mortgage lender, neither of whom participated in the abusive transaction with the homeowner, nor having any actual knowledge thereof. Voiding the deeds and mortgages in these cases (in situations where the instruments are voidable, as opposed to being absolutely void - "void ab initio") will turn on whether the subsequent third party purchaser or encumbrancer, despite lacking in actual knowledge of the fraud or other abusive transaction, can otherwise be charged with notice of the fraud, thereby making bona fide purchaser/encumbrancer status unavailable to them and, consequently, subjecting the deeds or mortgages to being voided/rescinded/set aside.

(In a related post that addresses the distinction between deeds that are absolutely void (void ab initio), and deeds that are merely voidable, see Unwinding An Abusive Or Fraudulent Real Estate Transaction? Determining If The Deed Is Void, Or Merely Voidable?)

While certainly not purporting to be an exhaustive list of cases dealing with the issue of possession and the duty to inquire when attempting to establish (or attack) one's status as a bona fide purchaser, the following compilation of case law citations specifically address this issue.

One caveat: Any serious consideration of the bona fide purchaser doctrine should, first and foremost, begin with a reading of the state recording statutes, as they are currently constituted. Since there are over 50 jurisdictions in the U.S., each with their own recording statute, I certainly can't address them here (for the Illinois recording statute, see 765 ILCS 5/30 of the Illinois Conveyances Act). But after reading your state's recording statutes, you may want to consider how these cases, if at all, fit into making the legal analysis necessary when attempting to undo/unwind/void an abusive real estate transaction by attacking the bona fide purchaser status of a subsequent purchaser or encumbrancer/mortgage lender. Keep in mind that, even in the event that the Illinois state legislature has passed laws subsequent to these court rulings that either modifies or renders them obsolete in Illinois, the persuasiveness of the logic that underlies them may still be of value to those involved in litigation outside of Illinois (don't lose sight of the fact that the doctrine of bona fide purchase is not a creature of state statute, but one of English common law, which is the starting point for this doctrine, not only as generally applied in Illinois, but as generally applied in Illinois' sister states as well).


Illinois Supreme Court Cases

Ambrosius v. Katz, 2 Ill. 2d 173; 117 N.E.2d 69; 1954 Ill. LEXIS 321 (Ill. 1954):

(Editor's Note: This case could be extremely helpful towards undoing a sale leaseback, foreclosure rescue scam or other real estate swindle where title or home equity is ripped off.

This case provides direct support for the proposition that a grantor who remains in possession [ie. a "grantor-in-possession"] of the property [ie. typically, the screwed-over homeowner], even after delivery and recording of the deed, is notice against subsequent purchasers [ie. typically, the foreclosure rescue operator or a straw buyer acting as the operator's alter ego] and mortgagees [ie. typically, the mortgage lender/financial institution that, albeit unwittingly, finances the scam and provides the funds that constitutes the equity strpping proceeds ending up in the scammer's pocket] of the grantor's possible interest in the property.)

  • A purchaser is bound to inquire of the person in possession by what tenure he holds and what interest he claims in the premises. It is well settled that whatever is sufficient to put a party on inquiry is notice of all facts which pursuit of such inquiry would disclose, and without such inquiry no one can claim to be an innocent purchaser as against him whose possession raises the inquiry. (Bryant v. Lakeside Galleries, Inc. 402 Ill. 466; Miller v. Bullington, 381 Ill. 238.)

  • This rule protects a grantor whose grant was induced by fraud, but who, remaining in possession, can show such possession as notice of his equity against a subsequent grantee. (White v. White, 89 Ill. 460; Ronan v. Bluhm, 173 Ill. 277.) The purchaser cannot excuse himself by merely obtaining information as to how possession was obtained or inquiring of the grantor or of other persons as to the rights of the person in possession, but he is bound to inquire of the person in possession by what tenure he holds and what interest he claims. Open possession is sufficient to charge such purchaser with notice of all legal and equitable claims of the occupant. German-American Nat. Bank v. Martin, 277 Ill. 629.

Bryant v. Lakeside Galleries, Inc., 402 Ill. 466; 84 N.E.2d 412 (Ill. 1949):

  • A purchaser is bound to inquire of the person in possession by what tenure he holds and what interest he claims in the premises. (German-American Bank v. Martin, 277 Ill. 629.) While appellant urges that she was entirely ignorant of appellee's possession, we have held that actual notice of possession is immaterial, if the facts were sufficient to put appellant on inquiry. (Mallett v. Kaehler, 141 Ill. 70.) The facts here were, in our opinion, sufficient to put appellant on inquiry. It is well settled that whatever is sufficient to put a party upon inquiry is notice of all facts which pursuit of such inquiry would lead to, and without such inquiry no one can claim to be an innocent purchaser as against him whose possession raises the inquiry. (Carnes v. Whitfield, 352 Ill. 384; Whitaker v. Miller, 83 Ill. 381.)

