Cross References.

“Real property” defined,§ 73-114.

“Real property” defined in tax laws,§ 63-201.

Buildings.

Hotel building affixed to land and held and conveyed as real estate, with the land upon which it stands, is real estate within the meaning of this section, and its character as such cannot be changed by attempted execution of a chattel mortgage purporting to cover building apart from land. Beeler v. C.C. Mercantile Co., 8 Idaho 644, 70 P. 943 (1902).

Buildings built by school district on land deeded for school purposes did not revert to grantor despite reversionary clause to that effect, since reversionary clause was invalid. Independent Sch. Dist. No. 7 v. Barnes, 71 Idaho 203, 228 P.2d 939 (1950).

Ditches.

Ditches and water rights are real estate under the provisions of this section. Ada County Farmers’ Irrigation Co. v. Farmers Canal Co., 5 Idaho 793, 51 P. 990 (1898); Nelson Bennett Co. v. Twin Falls Land & Water Co., 14 Idaho 5, 93 P. 789 (1908); Brunzell v. Stevenson, 30 Idaho 202, 164 P. 89 (1917). In action to quiet title to irrigation ditch, where rights of parties are mutual, court may direct each to pay costs. Mahaffey v. Carpenter, 42 Idaho 619, 248 P. 13 (1926).

Ditches, by means of which water is diverted from irrigation canal and conveyed to user’s land, are appurtenant to land and are real property. Randall Canal Co. v. Randall, 56 Idaho 99, 50 P.2d 593 (1935).

Fixtures.

A fixture is “real property” for the purposes of§ 5-241. West v. El Paso Prods. Co., 122 Idaho 133, 832 P.2d 306 (1992).

Grass and Timber.

Grasses growing from perennial roots are real estate. Severe v. Gooding, 43 Idaho 755, 254 P. 1054 (1927).

Standing timber or stumpage is real estate. Spence v. Price, 48 Idaho 121, 279 P. 1092 (1929).

Standing uncut timber is real property. Howard v. Estate of Howard, 112 Idaho 306, 732 P.2d 275 (1987).

The sale of land with timber on it was not the same as a sale of timber such that the income distribution mechanism of the trust was triggered, where the will distinguished between sales of realty and sales of timber, and the testator was knowledgeable in the business of timber land transactions. Howard v. Estate of Howard, 112 Idaho 306, 732 P.2d 275 (1987).

Hereditaments.

Real property includes that which is appurtenant to the land; it includes all easements attached to the land; and, it includes hereditaments, whether corporeal or incorporeal, such as easements, and every interest in land. Hughes v. State, 80 Idaho 286, 328 P.2d 397 (1958).

Mobile Homes.

Mobile home was affixed to the land at the time of a non-judicial foreclosure sale and, therefore, was converted to real property pursuant to this section, as the owner had installed a well set-up, with a pump, pressure tanks, and lines; a septic system with inspections and hookup to the home; a driveway; power lines; and a foundation, decks, and mobile set-up. Spencer v. Jameson, 147 Idaho 497, 211 P.3d 106 (2009).

Mortgage.

A mortgage does not meet any of the elements of the definition of real property in this section and is, thus, considered personal property under§ 55-102. McKay v. Walker, 160 Idaho 148, 369 P.3d 926 (2016).

Shares in Irrigation Company.

While shares in irrigation company have been held to be personal property, ownership of shares in mutual irrigation company not organized for profit is but incidental to ownership of water right. Ireton v. Idaho Irrigation Co., 30 Idaho 310, 164 P. 687 (1917).

Water.

In action to quiet title to certain shares of canal company stock, where it was shown that plaintiff had notice of defendants’ open, notorious and uninterrupted use of water right represented by such shares, by virtue of which the defendants gained prescriptive title thereto, the court properly quieted title to the stock in defendants. Pflueger v. Hopple, 66 Idaho 152, 156 P.2d 316 (1945). Water.

— Attributes of Real Property Lacking.

A water right does not have all the attributes of a real property interest, in that the water right may be conveyed without a complete legal description and may be lost through nonuse. Crow v. Carlson, 107 Idaho 461, 690 P.2d 916 (1984).

— Permits.

Permit to appropriate water is not real property. It is not an appropriation of public waters of state but merely the consent given by state to construct and acquire real property. Speer v. Stephenson, 17 Idaho 707, 102 P. 365 (1909); Marshall v. Niagara Springs Orchard Co., 22 Idaho 144, 125 P. 208 (1912); Basinger v. Taylor, 30 Idaho 289, 164 P. 522 (1917).

Water right is real estate and must be conveyed as real estate, and where one has a valid water permit issued to him by state engineer, he cannot convey water right secured thereby by simply handing permit to a would-be purchaser. Gard v. Thompson, 21 Idaho 485, 123 P. 497 (1912).

— Rights.

Water right is real estate. Albion-Idaho Land Co. v. Adams, 58 F. Supp. 579 (D. Idaho 1945); Knowles v. New Sweden Irrigation Dist., 16 Idaho 217, 101 P. 81 (1908); Nielson v. Parker, 19 Idaho 727, 115 P. 488 (1911); Nampa & Meridian Irrigation Dist. v. Briggs, 27 Idaho 84, 147 P. 75 (1915); Bennett v. Twin Falls North Side Land & Water Co., 27 Idaho 643, 150 P. 336 (1915).

Water right is real property and may be sold and transferred separately from land upon which it is used, same as any other real property. Hard v. Boise City Irrigation & Land Co., 9 Idaho 589, 76 P. 331 (1904); Boise City Irrigation & Land Co. v. Stewart, 10 Idaho 38, 77 P. 25 (1904); Twin Falls Canal Co. v. Shippen, 46 Idaho 787, 271 P. 578 (1928).

Water right is an appurtenance to land irrigated by use of such water. Taylor v. Hulett, 15 Idaho 265, 97 P. 37 (1908); Paddock v. Clark, 22 Idaho 498, 126 P. 1053 (1912).

While shares of water stock may be personalty, the water right which such shares control is real property. Bothwell v. Keefer, 53 Idaho 658, 27 P.2d 65 (1933).

A water right is real property and may be sold as such, with the purchaser acquiring no greater right than his vendor. Beecher v. Cassia Creek Irrigation Co., 66 Idaho 1, 154 P.2d 507 (1944).

A water right, being real property, may be acquired through prescriptive title by adverse possession and use for more than the statutory period. Pflueger v. Hopple, 66 Idaho 152, 156 P.2d 316 (1945).

Plaintiff, who had prior decreed rights to water was entitled to recover damages from the defendants for loss or damage to plaintiff’s crops proximately caused by acts of defendants, which deprived plaintiff of the water decreed to his land and to the use of which he was entitled. Follett v. Taylor Bros., 77 Idaho 416, 294 P.2d 1088 (1956). Appellants’ decreed water right constitutes real property and such right is appurtenant to appellants’ land to which the water represented thereby has been beneficially applied. Anderson v. Cummings, 81 Idaho 327, 340 P.2d 1111 (1959).

Inasmuch as water rights are real property which may be protected by injunction, mandamus or prohibition when threatened, lessor’s complaint, which alleged that as a result of lessees’ failure to use water rights they were in danger of being lost, stated a claim for equitable relief and should not have been dismissed. Olson v. Bedke, 97 Idaho 825, 555 P.2d 156 (1976).

Because the senior appropriators had acquired water rights, they had property rights under this section that could not be taken from them for public or private use, except by due process of law. When there was insufficient water to satisfy both the senior appropriators’ and the junior appropriators’ water rights, giving the junior appropriators a preference to the use of the water would constitute a taking for which compensation was required under Idaho Const., Art. XV, § 3. Clear Springs Foods, Inc. v. Spackman, 150 Idaho 790, 252 P.3d 71 (2011).

Am. Jur. 2d.

C.J.S.

Am. Jur. 2d.

§ 55-101B. “Condominium” defined.

A condominium is an estate consisting of (i) an undivided interest in common in real property, in an interest or interests in real property, or in any combination thereof, together with (ii) a separate interest in real property, in an interest or interests in real property, or in any combination thereof.

History.

I.C.,§ 55-101B, as added by 1965, ch. 104, § 2, p. 190.

Cross References.

“Personal property” defined,§ 73-114.

“Personal property” defined in revenue law,§ 63-201.

Wildlife property of the state,§ 36-103.

Apple Crop.

Apple crop is personal property. Twin Falls Bank & Trust Co. v. Weinberg, 44 Idaho 332, 257 P. 31 (1927).

Income.

Income is included within generic definition of personal property. Diefendorf v. Gallet, 51 Idaho 619, 10 P.2d 307 (1932).

Mortgage.

A mortgage does not meet any of the elements of the definition of real property in§ 55-101 and is, thus, considered personal property under this section. McKay v. Walker, 160 Idaho 148, 369 P.3d 926 (2016).

Am. Jur. 2d.

C.J.S.

ALR.

§ 55-103. Who may own property.

Any person, whether citizen or alien, may take, hold and dispose of property, real or personal.

History.

R.S., § 2827; reen. R.C. & C.L., § 3058; C.S., § 2827; I.C.A.,§ 54-103.

Cross References.

Inheritance by aliens,§ 15-2-112.

Am. Jur. 2d.

C.J.S.

Cross References.

Cointerests deemed to be in common,§ 55-508.

“Community property” defined,§ 32-906.

Simultaneous death of joint tenants or tenants by the entireties,§ 15-2-613.

Waste by joint tenants, action for,§ 6-201.

Waste by tenants for life or years, action for,§ 6-201.

Waste by tenants in common, action for,§ 6-201.

Accounting Between Cotenants.

Where a cotenant leases or lets property for profit, he must account to his cotenant. Washington County Irrigation Dist. v. Talboy, 55 Idaho 382, 43 P.2d 943 (1935).

Burden of Proof.

Where money in a joint tenancy survivorship account is deposited by one party, and after his death a question of his intent arises, the party asserting the gift must prove all the elements of a gift, excepting irrevocable delivery, by clear and convincing evidence. In re Estate of Chase, 82 Idaho 1, 348 P.2d 473 (1960).

Cotenants in Water.

As respects the right of irrigation district to recover damages from other districts for diversion of unused stored water in reservoir, districts which were not using water on their own land, but who were distributing appropriations to land owners and collecting rent therefor, were cotenants. Washington County Irrigation Dist. v. Talboy, 55 Idaho 382, 43 P.2d 943 (1935).

In an irrigation district’s action for damages for diversion of water from a reservoir by co-owner, co-owner could not profit by failure of the district to make final proof of completion of diversion works, or take from reservoir the district’s share of water and distribute it to its consumers, where co-owner made its proof of completion of diversion works for its share of water and same diversion works impounded water belonging to all parties. Washington County Irrigation Dist. v. Talboy, 55 Idaho 382, 43 P.2d 943 (1935).

Estoppel of Co-owner.

In an irrigation district’s action against co-owner for diversion of unused waters from reservoir, co-owner is estopped to set up provision of contract that waters reserved to district’s grantors should be appurtenant to lands and to be used only for irrigation of lands and domestic and stock use therefrom, where co-owners took same water and distributed it to its water users outside of the district. Washington County Irrigation Dist. v. Talboy, 55 Idaho 382, 43 P.2d 943 (1935).

Incidents of Cotenancy.

Cotenant cannot take advantage of any defect in the common title by purchasing an outstanding title or encumbrance and assert it against his companions in interest. Legal title acquired by him is held in trust for the others if they choose within a reasonable time to claim the benefit of the purchase by contributing or offering to contribute their proportion of the purchase money. Wilson v. Linder, 21 Idaho 576, 123 P. 487 (1912).

Tenant in common is entitled to contribution for expenditures absolutely necessary for the benefit and preservation of the common property and may charge cotenants with their proportion of the reasonable expenses incurred fairly and in good faith for the benefit of the common property. Keyser v. Morehead, 23 Idaho 501, 130 P. 992 (1913).

A tenant in common is entitled to the use, benefit and possession of common property, provided he does not exclude his cotenant from like use and benefit. Washington County Irrigation Dist. v. Talboy, 55 Idaho 382, 43 P.2d 943 (1935).

Joint Tenancy.

— Abrogation.

Under this section and§ 55-508 the common-law rule of joint tenancy has been abrogated, and every interest in real estate granted or devised to two or more persons, other than executors or trustees, constitutes a tenancy in common, unless expressly declared to the contrary. Powell v. Powell, 22 Idaho 531, 126 P. 1058 (1912).

This section, abrogating the common-law rule of joint tenancy, does not abolish such tenancy. It merely declares that such an interest is in common “unless declared in its creation to be a joint interest.” Gray v. Gray, 78 Idaho 439, 304 P.2d 650 (1956).

— Bank Account.

A joint tenancy may be terminated prior to the death of one of the joint tenants by any act of the joint tenants which destroys one or more of the essential common-law unities of interest, title, time and possession. Ogilvie v. Idaho Bank & Trust Co., 99 Idaho 361, 582 P.2d 215 (1978). — Bank Account.

Where the tenancy was created by a written agreement in which the parties declared the tenancy to be joint, a valid gift of a joint interest in the account with right of survivorship was made and effectively delivered to the plaintiff, one of the parties, at the time the account was created, and, therefore, the balance in the account at the time of the death of one of the parties was and is the property of the plaintiff. Gray v. Gray, 78 Idaho 439, 304 P.2d 650 (1956).

All the elements of a valid gift inter vivos may or may not be present in the creation of a joint tenancy in a bank account. The gift may or may not be involved. The essentials of a valid joint tenancy account are those set out in S.L. 1943, ch. 30, § 1 and this section. These essentials being present, the right of the survivor does not depend on the fact of a completed gift. Gray v. Gray, 78 Idaho 439, 304 P.2d 650 (1956).

— Enforcement of Debts Against.

Because of the right of survivorship, debts secured by jointly owned property by a debtor joint tenant are not enforceable against the joint tenancy property after the death of the debtor joint tenant, unless one or more of the essential unities was destroyed prior to the joint tenancy’s termination by death, and then only to the extent of the debtor joint tenant’s interest. Ogilvie v. Idaho Bank & Trust Co., 99 Idaho 361, 582 P.2d 215 (1978).

— Survivorship.

The fact that real property was purchased by the husband and wife with joint tenancy funds did not create a joint tenancy with right of survivorship in the realty. Greene v. Cooke, 96 Idaho 48, 524 P.2d 176 (1973).

Presumption from Possession.

The law presumes that possession of one cotenant is possession of all cotenants, and no presumption of abandonment arises. Washington County Irrigation Dist. v. Talboy, 55 Idaho 382, 43 P.2d 943 (1935).

Am. Jur. 2d.

C.J.S.

ALR.

Termination of tenancy, what acts by one or more of joint tenants will sever or terminate the tenancy. 39 A.L.R.4th 1068.

Alien Beneficiaries of Trust.

Under inter vivos trust agreement that named 14 German citizens as beneficiaries and provided that annual payments of income be made at the discretion of the trustees, that any beneficiary coming to the United States was to be paid his share of trust estate, and that payments should not be subject to confiscation by or create sinews of war for any government antagonistic to the United States it was not possible after the time of making the conveyance for any person other than the named beneficiaries of the trust to acquire a property interest in it other than through a named beneficiary. Hermann v. Brownell, 274 F.2d 842 (9th Cir.), cert. denied, 364 U.S. 821, 81 S. Ct. 56, 5 L. Ed. 2d 50 (1960).

Easement with Vested Rights.

Where the original grantors of an easement gave grantees the right at any time to lay and maintain an additional pipeline or pipelines alongside of the first one, the grantors did not only create a mere option, but also an expansible easement with vested rights not affected by the rule against perpetuities, nor did the contract suspend the power of alienation in violation of this section. Northwest Pipeline Corp. v. Forrest Weaver Farm, Inc., 103 Idaho 180, 646 P.2d 422 (1982).

Right of Refusal.

A preemptive right of first refusal at the owner’s own price or a third-parties’ bona fide offer which the owner is willing to accept does not suspend the absolute power of alienation of real property. Meridian Bowling Lanes, Inc. v. Meridian Athletic Ass’n, 105 Idaho 509, 670 P.2d 1294 (1983).

Vesting.

Cited

Where will devises property to testator’s widow for life with remainder to testator’s son, title to property vests immediately in son upon the death of testator. Coats v. Harris, 9 Idaho 458, 75 P. 243 (1904). Cited Hodge v. Waggoner, 164 Idaho 89, 425 P.3d 1232 (2018).

Am. Jur. 2d.

C.J.S.

Cross References.

Rule in Shelley’s Case abolished,§ 55-206.

Future Interest.

Although a deed may create a future interest in an easement, such an easement may run afoul of public policy when the easement is conditioned on an event that may never occur. Kirk v. Wescott, 160 Idaho 893, 382 P.3d 342 (2016).

Am. Jur. 2d.

C.J.S.

Am. Jur. 2d.

C.J.S.

ALR.

§ 55-108. Inheritance by posthumous children.

When a future interest is limited to successors, heirs, issue or children, posthumous children are entitled to take in the same manner as if living at the death of their parent.

History.

R.S., § 2833; reen. R.C. & C.L., § 3064; C.S., § 5332; I.C.A.,§ 54-108.

Cross References.

Unborn child as existing person,§ 32-102.

Am. Jur. 2d.

C.J.S.

ALR.

§ 55-109. Transfer and devolution of future interests.

Future interests pass by succession, will and transfer in the same manner as present interests.

History.

R.S., § 2834; reen. R.C. & C.L., § 3065; C.S., § 5333; I.C.A.,§ 54-109.

Am. Jur. 2d.

C.J.S.

Cross References.

Transfer of possibilities barred,§ 55-501.

Settlor of Trust.

Where under inter vivos trust agreement the possibility that the trust property might revert to the settlor was inalienable, unsaleable and remote, settlor had no interest of any kind in the trust property. Hermann v. Brownell, 274 F.2d 842 (9th Cir.), cert. denied, 364 U.S. 821, 81 S. Ct. 56, 5 L. Ed. 2d 50 (1960).

Amendments.

The 2008 amendment, by ch. 77, rewrote the section, substituting the heading “No rule against perpetuities” for “suspension of power of alienation”. See§ 55-111A for present similar provisions.

Compiler’s Notes.

Section 2 of S.L. 1957, ch. 54 read: “All other acts, or parts of acts, in conflict with this act to the extent of said conflict are hereby repealed.”

Effective Dates.

Section 3 of S.L. 1957, ch. 54 declared an emergency. Approved February 20, 1957.

Rule Against Perpetuities.

Although a deed may create a future interest in an easement, such an easement may run afoul of public policy when the easement is conditioned on an event that may never occur. Kirk v. Wescott, 160 Idaho 893, 382 P.3d 342 (2016).

Decisions Under Prior Law

Charitable Gift.

The language of the possession list making gifts to various friends and charitable organizations did not offend the rule against suspension of the power of alienation pursuant to this section because this rule does not apply to charitable trusts. Salfeety v. Seideman, 127 Idaho 817, 907 P.2d 794 (1995). This section was not violated since the real property in trust was to be immediately sold upon settlor’s death and the proceeds distributed to designated charities; thus, there was no suspension of the power of alienation of the real property. Salfeety v. Seideman, 127 Idaho 817, 907 P.2d 794 (1995).

Where the only gift which could potentially violate this section was settlor’s gift of the income from the oil and gas leases, because she specifically stated in the possession list and the script that the leases should not be sold since they were a gift to charity, and because this section does not apply to charitable trusts, that gift was valid. Salfeety v. Seideman, 127 Idaho 817, 907 P.2d 794 (1995).

Deed.

Where a deed clearly refers to a person’s interest as a life estate and the remainder interests pass at the person’s death, the remainder interests vest upon the person’s death and meet the requirement that a remainder interest vest or fail within twenty-five years of the death of a life in being. Riley v. Rowan, 131 Idaho 831, 965 P.2d 191 (1998).

Rule Against Perpetuities.

The common law rule against perpetuities is generally stated to be that no interest in real estate is good unless it must vest, if at all, not later than twenty-one years after some life in being at the creation of the interest plus the period of gestation. Locklear v. Tucker, 69 Idaho 84, 203 P.2d 380 (1949).

Idaho has adopted what is intended to be a complete system governing alienation of real property; and the common-law rule against perpetuities is not in force in this jurisdiction. Locklear v. Tucker, 69 Idaho 84, 203 P.2d 380 (1949).

Testamentary Trusts.

A testamentary trust under which the testator bequeathed his interest in a corporation to his wife, in trust, with authority to terminate trust at any time the business proved unprofitable, but otherwise to operate the same as going concern for 10 years after testator’s decease and thereafter the wife to close trust or continue it in her discretion, and with a direction that the net proceeds should be sole property of testator’s wife except that profits in excess of $20,000 in any one year should be subject to division, with the wife receiving one-half and other half being distributed among employees, did not violate statutory rule against perpetuities. In re Zeb’s Estate, 67 Idaho 567, 189 P.2d 95 (1947).

Even though parties had agreed that the only question involved was whether or not a trust provision violated the terms of this section, a holding that, regardless of the trust provision, petitioners were barred from any relief by other provisions of will was not prejudicial in view of fact that court determined the trust provision was valid. In re Zeb’s Estate, 67 Idaho 567, 189 P.2d 95 (1947).

Am. Jur. 2d.

ALR.

Am. Jur. 2d.

C.J.S.

Amendments.

This section was amended by two 2016 acts which appear to be compatible and have been compiled together.

The 2016 amendment, by ch. 209, added subsection (3).

The 2016 amendment, by ch. 365, added subsection (3) [now (4)].

The 2017 amendment, by ch. 58, redesignated the last subsection, formerly designated as subsection (3), as subsection (4), resolving a conflict caused by the multiple 2016 amendments of this section.

The 2019 amendment, by ch. 199, inserted present subsection (4) and redesignated former subsection (4) as subsection (5).

The 2020 amendment, by ch. 242, added present subsections (5) and (6) and redesignated former subsection (5) as present subsection (7).

Effective Dates.

Section 3 of S.L. 2016, ch. 209 declared an emergency. Approved March 24, 2016.

Am. Jur. 2d.

C.J.S.

Cross References.

Rule in Shelley’s Case abrogated,§ 55-206.

Suspension of power of alienation,§ 55-111A.

Am. Jur. 2d.

C.J.S.

C.J.S.

§ 55-204. Remainders upon successive life estates.

No remainder can be created upon successive estates for life, provided for in the preceding section, unless such remainder is in fee; nor can a remainder be created upon such estate in a term for years, unless it is for the whole residue of such term.

History.

R.S., § 2853; reen. R.C. & C.L., § 3074; C.S., § 5342; I.C.A.,§ 54-204.

C.J.S.

ALR.

Heirs.

Under provisions of this section the common-law rule, generally known as the rule in Shelley’s case, has been abrogated, and term “heirs” has been changed from a word of limitation to one of purchase. Wilson v. Linder, 18 Idaho 438, 110 P. 274 (1910).

Am. Jur. 2d.

C.J.S.

Am. Jur. 2d.

C.J.S.

Cross References.

Service of notice on tenant,§ 6-304.

Compiler’s Notes.

The code of civil procedure, referred to in subsection (1), is a division of the Idaho Code, consisting of Titles 1 through 13.

Inapplicable to Orders to Vacate.

This section has no application to court orders directing a party to vacate premises; thus, court order directing tenants to vacate premises on less than one-month’s notice was not violative of this section. Hinkle v. Winey, 126 Idaho 993, 895 P.2d 594 (Ct. App. 1995).

Notice.

Where the first notice sent by a gas company informing a bulk plant operator of the company’s desire to terminate distributor and consignment agreements did not afford the operator the required one-month notice to vacate the bulk plant, but where a second written notice was served on the operator to vacate the plant on date more than one month following service of the note, the bulk plant operator had sufficient notice of termination of the tenancy at will. Texaco, Inc. v. Johnson, 96 Idaho 935, 539 P.2d 288 (1975).

Where original lessee assigned lease to second party without approval of lessor as required by lease but lessor did not treat such party as a trespasser after the expiration of the original lease and did not at that time demand that he vacate the property, nor did they bring an unlawful detainer action against him but continued to accept rent from him a new tenancy, implied from conduct, arose by operation of law; thus such party was entitled to a minimum of one month’s notice, under the provisions of this section, before the tenancy could be terminated and it is clear that until the tenancy was legally terminated such party had the right to remove improvements. Lewiston Pre-Mix Concrete, Inc. v. Rohde, 110 Idaho 640, 718 P.2d 551 (Ct. App. 1985).

Am. Jur. 2d.

C.J.S.

Am. Jur. 2d.

C.J.S.

ALR.

§ 55-210. Right of reentry.

Whenever the right of reentry is given to a grantor or a lessor in any grant or lease, or otherwise, such reentry may be made at any time after the right has accrued, upon three (3) days’ notice, as provided in the Code of Civil Procedure.

History.

R.S., § 2859; reen. R.C. & C.L., § 3080; C.S., § 5348; I.C.A.,§ 54-210.

Cross References.

Service of notice in unlawful detainer,§ 6-304.

