In Lin v. Coronado, plaintiff purchased a residential property at a foreclosure sale with two other investors. She allegedly contributed $150,000, while the other investors contributed $100,000. Following the auction, a trust deed was delivered to one of the investors stating that the property was conveyed to the investors and plaintiff, but indicated that plaintiff owned zero percent. Without plaintiff’s knowledge or consent, the trust deed was altered to remove any reference to her and the property was subsequently reconveyed to the investors. The property was eventually sold by the other investors to defendant Coronado. Plaintiff sued Coronado to quiet title to the property, alleging that the deed was altered before it was recorded and therefore, it was void. The trial court sustained defendant’s demurrer without leave to amend and entered judgment in Coronado’s favor. The court of appeal affirmed.
The court held that, in general, when a deed is altered or changed by someone other than the grantor before it is delivered or recorded, the deed is void and no title vests in the grantee. However, for this rule to apply, the alteration must be considered material. An alteration which does not change the legal effect of the deed will not render it void. The court reasoned that even if plaintiff could prove that the trust deed was altered, she was unable to show that the alteration was material, because the trust deed reflected that she had a zero percent ownership interest in the property. The court also declined to grant reformation of the deed absent a showing that the deed was void. The court pointed out that any claim plaintiff might assert should be alleged against her fellow investors, not the eventual purchaser of the property.
Shannon B. Jones, Partner, firstname.lastname@example.org