Bullard v. Turner, 357 Ill. 279, 192 N.E. 223 (Ill. 1934):

  • The public records of conveyances and instruments affecting the title to real estate are established by statute to furnish evidence of such title, and a purchaser may rely upon such records in security unless he has notice, or is chargeable in some way with notice, of a claim, estate or interest inconsistent therewith. (Vombrack v. Wavra, 331 Ill. 508).

  • Under the system of recording the evidences of title to real estate in force in this State, the actual occupancy of land is equivalent to the record of the instrument under which the occupant claims so far as notice to subsequent purchasers and incumbrancers is concerned. McDonnell v. Holden, 352 Ill. 362; Garlick v. Imgruet, 340 id. 136; Moore v. Machinery Sales Co. 297 id. 564; Merchants and Farmers State Bank v. Dawdy, 230 id. 199; Coari v. Olsen, 91 id. 273. A purchaser or incumbrancer is bound to inquire of a person in possession of real estate by what right he holds possession and what interest he claims; and in case the purchaser or incumbrancer fails to make such inquiry, the law charges him with constructive notice of all those facts which he would have ascertained respecting the claim or title of the person in possession had inquiry been made of him. (Nelson v. Joshel, 305 Ill. 420; Williams v. Brown, 14 id. 200; White v. White, 89 id. 460; Coari v. Olsen, 91 id. 273; Ford v. Marcall, 107 id. 136; Tillotson v. Mitchell, 111 id. 518; Rock Island and Peoria Railway Co. v. Dimick, 144 id. 628; German-American Nat. Bank v. Martin, 277 id. 629; Moore v. Machinery Sales Co. 297 id. 564).

McDonnell v. Holden, 352 Ill. 362, 185 N.E. 572 (Ill. 1933):

(See Editor's Note for Ambrosius v. Katz, above for situations involving a grantor-in-possession. Note further that this case deciding that a subsequent purchaser acquired its interest with notice of the rights of the grantor in possession occurred in the context of the grantor in possession's claim of equitable mortgage):

The following text is the court's statement of the relevant Illinois law and its application to the specific facts in the case (bold text is my emphasis, not in the original):

  • While, generally, mere inadequacy of price will not be considered as sufficient to set aside a deed or to have a deed declared a mortgage or the basis of a trust, yet gross inadequacy of price is always considered as an evidentiary fact. Totten v. Totten, 294 Ill. 70.


  • Under the system of recording the evidences of title to real estate in force in this State, the actual occupancy of land is equivalent to the record of the instrument under which the occupant claims, so far as notice to subsequent purchasers is concerned, (Garlick v. Imgruet, 340 Ill. 136,) and a purchaser is bound to inquire by what right or title the occupant holds, and the premises are taken by the purchaser subject to that title or interest, whatever it may be. (Moore v. Machinery Sales Co. 297 Ill. 564; Coari v. Olsen, 91 id. 273; Carr v. Brennan, 166 id. 108.) The rule is, that where one purchases land of another which is at the time of the purchase in the actual, open, exclusive and visible possession of a third person, such possession is constructive notice to the purchaser of all the rights whatever [***9] of the possessor of the land at the time of the purchase. (Union Bank of Chicago v. Gallup, 317 Ill. 184; Mauvaisterre Drainage District v. Frank, 313 id. 431.)

  • Where a grantor does not deliver possession to the grantee but remains in the open, exclusive possession of the premises, a party taking a deed from the grantee during such occupancy is charged with notice of all the rights and equities of the first grantor. (Ronan v. Bluhm, 173 Ill. 277; Bruner v. Manlove, 3 Scam. 339.)

  • In Dyer v. Martin, 4 Scam. 146, it is said: "Martin's possession was notice to all the world that he had some interest in the land, and whoever bought the land while that possession continued, took it subject to that interest, whatever it might be. -- 1 Story's Eq. 388-9; 2 Vesey, 437; 13 Vesey, 118; 2 Paige, 300; 3 Paige, 421; 16 Vesey, 249; 5 Jones' Ch. r. 29." The main questions, therefore, to be decided are whether or not, at the time of the making of the deeds, appellant had an interest in the premises, and if so, the extent of such interest.