Compiler’s Notes.

The Code of Civil Procedure, referred to in this section, is a division of the Idaho Code, consisting of Titles 1 through 13.

Choice of Remedy.

A lessor’s contractual right to forfeiture must be clearly stipulated in order to be enforceable; however, even absent a contractual forfeiture remedy, such statutory remedy is still available in an unlawful detainer action. Consequently, absent a clear contractual right to declare forfeiture, a landlord may not, without the express consent of a tenant, repossess his property without resorting to remedies provided in the unlawful detainer statutes. Riverside Dev. Co. v. Ritchie, 103 Idaho 515, 650 P.2d 657 (1982).

Where a lease agreement contained a very definitive contractual right to terminate the lease upon default of the lessee, the lessor had a choice of pursuing either its contractual or statutory remedy. Riverside Dev. Co. v. Ritchie, 103 Idaho 515, 650 P.2d 657 (1982).

Damages Resulting from Entry.

Where landlord entered to harvest and pack apples to which he was entitled as rent, the only question involved is the damages resulting to tenant from entry. Muegerl v. Hawley, 49 Idaho 790, 292 P. 242 (1930).

Forfeiture.

Notice.

The remedy of forfeiture permitted under the unlawful detainer statutes is merely cumulative to any contractual right of reentry provided for in the lease agreement. Riverside Dev. Co. v. Ritchie, 103 Idaho 515, 650 P.2d 657 (1982). Notice.

A notice not complying with the requirements of this section was ineffective as a cancellation of the lease. Adair v. Freeman, 92 Idaho 773, 451 P.2d 519 (1969).

Where a lessor of business property had the right to enter the premises because the lease had expired, three days’ notice was not required, since the notice requirement set forth in this section applies only where a lessor enters premises under a right of reentry. Ringer v. Rice, 97 Idaho 105, 540 P.2d 290 (1975).

Where the lessor gave the lessee notice of default on May 20, 1977, for his failure to pay the May, 1977 minimum rent and, on June 22, 1977, the lessee had still not cured the default, and the lessor sent a notice of termination, the lessee thus had more than the 30 days permitted in the lease to cure the default; and since no reentry was attempted by the lessor within three days of the termination notice the notice requirement of this section was met. Riverside Dev. Co. v. Ritchie, 103 Idaho 515, 650 P.2d 657 (1982).

Am. Jur. 2d.

C.J.S.

ALR.

§ 55-211. Summary proceedings — Where provided for.

Summary proceedings for obtaining possession of real property forcibly entered, or forcibly and unlawfully detained, are provided for in the Code of Civil Procedure.

History.

R.S., § 2860; reen. R.C. & C.L., § 3081; C.S., § 5349; I.C.A.,§ 54-211.

Compiler’s Notes.

The Code of Civil Procedure, referred to in this section, is a division of the Idaho Code, consisting of Titles 1 through 13.

Am. Jur. 2d.

C.J.S.

ALR.

§ 55-212. Action for real property — Notice unnecessary.

An action for the possession of real property, leased or granted, with a right of reentry, may be maintained at any time, in the district court, after the right to reenter has accrued, without notice.

History.

R.S., § 2861; reen. R.C. & C.L., § 3082; C.S., § 5350; I.C.A.,§ 54-212.

Am. Jur. 2d.

C.J.S.

ALR.

Am. Jur. 2d.

§ 55-302. Remedies of lessor against lessee’s assignee.

Whatever remedies the lessor of any real property has against his immediate lessee for the breach of any agreement in the lease, or for recovery of the possession, he has against the assignees of the lessee, for any cause of action accruing while they are such assignees, except where the assignment is made by way of security for a loan, and is not accompanied by possession of the premises.

History.

R.S., § 2876; reen. R.C. & C.L., § 3084; C.S., § 5352; I.C.A.,§ 54-302.

Assignee Bound by Lien.

Under allegations that assignee had actual notice of provisions of lease and was successor in interest of original lessee, he is bound by provisions of lease and equitable lien is good against him. Neilson v. Peterson, 37 Idaho 171, 215 P. 836 (1923).

C.J.S.

§ 55-303. Remedies of lessee against lessor’s assignee.

Whatever remedies the lessee of any real property may have against his immediate lessor, for the breach of any agreement in the lease, he may have against the assigns of the lessor, and the assigns of the lessee may have against the lessor and his assigns, except upon covenants against encumbrances or relating to the title or possession of the premises.

History.

R.S., § 2877; reen. R.C. & C.L., § 3085; C.S., § 5353; I.C.A.,§ 54-303.

Am. Jur. 2d.

§ 55-304. Recovery of rent on lease for life.

Rent due upon a lease for life may be recovered in the same manner as upon a lease for years.

History.

R.S., § 2878; reen. R.C. & C.L., § 3086; C.S., § 5354; I.C.A.,§ 54-304.

Am. Jur. 2d.

C.J.S.

ALR.

Right of contingent remainderman to maintain action for damages for waste. 56 A.L.R.3d 677.

Amendments.

The 2020 amendment, by ch. 254, added subsection (3).

Am. Jur. 2d.

C.J.S.

ALR.

§ 55-308. Removal of fixtures by tenant.

A tenant may remove from the demised premises, any time during the continuance of his term, anything affixed thereto for the purposes of trade, manufacture, ornament or domestic use, if the removal can be effected without injury to the premises, unless the thing has, by the manner in which it is affixed, become an integral part of the premises.

History.

R.S., § 2882; reen. R.C. & C.L., § 3090; C.S., § 5358; I.C.A.,§ 54-308.

Cross References.

Removal of improvements made by occupying claimant,§ 6-414.

Fixtures.

Property consisting of a front and back bar, ice chest, etc., placed in a saloon building by tenant and fastened to the wall and floor, constitutes trade fixtures and may be removed by tenant during the continuance of his term. Bush v. Havird, 12 Idaho 352, 86 P. 529 (1964).

Accepting trial court’s determination that they were fixtures, a metal canopy or hood, soda fountain with compressor, stainless steel sink, air conditioner and special acid-resistant sink, installed by tenant operator of drug store, could be removed by tenant during operation of lease, not having become integral parts of the building, since removal involved no more than unscrewing attaching supports and removal of lines for electricity, water and drainage used for their service. Pearson v. Harper, 87 Idaho 245, 392 P.2d 687 (1964).

In determining whether a particular article has become a trade fixture, three general tests are applied: 1. annexation to the realty, either actual or constructive; 2. adaptation or application to the use or purpose to which that part of the realty to which it is connected is appropriated; and, 3. intention to make the article a permanent accession to the freehold. Pearson v. Harper, 87 Idaho 245, 392 P.2d 687 (1964); Steel Farms, Inc. v. Croft & Reed, 154 Idaho 259, 297 P.3d 222 (2012).

Provision in lease requiring payment of $10.00 per day during the time possession is withheld, following default and 30-day notice, is indicative of tenant’s intent upon holding over; therefore, even though terms of the lease had expired, his possession was not more than a continuance of the original term, and tenant was entitled to remove trade fixtures which had not become an integral part of the premises and that could be removed without injury to the premises. Pearson v. Harper, 87 Idaho 245, 392 P.2d 687 (1964). Trial court found a dividing partition was so affixed that it became an integral part of leased building and that shelving, although not an integral part of building, could not be removed without injury to the building; therefore, tenant was not authorized to remove either partition or shelving. Pearson v. Harper, 87 Idaho 245, 392 P.2d 687 (1964).

Where pivot irrigation system was annexed to the land, either constructively or actually, in that it was bolted to cement slabs buried in the ground, and attached to pipes and electrical wires which were buried three to four feet underground and removal of the system necessitated digging up these buried wires and pipes, which could only result in some damage to the realty itself and such system was clearly adapted to the land since the purpose and use of the land in question was that of farming and irrigation is peculiarly necessary to a farming operation conducted in Idaho and where the gravity system in place before such system was installed was destroyed, indicating that it was no longer necessary to have the gravity system because of the permanent installation of another irrigation system, such system was a fixture. Rayl v. Shull Enters., Inc., 108 Idaho 524, 700 P.2d 567 (1985).

An irrigation system as a whole is not necessarily a fixture, but may be personal property. The court must assess objective intent, annexation, and adaptation to determine intent. Steel Farms, Inc. v. Croft & Reed, Inc., 154 Idaho 259, 297 P.3d 222 (2012).

Tenant waived its right to remove an electrical transformer it had installed on leased premises, when it failed to remove the transformer before surrendering the premises. Caldwell Land and Cattle, LLC v. Johnson Thermal Sys., — Idaho —, 452 P.3d 809 (2019).

Question for Jury.

Where the evidence presented at trial established that the equipment was very heavy and bolted to the mill and there was contradictory testimony as to whether the equipment could be removed from the mill without damage, but the jury could find that the equipment could be removed without harm to the structure, it was a question of fact for the jury to determine whether the equipment was removable under this section. P.N. Cedar, Inc. v. D & G Shake Co., 110 Idaho 561, 716 P.2d 1333 (Ct. App. 1986).

Time for Removal.

Trade fixtures must be removed by tenant during continuance of his term; right to remove them is lost after a surrender of possession by tenant, or eviction by landlord by summary proceedings. Bush v. Havird, 12 Idaho 352, 86 P. 529 (1964).

As long as a tenant remains in possession of premises and holds over term provided by the lease, which also provides for payment of a fixed sum for each day of holding over, he is still within the purview of the statute allowing him to remove his property “any time during the continuance of his term.” Pearson v. Harper, 87 Idaho 245, 392 P.2d 687 (1964).

Title.

Where original lessee assigned lease to second party without approval of lessor as required by lease but lessor did not treat such party as a trespasser after the expiration of the original lease and did not, at that time, demand that he vacate the property, nor did he bring an unlawful detainer action against the assignee but continued to accept rent from him, a new tenancy, implied from conduct, arose by operation of law; thus such party was entitled to a minimum of one month’s notice, under the provisions of§ 55-208, before the tenancy could be terminated and it is clear that, until the tenancy was legally terminated, such party had the right to remove improvements. Lewiston Pre-Mix Concrete, Inc. v. Rohde, 110 Idaho 640, 718 P.2d 551 (Ct. App. 1985). Title.

If lease does not give tenant right to remove trade fixtures, failure of tenant to remove trade fixtures prior to expiration of lease vests title to trade fixtures in landlord. Fidelity Trust Co. v. State, 72 Idaho 137, 237 P.2d 1058 (1951).

Am. Jur. 2d.

C.J.S.

ALR.

§ 55-309. Ownership of street by abutter.

An owner of land bounded by a road or street is presumed to own to the center of the way, but the contrary may be shown.

History.

R.S., § 2883; reen. R.C. & C.L., § 3091; C.S., § 5359; I.C.A.,§ 54-309.

Am. Jur. 2d.

C.J.S.

Want of Care.

Excavation by owner on his own land, causing damage to a building on adjoining owner’s land, without the knowledge of, or previous notice to, such adjoining owner, is evidence of want of care in doing the work. Zilka v. Graham, 26 Idaho 163, 141 P. 639 (1914).

Am. Jur. 2d.

C.J.S.

Category of Waste.

Although this section does not expressly address waste of a lawn, trees and shrubs located on a life estate, the reference to “real property” in§ 6-201 includes waste of the lawn, trees, and shrubs located on the life estate. Kimbrough v. Reed, 130 Idaho 512, 943 P.2d 1232 (1997).

Paving Assessments.

Where life estate was left husband by wife and paving assessments were levied after death of wife, such assessment should be borne proportionately by husband and remainderman. Felton v. Anderton, 67 Idaho 160, 174 P.2d 212 (1946).

Taxes.

Taxes paid by surviving husband cannot be charged against deceased wife’s estate, since it was incumbent on the husband as owner of the life estate to pay them. Felton v. Anderton, 67 Idaho 160, 174 P.2d 212 (1946).

ALR.

§ 55-312. Monuments and fences.

Coterminous owners are mutually bound equally to maintain:

1. The boundaries and monuments between them.
2. The fences between them, unless one of them chooses to let his land lie without fencing, in which case, if he afterward incloses it, he must refund to the other the just proportion of the value, at that time, of any division fence made by the latter.

History.

R.S., § 2886; reen. R.C. & C.L., § 3094; C.S., § 5362; I.C.A.,§ 54-312.

Cross References.

Erection, maintenance, and repair of partition fences,§ 35-101 et seq.

Am. Jur. 2d.

C.J.S.

Consent.

This section unambiguously permitted the relocation of an access road, and did not require the consent of the neighboring dominant estate holders; the relocation did not constitute a taking and there was no genuine issue of material fact as to whether the estate holders sustained an injury. Statewide Constr., Inc. v. Pietri, 150 Idaho 423, 247 P.3d 650, overruled on other grounds, Verska v. St. Alphonsus Med. Ctr., 151 Idaho 889, 265 P.3d 502 (2011).

Relocation Improper.

Where substantial and competent evidence was presented at trial that the slope of a relocated easement was steep enough to cause injury to those using the easement, property owners may be enjoined from relocating the easement. Belstler v. Sheler, 151 Idaho 819, 264 P.3d 926 (2011).

This section does not permit the relocation, or change of dimensions, of an easement for a driveway, where the change would clearly obstruct motor vehicle travel and injure the owners of the easement, as they would require the construction of a new driveway across their front lawn. Manning v. Campbell, 152 Idaho 232, 268 P.3d 1184 (2012).

Devolution of Personal Property.

Shares of stock in corporation are personal property and descend according to the laws of the state which was the domicil of owner at time of his death, and certificates of shares of corporate stock, which constitute evidence of ownership, are transferred according to the laws of the state wherein corporation was organized. State ex rel. Peterson v. Dunlap, 28 Idaho 784, 156 P. 1141 (1916).

Laws of Succession Controlling.

French laws of succession controlled the distribution of bequests to residents of France of an Idaho testator who died intestate during the pendency of the administration of the testator’s estate, leaving French heirs at law. Barthel v. Johnston, 92 Idaho 94, 437 P.2d 366 (1968).

Marital Domicile.

Personal property acquired during coverture is governed and controlled by the law of the marital domicile. Ashe v. Hurt, 114 Idaho 70, 753 P.2d 281 (Ct. App. 1988), aff’d, 117 Idaho 266, 787 P.2d 252 (1990).

Where spouses held a brokerage account as joint tenants with right of survivorship while domiciled in California, and the husband terminated and then reestablished the account when the spouses were domiciled in Idaho, the property was subject to Idaho law. Ashe v. Hurt, 114 Idaho 70, 753 P.2d 281 (Ct. App. 1988), aff’d, 117 Idaho 266, 787 P.2d 252 (1990).

Idaho Law Review.

Idaho Law Review. — Choice of Law in Idaho: A Survey and Critique of Idaho Cases, Andrew S. Jorgensen. 49 Idaho L. Rev. 547 (2013).

Compiler’s Notes.

The Code of Civil Procedure, referred to in this section, is a division of the Idaho Code consisting of Titles 1 through 13.

Contractual Obligation of Carrier.

The provisions and procedures contemplated by§ 11-507 are applicable to a cause of action belonging to judgment debtors against their insurance carriers based on wrongful refusal by carriers to settle claims against judgment debtors within policy limits, which cause arises from the contractual obligation of the carriers and is a thing in action arising out of violation of an obligation and, thus, assignable under§ 5-302 and this section. Whitehead v. Van Leuven, 347 F. Supp. 505 (D. Idaho 1972).

Damages to Mining Ground Assignable.

A cause of action for damages to mining ground from oil and grease nuisance is a thing in action, arising out of alleged violation of right of property, and assignable. Idaho Gold Dredging Corp. v. Boise Payette Lumber Co., 54 Idaho 765, 37 P.2d 407 (1934), cert. denied, 299 U.S. 577, 57 S. Ct. 40, 81 L. Ed. 425 (1936).

Fraud in Stock Sale.

Cause of action for fraud in sale of stock survives. MacLeod v. Stelle, 43 Idaho 64, 249 P. 254 (1926).

Legal Malpractice Claim.

While legal malpractice claims are generally not assignable, such a claim is transferrable if it is transferred to an assignee in a commercial transaction, along with other business assets and liabilities. St. Luke’s Magic Valley Reg’l Med. Ctr. v. Luciani (In re Order Certifying Question to Idaho Supreme Court), 154 Idaho 37, 293 P.3d 661 (2013).

Personal Injuries.

Injuries of personal nature which do not survive are such as injury to person, malicious prosecution, false imprisonment, libel, slander and the like; but injury which lessens estate of injured party does survive and is, thus, assignable. MacLeod v. Stelle, 43 Idaho 64, 249 P. 254 (1926).

Am. Jur. 2d.

C.J.S.

Compiler’s Notes.

This section, which comprised I.C.,§ 55-403A, as added by 1986, ch. 136, § 2, p. 365, was repealed by S.L. 2005, ch. 217, § 3.

Cross References.

Possibility not a property interest,§ 55-110.

Am. Jur. 2d.

§ 55-503. Transfer by disseizee.

Any person claiming title to real property in the adverse possession of another may transfer it with the same effect as if in actual possession.

History.

1863, p. 528, § 33; R.S., § 2902; reen. R.C. & C.L., § 3099; C.S., § 5367; I.C.A.,§ 54-503.

Am. Jur. 2d.

C.J.S.

Cross References.

Real estate transfers required to be in writing,§§ 9-503, 9-504.

Am. Jur. 2d.

C.J.S.

Am. Jur. 2d.

C.J.S.

Cross References.

Interests in common,§ 55-104.

Abrogation of Joint Tenancy.

Under this section and§ 55-104, the common-law rule of joint tenancy has been abrogated, and every interest in real estate granted or devised to two or more persons, other than executors or trustees, constitutes a tenancy in common, unless expressly declared to the contrary. Powell v. Powell, 22 Idaho 531, 126 P. 1058 (1912).

Accounting Between Cotenants.

Where a cotenant leases or lets property for profit, he must account to his cotenant. Washington County Irrigation Dist. v. Talboy, 55 Idaho 382, 43 P.2d 943 (1935).

Cotenants in Water.

As respects the right of irrigation district to recover damages from other districts for diversion of unused stored water in reservoir, districts which were not using water on their own land, but who were distributing appropriations to land owners and collecting rent therefor, were cotenants. Washington County Irrigation Dist. v. Talboy, 55 Idaho 382, 43 P.2d 943 (1935).

Joint Tenancy with Right of Survivorship.

In an irrigation district’s action for damages for diversion of water from a reservoir by co-owner, co-owner could not profit by failure of the district to make final proof of completion of diversion work, or take from reservoir the district’s share of water and distribute it to its consumers, where co-owner made its proof of completion of diversion works for its share of water and same diversion works impounded water belonging to all parties. Washington County Irrigation Dist. v. Talboy, 55 Idaho 382, 43 P.2d 943 (1935). Joint Tenancy with Right of Survivorship.

The mere fact that real property was purchased by the husband and wife with joint tenancy funds does not create a joint tenancy with right of survivorship in the realty. Greene v. Cooke, 96 Idaho 48, 524 P.2d 176 (1973).

Presumption from Possession.

The law presumes that possession of one cotenant is possession of all cotenants, and no presumption of abandonment arises. Washington County Irrigation Dist. v. Talboy, 55 Idaho 382, 43 P.2d 943 (1935).

Use and Possession.

A tenant in common is entitled to the use, benefit and possession of common property, provided he does not exclude his cotenants from like use and benefit. Washington County Irrigation Dist. v. Talboy, 55 Idaho 382, 43 P.2d 943 (1935).

Am. Jur. 2d.

C.J.S.

Cross References.

Death of vendor prior to conveyance, executor or administrator to make conveyance,§ 15-3-715.

Partition of real estate, actions for,§ 6-501 et seq.

Statute of frauds,§§ 9-505, 28-2-201.

Transfers of real property must be in writing,§§ 9-503, 9-504.

Acknowledgment.

Since acknowledgment is not required except for purpose of recording, lack of acknowledgment before a notary did not by itself vitiate deed. Mollandorf v. Derry, 95 Idaho 1, 501 P.2d 199 (1972).

Address of Grantee.

The identification of the city in the agreement as a municipal corporation is sufficient to satisfy the requirement of this section relating to disclosure of the address of a grantee, when the grantee is a municipality. City of Kellogg v. Mission Mt. Interests Ltd., 135 Idaho 239, 16 P.3d 915 (2000). The district court ruled that a grantee’s mailing address on the deed was sufficient compliance with this section. KEB Enters., L.P. v. Smedley, 140 Idaho 746, 101 P.3d 690 (2004).

Warranty deed conveying a property to a corporation in an attempt to redeem after a foreclosure was not ineffective based on an address requirement under this section, since it only applied to grantees. Riley v. W. R. Holdings, LLC, 143 Idaho 116, 138 P.3d 316 (2006).

Mortgage which a business gave to a husband and wife to secure debts the business allegedly owed the husband and wife was not valid under§ 45-902 and this section, because the husband and wife did not include their complete mailing address on the instrument, or incorporate their address by reference to some other document. Hopkins v. Thomason Farms, Inc. (In re Thomason), Case No. 03-42400, 2009 Bankr. LEXIS 1769 (Bankr. D. Idaho June 24, 2009).

Boundary Agreements.

Where the location of a true boundary line between coterminous owners is known to either of the parties, or is not uncertain, and is not in dispute, an oral agreement between them purporting to establish another line as the boundary between their properties constitutes an attempt to convey real property in violation of the statute of frauds. Downing v. Boehringer, 82 Idaho 52, 349 P.2d 306 (1960).

Where the location of the true boundary line between coterminous owners is unknown, uncertain or in dispute, the coterminous owners may orally agree upon a boundary line, and the agreement, when possession is taken under it, will be binding upon the owners and those claiming under them and will not violate the statute of frauds for lack of a writing because it is not a conveyance of land, but merely the locating and establishing of the common boundary. Hyde v. Lawson, 94 Idaho 886, 499 P.2d 1242 (1972), overruled on other grounds, Trappett v. Davis, 102 Idaho 527, 633 P.2d 592 (1981).

Idaho case law, presently and historically, would permit application of the oral agreement doctrine where the location of the true line is unknown to both property owners, even though they may not entertain uncertain or disputatious feelings about it, because the doctrine of boundary by agreement promotes practical and stable boundaries, while concurrently preventing property owners from engaging in oral transactions to convey land. Norwood v. Stevens, 104 Idaho 44, 655 P.2d 938 (Ct. App. 1982).

In every case where a boundary by agreement is asserted, the underlying issue is whether such an agreement represents an oral conveyance of land in violation of the statute of frauds. The general rule of case law is that an agreement which arises from uncertainty or dispute over the location of a boundary is valid and does not constitute an oral conveyance of land. Norwood v. Stevens, 104 Idaho 44, 655 P.2d 938 (Ct. App. 1982).

Mediation agreement fell within the boundary agreement exception to statute of frauds, the elements of which are: (1) an uncertain or disputed boundary and (2) an express or implied agreement subsequently fixing that boundary. Goodman v. Lothrop, 143 Idaho 622, 151 P.3d 818 (2007).

Conveyance to spouse.

Creation of Easement.

Where husband, during marriage, executed a quitclaim deed to ranch property to his wife as her separate property and in accordance with the requirements of this section, husband’s testimony as to lack of consideration was inadmissible and his evidence insufficient to rebut the presumption of§ 32-906; therefore, finding that property was wife’s separate property was upheld. Bliss v. Bliss, 127 Idaho 170, 898 P.2d 1081 (1995). Creation of Easement.

Escrow agreement in which buyer promised to pay a certain sum to seller in return for two acres and various interests in the land including nonexclusive use of airport was a conveyance within the meaning of§ 55-813. When two recorded conveyances purport to convey conflicting interests in real property, the conveyance first recorded controls. Thus, where escrow agreement was recorded in 1989 and deed for sale of remainder of land owned by seller was recorded in 1991, the escrow agreement entitled buyer of the two acres to an easement of nonexclusive use of the airport even though the easement for nonexclusive use of the airport had been omitted from the deed for sale of the two acres. West v. Bowen, 127 Idaho 128, 898 P.2d 59 (1995).

Delivery of Deed.

Before a deed can operate as a valid transfer of title, there must be a delivery of the instrument and it must be effected during the life of the grantor. Crenshaw v. Crenshaw, 68 Idaho 470, 199 P.2d 264 (1948).

It is essential to the delivery of a deed that there is a giving of the deed by the grantor and a receiving of it by the grantee with a mutual intention to pass title from the one to the other. Crenshaw v. Crenshaw, 68 Idaho 470, 199 P.2d 264 (1948).

Record of survey constituted a properly recorded conveyance; where it purported to transfer the disputed property, it created, alienated, mortgaged or encumbered the title of both lots, it was in writing, it contained a sufficient description of the property, it contained the name of the grantee, and it clearly indicated the legal description of the subject property and the lots. Adams v. Anderson, 142 Idaho 208, 127 P.3d 111 (2005).

Equitable Relief.

Failure to comply with this section does not deprive a taxpayer of the right to equitable relief. Giacobbi v. Hall, 109 Idaho 293, 707 P.2d 404 (1985).

Mining Privileges.

Grant of mining privileges entered into by manager of company without authority expressed by company will be held a binding lease when it has been ratified by acceptance of royalties. Page v. Savage, 42 Idaho 458, 246 P. 304 (1926).

Necessity of Description.

Where two resolutions by a county board of commissioners contained no description of the property purported to be conveyed, they were insufficient to pass title. Worley Hwy. Dist. v. Kootenai County, 98 Idaho 925, 576 P.2d 206 (1978).

Prior Recorded Conveyance.

Cited

The bona fide purchaser doctrine does not protect a subsequent purchaser from prior recorded conveyances. Rather, it merely allows a subsequent good faith purchaser to void a prior unrecorded conveyance by recording first. West v. Bowen, 127 Idaho 128, 898 P.2d 59 (1995). Cited First Nat’l Bank v. Williams, 2 Idaho 670, 23 P. 552 (1890); Federal Land Bank v. Union Cent. Life Ins. Co., 54 Idaho 161, 29 P.2d 1009 (1934); Old Stone Capital Corp. v. John Hoene Implement Corp., 647 F. Supp. 916 (D. Idaho 1986); Chavez v. Barrus, 146 Idaho 212, 192 P.3d 1036 (2008); Bagley v. Thomason, 149 Idaho 799, 241 P.3d 972 (2010); McGimpsey v. D&L Ventures, Inc., — Idaho —, 443 P.3d 219 (2019); Papin v. Papin, — Idaho —, 454 P.3d 1092 (2019).

Am. Jur. 2d.

C.J.S.

Am. Jur. 2d.

C.J.S.

Hereditaments.

Real property includes that which is appurtenant to the land. It includes all easements attached to the land; and it includes hereditaments, whether corporeal or incorporeal, such as easements, and every interest in land. Hughes v. State, 80 Idaho 286, 328 P.2d 397 (1958).

Mortgage.

Mortgage was held to have passed all easements and appurtenances at time belonging to lands. Union Cent. Life Ins. Co. v. Albrethsen, 50 Idaho 196, 294 P. 842 (1930).

Notice of Easement.

Where, pursuant to an oral agreement, part of a tract of city property was conveyed to grantee and building was constructed on entire tract, and the upper floors of the portion of the building which was located on the grantee’s property continuously after the erection of the building were used for hotel purpose, and were reached by sole means of access through lobby and stairs located on part of tract retained by grantor, the successors in interest of grantor were charged with notice of existence of easement which was apparent from a mere examination of the premises. Eagle Rock Corp. v. Idamont Hotel Co., 59 Idaho 413, 85 P.2d 242 (1938).

Water Rights.

By transfer of tract of land on which waters obtained by water right have been used by person whose estate is transferred, purchaser acquires right to continue use and enjoyment of such water right as the same had been previously used and enjoyed by owner. Russell v. Irish, 20 Idaho 194, 118 P. 501 (1911).

Cited

General clause conveying “appurtenances” is sufficient to transfer appurtenant water right not specifically described in deed. Johnson v. Gustafson, 49 Idaho 376, 288 P. 427 (1930). Cited Bothwell v. Keefer, 53 Idaho 658, 27 P.2d 65 (1933); Cordwell v. Smith, 105 Idaho 71, 665 P.2d 1081 (Ct. App. 1983); Davis v. Gage, 106 Idaho 735, 682 P.2d 1282 (Ct. App. 1984).

Am. Jur. 2d.

C.J.S.

ALR.

§ 55-604. Fee presumed to pass.

A fee simple title is presumed to be intended to pass by a grant of real property unless it appears from the grant that a lesser estate was intended.

History.

1863, p. 528, § 43; R.S., § 2927; reen. R.C. & C.L., § 3112; C.S., § 5376; I.C.A.,§ 54-604.

Easements.

In a dedication of streets and alleys to use of the public, it will not be presumed that owner granted a greater estate than that which the public requires; it will not be presumed that he intended to convey to the city, in fee, title to the streets. Shaw v. Johnston, 17 Idaho 676, 107 P. 399 (1910).

Equitable Title.

Grantors’ quitclaim deed passed to grantees their equitable title in land in which they held only desert entry rights. Scogings v. Andreason, 91 Idaho 176, 418 P.2d 273 (1966).

Evidence.

Evidence that after decedent grantor executed and delivered deed to plaintiff-grantee requesting that grantee have it recorded, decedent continued to live on one lot and collect rents from another was not enough to uphold trial court’s fact finding that decedent did not intend that a fee simple title should pass immediately. Hartley v. Stibor, 96 Idaho 157, 525 P.2d 352 (1974).

Where the deeds clearly and unambiguously conveyed fee simple title to the railroad, the mere presence of the term “right of way” on the deeds’ cover sheets does not, by itself, create an ambiguity in what are otherwise clearly worded conveyances. C & G, Inc. v. Rule, 135 Idaho 763, 25 P.3d 76 (2001).

Mineral Reservation.

Deed’s reservation of “all the oil, gas, and minerals, in, on, or under the surface” of the land was ambiguous and, therefore, was construed against the grantor. The reservation to the grantor therefore did not include geothermal resources on the property; rather, these passed with the deed to the grantee. Ida-Therm, LLC v. Bedrock Geothermal, LLC, 154 Idaho 6, 293 P.3d 630 (2012).

Mortgage.

A warranty deed along with an agreement to reconvey the property in the future was an outright conveyance rather than a mortgage, where the transaction did not secure any debt. Defendants’ predecessors could reacquire the property by paying certain sums to plaintiffs’ predecessors, but they were not obligated to make those payments, and amount paid by plaintiffs’ predecessors was the fair market value of the real property at the time of the transaction. Hogg v. Wolske, 142 Idaho 549, 130 P.3d 1087 (2006).

C.J.S.

§ 55-605. Acquisition of subsequent title by grantor.

Where a person purports by proper instrument to convey or grant real property in fee simple, and subsequently acquires any title or claim of title thereto, the same passes by operation of law to the grantee or his successors.

History.

1863, p. 528, § 32; R.S., § 2928; reen. R.C. & C.L., § 3113; C.S., § 5377; I.C.A.,§ 54-605.

Grantee’s Mortgage for Purchase Money.

Grantors’ quitclaim deed passed to grantees their equitable title in land in which they held only desert entry rights and grantees’ mortgage to grantors for purchase money was valid as between the parties even though the legal title was acquired after the land was mortgaged. Scogings v. Andreason, 91 Idaho 176, 418 P.2d 273 (1966).

No Title.

This section only requires that the person purport to convey the property, not that the person actually have title to the property when giving the deed, and the doctrine of after-acquired title presupposes that the person giving the deed did not have title when purporting to convey the property; because the record indicated that the mortgage company did not have title to the real property when it filed this lawsuit, it was error to grant the company’s motion for summary judgment. PHH Mortg. Servs. Corp. v. Perreira, 146 Idaho 631, 200 P.3d 1180 (2009).

Am. Jur. 2d.

C.J.S.

Cross References.

Recordation,§ 55-801 et seq.

Effective Dates.

Section 2 of S.L. 1989, ch. 107 declared an emergency. Approved March 27, 1989.

Actual Knowledge.

When a subsequent encumbrancer or purchaser has actual knowledge of a prior interest, it makes no difference whether the prior interest was properly acknowledged and recorded. Farm Bureau Fin. Co. v. Carney, 100 Idaho 745, 605 P.2d 509 (1980).

According to Idaho’s recording statutes, a mortgage recorded first in time had priority against all other subsequent mortgagees where the title company executed and recorded its mortgage first (twelve days before the landowners) and the owners were not good faith purchasers because they knew of the company’s mortgage, such that because the owners did not record first and had at least constructive notice of the company’s mortgage, the company’s mortgage took priority. Estate of Skvorak v. Sec. Union Title Ins. Co., 140 Idaho 16, 89 P.3d 856 (2004). An unrecorded easement for a billboard was unenforceable, where the purchaser’s conversation with the seller, along with a signed lease, a warranty deed free of restrictions, and a title policy indicating that the property was free of encumbrances, showed that the purchaser did not have knowledge of the easement and had conducted a reasonable investigation. Tiller White, LLC v. Canyon Outdoor Media, LLC, 160 Idaho 417, 374 P.3d 580 (2016).

Constructive Notice.

A deed notarized by husband of grantee does not give constructive notice to anyone though recorded, but is valid as between the parties. Johnson v. Casper, 75 Idaho 256, 270 P.2d 1012 (1954).

Evidence.

The fact that after decedent executed and delivered deed to plaintiff-grantee requesting that grantee have it recorded, decedent continued to live on one lot and collect rents from another was not enough to uphold trial court’s fact finding that decedent did not intend that a fee simple title should pass immediately. Hartley v. Stibor, 96 Idaho 157, 525 P.2d 352 (1974).

Instrument.

Unrecorded deed prevailed even though a creditor’s judgment was recorded first, because the judgment was not an “instrument” under this section. While the deed was an “invalid” deed — one not acknowledged and not recorded — it was, however, still valid as between the parties and took priority over the judgment. Siegel Mobile Home Group, Inc. v. Bowen, 114 Idaho 531, 757 P.2d 1250 (Ct. App. 1988).

Knowledge of Prior Option Agreement.

Owner of easement across 42-foot strip of land could not claim to be a bona fide purchaser based on vendors’ agreement to devise the strip to easement owner upon the death of surviving spouse, where, prior to parting with consideration for vendors’ promise to convey the strip in the future, easement owner had acquired actual knowledge of an earlier unrecorded contract wherein vendors granted defendants the preemptive right of first refusal if the strip was offered for sale. Garmo v. Clanton, 97 Idaho 696, 551 P.2d 1332 (1976).

Knowledge of Transfer.

Judgment creditor, who at time of execution knew that property formerly in name of debtor had been transferred to a third party was not entitled to sell property under levy. Johnson v. Casper, 75 Idaho 256, 270 P.2d 1012 (1954).

Shelter Rule.

The “Shelter Rule” provides that one who is not a bona fide purchaser, but who takes an interest in property from a bona fide purchaser, may be sheltered in the latter’s protective status; therefore, a bona fide purchaser can transfer good title to a person who has notice of a prior adverse equity or right. Sun Valley Land & Minerals, Inc. v. Burt, 123 Idaho 862, 853 P.2d 607 (Ct. App. 1993). There are two exceptions to the “Shelter Rule”: (1) where the interest held by a bona fide purchaser was obtained from a grantor with notice of an outstanding interest in the property, and the property is reconveyed to the grantor; and (2) when the property is reconveyed from a bona fide purchaser to a person guilty of a violation of a trust or duty with respect to the property. Sun Valley Land & Minerals, Inc. v. Burt, 123 Idaho 862, 853 P.2d 607 (Ct. App. 1993).

Unenforceable.

A quitclaim deed was unenforceable as a matter of law, where it did not contain an adequate description of the property, the grantee had submitted inconsistent determinations of the boundaries and acreage of the property, the grantors did not have authority to convey the subject property when the grantee attempted to record the deed, and extrinsic evidence could not be used to determine the sufficiency of the description. David & Marvel Benton v. McCarty, 161 Idaho 145, 384 P.3d 392 (2016).

Unrecorded Deed.

Prior unrecorded deed prevails over subsequent judgment. Johnson v. Casper, 75 Idaho 256, 270 P.2d 1012 (1954).

Unrecorded Mortgage.

Lien of unrecorded mortgages was held not superior to lien of mechanic furnishing labor without knowledge of mortgages. Poynter v. Fargo, 48 Idaho 271, 281 P. 1111 (1929).

When Record Effective.

A duly recorded interest is effective against prior unrecorded interests only where the recorded interest is taken for a valuable consideration and without knowledge, either actual or constructive, that unrecorded interests exist. Farm Bureau Fin. Co. v. Carney, 100 Idaho 745, 605 P.2d 509 (1980).

Am. Jur. 2d.

C.J.S.

C.J.S.

§ 55-608. Defeat of grant on condition subsequent.

Where a grant is made upon condition subsequent, and is subsequently defeated by the nonperformance of the condition, the person otherwise entitled to hold under the grant must reconvey the property to the grantor or his successors, by grant duly acknowledged for record.

History.

R.S., § 2931; reen. R.C. & C.L., § 3116; C.S., § 5380; I.C.A.,§ 54-608.

C.J.S.

§ 55-609. Grant on condition precedent.

An instrument purporting to be a grant of real property, to take effect upon condition precedent, does not pass the estate upon the performance of the condition. Such instrument is an executory contract for the conveyance of the property. Upon compliance with the condition, the grantee is entitled to a grant or conveyance, from the grantor or his successors, for the property, duly acknowledged for record.

History.

R.S., § 2932; reen. R.C. & C.L., § 3117; C.S., § 5381; I.C.A.,§ 54-609.

Escrows.

This section relates to contract of sale and has no application to deed deposited in escrow. Gardiner v. Gardiner, 36 Idaho 664, 214 P. 219 (1923).

C.J.S.

§ 55-610. Grant of rents, reversions, or remainders.

Grants of rents or of reversions or of remainders are good and effectual without attornments of the tenants; but no tenant who, before notice of the grant, has paid rent to the grantor, must suffer any damage thereby.

History.

1863, p. 528, § 47; R.S., § 2933; reen. R.C. & C.L., § 3118; C.S., § 5382; I.C.A.,§ 54-610.

Am. Jur. 2d.

§ 55-611. Grant of land bounded by highway.

A transfer of land, bounded by a highway, passes the title of the person whose estate is transferred to the soil of the highway in front, to the center thereof, unless a different intent appears from the grant.

History.

R.S., § 2934; reen. R.C. & C.L., § 3119; C.S., § 5383; I.C.A.,§ 54-611.

Cross References.

Ownership of street by abutter,§ 55-309.

Am. Jur. 2d.

C.J.S.

Encumbrances.

Encumbrance is not contemplated by this section, unless grantor was under personal obligation to pay it. Polak v. Mattson, 22 Idaho 727, 128 P. 89 (1912).

Unless grantee agrees to pay taxes levied prior to his acquisition of title, same are not encumbrances herein. Polak v. Mattson, 22 Idaho 727, 128 P. 89 (1912).

This section implies that, when the word “grant” is used in a deed, the estate conveyed is free from encumbrances of the grantor or any one claiming under him. Where the claimant of a mechanic’s lien on the premises for services and materials furnished under a contract conveyed, by a grant deed, such premises to the party against whom the lien was asserted, the claim of lien for services and materials rendered prior to the delivery of the deed was “merged” in the deed which rendered the claim unenforceable in the absence of a reservation of the title. Finlayson v. Waller, 64 Idaho 618, 134 P.2d 1069 (1943).

The definition of “encumbrance” does not include an alleged restriction on the use of the property. Middlekauff v. Lake Cascade, Inc., 103 Idaho 832, 654 P.2d 1385 (1982).

Grant.

The word “grant” in a conveyance is a covenant that the estate so conveyed is, at the time of the execution thereof, free from encumbrances done, made or suffered by grantor or any person claiming under him, but is not a warranty of title or a covenant of quiet enjoyment against encumbrances. Warren v. Stoddart, 6 Idaho 692, 59 P. 540 (1899); Moore v. Pooley, 17 Idaho 57, 104 P. 898 (1909).

Covenant of seizin is not implied from use of word “grant” in deed. Bliss Townsite Co. v. Morris-Roberts Co., 33 Idaho 110, 190 P. 1028 (1920).

Implied warranty against encumbrances from use of word “grant” is a covenant running with the land. Brinton v. Johnson, 35 Idaho 656, 208 P. 1028 (1922); Carssow v. Brinton, 35 Idaho 667, 208 P. 1031 (1922).

Word “grant” in a deed of conveyance implies a covenant against an encumbrance of a tax lien “done, made, or suffered” by grantor which runs with the land. Brinton v. Johnson, 35 Idaho 656, 208 P. 1028 (1922); Carssow v. Brinton, 35 Idaho 667, 208 P. 1031 (1922).

Implied and Express Covenants.

Implied and express covenants should be construed together, unless it clearly appears that the express covenant was intended to restrict the implied. Polak v. Mattson, 22 Idaho 727, 128 P. 89 (1912).

Not Encumbrances.

Since the alleged promise of seller that certain property adjoining that of purchasers would be reserved for common use was not a lien or encumbrance, order of bankruptcy court authorizing sale of part of such property “free and clear of all liens and encumbrances” did not put the purchasers on notice of fraud and did not start the statute of limitations running on purchasers’ action to enforce the promise. Middlekauff v. Lake Cascade, Inc., 103 Idaho 832, 654 P.2d 1385 (1982).

Notice of Encumbrance.

Grantor was not liable on warranties of title, where grantee knew of the existing liens which were charges against the land, but not against grantor personally. Urich v. McPherson, 27 Idaho 319, 149 P. 295 (1915).

Evidence required finding that mortgagee of ranch and water right, originally appurtenant thereto, acquired right in good faith, without actual or constructive notice of claim of another mortgagee under prior mortgage, given by mortgagor on different ranch. Federal Land Bank v. Union Cent. Life Ins. Co., 54 Idaho 161, 29 P.2d 1009 (1934).

Suffered.

“Suffered,” as used in this section, implies reasonable control and it cannot be held to apply to an encumbrance not caused by the act of the party nor within his power to prevent. Polak v. Mattson, 22 Idaho 727, 128 P. 89 (1912).

Am. Jur. 2d.

§ 55-613. Encumbrances defined.

The term “encumbrances” includes taxes, assessments, and all liens upon real property.

History.

R.S., § 2936; reen. R.C. & C.L., § 3121; C.S., § 5385; I.C.A.,§ 54-613.

Encumbrances.

Private roadway. Newmyer v. Roush, 21 Idaho 106, 120 P. 464 (1912).

Mechanics’ liens. Urich v. McPherson, 27 Idaho 319, 149 P. 295 (1915).

Tax lien attaching while party is owner of property. Brinton v. Johnson, 35 Idaho 656, 208 P. 1028 (1922); Carssow v. Brinton, 35 Idaho 667, 208 P. 1031 (1922).

Not Encumbrances.

Canal rights of way. Schurger v. Moorman, 20 Idaho 97, 117 P. 122 (1911).

Public highway. Newmyer v. Roush, 21 Idaho 106, 120 P. 464 (1912).

Taxes prior to ownership. Polak v. Mattson, 22 Idaho 727, 128 P. 89 (1912).

Lien for local improvement is not considered an encumbrance from which title conveyed by tax deed is free, when it attaches subsequent to the assessment for taxes on account of which the property was sold. Hunt v. City of St. Maries, 44 Idaho 700, 260 P. 155 (1927).

Water contract appurtenant to all lots in block, and under which canal company need not deliver water to any lots unless maintenance charges against all were paid, is not an encumbrance relieving purchasers of some lots from obligation on contract of purchase. Hunt v. Bremer, 47 Idaho 490, 276 P. 964 (1929).

Encumbrance that did not fit within the categories of the statute had to be a right, interest, or hostile title relating to the land; the court did not extend the traditional scope of a general warranty against encumbrances in such a manner as to include zoning matters. Hoffer v. Callister, 137 Idaho 291, 47 P.3d 1261 (2002).

Am. Jur. 2d.

§ 55-614. Lineal and collateral warranties abolished.

Lineal and collateral warranties, with all their incidents, are abolished; but the heirs and devisees of every person who has made any covenant or agreement in reference to the title of, in, or to any real property, are answerable upon such covenant or agreement to the extent of the land descended or devised to them, in the cases and in the manner prescribed by law.

History.

1863, p. 528, § 49; R.S., § 2937; reen. R.C. & C.L., § 3122; C.S., § 5386; I.C.A., 54-614.

Effective Dates.

Section 2 of S.L. 1978, ch. 294 declared an emergency. Approved March 29, 1978.

Cross References.

Books of record, manner of recording, and indexes,§ 31-2401 et seq.

Certified copy of record of conveyance admissible in evidence,§ 9-410.

Deeds, grants and transfers of real estate to be recorded by county recorder,§ 31-2402; index,§ 31-2404.

Foreclosure judgments conclusive against unrecorded conveyances or liens,§ 6-101.

Extent of Protection.

Protection afforded by the recording acts not to be extended beyond their reasonable import. Ewald v. Hufton, 31 Idaho 373, 173 P. 247 (1918).

Notice contemplated by the recording statutes is not a publication to the world, but only notice to subsequent purchasers and encumbrancers. Maxwell v. Twin Falls Canal Co., 49 Idaho 806, 292 P. 232 (1930).

Word “instrument” does not include notice of claim made by stranger to title. Maxwell v. Twin Falls Canal Co., 49 Idaho 806, 292 P. 232 (1930).

Claim of equitable lien for drilling wells was held not entitled to be recorded. Maxwell v. Twin Falls Canal Co., 49 Idaho 806, 292 P. 232 (1930).

Purpose of Recording.

The primary purpose of the recording statute is to give notice to others that an interest is claimed in real property and, thus, to give protection against bona fide third parties who may be dealing in the same property. Matheson v. Harris, 98 Idaho 758, 572 P.2d 861 (1977).

If minor errors or omissions are made in the recording of an interest in real property, the minor errors could be overlooked if the recorded instrument gives enough notice to subsequent purchasers. Hymas v. Am. Gen. Fin., Inc. (In re Blair), 2000 Bankr. LEXIS 2115 (Bankr. D. Idaho May 18, 2000).

Requirement of Acknowledgment.

Laborers and materialmen have the right to assert and obtain a lien which need not include an acknowledgment for it to be properly recorded against the property upon which they have performed labor or for which they have furnished materials. A-J Corp. v. GVR Ltd., 107 Idaho 1101, 695 P.2d 1240 (1985).

Am. Jur. 2d.

C.J.S.

Assignment of Judgment.

There is no provision for recording assignment of judgment. Houtz v. Daniels, 36 Idaho 544, 211 P. 1088 (1922).

Effect of Unrecorded Judgment.

Judgment entered in a court of competent jurisdiction has the same actual and constructive notice to the parties and privies to the suit and serves the same purpose as is provided by the recording statute. Smith v. Kessler, 22 Idaho 589, 127 P. 172 (1912).

Am. Jur. 2d.

C.J.S.

Effective Dates.

Section 2 of S.L. 1981, ch. 59, declared an emergency. Approved March 19, 1981.

Amendments.

The 2017 amendment, by ch. 192, substituted “chapter 1, title 51” for “chapter 7, title 55” near the middle of the section.

Acknowledgment Regular on Its Face.

A certificate of acknowledgment complete and regular on its face raises a presumption in favor of the truth of every fact recited therein, which the uncorroborated testimony of the party acknowledging the instrument is insufficient to overcome, and the additional affidavit of the notary that he could not recall any of the circumstances surrounding the execution and acknowledgment of an instrument, although it had sometimes been his practice to take an acknowledgment in the absence of the signing party, was insufficient to impeach the validity of the acknowledgment. Credit Bureau v. Sleight, 92 Idaho 210, 440 P.2d 143 (1968).

Construction.

Technical deficiencies in the certificate of acknowledgment will not render the certificate defective if the alleged deficiency can be cured by reference to the instrument itself. Farm Bureau Fin. Co. v. Carney, 100 Idaho 745, 605 P.2d 509 (1980).

Construction of Certificate.

The omission of the acknowledger’s name in the blank in the certificate will not render the certificate ineffective if his name can be ascertained from other sources, as from the face of the instrument itself or from other parts of the certificate. Farm Bureau Fin. Co. v. Carney, 100 Idaho 745, 605 P.2d 509 (1980).

Failure to Acknowledge.

The fact that the assignment of an existing lease agreement was not acknowledged did not render it ineffective as between the parties themselves; the lack of an acknowledgment does not affect a document’s validity as between the parties. Hunt v. Hunt, 110 Idaho 649, 718 P.2d 560 (Ct. App. 1985).

Laborers and Materialmen’s Lien.

Laborers and materialmen have the right to assert and obtain a lien which need not include an acknowledgment for it to be properly recorded against the property upon which they have performed labor or for which they have furnished materials. A-J Corp. v. GVR Ltd., 107 Idaho 1101, 695 P.2d 1240 (1985).

Legislative Intent.

Mechanics’ and Materialmen’s Liens.

The manifest intent of the legislature in requiring a notary public to execute a certificate of acknowledgment is to provide protection against the recording of false instruments; the sine qua non of this statutory requirement is the involvement of the notary, a public officer, in a position of public trust. Farm Bureau Fin. Co. v. Carney, 100 Idaho 745, 605 P.2d 509 (1980). Mechanics’ and Materialmen’s Liens.

Claims of mechanics’ and materialmen’s liens filed under Title 45, Chapter 5 of the Idaho Code must be acknowledged in accord with this section before they are entitled to be recorded, and the “verification” required under§ 45-507 does not serve the same purpose or function of an “acknowledgment” and cannot be a substitute therefor; accordingly, liens that were not acknowledged, or acknowledged but where the certificate of acknowledgment did not substantially comply with Title 55, Chapter 7 of the Idaho Code, were not enforceable against the bankruptcy trustee. Kloos v. Jacobson, 30 Bankr. 965 (Bankr. D. Idaho 1983).