  • Appellee claims that Haley's deed from the master in chancery could not be considered as a mortgage as in making such purchase he used his own money, and that at the time of the making of the deed the relation of debtor and creditor did not exist between Haley and appellant. Where title is acquired by a purchaser through a master's deed, such deed will not be considered as a mortgage where at the time of such purchase the party claiming to be the mortgagor had permitted the period of redemption to expire and no indebtedness existed between him and the purchaser. (Eames v. Hardin, 111 Ill. 634.) Title acquired by the purchase of a certificate of sale at the request of the mortgagor, and a master's deed thereon, will not be considered as a mortgage where at the time of such purchase the mortgagor's period of redemption had expired and no indebtedness existed between him and the purchaser. (Burgett v. Osborne, 172 Ill. 227.)

  • This rule does not apply in this case, as at the time of the making of the arrangement between appellant and Haley with reference to the property the time of redemption had not expired, and if in pursuance of that arrangement Haley advanced his money to procure the title for appellant's benefit, then the relation of debtor and creditor existed between them and there was an indebtedness which could be secured by a mortgage. A certificate of sale for certain land, and the sheriff's deed based thereon, are not conclusive of their true character, and it is competent to show by parol that they were, by agreement between the owner and the purchaser, intended as a mortgage. (Trogdon v. Trogdon, 164 Ill. 144; Whittemore v. Fisher, 132 id. 243.)

  • Where the owner of land which has been sold under an execution made an arrangement with his tenant to redeem the same, and the tenant took an assignment of the certificate of purchase in his own name while acting as the agent of the owner, the landlord, and afterwards procured the sheriff to make a deed to himself instead of to the principal, it seems this inequity will constitute such agent the trustee of the principal. Moore v. Pickett, 62 Ill. 158.

  • A fiduciary relation existed between appellant and Haley at the time of Haley's acquisition of the deed from the master in chancery. From the authorities cited it would appear that if at that time Haley was acting as appellee's agent to redeem the premises and instead of redeeming took the title in his own name, the law would raise a trust ex maleficio, and he would hold such title as a mortgagee and not as the owner of the fee. If, on the other hand, while appellant still had title to and an interest in the premises, an arrangement was made between the parties whereby Haley was to loan to appellant the money necessary to acquire the master's deed, and such loan was made, then the proceeds of such loan belonged to appellant, and if Haley acquired the master's deed by using the proceeds of such loan then a resulting trust would arise in favor of appellant. (Kochorimbus v. Maggos, 323 Ill. 510.)

  • In that case it was said: "Constructive trusts are divided into two general classes: one consisting of those cases in which actual fraud is considered as equitable ground for raising the trust, and the other of those cases in which the existence of a confidential relation, and subsequent abuse of the confidence reposed, are sufficient to take the case out of the Statute of Frauds. (Miller v. Miller, 266 Ill. 522.) A party may voluntarily assume a confidential relation towards another, and if he does so he cannot thereafter do any act for his own gain at the expense of that relation. (Reed v. Peterson, 91 Ill. 288.)

  • A fiduciary relation is not limited to cases of trustee and cestui que trust, guardian and ward, attorney and client, or other recognized legal relation, but it exists in all cases in which influence has been acquired and abused, in which confidence has been reposed and betrayed. The origin of the confidence is immaterial. It may be moral, social, domestic or merely personal. If the confidence, in fact, exists, is reposed by the one party and accepted by the other, the relation is fiduciary, and equity will regard dealings between the parties according to the rules which apply to such relation. (Higgins v. Chicago Title and Trust Co. 312 Ill. 11.) While neither an express trust nor a resulting trust can be created by parol agreement, yet where the transaction is such that at the moment the title passes either a resulting or constructive trust would arise in the absence of a parol agreement, such an agreement will not prevent a trust arising. -- Smith v. Smith, 85 Ill. 189; Wallace v. Carpenter, id. 590; Williams v. Brown, 14 id. 200." This is true, regardless of the existence of actual fraud, undue influence or coercion, and often directly contrary to the intention of the one holding the legal title. Housewright v. Steinke, 326 Ill. 398.

  • It is claimed by appellee that if appellant's contentions are correct he is barred from maintaining his suit by reason of laches. Laches cannot be maintained as a defense to this action. During the entire time that Haley held title to the land, and up until the time of the trial, Haley had always recognized appellant's claim to be the owner of the land and that he was holding the title in trust for him. When appellee took a quit-claim deed to the premises from Haley with notice of appellant's possession and claim of title, she acquired by her quit-claim deed no greater interest in the premises than Haley had therein. She acquiesced in appellant's possession of the premises and retention of the proceeds of the rent therefrom, and at no time did she do or say anything to disturb appellant in the enjoyment of his rights until just shortly before the bringing of the suit.