Missing or Defective Acknowledgment.

The primary purpose of recording is to give notice to others that an interest is claimed in real property; an instrument recorded without an acknowledgment or with a defective acknowledgment is not entitled to be recorded and cannot impart constructive notice. Anderson Land Co. v. Small Bus. Admin., 718 F.2d 968 (9th Cir. 1983).

District court erred in finding that a memorandum of sale was properly acknowledged and recorded, because the notary’s endorsement of the memorandum was not a certificate used for acknowledgments, but was the endorsement used for oaths and affirmations. The deficiency could not be cured by reference to the instrument. Salladay v. Bowen, 161 Idaho 563, 388 P.3d 577 (2017).

If a deed of trust is not acknowledged, or if the acknowledgment is not valid, the deed should not be recorded and it is avoidable by a bankruptcy trustee. Hillen v. Preston Roth IRA, LLC (In re Shiloh Mgmt. Servs.), 2018 Bankr. LEXIS 1774 (Bankr. D. Idaho June 15, 2018).

Deeds of trust were properly recorded and were not subject to avoidance by a bankruptcy trustee, because each of acknowledgments at issue substantially complied with the corporate acknowledgment form specified by§ 55-711, and the four corners of deeds of trust being acknowledged supplied the information missing from the acknowledgments. Hillen v. Preston Roth IRA, LLC (In re Shiloh Mgmt. Servs.), 2018 Bankr. LEXIS 1774 (Bankr. D. Idaho June 15, 2018).

Notarizing Blank Certificate.

A notary betrays the public trust when he signs a certificate of acknowledgment with knowledge that the blanks will be filled in later or when he signs a completed certificate of acknowledgment but without requiring the personal appearance of the acknowledgers. Farm Bureau Fin. Co. v. Carney, 100 Idaho 745, 605 P.2d 509 (1980).

Sheriff’s Sale Certificate.

Where a certificate of sale at sheriff’s sale was assigned and the assignment was properly acknowledged, the assignee was entitled to have it recorded. Panhandle Growers Union v. Scott, 58 Idaho 70, 70 P.2d 372 (1937).

Void Acknowledgment Bar to Filing.

Cited

The acknowledgment on chattel mortgages does not even pretend to comply with the corporate acknowledgment of§ 55-711 and is, therefore, void because it fails to disclose that party making it was a corporate officer of corporation and with the authority to execute it. This being a void acknowledgment, the instrument could not be filed for record under the mandatory provision of this section. Under the circumstances, mortgages had no preference and the mortgagee was the same as the general creditors. Jordan v. Securities Credit Corp., 79 Idaho 284, 314 P.2d 967 (1957). Cited Bell v. Shields, 18 Idaho 649, 111 P. 1076 (1910); Harris v. Reed, 21 Idaho 364, 121 P. 780 (1912); Keane v. Kibble, 28 Idaho 274, 154 P. 972 (1915); Pacific Coast Joint Stock Land Bank v. Security Prods. Co., 56 Idaho 436, 55 P.2d 716 (1936); Treasure Valley Plumbing & Heating, Inc. v. Earth Resources Co., 106 Idaho 920, 684 P.2d 322 (Ct. App. 1984).

Am. Jur. 2d.

§ 55-806. Power must be recorded before conveyance by attorney.

An instrument executed by an attorney in fact must not be recorded until the power of attorney authorizing the execution of the instrument is filed for record in the same office.

History.

R.S., § 2995; reen. R.C. & C.L., § 3154; C.S., § 5418; I.C.A.,§ 54-806.

Cross References.

Powers of attorney to convey real estate to be recorded by county recorder,§ 31-2402; index,§ 31-2404.

Applicability.

Recording rule in this section does not apply where an instrument, signed by an attorney in fact, merely names a new trustee under the trust deed. All that appointment does is change the identity of a previously established trustee. No interest in real property is altered in any way, as the trust deed already established the trustee’s rights and duties. Gordon v. United States Bank Nat’l Ass’n, — Idaho —, 455 P.3d 374 (2019).

Deed by Attorney in Fact.

While the filing and recording of a deed executed by grantor’s attorney in fact, before the filing and recording of power of attorney, does not necessarily render the deed void, as between the parties, in the absence of intervening rights, it does not constitute constructive notice to subsequent purchasers of the land conveyed. Hunt v. McDonald, 65 Idaho 610, 149 P.2d 792 (1944).

Purpose of Recording.

In property owner’s action challenging a non-judicial foreclosure action taken on the deed of trust securing a note on the subject property, the failure to record a power of attorney under this section did not invalidate a change in trustees of the note. The purpose of the recording statutes is to provide notice to subsequent purchasers: the property owner was not a subsequent purchaser, and he was on notice of the change in the power of attorney status by other instruments that were recorded. Purdy v. Bank of Am., 2012 U.S. Dist. LEXIS 140935 (D. Idaho Sept. 26, 2012).

Am. Jur. 2d.

§ 55-807. Recorder’s fee to be endorsed on instrument and record.

The recorder must in all cases indorse the amount of his fee on the instrument recorded, and on the record thereof.

History.

R.S., § 2996; reen. R.C. & C.L., § 3155; C.S., § 5419; I.C.A.,§ 54-807.

Cross References.

Fees of county recorder,§ 31-3205.

Am. Jur. 2d.

C.J.S.

Am. Jur. 2d.

§ 55-809. When deemed recorded.

An instrument is deemed to be recorded when, being duly acknowledged, or proved and certified, it is deposited in the recorder’s office with the proper officer for record.

History.

R.S., § 2998; reen. R.C. & C.L., § 3157; C.S., § 5421; I.C.A.,§ 54-809.

Improperly Recorded Instruments.

If a party submits an instrument governing real property to be recorded but the recording official fails to properly record it, subsequent purchasers of that real property are still on notice of the instrument. Miller v. Simonson, 140 Idaho 287, 92 P.3d 537 (Ct. App. 2004).

Subsequent purchaser must bear the risk of improperly recorded instruments when the recording party has fully satisfied the requirements of the Idaho recording statute. Miller v. Simonson, 140 Idaho 287, 92 P.3d 537 (Ct. App. 2004).

Neglect of Officers.

Paper is recorded when deposited with proper custodian and fee tendered. Failure of officer to place thereon proper filing marks does not destroy filing. O’Connor v. Board of County Comm’rs, 17 Idaho 346, 105 P. 560 (1909).

Duties of a recording officer do not impose any further recording requirements; therefore, a purchaser of land had constructive notice of covenants, conditions, and restrictions imposed upon subdivided land, despite the fact that a recording official improperly recorded the document under the incorrect name. Miller v. Simonson, 140 Idaho 287, 92 P.3d 537 (2004).

C.J.S.

§ 55-810. Books of record.

Grants and conveyances absolute in terms, are to be recorded in one set of books and mortgages in another or in an approved electronic storage system containing segregated searchable and retrieval files.

History.

R.S., § 2999; reen. R.C. & C.L., § 3158; C.S., § 5422; I.C.A.,§ 54-810; am. 2005, ch. 243, § 9, p. 756.

Am. Jur. 2d.

C.J.S.

Cross References.

Record as notice,§ 55-730.

Compiler’s Notes.

The bracketed insertion at the end of the first paragraph was added by the compiler to supply the probable intended word.

Effective Dates.

Section 2 of S.L. 1941, ch. 119 declared an emergency. Approved March 10, 1941. The title of said act did not provide for an emergency.

Conveyance by Strangers.

Conveyance of real property which this section provides shall constitute constructive notice to “subsequent purchasers and mortgagees,” is a conveyance made by the person from whom such “subsequent purchaser or mortgagee” is compelled to deraign his title and has no reference to, and does not include, conveyances made by strangers to the record title. Harris v. Reed, 21 Idaho 364, 121 P. 780 (1912). If a mortgage was executed by one who was at the time a stranger to the title, recording of such mortgage does not constitute constructive notice to an intending purchaser of a prior unrecorded deed to mortgagor. Jackson v. Lee, 47 Idaho 589, 277 P. 548 (1929).

Conveyance Not Acknowledged.

Under provisions of this section, a recorded conveyance of real property which has not been acknowledged or proved and certified, as required by law, does not impart constructive notice of its contents to subsequent purchasers and mortgagees. Harris v. Reed, 21 Idaho 364, 121 P. 780 (1912).

Misrepresentation.

This section does not preclude an action by a purchaser of real property against a seller and realtors for misrepresentation concerning the availability of the property for commercial purposes. Large v. Cafferty Realty, Inc., 123 Idaho 676, 851 P.2d 972 (1993).

Notice.

— Recording.

Notice is imparted by proper recording of an instrument affecting the title to real property, and a lien existing on property before a mechanic’s lien attaches has priority over such lien and§ 45-506, relating to priority of a mechanic’s lien over liens unrecorded at the time work was done or materials were commenced to be furnished has no application. Finlayson v. Waller, 64 Idaho 618, 134 P.2d 1069 (1943).

In a suit by landowners to recover damages for flooding of land by power company, an easement executed by former owners in favor of power company releasing power company for all claims of damage both present and future for overflowing of land caused by fluctuation of the flow of the river, and granting the power company the right to continue the manipulation and fluctuation of the flow of the river so long as the future fluctuation did not exceed that heretofore occurring, and which was duly recorded, operated as an estoppel of record of plaintiff’s suit for damages. Griffeth v. Utah Power & Light Co., 226 F.2d 661 (9th Cir. 1955).

This section provides that a recorded instrument conveying an interest in real property gives notice “to subsequent purchasers and mortgagees.” However, it does not give constructive notice to prior parties in the chain of title; thus, recordation of an assignment by a buyer of an interest in land to a third party did not give the seller of the land constructive notice of such assignment. Lockhart Co. v. B.F.K., Ltd., 107 Idaho 633, 691 P.2d 1248 (Ct. App. 1984).

Duties of a recording officer do not impose any further recording requirements; therefore, a purchaser of land had constructive notice of covenants, conditions, and restrictions imposed upon subdivided land, despite the fact that a recording official improperly recorded the document under the incorrect name. Miller v. Simonson, 140 Idaho 287, 92 P.3d 537 (2004).

— Sufficiency.

Where an earnest money agreement was signed by all parties but not acknowledged by the sellers and was recorded with an acknowledged cover sheet captioned “Notice,” the extent of the interest claimed was clear for all to see and the attachment of the cover sheet had no additional effect. Matheson v. Harris, 98 Idaho 758, 572 P.2d 861 (1977).

Plats and the master plan for planned unit development, which were on file in the proper office and were properly acknowledged and certified, imparted notice of their contents to defendant, the subsequent purchaser. Therefore, defendant was, by law, on notice the recorded third replat contained a note which identified the master plan on file in the planning office of the county, and thus, this recorded instrument gave defendant notice that he could only build an additional eighteen (18) units in a block of the development. Haugh v. Smelick, 126 Idaho 481, 887 P.2d 26 (1993). According to Idaho’s recording statutes, a mortgage recorded first in time had priority against all other subsequent mortgagees where the title company executed and recorded its mortgage first (twelve days before the landowners) and the owners were not good faith purchasers because they knew of the company’s mortgage, such that because the owners did not record first and had at least constructive notice of the company’s mortgage, the company’s mortgage took priority. Estate of Skvorak v. Sec. Union Title Ins. Co., 140 Idaho 16, 89 P.3d 856 (2004).

Am. Jur. 2d.

C.J.S.

Actual Knowledge.

When a subsequent encumbrancer or purchaser has actual knowledge of a prior interest, it makes no difference whether the prior interest was properly acknowledged and recorded. Farm Bureau Fin. Co. v. Carney, 100 Idaho 745, 605 P.2d 509 (1980).

An unrecorded easement for a billboard was unenforceable, where the purchaser’s conversation with the seller, along with a signed lease, a warranty deed free of restrictions, and a title policy indicating that the property was free of encumbrances, showed that the purchaser did not have knowledge of the easement and had conducted a reasonable investigation. Tiller White, LLC v. Canyon Outdoor Media, LLC, 160 Idaho 417, 374 P.3d 580 (2016).

Bona Fide Purchaser.

One who has notice or knowledge of a previous sale of real property, or who has notice or knowledge of such facts and circumstances as would lead a reasonably prudent man to discover that a previous sale had been made, is not a purchaser in good faith within the meaning of this section; but one who purchases vacant property and procures an abstract of title which fails to show a previous conveyance, because the same was not recorded, and pays the purchase-price without any knowledge of such previous conveyance, is a purchaser in good faith and is entitled to the property as against holder of the prior unrecorded deed. Froman v. Madden, 13 Idaho 138, 88 P. 894 (1907). Defense of good faith cannot be used to create a title, where not even a defective title exists. Ewald v. Hufton, 31 Idaho 373, 173 P. 247 (1918).

Distinction is made by legislature between encumbrancers and purchasers in good faith and purchasers for value. Millick v. Stevens, 44 Idaho 347, 257 P. 30 (1927).

Assignee of junior mortgage duly recorded takes it free from lien of prior mortgage which was unrecorded, unless he had notice thereof or has failed to record his assignment, notwithstanding his assignor’s knowledge of prior mortgage. Adams v. Satterberg, 46 Idaho 271, 267 P. 445 (1928).

Subsequent mortgagee not making proper inquiry with respect to unreleased prior mortgage is not entitled to protection of statute. Merchants Trust Co. v. Davis, 49 Idaho 494, 290 P. 383 (1930).

Owner of easement across 42-foot strip of land could not claim to be a bona fide purchaser based on vendors’ agreement to devise the strip to easement owner upon the death of surviving spouse, where prior to parting with consideration for vendors’ promise to convey the strip in the future easement owner had acquired actual knowledge of an earlier unrecorded contract wherein vendors granted defendants the preemptive right of first refusal if the strip was offered for sale. Garmo v. Clanton, 97 Idaho 696, 551 P.2d 1332 (1976).

Where a purchaser of real estate is in possession of the property, there can be no bona fide purchaser from the vendor. Fitzgerald v. Thornley (In re Lewis), 19 Bankr. 548 (Bankr. D. Idaho 1982).

It has long been established in Idaho that a purchaser under an unrecorded real estate contract who is in physical possession of the property purchased will prevail over a subsequent purchaser of the property from the original seller. Fitzgerald v. Thornley (In re Lewis), 19 Bankr. 548 (Bankr. D. Idaho 1982).

Even if purchaser of land had prior notice of water association’s use of a well on the purchased land, that prior notice did not create any real property right in the association; thus, there was no basis for association’s assertion that purchaser was not a bona fide purchaser in good faith. Bear Island Water Ass’n v. Brown, 125 Idaho 717, 874 P.2d 528 (1994).

Constructive Notice.

Where subsequent purchaser knew that the prior purchaser was occupying the lot in question and was conducting a commercial business on it, subsequent purchaser had constructive notice such as to require an inquiry of prior purchaser’s claim and the result of his failure to do so was that the unrecorded deed of prior purchaser prevailed over subsequent purchaser’s recorded deed. Fajen v. Powlus, 96 Idaho 625, 533 P.2d 746 (1975).

Purchaser could not use this section to defeat a prior unrecorded interest in a water well if purchaser had prior actual or constructive notice of that interest. Bear Island Water Ass’n v. Brown, 125 Idaho 717, 874 P.2d 528 (1994).

Defective Deed.

Deeds.

Trustee, in the place of a bona fide purchaser, could avoid a transfer of property allegedly made to a creditor to the extent that the deed of trust that was recorded with the mortgage improperly described the property that was to be encumbered by the loan agreement. Hymas v. Am. Gen. Fin., Inc. (In re Blair), 2000 Bankr. LEXIS 2115 (Bankr. D. Idaho May 18, 2000). Deeds.

Unrecorded deed of ditch was held invalid against purchaser. Swank v. Sweetwater Irrigation & Power Co., 15 Idaho 353, 98 P. 297 (1908).

Whether quitclaim deed from mortgagee to mortgagor is effective as a release and satisfaction of mortgage lien depends on the intent of the parties. Merchants Trust Co. v. Davis, 49 Idaho 494, 290 P. 383 (1930).

First Recorded.

The instrument first recorded takes precedence where the recording party is a holder for valuable consideration and in good faith. Sun Valley Land & Minerals, Inc. v. Burt, 123 Idaho 862, 853 P.2d 607 (Ct. App. 1993).

Under this section, the first good faith purchaser to record evidence of title will prevail. Young v. Washington Fed. Sav. & Loan Ass’n, 156 Bankr. 282 (Bankr. D. Idaho 1993).

Good Faith.

The act of recording a conveyance does not cut off rights not created by a writing without regard to whether or not the recording party is a good faith purchaser without notice of the rights. Langroise v. Becker, 96 Idaho 218, 526 P.2d 178 (1974).

One who purchases or encumbers property with notice of conflicting claims, or who fails to investigate an obvious conflicting claim does not take in “good faith” and will not prevail over a prior purchaser. Langroise v. Becker, 96 Idaho 218, 526 P.2d 178 (1974).

The words “good faith” in this section mean actual or constructive knowledge of a prior interest or defect in title. Benz v. D. L. Evans Bank, 152 Idaho 215, 268 P.3d 1167 (2012).

Judgments.

Judgment entered in a court of competent jurisdiction has the same actual and constructive notice to the parties and privies to the suit and serves the same purpose as is provided by the recording statutes. Smith v. Kessler, 22 Idaho 589, 127 P. 172 (1912).

Mortgages.

Mortgage was upheld as against prior deed; fraud also involved. Blucher v. Shaw, 26 Idaho 497, 144 P. 342 (1914).

Mortgage was upheld as lien even upon unrecorded contract making water appurtenant to land. Ireton v. Idaho Irrigation Co., 30 Idaho 310, 164 P. 687 (1917).

By term “mortgagee” legislature intended to include any person occupying, either as original mortgagee or as assignee of mortgage, position of mortgagee. Adams v. Satterberg, 46 Idaho 271, 267 P. 445 (1928).

Where record shows a release of a mortgage by mortgagee, subsequent purchasers or encumbrancers in good faith and for value are protected against any claim of an assignee under an unrecorded assignment. Millick v. O’Malley, 47 Idaho 106, 273 P. 947 (1928).

Where lien claimant had no notice of mortgage at time labor and material were furnished, and where such mortgage was unrecorded, it will not be allowed superiority over lien. Poynter v. Fargo, 48 Idaho 271, 281 P. 1111 (1929).

Mortgagee of a ranch and water right is not chargeable with notice of limitation on water right by the fact that mortgagor’s applications for loan, which it rejected, showed lesser water right than that shown by record, and stated that land did not require surface irrigation. Federal Land Bank v. Union Cent. Life Ins. Co., 54 Idaho 161, 29 P.2d 1009 (1934). One taking mortgage on ranch and water right had right, as against prior mortgagee of mortgagor’s other ranch, to rely on record which showed water right taken was appurtenant to first ranch and which failed to show previous mortgage of water right. Federal Land Bank v. Union Cent. Life Ins. Co., 54 Idaho 161, 29 P.2d 1009 (1934).

Evidence required finding that mortgagee of ranch and water right originally appurtenant thereto acquired right in good faith, without actual or constructive notice of claim of another mortgagee under prior mortgage, given by mortgagor on different ranch. Federal Land Bank v. Union Cent. Life Ins. Co., 54 Idaho 161, 29 P.2d 1009 (1934).

According to Idaho’s recording statutes, a mortgage recorded first in time had priority against all other subsequent mortgagees where the title company executed and recorded its mortgage first (twelve days before the landowners) and the owners were not good faith purchasers because they knew of the company’s mortgage, such that because the owners did not record first and had at least constructive notice of the company’s mortgage, the company’s mortgage took priority. Estate of Skvorak v. Sec. Union Title Ins. Co., 140 Idaho 16, 89 P.3d 856 (2004).

In setting priority for competing deeds of trust, this section only voids a prior conveyance if (1) the subsequent conveyance was made in good faith and for valuable consideration; and (2) the subsequent conveyance is the first duly recorded. The validity of a conveyance does not depend upon when it is recorded. Insight LLC v. Gunter, 154 Idaho 779, 302 P.3d 1052 (2013).

Physical Possession.

Where the purchasers of real estate from a debtor were in physical possession of the property for a period of approximately six years following the purchase, the rights of the purchasers prevailed over the trustee in his attempt to avoid the transfer of the debtor’s interests in the real property, even though the purchasers had not recorded the real estate contract. Fitzgerald v. Thornley (In re Lewis), 19 Bankr. 548 (Bankr. D. Idaho 1982).

Priority.

The first recorded conveyances of real property, taken in good faith and for valuable consideration, except leases not exceeding one year, have priority over subsequent recorded purchasers or mortgagees of the same property. Valiant Idaho, LLC v. VP Inc., 164 Idaho 314, 429 P.3d 855 (2018).

Valuable Consideration.

While natural love and affection is good consideration, it is not valuable consideration within meaning of this section. Gardiner v. Gardiner, 36 Idaho 664, 214 P. 219 (1923).

Nothing passes under deed without valuable consideration if grantor has theretofore executed and delivered deed of premises to another. Gardiner v. Gardiner, 36 Idaho 664, 214 P. 219 (1923).

Where subsequent deed is supported by good, as distinguished from valuable, consideration it cannot prevail. Hiddleson v. Cahoon, 37 Idaho 142, 214 P. 1042 (1923).

When Record Effective.

This section, in effect, provides that unrecorded deed is void as against subsequent conveyance which is duly recorded, when, and only when, subsequent conveyance is in good faith and for valuable consideration. Hiddleson v. Cahoon, 37 Idaho 142, 214 P. 1042 (1923). When Record Effective.

A duly recorded interest is effective against prior unrecorded interests only where the recorded interest is taken for a valuable consideration and without knowledge, either actual or constructive, that unrecorded interests exist. Farm Bureau Fin. Co. v. Carney, 100 Idaho 745, 605 P.2d 509 (1980).

Am. Jur. 2d.

§ 55-813. Conveyance defined.

The term “conveyance” as used in this chapter, embraces every instrument in writing by which any estate or interest in real property is created, alienated, mortgaged or encumbered, or by which the title to any real property may be affected, except wills.

History.

1863, p. 528, § 35; R.S., § 3002; reen. R.C. & C.L., § 3161; C.S., § 5425; I.C.A.,§ 54-813.

Effect of Recording Laws.

It is possible for a subsequent purchaser to acquire a paramount title through the medium of the recording laws, relegating prior purchaser to an action for damages against vendor. Madden v. Caldwell Land Co., 16 Idaho 59, 100 P. 358 (1909).

Protection afforded by the recording acts is purely statutory and is not to be extended beyond their reasonable import. They do not apply where a title vests by virtue of law and not through a conveyance. Ewald v. Hufton, 31 Idaho 373, 173 P. 247 (1918).

Escrow agreement in which buyer promised to pay a certain sum to seller in return for two acres and various interests in the land including nonexclusive use of airport was a conveyance within the meaning of this section, and when two recorded conveyances purport to convey conflicting interests in real property, the conveyance first recorded controls. Thus, where escrow agreement was recorded in 1989 and deed for sale of remainder of land owned by seller was recorded in 1991, the escrow agreement entitled buyer of the two acres to an easement of nonexclusive use of the airport even though the easement for nonexclusive use of the airport had been omitted from the deed for sale of the two acres. West v. Bowen, 127 Idaho 128, 898 P.2d 59 (1995).

Extent of Application.

Definition herein contained is limited in its application to chapter of statutes relating to recording of instruments. Fargo v. Bennett, 35 Idaho 359, 206 P. 692 (1922).

Leases.

Mortgages.

A lease for more than one year or a mortgage is such a conveyance or encumbrance that it falls within the prohibition that a husband acting as agent for the community cannot execute same unless his wife joins with him in executing the instrument. Morgan v. Firestone Tire & Rubber Co., 68 Idaho 506, 201 P.2d 976 (1948). Mortgages.

A “mortgage” is a “conveyance,” within the meaning of statutory definition of term “conveyance,” and is included within the scope of statute invalidating conveyances of realty to foreign corporations failing to comply with statutory requirements for doing business within state, notwithstanding a mortgage does not pass title to mortgaged property. John Hancock Mut. Life Ins. Co. v. Girard, 57 Idaho 198, 64 P.2d 254 (1936).

In setting priority for competing deeds of trust,§ 55-812 only voids a prior conveyance if (1) the subsequent conveyance was made in good faith and for valuable consideration; and (2) the subsequent conveyance is the first duly recorded. The validity of a conveyance does not depend upon when it is recorded. Insight LLC v. Gunter, 154 Idaho 779, 302 P.3d 1052 (2013).

Record as Notice.

Plats and the Master Plan, which were on file in the proper office and were properly acknowledged and certified, imparted notice of their contents to defendant, the subsequent purchaser. Therefore defendant was, by law, on notice the recorded third replat contained Note 6 which identified the Master Plan on file in the planning office of the county, and thus, this recorded instrument gave defendant notice that he could only build an additional eighteen (18) units in Block 3 in a cluster configuration as located on the third replat. Haugh v. Smelick, 126 Idaho 481, 887 P.2d 26 (1993).