  • The decree will be reversed and the cause remanded, with instructions to enter a decree in accordance with the prayer of the bill and the views herein expressed.

Carnes v. Whitfield, 352 Ill. 384; 185 N.E. 819 (Ill. 1933):

  • Actual residence is not essential to continuous possession. If the owner is in actual possession and there are continuous acts of ownership there is sufficient notice to the world of his claim of title. (Thomas v. Burnett, 128 Ill. 37; Mallett v. Kaehler, 141 id. 70.) A purchaser is bound to inquire of the person in possession by what tenure he holds and what interest he claims in the premises. (German-American Bank v. Martin, 277 Ill. 629; Williams v. Brown, 14 id. 200.) It is well settled that whatever is sufficient to put a party upon inquiry is notice of all facts which pursuit of such inquiry would lead to, and without such inquiry no one can claim to be an innocent purchaser as against him. (Mallett v. Kaehler, supra; Whitaker v. Miller, 83 Ill. 381.) In the application of this rule this court has repeatedly held that where the first purchaser is in possession it constitutes sufficient notice and protects his rights as effectually as by recording his deed. (Morrison v. Kelly, 22 Ill. 609.) Possession of a tenant is constructive notice of the legal or equitable rights of the landlord under whom he holds and to whom he pays rent, even though the legal title stands in another's name. Gallagher v. Northrup, 215 Ill. 563; Smith v. Heirs of Jackson, 76 id. 254.

German-American Nat'l Bank v. Martin, 277 Ill. 629, 115 N.E. 721 (Ill. 1917):

The following excerpt is the court's statement of the relevant Illinois law that it applied to the specific facts of this case [bold text is my emhasis, not in the original]:

  • Whether these deeds were void as to subsequent creditors depends wholly upon whether such subsequent creditors had actual or constructive notice of their execution or delivery. Section 30 of the Conveyance act provides that all deeds, mortgages and other instruments of writing which are authorized to be recorded shall take effect and be in force from and after the time of filing the same for record, and not before, as to all creditors and subsequent purchasers without notice, and that all such deeds shall be adjudged void as to all such creditors and subsequent purchasers without notice until the same shall be filed for record.

  • This statute places creditors on the same footing as subsequent purchasers, and the question then is, would a subsequent purchaser have been held, under the facts in this case, to have received notice of the execution and delivery of these deeds? ( Hatch v. Bigelow, 39 Ill. 546.)

  • Each case is governed by its own particular facts. While it is sometimes difficult to determine what acts are sufficient to put a party on inquiry, there has never been any departure from the rule controlling the question at it was first stated in this State in Doyle v. Teas, 4 Scam. 202.

  • The rule as there announced is as follows: "Where the court is satisfied that the subsequent purchaser acted in bad faith, and that he either had actual notice or might have had that notice had he not willfully or negligently shut his eyes against those lights which with proper observation would have led him to knowledge, he must suffer the consequences of his ignorance and be held to have had notice so as to taint this purchase with fraud in law. It is sufficient if the channels which would have led him to the truth were open before him, and his attention so directed that they would have been seen by a man of ordinary prudence and caution if he was liable to suffer the consequence of his ignorance. The law will not allow him to shut his eyes when his ignorance is to benefit himself at the expense of another, when he would have had them open and inquiring had the consequences of his ignorance been detrimental to himself and advantageous to the other."

  • This rule has been consistently followed, repeatedly re-affirmed and never departed from. Among the cases in which it has been followed and applied are Rupert v. Mark, 15 Ill. 540; Merrick v. Wallace, 19 id. 486; Morrison v. Kelly, 22 id. 609; Hatch v. Bigelow, supra; Harper v. Ely, 56 Ill. 179; Babcock v. Lisk, 57 id. 327; Chicago, Rock Island and Pacific Railroad Co. v. Kennedy, 70 id. 350; Bent v. Coleman, 89 id. 364; Morrison v. Miles, 270 id. 41.

  • As a part of this rule this court has uniformly held that the actual occupation of land is equal to the record of the deed or other instrument under which the occupant claims; that the purchaser is bound to inquire by what right or title he holds, and that the open, visible possession of premises is sufficient to charge a purchaser with notice of all legal and equitable claims of the occupant. ( Coari v. Olsen, 91 Ill. 273; Dyer v. Martin, 4 Scam. 146; Brown v. Gaffney, 28 Ill. 149; Lumbard v. Abbey, 73 id. 177; Whitaker v. Miller, 83 id. 381; Haworth v. Taylor, 108 id. 275; Mallett v. Kaehler, 141 id. 70; Merchants' Bank v. Dawdy, 230 id. 199.)

  • Whatever is notice enough to excite attention and put the party on his guard and call for inquiry is notice of everything to which such inquiry might have led, and every unusual circumstance is a ground of suspicion and prescribes inquiry. Whatever is sufficient to put a party upon inquiry which would lead to the truth is in all respects equal to and must be regarded as notice. One having notice of such facts as would put a prudent man on inquiry is chargeable with the knowledge of other facts which he might have discovered on diligent inquiry. ( Blake v. Blake, 260 Ill. 70.) A purchaser may not excuse himself by merely obtaining information of the character in which the possession was originally obtained, but is bound to inquire of the person in possession by what tenure he holds possession and what interest he claims in the premises. Williams v. Brown, 14 Ill. 200.

Gray v. Lamb, 207 Ill. 258; 69 N.E. 794; 1904 Ill. LEXIS 3204 (Ill. 1904): The Illinois Supreme Court quotes from one of its earlier rulings:

  • "Possession, before it can be held to operate as notice of an unrecorded deed, must be 'open, visible, exclusive and unambiguous, such as is not liable to be misunderstood or misconstrued.' * * * Such a possession must be of an open and visible character, which will be calculated to apprise the world that the property has been appropriated and is occupied, and the occupancy must be exclusive. 'If only used and enjoyed in common with others, or with the public in general, it could not be regarded as hostile to others claiming title.'" (Robertson v. Wheeler, 162 Ill. 566.)

Williams v. Spitzer, 203 Ill. 505, 68 N.E. 49 (Ill. 1903):

  • The open and visible possession of land by the equitable owner is sufficient to charge a mortgagee with notice of the rights of such owner, and the mortgagee will take the lien subject to the rights of the person in such possession, whatever they may be. (Harris v. McIntyre, 118 Ill. 275; Joiner v. Duncan, 174 id. 252.)

Rock Island & P. R. Co. v. Dimick, 144 Ill. 628; 32 N.E. 291; 1892 Ill. LEXIS 1188 (Ill. 1892):

  • The law is well settled in this State, as generally elsewhere, when not changed by the recording acts, that open and exclusive possession of lands, under an apparent claim of ownership, is notice to those subsequently dealing with the title of whatever interest the possessor has in the premises, whether the interest be legal or equitable in its nature. Wade on Notice, sec. 273; Davis v. Hopkins, 15 Ill. 519; Truesdale v. Ford, 37 id. 210; Smith v. Jackson's Heirs, 76 id. 254; Partridge v. Chapman, 81 id. 137.

  • It has been held also in this State, that if the grantor remains in possession after conveyance, purchasers from the grantee are affected with notice of the grantor's rights in the land. White v. White, 89 Ill. 460; Ford v. Marcall, 107 id. 136.

  • Nor does the doctrine, that the tenant in possession will not be permitted to assert a claim inconsistent with his recorded deed, (Wade on Notice, secs. 298-9; Smith v. Jackson's Heirs, supra), where otherwise applicable, apply to the reservation of an easement or right of way or passage in the land conveyed, where the grantor retains title to adjacent lands, and the easement or right of way is appurtenant to, and essential to the full enjoyment of the adjacent premises, the title to which remains in the grantor. Wade on Notice, sec. 300, and cases cited. Ordinarily, where an easement or right of way only is claimed, in the very nature of the right, the use or occupation of the land will be intermittent and, strictly speaking, not capable of that continuous possession of which lands are ordinarily susceptible. In such cases, notice is necessarily afforded, if at all, by the continued and uninterrupted user, which is analogous to, and in a sense, possession. And the same rule applies, the user must be open, visible and so far exclusive, as to put persons seeing the premises, upon notice thereof.