Record of survey constituted a properly recorded conveyance; where it purported to transfer the disputed property, it created, alienated, mortgaged or encumbered the title of both lots, it was in writing, it contained a sufficient description of the property, it contained the name of the grantee, and it clearly indicated the legal description of the subject property and the lots. Adams v. Anderson, 142 Idaho 208, 127 P.3d 111 (2005).

A notice of default recorded by the trustee is not a “conveyance” under this section; therefore, the alleged failure to record the power of attorney held by trustee for bank defendant does not invalidate the non-judicial foreclosure process by the bank defendants. It is the recording of the original deed of trust that provided notice of conveyance and a mortgage interest in debtor’s property to all subsequent purchasers and mortgagees. Purdy v. Bank of Am., 2012 U.S. Dist. LEXIS 140935 (D. Idaho Sept. 26, 2012).

Unrecorded Conveyances.

Unrecorded conveyance made more than four months before petition in bankruptcy is valid as between parties thereto. Peacock v. Fairbairn, 45 Idaho 628, 264 P. 231 (1928).

In property owner’s action challenging a non-judicial foreclosure action taken on the deed of trust securing a note on the subject property, the failure to record a power of attorney under§ 55-806 did not invalidate a change in trustees of the note. The purpose of the recording statutes is to provide notice to subsequent purchasers: the property owner was not a subsequent purchaser, and he was on notice of the change in the power of attorney status by other instruments that were recorded. Purdy v. Bank of Am., 2012 U.S. Dist. LEXIS 140935 (D. Idaho Sept. 26, 2012).

Compiler’s Notes.

Section 2 of S.L. 1951, ch. 127, read: “If the said period of ten years has expired, or will expire before September 1, 1951, the holder or owner of the obligation or indebtedness secured by such mortgage or lien shall have until September 1, 1951, within which to file for record, in the county or counties where said mortgage or lien is recorded, an agreement or affidavit showing the date of payment of such obligation or indebtedness as extended. Such agreement or affidavit shall describe the property embraced in such mortgage or lien and give the book and page where such mortgage or lien appears of record. The county recorder shall note on the record of such mortgage or other lien the due date thereof as shown by such affidavit, and shall also note on such record the book and page where such agreement or affidavit is recorded.”

S.L. 1935, ch. 107, § 2, referred to at the end of the first sentence, read as follows: “If the said period of ten years has expired, or will expire before September 1, 1935, the holder or owner of the obligation or indebtedness secured by such mortgage or lien shall have until September 1, 1935 within which to file for record, in the county or counties where said mortgage or lien is recorded, an agreement or affidavit showing the date of payment of such obligation or indebtedness as extended. Such agreement or affidavit shall describe the property embraced in such mortgage or lien and give the book and page where such mortgage or lien appears of record. The county recorder shall note on the record of such mortgage or other lien the due date thereof as shown by such affidavit, and shall also note on such record the book and page where such agreement or affidavit is recorded.”

Record Notice.

Record notice of existence and nonpayment of mortgage does not entitle purchaser of mortgaged land to quiet title as against mortgage though debt is barred by limitation period, if purchaser is in privity with original mortgagor and knows that mortgage in fact has not been paid. Trusty v. Ray, 73 Idaho 232, 249 P.2d 814 (1952).

ALR.

§ 55-818. Recording of summary of instrument — Effect.

A summary of any instrument creating an interest in, or affecting the title to or possession of real property, may be recorded under this chapter or the laws of this state if the requirements of this section are substantially met. A summary of the instrument shall be signed and acknowledged by all parties to the original instrument. The summary of the instrument shall clearly state: the names of the parties to the original instrument, the complete mailing address of the grantee, the title and date of the instrument, a description of the interest or interests in real property created by the instrument, and the legal description of the property. Other elements of transaction may be stated in the summary. If the requirements of this section are met, the summary of the instrument may be recorded under the provisions of this chapter and, as to the contents of the summary only, it shall have the same force and effect as if the original instrument had been recorded, and constructive notice shall be deemed to be given concerning the contents of the summary and the existence of the instrument to any subsequent purchasers, mortgagees or other persons or entities that acquire an interest in the real property.

History.

I.C.,§ 55-818, as added by 1987, ch. 353, § 1, p. 785; am. 1989, ch. 105, § 2, p. 238.

Mandatory Requirement.

Memorandum of sale was not entitled to be recorded as a summary of an instrument, because it was only signed by a personal representative of the buyer. Even though the first sentence uses the phrase “substantially met,” when referring to the requirements of the section, the use of “shall” in the requirement that both parties shall sign the instrument indicates that that particular requirement is mandatory. Salladay v. Bowen, 161 Idaho 563, 388 P.3d 577 (2017).

Cross References.

Department of health and welfare,§ 56-1001 et seq.

Cross References.

Decedents’ estates, actions to set aside fraudulent conveyances,§ 15-3-710.

Fraudulent practices,§ 55-1812.

Actual Fraud.

Execution and delivery of trust deed by father, who was experiencing business difficulties, to daughter, creating first mortgage lien on father’s property in favor of daughter, was not a fraudulent conveyance where the deed was given for adequate consideration, consisting of prior advances and expenditures by daughter, and where evidence presented by judgment creditor of father failed to establish actual fraud or “badges of fraud” from which an inference of actual fraud might be warranted. Mohar v. McLelland Lumber Co., 95 Idaho 38, 501 P.2d 722 (1972).

Conflict of Laws.

Where a title to an Idaho mining claim was conveyed to an Arizona corporation, the law of Arizona would control the rights and liabilities of the corporation, as respects avoidance of the conveyance for fraud in representing that the stock would be fully paid and nonassessable, unless the Arizona law was contrary to the public policy of Idaho. Bruun v. Hanson, 103 F.2d 685 (9th Cir.), cert. denied, 308 U.S. 571, 60 S. Ct. 86, 84 L. Ed. 479 (1939).

Intent.

A conveyance of Idaho mining claims to an Arizona corporation was not subject to attack for fraud in procurement on the ground that the representation that the stock in the Arizona corporation would be fully paid and nonassessable was contrary to law and incapable of performance in the absence of a showing of the Arizona statute or a decision invalidating such a promise, since, under the rule prevailing in Idaho, such a contract would be upheld. Bruun v. Hanson, 103 F.2d 685 (9th Cir.), cert. denied, 308 U.S. 571, 60 S. Ct. 86, 84 L. Ed. 479 (1939). Intent.

If debtor transfers assets with the intent to defraud creditors, transfer is void as against judgment creditor, even though debtor is not insolvent. Hilliard v. Sisil, 192 F.2d 800 (9th Cir. 1951).

Question of Fact and Intent.

Where different minds might reach different conclusions on the evidence, meager evidence, if it is of a substantial nature and character, is sufficient to sustain the findings of the trier of facts. Lingenfelter v. Eby, 68 Idaho 134, 190 P.2d 130 (1948).

Am. Jur. 2d.

C.J.S.

ALR.

Rule denying recovery of property to one who conveyed to defraud creditors as applicable where the claim which motivated the conveyance was never established. 6 A.L.R.4th 862.

Creditor’s right to prevent debtor’s renunciation of benefit under will or debtor’s election to take under will. 39 A.L.R.4th 634.

Close Relationship.

Although the existence of a close relationship between debtor and transferee invites close scrutiny, it is not a “badge of fraud” per se and must be supplemented by other proof of bad faith to establish a prima facie case of fraud. Mohar v. McLelland Lumber Co., 95 Idaho 38, 501 P.2d 722 (1972).

Inadequate Consideration.

Knowledge and participation of grantees is not required to render transfer void, where there is gross inadequacy of consideration for transfer. Buhl State Bank v. Glander, 56 Idaho 543, 56 P.2d 757 (1936).

Inference of Actual Fraud.

Although actual fraud must be proven by clear and convincing evidence, an inference of actual fraud may be warranted where certain badges of fraud attend the conveyance and are not adequately explained. Mohar v. McLelland Lumber Co., 95 Idaho 38, 501 P.2d 722 (1972).

Inference of actual fraud in connection with transfer from father to daughter was not warranted by informality of the transaction, time gap between execution and recording of trust deed and financial difficulty of father where informality naturally resulted from close relationship, the deed was recorded promptly on delivery to daughter and the deed was supported by adequate consideration. Mohar v. McLelland Lumber Co., 95 Idaho 38, 501 P.2d 722 (1972).

Intent to Defraud.

Although a conveyance is supported by fair and valuable consideration, it may be set aside with respect to creditors if it is the product of a fraudulent attempt by the debtor and transferee to obstruct access to the debtor’s property for satisfaction of legitimate claims and is marked by an actual intent of both the debtor and transferee to defraud the creditors. Mohar v. McLelland Lumber Co., 95 Idaho 38, 501 P.2d 722 (1972).

Am. Jur. 2d.

C.J.S.

Amendments.

The 2007 amendment, by ch. 68, substituted “oral” for “verbal” and added the last sentence.

Federal References.

Sections 671 through 679 of the Internal Revenue Code, are codified as 26 U.S.C.S. §§ 671 through 679.

Extent of Application.

This section relates to personal property only. Capital Lumber Co. v. Saunders, 26 Idaho 408, 143 P. 1178 (1914).

Valid Transfers.

Taking by mortgagee of property under mortgage executed more than four months prior to filing of petition in bankruptcy is not a transfer in fraud of creditors. In re Simpson, 31 F.2d 317 (D. Idaho), aff’d, 35 F.2d 840 (9th Cir. 1929). Conveyance made by decedent to his daughter, without intent to defraud and not in trust, does not come under provisions of this section. Brown v. Perrault, 5 Idaho 729, 51 P. 752 (1898).

Void Transfers.

Assignment in trust to secure certain creditor by permitting him to keep sufficient proceeds to pay his debts, accompanied by a contemporaneous parol agreement that any excess of such proceeds above the amount sufficient to pay creditor shall belong to grantor, is void as against creditors of grantor. Johnson v. Sage, 4 Idaho 758, 44 P. 641 (1896).

Am. Jur. 2d.

ALR.

Assignment to Trustee.

Provision in assignment which exempts trustee from ordinary legal degree of liability renders assignment void. Rogers v. Boise Ass’n. of Credit Men, 33 Idaho 513, 196 P. 213 (1921).

Cases in which trustee may be authorized to carry on business are those in which such business is merely ancillary to winding up affairs and with view of more effectually promoting interest of creditors. Rogers v. Boise Ass’n. of Credit Men, 33 Idaho 513, 196 P. 213 (1921). Where authority to continue business is given chiefly for benefit of debtor or is intended to hinder and delay creditors for unreasonable period, transfer is fraudulent and void. Rogers v. Boise Ass’n. of Credit Men, 33 Idaho 513, 196 P. 213 (1921).

Attorneys Fees.

Every party found to have committed fraud is not automatically required to pay the opposing party’s attorney fees for having unsuccessfully defended against the claim of fraud. It is possible for defendants to raise a reasonable, yet unsuccessful, defense against a claim of fraud. Haney v. Molko, 123 Idaho 132, 844 P.2d 1382 (Ct. App. 1992).

Close Relationship with Transferee.

Transfers from father and mother to sons are subject to the court’s scrutiny. Buhl State Bank v. Glander, 56 Idaho 543, 56 P.2d 757 (1936).

Transfers between members of a debtor’s household are not prima facie fraudulent, but only slight additional evidence is required for a prima facie case. Louk v. Patten, 58 Idaho 334, 73 P.2d 949 (1937).

Although the existence of a close relationship between debtor and transferee invites close scrutiny, it is not a “badge of fraud” per se and must be supplemented by other proof of bad faith to establish a prima facie case of fraud. Mohar v. McLelland Lumber Co., 95 Idaho 38, 501 P.2d 722 (1972).

Common-Law Rule.

This section substantially puts into effect the long established rule of the common law upon the same subject. Capital Lumber Co. v. Saunders, 26 Idaho 408, 143 P. 1178 (1914).

Contingent Liability.

A contingent liability is protected against fraudulent, voluntary conveyances, and whoever has a claim arising out of a preexisting contract, although it may be contingent, is a “creditor” whose rights are affected by such conveyances, and, as such, can avoid them when the contingency happens upon which the claim depends. Louk v. Patten, 58 Idaho 334, 73 P.2d 949 (1937).

Deeds of Correction.

Deed given to correct former deed based on valuable consideration is not fraud on creditors who have come into existence since original conveyance, even though grantor is insolvent when second deed is given. Feltham v. Blunck, 34 Idaho 1, 198 P. 763 (1921).

Estoppel.

That a bankrupt national bank stockholder, who conveyed his property to his wife long prior to the closing of the bank, thereafter paid taxes, collected rents and directed operation of said property, does not estop the wife from resisting an attempt of the trustee in bankruptcy of the husband to set aside the conveyances as in fraud of creditors. Kester v. Helmer, 16 F. Supp. 260 (D. Idaho 1935), aff’d, 85 F.2d 646 (9th Cir.), cert. denied, 299 U.S. 608, 57 S. Ct. 234, 81 L. Ed. 448 (1936). A wife who at all times knew that property, for purchase of which she had contributed separate funds stood in the name of her husband, but failed to object, although the husband borrowed money from the bank on security thereof, is estopped to assert claim of interest in property to defeat claim of bank, in an action to set aside fraudulent conveyances of said property. Buhl State Bank v. Glander, 56 Idaho 543, 56 P.2d 757 (1936).

Evidence and Proof.

Neither a gift from a man to his wife, nor a conveyance to another without consideration, is prima facie fraudulent. Kester v. Helmer, 16 F. Supp. 260 (D. Idaho 1935), aff’d, 85 F.2d 646 (9th Cir.), cert. denied, 299 U.S. 608, 57 S. Ct. 234, 81 L. Ed. 448 (1936).

Under this section great latitude of inquiry on the issue of fraud is permissible, and any facts which tend to prove an intent to delay or defraud any creditor are pertinent and proper. Harkness v. Smith, 3 Idaho 221, 28 P. 423 (1891).

Burden is on attacking party to show intent to defraud, and mere fact that preference results is not proof of fraud. Rogers v. Boise Ass’n. of Credit Men, 33 Idaho 513, 196 P. 213 (1921).

Court must determine bona fides of transfer from all facts and circumstances in evidence. Snell v. Prescott, 48 Idaho 783, 285 P. 483 (1930).

Proof that a husband and wife considered the wife’s participation in, or contribution to, the purchase of land resulted in debt to be repaid by husband or wife from community is insufficient to sustain burden of proof that subsequent conveyance of property to the son was not fraudulent. Buhl State Bank v. Glander, 56 Idaho 543, 56 P.2d 757 (1936).

In an action to set aside fraudulent conveyances, evidence that execution on plaintiff’s judgment was returned unsatisfied was admissible to show the financial condition of grantors at the time of the conveyance, in the absence of evidence of material change therein between the time of the conveyance and the time of the return of the execution, other than asserted fraudulent transfers and disposition of limited amount of personal property. Buhl State Bank v. Glander, 56 Idaho 543, 56 P.2d 757 (1936).

In an action to set aside fraudulent conveyances, evidence of conversation with grantor, subsequent to the conveyances, as to his purpose and intent in making transfers, was admissible to negative validity of transfers, where the evidence supported a finding that the grantees participated in fraud. Buhl State Bank v. Glander, 56 Idaho 543, 56 P.2d 757 (1936).

Conveyance from parent to child for a consideration which is grossly inadequate and attended by other circumstances indicative of fraud may be set aside. Buhl State Bank v. Glander, 56 Idaho 543, 56 P.2d 757 (1936).

Where the evidence showed that the owner of land, allegedly to secure payment of debts, conveyed it to a purported creditor, who immediately reconveyed it without consideration to a corporation of which the original grantor and his wife were the principal stockholders, that this purported creditor later mortgaged the land to the corporation and payments on the mortgage were transferred by the corporation to a bank in payment of personal debts of the original grantor, and the land was again conveyed by the purported creditor to the corporation in consideration of the satisfaction of said mortgage and a prior mortgage by the purported creditor to an insurance company, such transactions constituted “badges of fraud” from which the trial court could find that the final conveyance to the corporation was in fraud of the creditors of the original grantor. Chester B. Brown Co. v. Goff, 89 Idaho 170, 403 P.2d 855 (1965).

Future Creditors.

Where a bankrupt’s possible future liability on his national bank stock constituted the sole basis of a claim that the bankrupt had existing creditors at the time of the alleged fraudulent conveyances, such conveyances could not be set aside as fraudulent, where there was no evidence that at the time of the conveyances, the bank was insolvent, or that the bankrupt knew of such insolvency. Kester v. Helmer, 16 F. Supp. 260 (D. Idaho 1935), aff’d, 85 F.2d 646 (9th Cir.), cert. denied, 299 U.S. 608, 57 S. Ct. 234, 81 L. Ed. 448 (1936).

The possible future liability of a bankrupt national bank stockholder does not make either the bank or the bank’s creditors creditors of the bankrupt at the time of the execution of the alleged fraudulent conveyances several years prior to the closing of the bank, so as to justify setting such conveyances aside, where the bankrupt had no other creditors at the time of the conveyance, since liability on the bank stock did not arise until the comptroller made an assessment. Kester v. Helmer, 16 F. Supp. 260 (D. Idaho 1935), aff’d, 85 F.2d 646 (9th Cir.), cert. denied, 299 U.S. 608, 57 S. Ct. 234, 81 L. Ed. 448 (1936).

Where actual fraud is established, a conveyance may be void as to subsequent creditors, as well as to prior creditors. Louk v. Patten, 58 Idaho 334, 73 P.2d 949 (1937).

The words “other person” embrace those who have become creditors after the conveyance and who have been defrauded thereby. Louk v. Patten, 58 Idaho 334, 73 P.2d 949 (1937).

Inference of Actual Fraud.

Although actual fraud must be proven by clear and convincing evidence, an inference of actual fraud may be warranted where certain badges of fraud attend the conveyance and are not adequately explained. Mohar v. McLelland Lumber Co., 95 Idaho 38, 501 P.2d 722 (1972).

Inference of actual fraud in connection with transfer from father to daughter was not warranted by informality of the transaction, time gap between execution and recording of trust deed and financial difficulty of father where informality naturally resulted from close relationship, the deed was recorded promptly on delivery to daughter and the deed was supported by adequate consideration. Mohar v. McLelland Lumber Co., 95 Idaho 38, 501 P.2d 722 (1972).

Necessity for Existing Creditors.

On the question of whether the conveyance of property was fraudulent or not, it must appear that there were existing creditors at the time of the alleged fraudulent transfer, and that the transfer was made with intent to delay or defraud such creditors. Hendrickson v. Helmer, 7 F. Supp. 627 (D. Idaho 1934).

Non-creditors.

Limited liability company and estate of one of its two manager/members had no cause of action against the other manager/member for transferring property to defraud creditors since neither plaintiff was a creditor of the limited liability company. Estate of E.A. Collins v. Geist, 143 Idaho 821, 153 P.3d 1167 (2007).

Parties.

Pleading and Practice.

A judgment creditor, who has assigned a judgment to her counsel as security for attorneys’ fees and money loaned to her by counsel with the understanding that, when the indebtedness was paid, the balance would go to the judgment creditor, could maintain an action to set aside fraudulent conveyances by the judgment debtor. Louk v. Patten, 58 Idaho 334, 73 P.2d 949 (1937). Pleading and Practice.

A complaint seeking to set aside a deed executed by a bankrupt to his wife four years prior to the closing of a national bank, in which he was a stockholder, which alleged that the bankrupt was the owner of property in community and that he was in control and management of the property conveyed by deed, was not demurrable. Hendrickson v. Helmer, 7 F. Supp. 627 (D. Idaho 1934).

In a suit to cancel a deed, as being made in fraud of creditors, the complaint is not sufficient if it alleges fraud and notice, in respect to the transaction, only as conclusions of law. Kerns v. Washington Water Power Co., 24 Idaho 525, 135 P. 70 (1913).

After decree of foreclosure of mortgage, personal judgment must be entered before action can be maintained to set aside conveyance as fraudulent. Perkins v. Bundy, 42 Idaho 560, 247 P. 751 (1926).

Creditor must reduce claim to judgment before he can maintain action to set aside conveyance as fraudulent. Perkins v. Bundy, 42 Idaho 560, 247 P. 751 (1926); Petty v. Petty, 66 Idaho 717, 168 P.2d 818 (1946).

Purpose of Section.

This section is intended to protect creditors against debtor conveying his property away to any person, including his wife. Bank of Orofino v. Wellman, 26 Idaho 425, 143 P. 1169 (1914).

Statutory Claims.

The claim of minor child against father for support before being reduced to judgment, being statutory, comes within the provisions of this section. Petty v. Petty, 66 Idaho 717, 168 P.2d 818 (1946).

Valid Transfers.

While assignment with preferences is illegal, the statutes of Idaho do not prohibit preferences between nonresident debtors and creditors through assignment which is valid by laws of debtor’s domicile. Barnett v. Kinney, 147 U.S. 476, 13 S. Ct. 403, 37 L. Ed. 247 (1893).

Taking by mortgagee of property under mortgage executed more than four months prior to filing of petition in bankruptcy is not a transfer in fraud of creditors. In re Simpson, 31 F.2d 317 (D. Idaho), aff’d, 35 F.2d 840 (9th Cir. 1929).

If transfer of property by a husband to his wife is made in good faith and not to defraud existing creditors, the consideration for love and affection and for the purpose of making her a gift is valid, and the validity thereof, as against creditors, does not depend upon subsequent events. Hendrickson v. Helmer, 7 F. Supp. 627 (D. Idaho 1934).

A trustee in bankruptcy is not entitled to have set aside alleged fraudulent conveyances by a bankrupt, where there was no evidence showing that the bankrupt did not have remaining sufficient property to meet his then obligations, and possible future assessments on national bank stock owned by him. Kester v. Helmer, 16 F. Supp. 260 (D. Idaho 1935), aff’d, 85 F.2d 646 (9th Cir.), cert. denied, 299 U.S. 608, 57 S. Ct. 234, 81 L. Ed. 448 (1936).

Preference is valid in absence of actual intent to defraud. Rogers v. Boise Ass’n. of Credit Men, 33 Idaho 513, 196 P. 213 (1921). A gift deed, conveying realty to a daughter of grantor who had heart trouble and expected to die suddenly, as he later did, and who still had $2,500 cash on deposit in bank and bonds worth $10,000, was not invalid as intended to hinder, delay or defraud creditor. Eley v. Lyon, 60 Idaho 8, 88 P.2d 507 (1939).

Execution and delivery of trust deed by father, who was experiencing business difficulties, to daughter, creating first mortgage lien on father’s property in favor of daughter, was not a fraudulent conveyance where the deed was given for adequate consideration, consisting of prior advances and expenditures by daughter, and where evidence presented by judgment creditor of father failed to establish actual fraud or “badges of fraud” from which an inference of actual fraud might be warranted. Mohar v. McLelland Lumber Co., 95 Idaho 38, 501 P.2d 722 (1972).

Voidable Transfers.

— Contingent Liability.

A conveyance to grantor’s daughter, executed subsequent to grantor’s repudiation of a promise to marry, was subject to being set aside as a “fraudulent conveyance” by virtue of the contingent liability existing in favor of promisee at the time of conveyance. Louk v. Patten, 58 Idaho 334, 73 P.2d 949 (1937).

— Deficiency Judgments.

In an action by the holder of deficiency judgment to set aside conveyances from judgment debtors to sons, judgment setting aside conveyances should provide that conveyances were set aside only as to holder of deficiency judgment and subject only to satisfaction of deficiency judgment against judgment debtors. Buhl State Bank v. Glander, 56 Idaho 543, 56 P.2d 757 (1936).

— Intent to Defraud.

Assignment of property made partly for the reason that assignor feels that his creditors may levy on the proceeds of the property is void as against creditors of assignor. Johnson v. Sage, 4 Idaho 758, 44 P. 641 (1896).

If a transfer is made with intent to evade payment of debts and such intent is known to transferee, such transfer is void. Sears v. Lydon, 5 Idaho 358, 49 P. 122 (1897).

If debtor transfers assets with the intent to defraud creditors, transfer is void as against judgment creditor, even though debtor is not insolvent. Hilliard v. Sisil, 192 F.2d 800 (9th Cir. 1951).

Although a conveyance is supported by fair and valuable consideration, it may be set aside with respect to creditors if it is the product of a fraudulent attempt by the debtor and transferee to obstruct access to the debtor’s property for satisfaction of legitimate claims and is marked by an actual intent of both the debtor and transferee to defraud the creditors. Blankenship v. Myers, 97 Idaho 356, 544 P.2d 314 (1975).

— Reliance by Creditor.

— Tax Sales.

Grantee, withholding her father’s gift deed from record until after a corporation extended credit to him in reliance on his financial statement listing realty conveyed as an asset, was not estopped to assert title thereto, as against such creditor, where grantor had much more than the amount of debt left in cash and bonds, and grantee did not know of such statement when deed was made. Eley v. Lyon, 60 Idaho 8, 88 P.2d 507 (1939). — Tax Sales.