Ford v. Marcall, 107 Ill. 136, 1883 Ill. LEXIS 237 (Ill. 1883):

(See Editor's Note for Ambrosius v. Katz, above for situations involving a grantor-in-possession):

  • The law is, as this court has declared in White v. White, 89 Ill. 460, that when the grantor of real estate remains in possession, all persons acquiring title from the grantee are chargeable with notice of all the claims of the grantor. In this case it appears, from the evidence preserved in the decree, that Elizabeth Bonham and complainant have been in the full, complete, open and notorious possession of the premises, by themselves and tenants, cultivating and occupying the same since before the making of the deed to Susan A. Bonham. That was notice to defendant, before he purchased the land at execution sale, of the equitable rights of the parties in possession. Besides that, he was notified, long before the sheriff's sale, that Robinson had not then, and never had, any interest in the land, and that he only held the legal title for the benefit of Elizabeth Bonham, the real owner. Defendant is in no sense an innocent purchaser,--certainly not in that sense that he can claim the protection of the law. The doctrine of express trust insisted upon has no application to the facts of this case, and need not be discussed.

White v. White, 89 Ill. 460, 1878 Ill. LEXIS 448 (Ill. 1878):

(See Editor's Note for Ambrosius v. Katz, above for situations involving a grantor-in-possession):

  • The bill in this case charges that appellant Williams obtained a conveyance of a valuable farm in Kane county, also, a house and lot in Kaneville, in this State, from appellees [ie. Harry White & wife], through fraudulent representations; that the deed was not delivered by them to Williams; that he paid no consideration therefor; that the other appellants [ie. Harry White's children], knowing that the conveyance was obtained by Fraudulent means, and knowing all of the facts, and aiding Williams in procuring the deed, took from him a conveyance of the premises. On a hearing, the court below rendered a decree setting aside the deed from appellees to Williams, and the deed from him to appellant Harry S. White [ie. child of Harry White], and defendants appeal to this court, and ask a reversal.


  • That Williams was guilty of such fraud as should set aside the conveyance to him, seems to us to admit of none, the slightest doubt. He seems to have played on the fears of appellees, and the more successfully as we infer there had been some talk of procuring the appointment of a conservator. He made false representations as to the purpose of his children, but whether at their instance and for their benefit, or for his own profit, does not appear.

  • Here was property worth over $ 20,000, to which he obtained the title, and the only consideration was the future support of a man over seventy years of age. He paid nothing--was able to pay nothing. The relations of the parties were not such as to induce appellee to donate such a sum of money to him, and it appears that such was not the design, as he said he was willing to trust his wife to do what was right by his children, and there was fraud in failing and refusing to convey, as was agreed, to Mrs. White.

  • White would never have willingly conveyed the property in this manner to Williams. He only accomplished his purpose by obtaining the deed to him without the consent of the grantors, and then refusing to convey to Mrs. White. The deed was obtained without any consideration paid, and by deceit, fraudulent pretenses, and the most shameful practices in appealing to the fears of the grantors, and the transaction can find no sanction in a court of justice; nor do appellants pretend to justify or maintain its honesty, or claim that the means employed by Williams were fair or honest.

  • Then, were appellants [ie. Harry S. White and other siblings] protected as innocent purchasers for value? Most clearly they were not. The grantors were in possession, and all persons purchasing the property must be held charged with all of their claims, legal and equitable. If appellants did not employ Williams to thus procure the title, or if they had no actual notice of his fraud in obtaining the conveyance, they took it charged with notice as though they had seen their father, and he had informed them of all the particulars of the fraud perpetrated by Williams; and it is for the reason that a party purchasing real estate in the possession of another should see him, and learn what claim he has.

  • When a person is in the actual possession of lands, the presumption is that he owns or has some legal claim to it, and the person buying it does so subject to his claims.

  • It then follows, that as appellees could have set up the fraud against Williams, appellants taking charged with notice, they can urge the fraud with the same effect against them.

Whitaker v. Miller, 83 Ill. 381; 1876 Ill. LEXIS 477 (Ill. 1876):

  • But there is another, and perhaps more important, reason, why the alleged purchasers from Miller can not claim the protection accorded to innocent purchasers of real property. When they obtained their interests in these lands, whatever that may have been, complainant was in possession by her tenants, and it was their plain duty to inquire of her what interest she claimed. This they omitted to do. Her possession was notice to all the world of her rights in the premises, and inquiry of her would have disclosed a knowledge of the truth.

  • Without inquiry, no one can claim to be an innocent purchaser of lands in the actual possession of another, as against such party. The law charges him with notice of all the rights of the party in possession. The means of information were open to these parties, of which they did not avail, and it is, therefore, idle to insist defendants are innocent purchasers of these lands in any just sense.

Smith v. Heirs of Jackson, 76 Ill. 254; 1875 Ill. LEXIS 615 (1875):

(See Editor's Note for Ambrosius v. Katz, above for situations involving a grantor-in-possession. Note further that this case deciding that a subsequent purchaser acquired its interest with notice of the rights of the grantor in possession occurred in the context of the grantor in possession's claim of equitable mortgage):

  • There is nothing unreasonable in a rule which requires a purchaser of land in the open, visible and exclusive possession of a person other than his vendor, to make inquiry as to that person's rights, and to take subject to those rights if he neglects to do so. It has been the rule of all the courts, so far as we are aware, that, in case of a tenancy, the possession of the tenant would amount to constructive notice to a purchaser of such tenant's title.


  • It is true, this fact was not known to Smith, but he, according to his own testimony, purchased without even going or employing an agent to see the land, or make inquiry of the persons in occupation. Had inquiry been made, the fact would readily have been ascertained that they were paying rents to Jackson. The counsel who appear for him in this court were his legal advisers, he says, and to whom he presented the abstract for examination. It is not likely that counsel of such eminence would have failed to advise him of the necessity of inquiry whether there was any tenancy by others; for the law had been laid down by this court, as early as the case of Pittman v. Gaty, 5 Gilm. 186, that possession by the tenant was the possession of the landlord, and constructive notice of the landlord's title. That is the settled law in Pennsylvania, also in Iowa. See Dickey v. Lyon, 19 Iowa 544, where the principal cases upon both views of the question are collected and ably commented upon.

Flint v. Lewis, 61 Ill. 299; 1871 Ill. LEXIS 63 (Ill. 1871):

  • That possession was notice to all the world that he had some interest in the land; and whoever bought it, while that possession continued, took it subject to that interest, whatever it might be. Dyer v. Martin et al. 4 Scam. 146; Brown v. Gaffney, 28 Ill. 149; Riley v. Quigley, 50 Ill. 304. The facts of which Flint was chargeable with notice, and the fact of Lewis' possession, were sufficient to put the former upon inquiry, and his failure to make inquiry is equivalent to notice. If he had gone to Lewis, the party in possession, and inquired of him in respect to his interest in the lands, he would have doubtless learned that it was that of one who held the equity of redemption, which had not been cut off by the pretended and fraudulent sale under the trust deed.

Hatch v. Bigelow, 39 Ill. 546; 1864 Ill. LEXIS 3 (Ill. 1864):

  • A purchaser is held affected with notice of all that is patent on an examination of the premises he is about to buy.

Keys v. Test, 33 Ill. 317; 1864 Ill. LEXIS 68 (Ill. 1864):

  • The open and notorious possession by the complainant of this land was sufficient to put subsequent purchasers on inquiry, and operates as notice to them of a claim to the land. The case of Doyle v. Teas, 4 Scam. 202, is full on this point.

Metropolitan Bank v. Godfrey, 23 Ill. 531; 1860 Ill. LEXIS 276 (Ill. 1860):

(See Editor's Note for Ambrosius v. Katz, above for situations involving a grantor-in-possession. This case could be extremely helpful towards undoing a sale leaseback, foreclosure rescue scam or other real estate swindle where title or home equity is ripped off. This case provides support for the proposition that the retained possession of a grantor of a deed, absolute on its face, but intended as a mortgage, was notice, to a purchaser (including a mortgage lender) of the grantee, of the equities of the grantor.)

  • In Williams v. Brown, 14: Ill. 205, we say: A person who buys land in possession of another, is bound to inquire of the person in possession, by what tenure he holds possession, and what interest he claims in the premises. See also Prettyman et al. v. Wilkey et al., 19 Ill. 235, 238.

  • So it is held that possession of lands by the grantor in a deed, absolute on its face, but intended as a mortgage, was notice, to a purchaser from the grantee, of the equities of the grantor. Wright v. Bates and Niles, 13 Vt. 341; Roberts v. Anderson, 3 Johns. Ch. 380-1; Grimstone v. Carter, 3 Paige's Ch. 437.

Morrison v. Kelly, 22 Ill. 609; 1859 Ill. LEXIS 142 (Ill. 1859):

  • The doctrine is well recognized and established that a man may have the actual possession of real estate without a residence upon it. And it may be actual or constructive; actual, when there is an occupancy, such as the property is capable of, according to its adaptation to use; constructive, as when a person has the paramount title, which in contemplation of law draws to, and connects with it the possession. But to be adverse, it must be a pedis possessio, or an actual possession. And to constitute such a possession, there must be such an appropriation of the land to the individual, as will apprise the community in its vicinity that the land is in the exclusive use and enjoyment of such person. Trifling acts, doubtful and equivocal in their character, and which do not clearly indicate the intention with which they are performed, cannot be regarded as amounting to possession. But it has been held that neither actual occupancy, cultivation, or residence, are necessary to constitute actual possession. Ewing v. Burnett, 11 Peters 53.