One who purchased property at an execution or tax sale received legal title and could bring an action to remove a cloud on the title created by a fraudulent transfer. Therefore, the district court had the equitable power to clear tax sale purchaser’s title by setting aside the tax debtors’ deeds to the family trust, which deeds were void and unenforceable against the tax sale purchaser. Haney v. Molko, 123 Idaho 132, 844 P.2d 1382 (Ct. App. 1992).

Am. Jur. 2d.

C.J.S.

ALR.

§ 55-907. Transfers in fraud of creditors — Delivery and change of possession.

Every transfer of personal property other than a thing in action, and every lien thereon, other than [a] any transfer in connection with security interest created under the Uniform Commercial Code, is presumed, if made by a person having at the time the possession or control of the property, and not accompanied by an immediate delivery and followed by an actual and continued change of possession of the things transferred, to be fraudulent, and therefore void, against those who are his creditors while he remains in possession, and the successors in interests of such creditor, and against any persons on whom his estate devolves in trust for the benefit of others than himself, and against purchasers or encumbrancers in good faith subsequent to the transfer.

History.

1863, p. 540, § 15; R.S., § 3021; reen. R.C. & C.L., § 3170; C.S., § 5434; I.C.A.,§ 54-907; am. 1967, ch. 272, § 27, p. 745.

Cross References.

Secured transactions under Uniform Commercial Code,§ 28-9-101 et seq.

Compiler’s Notes.

The letter “a” was enclosed in brackets by the compiler to indicate surplusage from the 1967 amendment.

Section 33 of S.L. 1967, ch. 272, read: “Transactions validly entered into before the effective date specified in section 32 and the rights, duties and interest flowing from them remain valid thereafter and may be terminated, completed, consummated or enforced as required or permitted by any statute amended by this act as though such amendment had not occurred.”

Effective Dates.

Section 32 of S.L. 1967, ch. 272 provided that this act should become effective at midnight on December 31, 1967, simultaneously with the Uniform Commercial Code.

Possession Retained.

This section was held not to apply to sale of timber which had been cut into logs by purchaser but left on land of seller. In re McCartney, 218 F. 717 (D. Idaho 1914).

Title to goods sold passes to buyer when bill of sale is made, regardless of the fact that the time of the delivery is postponed. Walker v. Lightfoot, 124 F.2d 3 (9th Cir. 1941).

A bill of sale by a mining company was not insufficient to vest title to personalty sold to the lessor, because no delivery of the personalty was made at the time of the execution of the bill of sale in the absence of fraud in the sale, and the personalty transferred was to be covered by the lease, and the lessor took possession of the personalty upon forfeiture under the lease about five years after the bill of sale was made and before the lessee became bankrupt. Walker v. Lightfoot, 124 F.2d 3 (9th Cir. 1941).

Where property is not at time of the sale in the possession or under the control of vendor, this section has no application. Cornwall v. Mix, 3 Idaho 687, 34 P. 893 (1893).

Where assignor retains the property under the same control and management, the assignment is void as against creditors. Johnson v. Sage, 4 Idaho 758, 44 P. 641 (1896).

L sold a quantity of wheat to H and M; before delivery or change of possession thereof, and twenty days after the sale, the wheat was levied upon under an execution issued in an action against L. It was held that the sale to H and M was void as to creditors. Hallett v. Parrish, 5 Idaho 496, 51 P. 109 (1897).

Where tenant holds personal property on the demised premises for his landlord and the latter assigns the same to a third person, who leaves it on the demised premises for tenant to hold until a certain day, and property is seized upon an execution before that day, there is, at the time of the execution, no such delivery and change of possession as to vest title in the third person. Coombs v. Collins, 6 Idaho 536, 57 P. 310 (1899).

Where A purchases, at execution sale, stock belonging to B and leaves it in B’s possession, paying him to care for it, this section does not apply, and B’s judgment creditors obtain no right against A in respect to stock. Sweeten v. Ezell, 30 Idaho 154, 163 P. 612 (1917).

Alleged sale of personal property, not accompanied by an immediate delivery and not followed by an actual continued change of possession, is conclusively presumed to be fraudulent and void as against creditors of and purchasers from vendor. Ahlstrom v. Tage, 31 Idaho 459, 174 P. 605 (1918); Brown v. Herrick, 34 Idaho 171, 200 P. 117 (1921).

Alleged sale of automobile not accompanied by delivery and continued change of possession is fraudulent and void as against creditors of vendor. Sweetland v. Oakley State Bank, 40 Idaho 726, 236 P. 538 (1925).

Mortgagee of personal property under mortgage given to secure an antecedent debt has lien superior to purchaser of such property failing to remove it from owner’s premises. Millick v. Stevens, 44 Idaho 347, 257 P. 30 (1927).

Unrecorded bill of sale of cattle, not accompanied by change of possession, is void as to creditors of grantor and is not admissible in evidence in action for damages for alleged conversion. Servel v. Corbett, 49 Idaho 536, 290 P. 200 (1930).

Repossession.

Where property, without legal excuse, is replaced in the same apparent relation to vendor after delivery, and there is no manifest and continued change of possession, the transfer is void. Harkness v. Smith, 3 Idaho 221, 28 P. 423 (1891). Where there is an actual sale and delivery with change of possession, the subsequent act of prior owner in wrongfully taking possession of the property does not defeat purchaser’s title as against subsequent purchaser. Couch v. Montgomery, 6 Idaho 669, 59 P. 16 (1899).

Scope of Inquiry.

Sole inquiry in this case is whether there has been an immediate delivery followed by actual and continued change of possession. No question of intent, bona fides or notice is relevant. Harkness v. Smith, 3 Idaho 221, 28 P. 423 (1891).

Seizure under Attachment.

Officer sued for wrongfully seizing property under an invalid writ of attachment may protect himself from being mulcted in exemplary damages by showing that the goods seized under the writ were recently in the possession of defendant, and that there was no such change of possession as is required by this section. Sears v. Lydon, 5 Idaho 358, 49 P. 122 (1897).

Sufficiency of Delivery.

Statute does not refer to the place where goods are situated, but to actual and continual change of possession, and does not require goods sold to be removed in all cases from the place where situated when sold. Hazard v. Cole, 1 Idaho 276 (1869).

Where property is at time of sale in the custody of a third person and sale is made in good faith, notice to the third person is sufficient to constitute a delivery. Lufkins v. Collins, 2 Idaho 150, 7 P. 95 (1885).

Where horses pledged to secure a debt are at time of pledge in the possession of a third person who was to range the same for the winter, and pledgor tells such third person in the presence of all parties to hold them for pledgee, and such person takes the horses to the range and delivers them to pledgee in the spring, the latter paying for their care during the winter, there is a sufficient delivery and change of possession to satisfy the statute. Murphy v. Braase, 3 Idaho 544, 32 P. 208 (1893).

No fixed rule can be established as a test for determining what the “immediate delivery” or “actual possession” required by the statute means, but the questions are matters of fact to be determined by the jury from the evidence in each particular case. Simons v. Daly, 9 Idaho 87, 72 P. 507 (1903); Powelson v. Kinney, 40 Idaho 565, 234 P. 935 (1925).

A worked on the ranch for B and had a room in B’s house in town. B gave A a cream separator in settlement of a debt. A removed the separator from the ranch to his room in B’s house. It was held that there was sufficient delivery and change of possession. Rapple v. Hughes, 10 Idaho 338, 77 P. 722 (1904).

Where retail dealer sells a wagon to purchaser and receives the purchase-price and thereupon writes a card containing the words “Sold to C. H. Trousdale,” and places this notice on the wagon, and, thereupon, the wagon is left in the possession of retailer, and before it is taken away by purchaser a receiver takes charge of the property of retailer, there is sufficient change of possession to meet requirements of this section. Trousdale v. Winona Wagon Co., 25 Idaho 130, 137 P. 372 (1913).

Instruction enlarging upon terms of statute by stating “that this change must be an open, visible change, manifested by such outward signs as render evidence to persons dealing with the property that the possession of the former owner as such has ceased” does not constitute prejudicial error. Brown v. Feeler, 35 Idaho 57, 204 P. 659 (1922). When facts are undisputed it is for court to determine as matter of law whether there has been immediate delivery and continued change of possession. Sweetland v. Oakley State Bank, 40 Idaho 726, 236 P. 538 (1925).

In action of claim and delivery where evidence showed that, at time of transfer, certain cattle were on some lots owned by claimant, and that shortly after he arranged for their winter keep, there was such showing as to render statute inapplicable, and to leave question one of fact for jury. Webster v. McCullough, 45 Idaho 604, 264 P. 384 (1928).

Am. Jur. 2d.

C.J.S.

Compiler’s Notes.

Section 33 of S.L. 1967, ch. 272, read: “Transactions validly entered into before the effective date specified in section 32 and the rights, duties and interest flowing from them remain valid thereafter and may be terminated, completed, consummated or enforced as required or permitted by any statute amended by this act as though such amendment had not occurred.”

Effective Dates.

Section 32 of S.L. 1967, ch. 272, provided that this act should become effective at midnight December 31, 1967, simultaneously with the Uniform Commercial Code,§ 28-1-101 et seq.

Intent.

Intent with which a transfer in fraud of creditors is made is not established so much by attempting to ascertain the actual intent in mind of debtor, but rather by the facts and circumstances under which transfer was made and from which the law imputes a fraudulent motive. California Consol. Mining Co. v. Manley, 10 Idaho 786, 81 P. 50 (1905), appeal dismissed, 203 U.S. 579, 27 S. Ct. 779, 51 L. Ed. 326 (1906).

Whether a conveyance is for the purpose of defrauding creditors is a question of intent. Lingenfelter v. Eby, 68 Idaho 134, 190 P.2d 130 (1948).

A fraudulent intent may be imputed by the conditions and circumstances of the transfer. Siegel Mobile Home Group, Inc. v. Bowen, 114 Idaho 531, 757 P.2d 1250 (Ct. App. 1988). The lack of an acknowledgment on the first deed to the wife, subsequent multiple conveyances of the property, and the coincidence of the timing of these transfers and the judgment of the pending case against the husband, did not create a showing from which conflicting inferences of the husband’s intent could be drawn, where the affidavits given by the husband and wife, as well as the records in the divorce action, established the stated purpose of the deed as a settlement of the property dispute arising from their earlier divorce. Siegel Mobile Home Group, Inc. v. Bowen, 114 Idaho 531, 757 P.2d 1250 (Ct. App. 1988).

Presumptions and Evidence.

Neither gift from husband to wife nor conveyance to another without consideration is prima facie fraudulent. McMillan v. McMillan, 42 Idaho 270, 245 P. 98 (1926).

In order to constitute fraudulent conveyance, there must be shown the fraud of vendor and injury to creditor. McMillan v. McMillan, 42 Idaho 270, 245 P. 98 (1926).

Transfer pending determination of contingent liability was held a fraud on creditors, as a matter of law. Associated Fruit Co. v. Idaho-Oregon Fruit Growers’ Ass’n, 44 Idaho 200, 256 P. 99 (1927).

When insolvent debtor conveys all his property without consideration, inevitable result is to hinder and delay creditors. He is held to intend natural consequences of his act and natural inference is intent to defraud, in absence of circumstances that rebut that inference. Snell v. Prescott, 48 Idaho 783, 285 P. 483 (1930).

Question of Fact.

Determination of what constitutes immediate change of possession and delivery is purely a question of fact to be determined by the jury, or the court in case a jury is waived, from all the evidence in the particular case. Rapple v. Hughes, 10 Idaho 338, 77 P. 722 (1904).

Absence of valuable consideration does not necessarily render deed invalid. Feltham v. Blunck, 34 Idaho 1, 198 P. 763 (1921); Snell v. Prescott, 48 Idaho 783, 285 P. 483 (1930).

It is duty of trial court to determine bona fides of transaction from all facts and circumstances in evidence. Snell v. Prescott, 48 Idaho 783, 285 P. 483 (1930).

Release of Mortgage.

Refusal of mortgagee to release six chattel mortgages could not be excused on the ground that there was no consideration for one of the mortgages, since a mortgage is not fraudulent merely because there is lack of consideration, and, furthermore, question of fraud can only be raised by the creditors in a proper proceeding. Head v. Crone, 76 Idaho 196, 279 P.2d 1064 (1955).

Voluntary Transfers.

Conveyance made for a mere nominal consideration, when attacked as fraudulent, will be subjected to the rules applicable to voluntary transfers. Feltham v. Blunck, 34 Idaho 1, 198 P. 763 (1921).

Transfer of property from husband to wife is not fraudulent, if husband had sufficient remaining property to pay his debts. McMillan v. McMillan, 42 Idaho 270, 245 P. 98 (1926); Snell v. Prescott, 48 Idaho 783, 285 P. 483 (1930).

Bona Fide Transfers.

Transfer of stock by a married woman, although procured by duress and coercion on the part of her husband, was good where transferee was bona fide holder for value, without notice or knowledge of such duress or coercion. Bryan v. Montandon, 6 Idaho 352, 55 P. 650 (1898).

Transfer of property for purpose of defrauding creditors is good as between the parties. Berryman v. Dore, 47 Idaho 582, 277 P. 565 (1929).

Construction with Other Law.

Limited liability company and estate of one of its two manager/members had no cause of action against the other manager/member for transferring property to defraud creditors since neither plaintiff was a creditor of the limited liability company. Estate of E.A. Collins v. Geist, 143 Idaho 821, 153 P.3d 1167 (2007).

Fraudulent Transfers.

Where a debtor conveyed land to a minor daughter after a suit against the debtor had been instituted, it made out a prima facie case of fraudulent transfer under this section, and the grantee’s daughter’s successor had burden of showing good faith and that consideration had been paid. Kantola v. Hendrickson, 52 Idaho 217, 12 P.2d 866 (1932).

Good Faith Purchaser.

Regardless of any rights existing under the UCC in farmers who sold grain to buyer who failed to pay, an action for conversion could not be sustained against subsequent good faith purchaser for value. Western Idaho Prod. Credit Ass’n v. Simplot Feed Lots, Inc., 106 Idaho 264, 678 P.2d 52 (1984).

Cited Mohar v. McLelland Lumber Co., 95 Idaho 38, 501 P.2d 722 (1972); Lind v. Perkins, 107 Idaho 901, 693 P.2d 1103 (Ct. App. 1984).

Cited

Am. Jur. 2d.

C.J.S.

§ 55-910. Uniform voidable transactions act — Definitions.

As used in this act:

1. “Affiliate” means:
   1. A person that directly or indirectly owns, controls, or holds with power to vote, twenty percent (20%) or more of the outstanding voting securities of the debtor, other than a person that holds the securities:
      1. as a fiduciary or agent without sole discretionary power to vote the securities; or
      2. solely to secure a debt, if the person has not in fact exercised the power to vote;
   2. A corporation twenty percent (20%) or more of whose outstanding voting securities are directly or indirectly owned, controlled, or held with power to vote, by the debtor or a person that directly or indirectly owns, controls, or holds with power to vote, twenty percent (20%) or more of the outstanding voting securities of the debtor, other than a person that holds the securities:
      1. as a fiduciary or agent without sole discretionary power to vote the securities; or
      2. solely to secure a debt, if the person has not in fact exercised the power to vote;
   3. A person whose business is operated by the debtor under a lease or other agreement, or a person substantially all of whose assets are controlled by the debtor; or
   4. A person that operates the debtor’s business under a lease or other agreement or controls substantially all of the debtor’s assets.
2. “Asset” means property of a debtor, but the term does not include:
   1. Property to the extent it is encumbered by a valid lien;
   2. Property to the extent it is generally exempt under nonbankruptcy law.
3. “Claim” means a right to payment, whether or not the right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, or unsecured.
4. “Creditor” means a person that has a claim.
5. “Debt” means liability on a claim.
6. “Debtor” means a person that is liable on a claim.
7. “Electronic” means relating to technology having electrical, digital, magnetic, wireless, optical, electromagnetic or similar capabilities.
8. “Insider” includes:
   1. If the debtor is an individual:
      1. a relative of the debtor or of a general partner of the debtor;
      2. a partnership in which the debtor is a general partner;
      3. a general partner in a partnership described in subsection (7)(a)2. of this section; or
      4. a corporation of which the debtor is a director, officer, or person in control;
   2. If the debtor is a corporation:
      1. a director of the debtor;
      2. an officer of the debtor;
      3. a person in control of the debtor;
      4. a partnership in which the debtor is a general partner;
      5. a general partner in a partnership described in subsection (7)(b)4. of this section; or
      6. a relative of a general partner, director, officer, or person in control of the debtor; (c) If the debtor is a partnership:
9. “Lien” means a charge against or an interest in property to secure payment of a debt or performance of an obligation, and includes a security interest created by agreement, a judicial lien obtained by legal or equitable process or proceedings, a common-law lien, or a statutory lien.
10. “Organization” means a person other than an individual.
11. “Person” means an individual, estate, business or nonprofit entity, public corporation, government or governmental subdivision, agency or instrumentality, or any other legal entity.
12. “Property” means anything that may be the subject of ownership.
13. “Record” means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form.
14. “Relative” means an individual related by consanguinity within the third degree as determined by the common law, a spouse, or an individual related to a spouse within the third degree as so determined, and includes an individual in an adoptive relationship within the third degree.
15. “Sign” means, with present intent to authenticate or adopt a record:
    1. To execute or adopt a tangible symbol; or
    2. To attach to or logically associate with the record an electronic symbol, sound or process.
16. “Transfer” means every mode, direct or indirect, absolute or conditional, voluntary or involuntary, of disposing of or parting with an asset or an interest in an asset, and includes payment of money, release, lease, license and creation of a lien or other encumbrance.
17. “Valid lien” means a lien that is effective against the holder of a judicial lien subsequently obtained by legal or equitable process or proceedings.

1. a general partner in the debtor;

2. a relative of a general partner in, or a general partner of, or a person in control of the debtor;

3. another partnership in which the debtor is a general partner;

4. a general partner in a partnership described in subsection (7)(c)3. of this section; or

5. a person in control of the debtor;

(d) An affiliate, or an insider of an affiliate as if the affiliate were the debtor; and

(e) A managing agent of the debtor.

History.

I.C.,§ 55-910, as added by 1987, ch. 202, § 2, p. 422; am. 2015, ch. 342, § 1, p. 1290.

Prior Laws.

Former§§ 55-910 to 55-922 which comprised 1969, ch. 463, §§ 1 to 13, p. 1300, were repealed by S.L. 1987, ch. 202, § 1.

Amendments.

Compiler’s Notes.

The 2015 amendment, by ch. 342, substituted “voidable transactions” for “fraudulent transfer” in the section heading; added subsections (7), (10), (13), and (15) and redesignated the remaining subsections accordingly; inserted “in fact” in paragraph (1)(a)2.; inserted “discretionary” in paragraph (1)(b)1.; rewrote present subsection (11), which formerly read: “Person’ means an individual, partnership, corporation, association, organization, government or governmental subdivision or agency, business trust, estate, trust, or any other legal or commercial entity”; and inserted “license” near the end of present subsection (16). Compiler’s Notes.

The term “this act” in the introductory paragraph refers to S.L. 1987, ch. 202, which is compiled as§§ 55-910 to 55-918 and 55-920 to 55-922.

Official Comment

1. The definition of “affiliate” is derived from Bankruptcy Code § 101(2) (1984).
2. The definition of “asset” is substantially to the same effect as the definition of “assets” in § 1 of the Uniform Fraudulent Conveyance Act. The definition in this Act, unlike that in the earlier Act, does not, however, require a determination that the property is liable for the debts of the debtor. Thus, for example, an unliquidated claim for damages resulting from personal injury or a contingent claim of a surety for reimbursement, subrogation, restitution, contribution, or the like may be counted as an asset for the purpose of determining whether the holder of the claim is solvent as a debtor under § 2 of this Act, even if applicable law does not allow such an asset to be levied on and sold by a creditor. Cf. Manufacturers & Traders Trust Co. v. Goldman (In re Ollag Construction Equipment Corp.) , 578 F.2d 904, 907-09 (2d Cir. 1978).
3. The definition of “claim” is derived from Bankruptcy Code § 101(4) (1984). Because the purpose of this Act is primarily to protect unsecured creditors against transfers and obligations injurious to their rights, the words “claim” and “debt” as used in the Act generally have reference to an unsecured claim and debt. As the context may indicate, however, usage of the terms is not so restricted. See, e.g. , §§ 1(1)(i)(B) and 1(9).
4. The definition of “creditor” in combination with the definition of “claim” has substantially the same effect as the definition of “creditor” under § 1 of the Uniform Fraudulent Conveyance Act. As under that Act, the holder of an unliquidated tort claim or a contingent claim may be a creditor protected by this Act.
5. The definition of “debt” is derived from Bankruptcy Code § 101(11) (1984).
6. The definition of “debtor” had no analogue in the Uniform Fraudulent Conveyance Act.
7. The definition of “electronic” is the standard definition of that term used in acts prepared by the Uniform Law Commission as of 2014.
8. The definition of “insider” is derived from Bankruptcy Code § 101(28) (1984). In this Act, as in the Bankruptcy Code, the definition states that the term “includes” certain listed persons; it does not state that the term “means” the listed persons. Hence the definition is not exclusive, and the statutory list is merely exemplary. See also Bankruptcy Code § 102(3) (1984). Accordingly, a person may be an “insider” of a debtor that is an individual, corporation or partnership even though the person is not designated as such by the statutory list. For example, a trust may be found to be an “insider” of a beneficiary. Similarly, a court may find a person living with an individual debtor for an extended time in the same household or as a permanent companion to have the kind of close relationship intended to be covered by the term “insider.” See also, e.g., Browning Interests v. Allison (In re Holloway) , 955 F.2d 1008 (5th Cir. 1992) (former spouse of debtor was an “insider” because of their close and continued personal relationship, even though they had long ago divorced and remarried others). Likewise, a person may be an “insider” of a debtor that is not an individual, corporation or partnership. See, e.g., In re Longview Aluminum, L.L.C. , 657 F.3d 507 (7th Cir. 2011) (holding, under the Bankruptcy Code definition, that an individual serving on the Board of Managers of, and having a 12% membership interest in, a limited liability company was an “insider” of the company; the company’s organic documents vested management authority “in the Board of Managers and the Members”).
9. The definition of “lien” is derived from paragraphs (30), (31), (43), and (45) of Bankruptcy Code § 101 (1984), which define “judicial lien,” “lien,” “security interest,” and “statutory lien” respectively.
10. The definition of “organization” is derived from Uniform Commercial Code§ 1-201(b)(25) (2014).
11. The definition of “person” is the standard definition of that term used in acts prepared by the Uniform Law Commission as of 2014. Section 11 renders a “protected series” of a “series organization” a “person” for purposes of this Act, even though the “protected series” may not qualify as a “person” under paragraph (11) of this section.
12. The definition of “property” is derived from Uniform Probate Code§ 1-201(33) (1969). Property includes both real and personal property, whether tangible or intangible, and any interest in property, whether legal or equitable.
13. The definition of “record” is the standard definition of that term used in acts prepared by the Uniform Law Commission as of 2014.
14. The definition of “relative” is derived from Bankruptcy Code § 101(37) (1984) but is explicit in its references to the spouse of a debtor in view of uncertainty as to whether the common law determines degrees of relationship by affinity.
15. The definition of “sign” is the standard definition of that term used in acts prepared by the Uniform Law Commission as of 2014.
16. The definition of “transfer” is derived principally from Bankruptcy Code § 101(48) (1984). The definition of “conveyance” in § 1 of the Uniform Fraudulent Conveyance Act was similarly comprehensive, and the references in this Act to “payment of money, release, lease, and the creation of a lien or encumbrance” are derived from the Uniform Fraudulent Conveyance Act. While the definition in the Uniform Fraudulent Conveyance Act did not explicitly refer to an involuntary transfer, the decisions under that Act were generally consistent with an interpretation that covered such a transfer. See, e.g., Hearn 45 St. Corp. v. Jano , 283 N.Y. 139, 27 N.E.2d 814, 128 A.L.R. 1285 (1940) (execution and foreclosure sales); Lefkowitz v. Finkelstein Trading Corp. , 14 F. Supp. 898, 899 (S.D.N.Y. 1936) (execution sale); Langan v. First Trust & Deposit Co. , 277 App. Div. 1090, 101 N.Y.S.2d 36 (4th Dept. 1950), aff’d , 302 N.Y. 932, 100 N.E.2d 189 (1951) (mortgage foreclosure); Catabene v. Wallner , 16 N.J. Super. 597, 602, 85 A.2d 300, 302 (1951) (mortgage foreclosure). The 2014 amendments add a reference to transfer by “license,” which is derived from the definition of “proceeds” in Uniform Commercial Code§ 9-102(a)(64)(A) (2014).
17. The definition of “valid lien” had no analogue in the Uniform Fraudulent Conveyance Act. A valid lien includes an equitable lien that may not be defeated by a judicial lien creditor. See, e.g., Pearlman v. Reliance Insurance Co. , 371 U.S. 132, 136 (1962) (upholding a surety’s equitable lien in respect to a fund owing a bankrupt contractor).