  • And where the property is so situated as not to admit of any permanent, useful improvements, and the continued claim of the party has been evidenced by public acts of ownership, such as he would exercise over property which he claimed in his own right, and would not exercise over property which he did not claim, has been held to be such possession as will create a bar under the statute of limitations. Ewing v. Burnett, 11 Peters 53. What acts may or may not constitute a possession, are necessarily varied, and depend to some extent upon the nature, locality and use to which the property may be applied, the situation of the parties, and a variety of circumstances necessarily have to be taken into consideration, in determining the question. They must necessarily be left to the jury, whose peculiar province it is, to pass upon the question of possession. Ewing v. Burnett, 11 Peters 53.

  • It is the settled doctrine of this court, and it is believed to be in Great Britain, and the various courts of the Union, that under the registry laws, a notice of the prior conveyance is as effectual as the registry of the deed.

  • The object of recording the deed being to give notice to the world of the purchaser's claim of title, when that end is attained, whether by recording, actual notice, or such circumstances brought to the knowledge of the subsequent purchaser or creditor, as would induce a prudent man to make inquiry before he acted, answers the object of the statute. Doyle v. Teas, 4 Scam. 202. When the deed is filed and recorded in the proper office, it is frequently only constructive notice, and defeats the title of the second purchaser, not because he has seen the deed and has actual notice of its existence, but because he has the means afforded him of informing himself of the existence of the prior conveyance. It has always been held sufficient, if actual notice has come to the knowledge of the second grantee before his purchase.

  • While there is a conflict of authorities as to what circumstances brought to his knowledge are sufficient notice to protect the holder under an unrecorded deed, against a subsequent purchaser, it has been held by this court that, "Where the court is satisfied that the subsequent purchaser acted in bad faith, and that he either had actual notice, or might have had that notice, had he not willfully or negligently shut his eyes against those lights, which with proper observation, would have led him to knowledge, he must suffer the consequences of his ignorance, and be held to have had notice so as to taint his purchase with fraud in law. It is sufficient if the channels which would have led him to the truth, were open before him, and his attention so directed that they would have been seen by a man of ordinary prudence and caution, if he was liable to suffer the consequences of his ignorance. The law will not permit him to shut his eyes when his ignorance is to benefit himself at the expense of another, when he would have had them open and inquiring, had the consequences of his ignorance been detrimental to himself and advantageous to the other." Doyle v. Teas, 4 Scam. 250. The doctrine of this case was again recognized by this court in the cases of Rupert v. Mark, 15 Ill. 540; McConnell v. Read, 4 Scam. 123, and in Merrick v. Wallace, 19 Ill. 486. And it should now be regarded as the settled doctrine of this court.

Rupert v. Mark, 15 Ill. 540; 1854 Ill. LEXIS 57 (Ill. 1854):

  • The law on the subject of notice to a subsequent purchaser seems to be well established. If he has knowledge of the unrecorded conveyance when he makes his purchase, he can not protect himself against that conveyance. He is as effectually bound by knowledge of the existence of the prior deed as he is by its registration. It is deemed an act of fraud in him to take a second deed under such circumstances. And whatever is sufficient to put him on inquiry as to the rights of others is considered legal notice to him of those rights. He is chargeable with knowledge of such facts as might be ascertained by the exercise of ordinary diligence and understanding.

  • The actual possession of land is notice that the possessor has some interest therein. A party who purchases the same while that possession continues, takes the premises subject to that interest, whatever it may be. The possession is sufficient to put him on inquiry as to the title of the possessor; and it is his own fault if he does not ascertain the extent and character of that title.

  • Where the purchaser under an unregistered conveyance is in the open and visible possession of the premises, it is deemed sufficient notice to protect him against a subsequent purchaser, and to charge the latter with knowledge of his title. Tuttle v. Jackson, 6 Wend. 213; Colby v. Kenniston, 4 N.H. 262; Matthews v. Demerritt, 22 Me. 312; Norcross v. Widgery, 2 Mass. 506; Landes v. Brant, 10 Howard 348; Dyer v. Martin, 4 Scam. 146; Dixon v. Doe, 1 S. & M. 70; Boling v. Ewing, 9 Dana 76; McCaskle v. Amarine, 12 Ala. 17.

For more Illinois cases from the state appeals courts, and a couple of cases from the Illinois Federal courts, see Illinois Bona Fide Purchaser, Possession, Duty Of Inquiry - State Appellate Cases, Federal Cases.