Subparagraphs (i), (ii), and (iii) provide clarification by excluding from the term not only generally exempt property but also an interest in a tenancy by the entirety in many states and an interest that is generally beyond reach by unsecured creditors because subject to a valid lien. This Act, like the Uniform Fraudulent Conveyance Act and the Statute of 13 Elizabeth, declares rights and provides remedies for unsecured creditors against transfers that impede them in the collection of their claims. The laws protecting valid liens against impairment by levying creditors, exemption statutes, and the rules restricting levyability of interest in entireties property are limitations on the rights and remedies of unsecured creditors, and it is therefore appropriate to exclude property interests that are beyond the reach of unsecured creditors from the definition of “asset” for the purposes of this Act.

A creditor of a joint tenant or tenant in common may ordinarily collect a judgment by process against the tenant’s interest, and in some states a creditor of a tenant by the entirety may likewise collect a judgment by process against the tenant’s interest. See 2 American Law of Property 10, 22, 28-32 (1952); Craig, An Analysis of Estates by the Entirety in Bankruptcy , 48 Am.Bankr.L.J. 255, 258-59 (1974). The levyable interest of such a tenant is included as an asset under this Act.

The definition of “assets” in the Uniform Fraudulent Conveyance Act excluded property that is exempt from liability for debts. The definition did not, however, exclude all property that cannot be reached by a creditor through judicial proceedings to collect a debt. Thus, it included the interest of a tenant by the entirety although in nearly half the states such an interest cannot be subjected to liability for a debt unless it is an obligation owed jointly by the debtor with his or her cotenant by the entirety. See 2 American Law of Property 29 (1952); Craig, An Analysis of Estates by the Entirety in Bankruptcy , 48 Am.Bankr.L.J. 255, 258 (1974). The definition in this Act requires exclusion of interests in property held by tenants by the entirety that are not subject to collection process by a creditor without a right to proceed against both tenants by the entirety as joint debtors.

The reference to “generally exempt” property in § 1(2)(ii) recognizes that all exemptions are subject to exceptions. Creditors having special rights against generally exempt property typically include claimants for alimony, taxes, wages, the purchase price of the property, and labor or materials that improve the property. See Uniform Exemptions Act § 10 (1979) and the accompanying Comment. The fact that a particular creditor may reach generally exempt property by resorting to judicial process does not warrant its inclusion as an asset in determining whether the debtor is insolvent.

Because this Act is not an exclusive law on the subject of voidable transfers and obligations (see Comment 9 to § 4), it does not preclude the holder of a claim that may be collected by process against property generally exempt as to other creditors from obtaining relief from a transfer of such property that hinders, delays, or defrauds the holder of such a claim. Likewise the holder of an unsecured claim enforceable against tenants by the entirety is not precluded by the Act from pursuing a remedy against a transfer of property held by the entirety that hinders, delays, or defrauds the holder of such a claim.

Nonbankruptcy law is the law of a state or federal law that is not part of the Bankruptcy Code, Title 11 of the United States Code. The definition of an “asset” thus does not include property that would be subject to administration for the benefit of creditors under the Bankruptcy Code unless it is subject under other applicable law, state or federal, to process for the collection of a creditor’s claim against a single debtor.

The differences between the definition in this Act and that in the Bankruptcy Code are slight. In this Act, the definition has been restricted in clauses (i)(C), (ii)(E), and (iii)(D) to make clear that a partner is not an insider of an individual, corporation, or partnership if any of these latter three persons is only a limited partner. The definition of “insider” in the Bankruptcy Code does not purport to make a limited partner an insider of the partners or of the partnership with which the limited partner is associated, but it is susceptible of a contrary interpretation and one which would extend unduly the scope of the defined relationship when the limited partner is not a person in control of the partnership. The definition of “insider” in this Act also omits the reference in Bankruptcy Code § 101(28)(D) (1984) to an elected official or relative of such an official as an insider of a municipality.

Amendments.

The 2015 amendment, by ch. 342, in subsection (1), inserted “at a fair valuation,” substituted “the sum” for “all,” and deleted “at a fair valuation” from the end; in subsection (2), inserted “other than as a result of a bona fide dispute” in the first sentence and added the second sentence; deleted former subsection (3), which read: “A partnership is insolvent under subsection (1) of this section if the sum of the partnership’s debts is greater than the aggregate of all of the partnership’s assets, at a fair valuation, and the sum of the excess of the value of each general partner’s nonpartnership assets over the partner’s nonpartnership debts”; and redesignated former subsections (4) and (5) as present subsections (3) and (4).

Compiler’s Notes.

The term “this act” in subsection (3) refers to S.L. 1987, ch. 202, which is compiled as§§ 55-910 to 55-918 and 55-920 to and 55-922.

Official Comment

1. Subsection (a) is derived from the definition of “insolvent” in Bankruptcy Code § 101(29)(A) (1984). The definition in subsection (a) contemplates a fair valuation of the debts as well as the assets of the debtor. The 2014 amendments reword subsection (a) in order to eliminate the elegant variation in the original text between “the sum of” debts and “all of” assets, and to make clearer that “fair valuation” applies to debts as well as to assets. No change in meaning is intended. Financial accounting standards may permit or require fair value measurement of an asset or a debt. The fair value of an asset or a debt for financial accounting purposes may be based on standards that are not appropriate for use in subsection (a). For example, Fin. Accounting Standards Bd., Accounting Standards Codification /P¶ 820-10-35-17 to -18 (2014) (formerly Statement of Financial Accounting Standards No. 157: Fair Value Measurement ¶ 15 (2006)) requires for financial accounting purposes that the “fair value” of a liability reflect nonperformance risk ( i.e. , the risk that the debtor will not pay the liability as and when due). By contrast, proper application of subsection (a) excludes any adjustment to the face amount of a liability on account of nonperformance risk. Such an adjustment would be contrary to the purpose of subsection (a), which is to assess the risk that the debtor will not be able to satisfy its liabilities. Only in unusual circumstances would the “fair valuation” for the purpose of subsection (a) of a liquidated debt be other than its face amount. Examples of such circumstances include discounting the face amount of a contingent debt to reflect the probability that the contingency will not occur, and discounting the face amount of a non-interest-bearing debt that is due in the future in order to reduce the debt to its present value.
2. Subsection (b) establishes a rebuttable presumption of insolvency from the fact of general nonpayment of debts as they become due. Such general nonpayment is a ground for the filing of an involuntary petition under Bankruptcy Code § 303(h)(1) (1978). See also U.C.C.§ 1-201(23) (1962) (defining a person to be “insolvent” who “has ceased to pay his debts in the ordinary course of business”). The 2014 amendments to this Act clarify that general nonpayment of debts does not count nonpayment as a result of a bona fide dispute. That was the intended meaning of the language before 2014, as stated in the official comments, and the cited provisions of the Bankruptcy Code and the Uniform Commercial Code have been similarly clarified. See Bankruptcy Code § 303(h)(1) (2014); U.C.C.§ 1-203(b)(23) (2014) (defining “insolvent” to include “having generally ceased to pay debts in the ordinary course of business other than as a result of bona fide dispute”).
3. Subsection (c) follows the approach of the definition of “insolvency” in Bankruptcy Code § 101(29) (1984) by excluding from the computation of the value of the debtor’s assets any value that can be realized only by avoiding a transfer of an interest formerly held by the debtor or by discovery or pursuit of property that has been concealed or removed with intent to hinder, delay, or defraud creditors.
4. Subsection (d) has no analogue in Bankruptcy Code § 101(29) (1984). It makes clear that a person is not rendered insolvent under this section by counting as a debt an obligation secured by property of the debtor that is not counted as an asset. See also Comment 2 to § 1 and Comment 1 to § 2.

As under the definition of the term “insolvent” in § 2 of the Uniform Fraudulent Conveyance Act, exempt property is excluded from the computation of the value of the assets. See § 1(2). For similar reasons interests in valid spendthrift trusts and interests in tenancies by the entireties that are not subject to process by a creditor of only one tenant are not included. See Comment 2 to § 1. Because a valid lien also precludes an unsecured creditor from collecting the creditor’s claim from the encumbered interest in a debtor’s property, both the encumbered interest and the debt secured thereby are excluded from the computation of insolvency under this Act. See § 1(2) and subsection (d) of this section.

Subsection (b) defines the effect of the presumption to be (in paraphrase) that the burden of persuasion on the issue of insolvency shifts to the defendant. That conforms to the default definition of the effect of a presumption in civil cases set forth in Uniform Rules of Evidence (1974 Act), Rule 301(a) (later Rule 302(a) (1999 Act as amended 2005)). It also conforms to the Final Draft of Federal Rule 301 as submitted to the United States Supreme Court by the Advisory Committee on Federal Rules of Evidence in 1973. “The so-called ‘bursting bubble’ theory, under which a presumption vanishes upon the introduction of evidence which would support a finding of the nonexistence of the presumed fact, even though not believed, is rejected as according presumptions too ‘slight and evanescent’ an effect.” Advisory Committee’s Note to Rule 301, 56 F.R.D. 183, 208 (1973). See also 1 J. Weinstein & M. Berger, Evidence ¶ 301[01] (1982). It should be noted that the Federal Rule of Evidence as finally enacted gave by default a different effect to presumptions in civil cases, in effect adopting the “bursting bubble” definition. See Fed. R. Evid. 301 (1975) (carried forward in the 2011 revision). The statement of the effect of the presumption in subsection (b) was added by the 2014 amendments to this Act, but subsection (b) was intended to have the same meaning before 2014, as stated in the official comments. The presumption is established in recognition of the difficulties typically imposed on a creditor in proving insolvency in the bankruptcy sense, as provided in subsection (a). See generally Levit, The Archaic Concept of Balance-Sheet Insolvency , 47 Am.Bankr.L.J. 215 (1973). Not only is the relevant information in the possession of a debtor that is apt to be noncooperative, but the debtor’s records are apt to be incomplete and inaccurate. As a practical matter, insolvency is most cogently evidenced by a general cessation of payment of debts, as has long been recognized by the laws of other countries and is now reflected in the Bankruptcy Code. See Honsberger, Failure to Pay One’s Debts Generally as They Become Due: The Experience of France and Canada , 54 Am.Bankr.L.J. 153 (1980); J. MacLachlan, Bankruptcy 13, 63-64, 436 (1956). In determining whether a debtor is paying its debts generally as they become due, the court should look at more than the amount and due dates of the indebtedness. The court should also take into account such factors as the number of the debtor’s debts, the proportion of those debts not being paid, the duration of the nonpayment, and the existence of bona fide disputes or other special circumstances alleged to constitute an explanation for the stoppage of payments. The court’s determination may be affected by a consideration of the debtor’s payment practices prior to the period of alleged nonpayment and the payment practices of the trade or industry in which the debtor is engaged. The case law that has developed under Bankruptcy Code § 303(h)(1) (1984) has not required a showing that a debtor has failed or refused to pay a majority in number and amount of the debtor’s debts in order to prove general nonpayment of debts as they become due. See, e.g., Hill v. Cargill, Inc. (In re Hill) , 8 B.R. 779, 3 C.B.C.2d 920 (Bankr. D. Minn. 1981) (nonpayment of three largest debts held to constitute general nonpayment, although small debts were being paid); In re All Media Properties, Inc. , 5 B.R. 126, 6 B.C.D. 586, 2 C.B.C.2d 449 (Bankr. S.D. Tex. 1980) (missing significant number of payments or regularly missing payments significant in amount said to constitute general nonpayment; missing payments on more than 50% of aggregate of claims said not to be required to show general nonpayment; nonpayment for more than 30 days after billing held to establish nonpayment of a debt when it is due); In re Kreidler Import Corp. , 4 B.R. 256, 6 B.C.D. 608, 2 C.B.C.2d 159 (Bankr. D. Md. 1980) (nonpayment of one debt constituting 97% of debtor’s total indebtedness held to constitute general nonpayment).

Prior Laws.

Former§ 55-912 was repealed. See Prior Laws,§ 55-910.

Compiler’s Notes.

The bracketed insertion in subsection (1) was added by the compiler to correct a misspelling.

Antecedent Debt.

A transfer that satisfies an antecedent debt is value as defined by this section, but the debt must actually be satisfied and the value must be reasonably equivalent. Post v. Idaho Farmway, Inc., 135 Idaho 475, 20 P.3d 11 (2001).

Official Comment

1. This section defines when “value” is given for a transfer or an obligation. “Value” is used in that sense in various contexts in this Act, frequently with a qualifying adjective. Used in that sense the word appears in the following provisions:
2. Section 3(a) is adapted from Bankruptcy Code § 548(d)(2)(A) (1984). See also § 3(a) of the Uniform Fraudulent Conveyance Act. The definition in Section 3 is not exclusive. “Value” is to be determined in light of the purpose of the Act to protect a debtor’s estate from being depleted to the prejudice of the debtor’s unsecured creditors. Consideration having no utility from a creditor’s viewpoint does not satisfy the statutory definition. The definition does not specify all the kinds of consideration that do not constitute value for the purposes of this Act — e.g. , love and affection. See, e.g., United States v. West , 299 F. Supp. 661, 666 (D. Del. 1969).
3. Section 3(a) does not indicate what is “reasonably equivalent value” for a transfer or obligation. Under this Act, as under Bankruptcy Code § 548(a)(2) (1984), a transfer for security is ordinarily for a reasonably equivalent value notwithstanding a discrepancy between the value of the asset transferred and the debt secured, because the amount of the debt is the measure of the value of the interest in the asset that is transferred. See, e.g., Peoples-Pittsburgh Trust Co. v. Holy Family Polish Nat’l Catholic Church, Carnegie, Pa. , 341 Pa. 390, 19 A.2d 360 (1941). If the debt is a voidable obligation under this Act, a transfer to secure it as well as the obligation would be vulnerable to attack as voidable. A transfer to satisfy or secure an antecedent debt owed an insider is also subject to avoidance under the conditions specified in Section 5(b).
4. Section 3(a) of the Uniform Fraudulent Conveyance Act has been thought not to recognize that an unperformed promise could constitute fair consideration. See McLaughlin, Application of the Uniform Fraudulent Conveyance Act , 46 Harv. L. Rev. 404, 414 (1933). Courts construing these provisions of the prior law nevertheless have held unperformed promises to constitute value in a variety of circumstances. See, e.g., Harper v. Lloyd’s Factors, Inc. , 214 F.2d 662 (2d Cir. 1954) (transfer of money for promise of factor to discount transferor’s purchase-money notes given to fur dealer); Schlecht v. Schlecht , 168 Minn. 168, 176-77, 209 N.W. 883, 886-87 (1926) (transfer for promise to make repairs and improvements on transferor’s homestead); Farmer’s Exchange Bank v. Oneida Motor Truck Co. , 202 Wis. 266, 232 N.W. 536 (1930) (transfer in consideration of assumption of certain of transferor’s liabilities); see also Hummel v. Cernocky , 161 F.2d 685 (7th Cir. 1947) (transfer in consideration of cash, assumption of a mortgage, payment of certain debts, and agreement to pay other debts). Likewise a transfer in consideration of a negotiable note discountable at a commercial bank, or the purchase from an established, solvent institution of an insurance policy, annuity, or contract to provide care and accommodations clearly appears to be for value. On the other hand, an unperformed promise by an individual to support a parent or other transferor has generally been held not to constitute value. See, e.g., Springfield Ins. Co. v. Fry , 267 F. Supp. 693 (N.D. Okla. 1967); Sandler v. Parlapiano , 236 App. Div. 70, 258 N.Y. Supp. 88 (1st Dep’t 1932); Warwick Municipal Employees Credit Union v. Higham , 106 R.I. 363, 259 A.2d 852 (1969); Hulsether v. Sanders , 54 S.D. 412, 223 N.W. 335 (1929); Cooper v. Cooper , 22 Tenn. App. 473, 477, 124 S.W.2d 264, 267 (1939); Note, Rights of Creditors in Property Conveyed in Consideration of Future Support , 45 Iowa L. Rev. 546, 550-62 (1960). This Act adopts the view taken in the cases cited in determining whether an unperformed promise is value. 5. Subsection (b) rejects the rule of such cases as Durrett v. Washington Nat. Ins. Co. , 621 F.2d 201 (5th Cir. 1980) (nonjudicial foreclosure of a mortgage avoided as a voidable transfer when the property of an insolvent mortgagor was sold for less than 70% of its fair value); and Abramson v. Lakewood Bank & Trust Co. , 647 F.2d 547 (5th Cir. 1981), cert. denied, 454 U.S. 1164 (1982) (nonjudicial foreclosure held to be voidable transfer if made without fair consideration). Subsection (b) adopts the view taken in Lawyers Title Ins. Corp. v. Madrid (In re Madrid) , 21 B.R. 424 (B.A.P. 9th Cir. 1982), aff’d on another ground , 725 F.2d 1197 (9th Cir. 1984), that the price bid at a regularly conducted and noncollusive foreclosure sale determines the fair value of the property sold for purposes of voidable transfer law. See also BFP v. Resolution Trust Corp. , 511 U.S. 531, 537 n. 3 (1994) (similarly construing Bankruptcy Code § 548; opinion expressly limited to foreclosure of real estate mortgages).

4(a)(2) (“reasonably equivalent value”); 4(b)(8) (“value . . . reasonably equivalent”);

5(a) (“reasonably equivalent value”);

8(a) (“reasonably equivalent value”);

8(b)(1)(ii)(A) and (d) (“value”);

8(f)(1) (“new value”); and

8(f)(3) (“present value”).

“Value” is also used in other senses in this Act, to which this section is not relevant. See, e.g. , §§ 8(b)(1), 8(c) (“value” in the sense of the value of a transferred asset).

Subsection (b) prescribes the effect of a sale meeting its requirements, whether the asset sold is personal or real property. It applies only to a sale under a mortgage, deed of trust, or security agreement. Subsection (b) thus does not apply to a sale foreclosing a nonconsensual lien, such as a tax lien. However, the subsection does apply to a foreclosure by sale of the interest of a vendee under an installment land contract in accordance with applicable law that requires or permits the foreclosure to be effected by a sale in the same manner as the foreclosure of a mortgage. See G. Osborne, G. Nelson, & D. Whitman, Real Estate Finance Law 83-84, 95-97 (1979).

If a lien given an insider for a present consideration is not perfected as against a subsequent bona fide purchaser or is so perfected after a delay following an extension of credit secured by the lien, foreclosure of the lien may result in a transfer for an antecedent debt that is voidable under Section 5(b). Subsection (b) does not apply to an action under Section 4(a)(1) to avoid a transfer or obligation because made or incurred with actual intent to hinder, delay, or defraud any creditor.

6. Subsection (c) is an adaptation of Bankruptcy Code § 547(c)(1) (1984). A transfer to an insider for an antecedent debt may be voidable under § 5(b).

Prior Laws.

Amendments.

The 2015 amendment, by ch. 342, rewrote the section heading, which formerly read: “Transfer fraudulent as to present and future creditors”; in subsection (1), substituted “voidable” for “fraudulent” near the beginning of the introductory paragraph; and added subsection (3).

Applicability.

This section and§§ 55-914 and 55-918 apply under much the same circumstances as does 11 U.S.C.S. § 548(a)(2), except that they permit creditors to avoid transfers made as much as four years before the filing of a bankruptcy petition. In re Hodge, 220 Bankr. 386 (Bankr. D. Idaho 1998).

Because a debtor and his wife purchased a vehicle during their marriage, it was presumed to be community property under§ 32-906, and they did not rebut this presumption by testifying that the vehicle was purchased with funds from the wife’s separate bank account. A Chapter 7 trustee could avoid a transfer of the vehicle from debtor to his wife, as constructively fraudulent under 11 U.S.C.S. § 548(a)(1)(B),§ 55-914(1), and paragraph (1)(b) of this section, as the transfer occurred within the applicable reach back period, the debtor was insolvent at the time, and he transferred the vehicle for less than reasonably equivalent value. Rainsdon v. Kirtland (In re Kirtland), 2011 Bankr. LEXIS 3828 (Bankr. D. Idaho Sept. 30, 2011).

Where a debtor and his wife purchased a motorcycle prior to their marriage, it was not community property under§ 32-906; so when the debtor transferred his interest in the motorcycle to his wife after their marriage, it was her separate property from that time forward under§ 32-903. Because the motorcycle became her separate property at that time, the debtor did not transfer an interest in the motorcycle to his wife within the applicable reach back period in 11 U.S.C.S. § 548(a) or in the four-year period provided in§ 55-918, as applicable to the fraudulent transfer provisions in paragraphs (1)(a) and (1)(b) of this section and§ 55-914(a). Rainsdon v. Kirtland (In re Kirtland), 2011 Bankr. LEXIS 3828 (Bankr. D. Idaho Sept. 30, 2011).

Compelling Government Interest.

The application of avoidance statutes to debtors’ church tithing payments “substantially burdened” the free exercise of their religious beliefs and, although the avoidance statutes may be justified by a “compelling governmental interest,” they were not the “least restrictive means” of furthering that interest; the Religious Freedom Restoration Act (42 USCS § 2000bb et seq.) provided a defense to Chapter 7 trustee’s action to recover tithing payments as “fraudulent transfers.” In re Hodge, 220 Bankr. 386 (Bankr. D. Idaho 1998).

Intent.

Subdivision (2)(h) of this section contains but one of several factors which can be considered in determining whether a transfer was made or obligation was incurred with actual intent on the part of the debtor to hinder, delay, or defraud any creditor; such intent is a prerequisite for liability under this section. Alcan Bldg. Prods. v. Peoples, 124 Idaho 338, 859 P.2d 374 (Ct. App. 1993). Chapter 7 trustee failed to meet his burden of proving that transfers by a debtor to his wife within the two years prior to filing his petition were made with actual intent to hinder, delay, or defraud his creditors. Thus, the transfers were not avoidable under 11 U.S.C.S. § § 548(a)(1)(A) and§ 55-913(1)(a), even though several badges of fraud were present, including the fact that they were married at the time of the transfers, he admitted that he was insolvent at the time each transfer was made, and he did not list any of the transfers on his statement of financial affairs. On balance, while there were some traditional badges of fraud present, the court found that the debtor transferred his interests in the property to his wife in preparation for the parties’ divorce. Rainsdon v. Kirtland (In re Kirtland), 2011 Bankr. LEXIS 3828 (Bankr. D. Idaho Sept. 30, 2011).

Non-creditors.

Limited liability company and estate of one of its two manager/members had no cause of action against the other manager/member for transferring property to defraud creditors since neither plaintiff was a creditor of the limited liability company. Estate of E.A. Collins v. Geist, 143 Idaho 821, 153 P.3d 1167 (2007).

Preemption.

Claim brought under this section or§ 55-914(1), concerning an alleged fraudulent transfer, was not preempted by federal bankruptcy law when bankruptcy trustee was time-barred from bringing the claim. Christian v. Mason, 148 Idaho 149, 219 P.3d 473 (2009).

Official Comment

1. Section 4(a)(1) is derived from § 7 of the Uniform Fraudulent Conveyance Act, which in turn was derived from the Statute of 13 Elizabeth, c. 5 (1571). Factors appropriate for consideration in determining actual intent under Section 4(a)(1) are specified in subsection (b).
2. Section 4, unlike § 5, protects creditors of a debtor whose claims arise after as well as before the debtor made or incurred the challenged transfer or obligation. Similarly, there is no requirement in § 4(a)(1) that the intent referred to be directed at a creditor existing or identified at the time of transfer or incurrence. For example, promptly after the invention in Pennsylvania of the spendthrift trust, the assets and beneficial interest of which are immune from attachment by the beneficiary’s creditors, courts held that a debtor’s establishment of a spendthrift trust for the debtor’s own benefit is a voidable transfer under the Statute of 13 Elizabeth, without regard to whether the transaction is directed at an existing or identified creditor. Mackason’s Appeal , 42 Pa. 330, 338-39 (1862); see also, e.g., Ghormley v. Smith , 139 Pa. 584, 591-94 (1891); Patrick v. Smith , 2 Pa. Super. 113, 119 (1896). Cf. Restatement (Third) of Trusts § 58(2) (2003) (setting forth a substantially similar rule as a matter of trust law). Likewise, for centuries § 4(a)(1) and its predecessors have been employed to invalidate nonpossessory property interests that are thought to be potentially deceptive, without regard to whether the deception is directed at an existing or identified creditor. See, e.g., McGann v. Capital Sav. Bank & Trust Co., 89 A.2d 123, 183-84 (Vt. 1952) (seller’s retention of possession of goods after sale held voidable); Superior Partners v. Prof’l Educ. Network, Inc. , 485 N.E.2d 1218, 1221 (Ill. App. Ct. 1985) (similar); Clow v. Woods , 5 Serg. & Rawle 275 (Pa. 1819) (holding that a nonpossessory chattel mortgage is voidable, in the absence of a system for giving public notice of such interests such as is today supplied by Article 9 of the Uniform Commercial Code).
3. Section 4(a)(2) is derived from §§ 5 and 6 of the Uniform Fraudulent Conveyance Act but substitutes “reasonably equivalent value” for “fair consideration.” The transferee’s good faith was an element of “fair consideration” as defined in § 3 of the Uniform Fraudulent Conveyance Act, and lack of fair consideration was one of the elements of a fraudulent transfer as defined in four sections of the Uniform Fraudulent Conveyance Act. The transferee’s good faith is irrelevant to a determination of the adequacy of the consideration under this Act, but lack of good faith may be a basis for withholding protection of a transferee or obligee under § 8.
4. Unlike the Uniform Fraudulent Conveyance Act, this Act does not prescribe different tests for voidability of a transfer that is made for the purpose of security and a transfer that is intended to be absolute. The premise of this Act is that when a transfer is for security only, the equity or value of the asset that exceeds the amount of the debt secured remains available to unsecured creditors and thus cannot be regarded as the subject of a voidable transfer merely because of the encumbrance resulting from an otherwise valid security transfer. Disproportion between the value of the asset securing the debt and the size of the debt secured does not, in the absence of circumstances indicating a purpose to hinder, delay, or defraud creditors, constitute an impermissible hindrance to the enforcement of other creditors’ rights against the debtor-transferor. Cf. U.C.C.§ 9-401(b) (2014) (providing that a debtor’s interest in collateral subject to a security interest is transferable notwithstanding an agreement with the secured party prohibiting transfer).
5. Subparagraph (i) of § 4(a)(2) is an adaptation of § 5 of the Uniform Fraudulent Conveyance Act but substitutes “unreasonably small [assets] in relation to the business or transaction” for “unreasonably small capital.” The reference to “capital” in the Uniform Fraudulent Conveyance Act might be interpreted, incorrectly, to refer to the par value of stock or to the consideration received for stock issued. The special meanings of “capital” in corporation law have no relevance in the law of voidable transfers. The subparagraph focuses attention on whether the amount of all the assets retained by the debtor was inadequate, i.e. , unreasonably small, in light of the needs of the business or transaction in which the debtor was engaged or about to engage. Subparagraph (ii) of § 4(a)(2) is an adaptation of § 6 of the Uniform Fraudulent Conveyance Act, which relates to a debtor that has or will have debts beyond the debtor’s ability to pay as they become due (a condition that is sometimes referred to as “insolvency in the equity sense”). Subparagraph (ii) carries forward the previous Act’s language capturing a debtor that “intends” or “believes” that the debtor is or will be unable to pay the debtor’s debts as they become due, and adds to that language capturing a debtor that “reasonably should have believed” the same. The added language makes clear that subparagraph (ii) also captures a debtor that, on the basis of objective assessment, has or will have debts beyond the debtor’s ability to pay as they become due, regardless of the debtor’s subjective belief.
6. Subsection (b) is a nonexclusive catalogue of factors appropriate for consideration by the court in determining whether the debtor had an actual intent to hinder, delay, or defraud one or more creditors. Proof of the existence of any one or more of the factors enumerated in subsection (b) may be relevant evidence as to the debtor’s actual intent but does not create a presumption that the debtor has made a voidable transfer or incurred a voidable obligation. The list of factors includes most of the so-called “badges of fraud” that have been recognized by the courts in construing and applying the Statute of 13 Elizabeth and § 7 of the Uniform Fraudulent Conveyance Act. Proof of the presence of certain badges in combination establishes voidability conclusively — i.e. , without regard to the actual intent of the debtor — when they concur as provided in § 4(a)(2) or in § 5. The fact that a transfer has been made to a relative or to an affiliated corporation has not been regarded as a badge of fraud sufficient to warrant avoidance when unaccompanied by any other evidence of intent to hinder, delay, or defraud creditors. The courts have uniformly recognized, however, that a transfer to a closely related person warrants close scrutiny of the other circumstances, including the nature and extent of the consideration exchanged. See 1 G. Glenn, Fraudulent Conveyances and Preferences § 307 (Rev. ed. 1940). The second, third, fourth, and fifth factors listed are all adapted from the classic catalogue of badges of fraud provided by Lord Coke in Twyne’s Case , 3 Coke 80b, 76 Eng.Rep. 809 (Star Chamber 1601). Lord Coke also included the use of a trust and the recitation in the instrument of transfer that it “was made honestly, truly, and bona fide,” but the use of the trust is voidable only when accompanied by indicia of intent to hinder, delay, or defraud creditors, and recitals of “good faith” can no longer be regarded as significant evidence of intent to hinder, delay, or defraud creditors.
7. In considering the factors listed in § 4(b) a court should evaluate all the relevant circumstances involving a challenged transfer or obligation. Thus the court may appropriately take into account all indicia negativing as well as those suggesting intent to hinder, delay, or defraud creditors, as illustrated in the following reported cases:

Section 4(a)(1) has the meaning elaborated in the preceding paragraph, but it is of course possible that a jurisdiction in which this Act is in force might enact other legislation that modifies the results of the particular examples given to illustrate that meaning. For example, some states have enacted legislation authorizing the establishment and funding of self-settled spendthrift trusts, subject to specified conditions. In such a state, such legislation will supersede the historical interpretation referred to in the preceding paragraph, either expressly or by necessary implication, with respect to allowed transfers to such a statutorily-validated trust. See, e.g. , Del. Code. Ann. tit. 12, § 3572(a), (b) (2014). See also Comment 8. Likewise, the historical skepticism of nonpossessory property interests has been superseded as to security interests in personal property by the Uniform Commercial Code. See Comment 9.

1. Whether the transfer or obligation was to an insider: Salomon v. Kaiser (In re Kaiser) , 722 F.2d 1574, 1582-83 (2d Cir. 1983) (insolvent debtor’s purchase of two residences in the name of his spouse and the creation of a dummy corporation for the purpose of concealing assets held to evidence intent to hinder, delay, or defraud creditors); Banner Construction Corp. v. Arnold , 128 So.2d 893 (Fla. Dist. App. 1961) (assignment by one corporation to another having identical directors and stockholders constituted a badge of fraud); Travelers Indemnity Co. v. Cormaney , 258 Iowa 237, 138 N.W.2d 50 (1965) (transfer between spouses said to be a circumstance that shed suspicion on the transfer and that with other circumstances warranted avoidance); Hatheway v. Hanson , 230 Iowa 386, 297 N.W. 824 (1941) (transfer from parent to child said to require a critical examination of surrounding circumstances, which, together with other indicia of intent to hinder, delay, or defraud creditors, warranted avoidance); Lumpkins v. McPhee , 59 N.M. 442, 286 P.2d 299 (1955) (transfer from daughter to mother said to be indicative of intent to hinder, delay, or defraud creditors, but transfer held not to be voidable due to adequacy of consideration and delivery of possession by transferor).
2. Whether the transferor retained possession or control of the property after the transfer: Harris v. Shaw , 224 Ark. 150, 272 S.W.2d 53 (1954) (retention of property by transferor said to be a badge of fraud and, together with other badges, to warrant avoidance of transfer); Stephens v. Reginstein , 89 Ala. 561, 8 So. 68 (1890) (transferor’s retention of control and management of property and business after transfer held material in determining transfer to be voidable); Allen v. Massey , 84 U.S. (17 Wall.) 351 (1872) (joint possession of furniture by transferor and transferee considered in holding transfer to be voidable); Warner v. Norton , 61 U.S. (20 How.) 448 (1857) (surrender of possession by transferor deemed to negate allegations of intent to hinder, delay, or defraud creditors).
3. Whether the transfer or obligation was concealed or disclosed: Walton v. First National Bank , 13 Colo. 265, 22 P. 440 (1889) (agreement between parties to conceal the transfer from the public said to be one of the strongest badges of fraud); Warner v. Norton , 61 U.S. (20 How.) 448 (1857) (although secrecy said to be a circumstance from which, when coupled with other badges, intent to hinder, delay, or defraud creditors may be inferred, transfer was held not to be voidable when made in good faith and transferor surrendered possession); W.T. Raleigh Co. v. Barnett , 253 Ala. 433, 44 So.2d 585 (1950) (failure to record a deed in itself said not to evidence intent to hinder, delay, or defraud creditors, and transfer held not to be voidable).
4. Whether, before the transfer was made or obligation was incurred, a creditor sued or threatened to sue the debtor: Harris v. Shaw , 224 Ark. 150, 272 S.W.2d 53 (1954) (transfer held to be voidable when causally connected to pendency of litigation and accompanied by other badges of fraud); Pergrem v. Smith , 255 S.W.2d 42 (Ky. App. 1953) (transfer in anticipation of suit deemed to be a badge of fraud; transfer held voidable when accompanied by insolvency of transferor who was related to transferee); Bank of Sun Prairie v. Hovig , 218 F. Supp. 769 (W.D. Ark. 1963) (although threat or pendency of litigation said to be an indicator of intent to hinder, delay, or defraud creditors, transfer was held not to be voidable when adequate consideration and good faith were shown).
5. Whether the transfer was of substantially all the debtor’s assets: Walbrun v. Babbitt , 83 U.S. (16 Wall.) 577 (1872) (sale by insolvent retail shop owner of all of his inventory in a single transaction held to be voidable); Cole v. Mercantile Trust Co. , 133 N.Y. 164, 30 N.E. 847 (1892) (transfer of all property before plaintiff could obtain a judgment held to be voidable); Lumpkins v. McPhee , 59 N.M. 442, 286 P.2d 299 (1955) (although transfer of all assets said to indicate intent to hinder, delay, or defraud creditors, transfer held not to be voidable because full consideration was paid and transferor surrendered possession).
6. Whether the debtor had absconded: In re Thomas , 199 F. 214 (N.D.N.Y. 1912) (when debtor collected all of his money and property with the intent to abscond, intent to hinder, delay, or defraud creditors was held to be shown).
7. Whether the debtor had removed or concealed assets: Bentley v. Young , 210 F. 202 (S.D.N.Y. 1914), aff’d , 223 F. 536 (2d Cir. 1915) (debtor’s removal of goods from store to conceal their whereabouts and to sell them held to render sale voidable); Cioli v. Kenourgios , 59 Cal. App. 690, 211 P. 838 (1922) (debtor’s sale of all assets and shipment of proceeds out of the country held to be voidable notwithstanding adequacy of consideration).
8. Whether the value of the consideration received by the debtor was reasonably equivalent to the value of the asset transferred or the amount of the obligation incurred: Toomay v. Graham , 151 S.W.2d 119 (Mo. App. 1941) (although mere inadequacy of consideration said not to be a badge of fraud unless it is grossly inadequate, transfer held to be voidable when accompanied by other badges of fraud); Texas Sand Co. v. Shield , 381 S.W.2d 48 (Tex. 1964) (inadequate consideration said to be an indicator of intent to hinder, delay, or defraud creditors, and transfer held to be voidable because of inadequate consideration, pendency of suit, family relationship of transferee, and fact that all nonexempt property was transferred); Weigel v. Wood , 355 Mo. 11, 194 S.W.2d 40 (1946) (although inadequate consideration said to be a badge of fraud, transfer held not to be voidable when inadequacy not gross and not accompanied by any other badge; fact that transfer was from father to son held not sufficient to establish intent to hinder, delay, or defraud creditors).
9. Whether the debtor was insolvent or became insolvent shortly after the transfer was made or obligation was incurred: Harris v. Shaw , 224 Ark. 150, 272 S.W.2d 53 (1954) (insolvency of transferor said to be a badge of fraud and transfer held voidable when accompanied by other badges of fraud); Bank of Sun Prairie v. Hovig , 218 F. Supp. 769 (W.D. Ark. 1963) (although the insolvency of the debtor said to be a badge of fraud, transfer held not voidable when debtor was shown to be solvent, adequate consideration was paid, and good faith was shown, despite the pendency of suit); Wareheim v. Bayliss , 149 Md. 103, 131 A. 27 (1925) (although insolvency of debtor acknowledged to be an indicator of intent to hinder, delay, or defraud creditors, transfer held not to be voidable when adequate consideration was paid and whether debtor was insolvent in fact was doubtful).
10. Whether the transfer occurred shortly before or shortly after a substantial debt was incurred: Commerce Bank of Lebanon v. Halladale A Corp. , 618 S.W.2d 288, 292 (Mo. App. 1981) (when transferors incurred substantial debts near in time to the transfer, transfer was held to be voidable due to inadequate consideration, close family relationship, the debtor’s retention of possession, and the fact that almost all the debtor’s property was transferred).
11. Whether the debtor transferred the essential assets of the business to a lienor that transferred the assets to an insider of the debtor: The wrong addressed by § 4(b)(11) is collusive and abusive use of a lienor’s superior position to eliminate junior creditors while leaving equity holders in place, perhaps unaffected. The kind of disposition sought to be reached is exemplified by that found in Northern Pacific Co. v. Boyd , 228 U.S. 482, 502-05 (1913), the leading case in establishing the absolute priority doctrine in reorganization law. There the Court held that a reorganization whereby the secured creditors and the management-owners retained their economic interests in a railroad through a foreclosure that cut off claims of unsecured creditors against its assets was in effect a voidable disposition. See Bruce A. Markell, Owners, Auctions and Absolute Priority in Bankruptcy Reorganizations , 44 Stan. L. Rev. 69, 74-83 (1991). For cases in which an analogous injury to unsecured creditors was inflicted by a lienor and a debtor, see Voest-Alpine Trading USA Corp. v. Vantage Steel Corp. , 919 F.2d 206 (3d Cir. 1990) (lender foreclosed on assets of steel company at 5:00 p.m. on a Friday, then transferred the assets to an affiliate of the debtor; lender made a loan to the affiliate to enable it to purchase at the foreclosure sale on almost the same terms as the old loan; new business opened Monday morning); Jackson v. Star Sprinkler Corp. of Florida , 575 F.2d 1223, 1231-34 (8th Cir. 1978); Heath v. Helmick , 173 F.2d 157, 161-62 (9th Cir. 1949); Toner v. Nuss , 234 F. Supp. 457, 461-62 (E.D. Pa. 1964); and see In re Spotless Tavern Co., Inc. , 4 F. Supp. 752, 753, 755 (D. Md. 1933). 8. The phrase “hinder, delay, or defraud” in § 4(a)(1), carried forward from the primordial Statute of 13 Elizabeth, is potentially applicable to any transaction that unacceptably contravenes norms of creditors’ rights. Section 4(a)(1) is sometimes said to require “actual fraud,” by contrast to § 4(a)(2) and § 5(a), which are said to require “constructive fraud.” That shorthand is highly misleading. Fraud is not a necessary element of a claim for relief under any of those provisions. By its terms, § 4(a)(1) applies to a transaction that “hinders” or “delays” a creditor, even if it does not “defraud” the creditor. See, e.g., Shapiro v. Wilgus , 287 U.S. 348, 354 (1932); Means v. Dowd , 128 U.S. 273, 288-89 (1888); Consove v. Cohen (In re Roco Corp.) , 701 F.2d 978, 984 (1st Cir. 1983); Empire Lighting Fixture Co. v. Practical Lighting Fixture Co. , 20 F.2d 295, 297 (2d Cir. 1927); Lippe v. Bairnco Corp. , 249 F. Supp. 2d 357, 374 (S.D.N.Y. 2003). “Hinder, delay, or defraud” is best considered to be a single term of art describing a transaction that unacceptably contravenes norms of creditors’ rights. Such a transaction need not bear any resemblance to common-law fraud. Thus, the Supreme Court held a given transfer voidable because made with intent to “hinder, delay, or defraud” creditors, but emphasized: “We have no thought in so holding to impute to [the debtor] a willingness to participate in conduct known to be fraudulent. . . . [He] acted in the genuine belief that what [he] planned was fair and lawful. Genuine the belief was, but mistaken it was also. Conduct and purpose have a quality imprinted on them by the law.” Shapiro v. Wilgus , 287 U.S. 348, 357 (1932).

Diminution of the assets available to the debtor’s creditors is not necessarily required to “hinder, delay, or defraud” creditors. For example, the age-old legal skepticism of nonpossessory property interests, which stems from their potential for deception, has often resulted in their avoidance under § 4(a)(1) or its predecessors. See Comments 2 and 7(b); cf. Comment 9. A transaction may “hinder, delay, or defraud” creditors although it neither reduces the assets available to the debtor’s creditors nor involves any potential deception. See, e.g., Shapiro v. Wilgus , 287 U.S. 348 (1932) (holding voidable a solvent individual debtor’s conveyance of his assets to a wholly-owned corporation for the purpose of instituting a receivership proceeding not available to an individual).

A transaction that does not place an asset entirely beyond the reach of creditors may nevertheless “hinder, delay, or defraud” creditors if it makes the asset more difficult for creditors to reach. Simple exchange by a debtor of an asset for a less liquid asset, or disposition of liquid assets while retaining illiquid assets, may be voidable for that reason. See, e.g., Empire Lighting Fixture Co. v. Practical Lighting Fixture Co. , 20 F.2d 295, 297 (2d Cir. 1927) (L. Hand, J.) (credit sale by a corporation to an affiliate of its plant, leaving the seller solvent with ample accounts receivable, held voidable because made with intent to hinder creditors of the seller, due to the comparative difficulty of creditors realizing on accounts receivable under then-current collection practice). Overcollateralization of a debt that is made with intent to hinder the debtor’s creditors, by rendering the debtor’s equity in the collateral more difficult for creditors to reach, is similarly voidable. See Comment 4. Likewise, it is voidable for a debtor intentionally to hinder creditors by transferring assets to a wholly-owned corporation or other organization, as may be the case if the equity interest in the organization is more difficult to realize upon than the assets (either because the equity interest is less liquid, or because the applicable procedural rules are more demanding). See, e.g., Addison v. Tessier , 335 P.2d 554, 557 (N.M. 1959); First Nat’l Bank. v. F. C. Trebein Co. , 52 N.E. 834, 837-38 (Ohio 1898); Anno., 85 A.L.R. 133 (1933).

Under the same principle, § 4(a)(1) would render voidable an attempt by the owners of a corporation to convert it to a different legal form ( e.g. , limited liability company or partnership) with intent to hinder the owners’ creditors, as may be the case if an owner’s interest in the alternative organization would be subject only to a charging order, and not to execution (which would typically be available against stock in a corporation). See, e.g., Firmani v. Firmani , 752 A.2d 854, 857 (N.J. Super. Ct. App. Div. 2000); cf. Interpool Ltd. v. Patterson , 890 F. Supp. 259, 266-68 (S.D.N.Y. 1995) (similar, but relying on a “good faith” requirement of the former Uniform Fraudulent Conveyance Act rather than that act’s equivalent of § 4(a)(1)). If such a conversion is done with intent to hinder creditors, it contravenes § 4(a)(1) regardless of whether it is effected by conveyance of the corporation’s assets to a new entity or by conversion of the corporation to the alternative form. In both cases the owner begins with the stock of the corporation and ends with an ownership interest in the alternative organization, a property right with different attributes. Either is a “transfer” under the designedly sweeping language of § 1(16), which encompasses “every mode . . . of . . . parting with an asset or an interest in an asset.” Cf., e.g., United States v. Sims (In re Feiler) , 218 F.3d 948 (9th Cir. 2000) (debtor’s irrevocable election under the Internal Revenue Code to waive carryback of net operating losses is a “transfer” under the substantially similar definition in the Bankruptcy Code); Weaver v. Kellogg , 216 B.R. 563, 573-74 (S.D. Tex. 1997) (exchange of notes owed to the debtor for new notes having different terms is a “transfer” by the debtor under that definition).

In § 4(a)(1), the phrase “hinder, delay, or defraud,” like the word “intent,” is a term of art whose words do not have their dictionary meanings. For example, every grant of a security interest “hinders” the debtor’s unsecured creditors in the dictionary sense of that word. Yet it would be absurd to suggest that every grant of a security interest contravenes § 4(a)(1). The line between permissible and impermissible grants cannot coherently be drawn by reference to the debtor’s subjective mental state, for a rational person knows the natural consequences of his actions, and that includes the adverse consequences to unsecured creditors of any grant of a security interest. See, e.g., Dean v. Davis , 242 U.S. 438, 444 (1917) (equating an act whose “obviously necessary effect” is to hinder, delay, or defraud creditors with an act intended to hinder, delay, or defraud creditors); United States v. Tabor Court Realty Corp. , 803 F.3d 1288, 1305 (3rd Cir. 1986) (holding that the trial court’s finding of intent to hinder, delay, or defraud creditors properly followed from its finding that the debtor could have foreseen the effect of its act on its creditors, because “a party is deemed to have intended the natural consequences of his acts”); In re Sentinel Management Group Inc. , 728 F.3d 660, 667 (7th Cir. 2013). Whether a transaction is captured by § 4(a)(1) ultimately depends upon whether the transaction unacceptably contravenes norms of creditors’ rights, given the devices legislators and courts have allowed debtors that may interfere with those rights. Section 4(a)(1) is the regulatory tool of last resort that restrains debtor ingenuity to decent limits.

Thus, for example, suppose that entrepreneurs organize a business as a limited liability company, contributing assets to capitalize it, in the ordinary situation in which none of the owners has particular reason to anticipate personal liability or financial distress and no other unusual facts are present. Assume that the LLC statute has the creditor-thwarting feature of precluding execution upon equity interests in the LLC and providing only for charging orders against such interests. Notwithstanding that feature, the owners’ transfers of assets to capitalize the LLC is not voidable under § 4(a)(1) as in force in the same state. The legislature in that state, having created the LLC vehicle having that feature, must have expected it to be used in such ordinary circumstances. By contrast, if owners of an existing business were to reorganize it as an LLC under such a statute when the clouds of personal liability or financial distress have gathered over some of them, and with the intention of gaining the benefit of that creditor-thwarting feature, the transfer effecting the reorganization should be voidable under § 4(a)(1), at least absent a clear indication that the legislature truly intended the LLC form, with its creditor-thwarting feature, to be available even in such circumstances. Because the laws of different jurisdictions differ in their tolerance of particular creditor-thwarting devices, choice of law considerations may be important in interpreting § 4(a)(1) as in force in a given jurisdiction. For example, as noted in Comment 2, the language of § 4(a)(1) historically has been interpreted to render voidable a transfer to a self-settled spendthrift trust. Suppose that jurisdiction X, in which this Act is in force, also has in force a statute permitting an individual to establish a self-settled spendthrift trust and transfer assets thereto, subject to stated conditions. If an individual Debtor whose principal residence is in X establishes such a trust and transfers assets thereto, then under § 10 of this Act the voidable transfer law of X applies to that transfer. That transfer cannot be considered voidable in itself under § 4(a)(1) as in force in X, for the legislature of X, having authorized the establishment of such trusts, must have expected them to be used. (Other facts might still render the transfer voidable under X’s enactment of § 4(a)(1).) By contrast, if Debtor’s principal residence is in jurisdiction Y, which also has enacted this Act but has no legislation validating such trusts, and if Debtor establishes such a trust under the law of X and transfers assets to it, then the result would be different. Under § 10 of this Act, the voidable transfer law of Y would apply to the transfer. If Y follows the historical interpretation referred to in Comment 2, the transfer would be voidable under § 4(a)(1) as in force in Y.

9. This Act is not an exclusive law on the subject of voidable transfers and obligations. See § 1, Comment 2. For example, the Uniform Commercial Code supplements or modifies the operation of this Act in numerous ways. Instances include the following:

(a) U.C.C.§ 2-402(2) (2014) recognizes the generally prevailing rule that retention of possession of goods by a seller may be voidable, but limits the application of the rule by negating any imputation of voidability from “retention of possession in good faith and current course of trade by a merchant-seller for a commercially reasonable time after a sale or identification.” (Indeed, independently of§ 2-402(2), retention of possession of goods in good faith and current course of trade by a merchant-seller for a commercially reasonable time after a sale or identification should not in itself be considered to “hinder, delay, or defraud” any creditor of the merchant-seller under § 4(a)(1).)

(b) Section 2A-308(1) provides a rule analogous to§ 2-402(2) for situations in which a lessor retains possession of goods that are subject to a lease contract. Section 2A-308(3) provides that retention of possession of goods by the seller-lessee in a sale-leaseback transaction does not render the transaction voidable by a creditor of the seller-lessee if the buyer bought for value and in good faith.

(c) This Act does not preempt statutes governing bulk transfers, including Article 6 of the Uniform Commercial Code in jurisdictions in which it remains in force.

(d) Section 9-205 precludes treating a security interest in personal property as voidable on account of various enumerated features it may have. Among other things,§ 9-205 immunizes a security interest in tangible property from being avoided on account of the secured party not being in possession of the property, notwithstanding the historical skepticism of nonpossessory property interests.

This Act operates independently of rules in an organic statute applicable to a business organization that limit distributions by the organization to its equity owners. Compliance with those rules does not insulate such a distribution from being voidable under this Act. It is conceivable that such an organic statute might contain a provision preempting the application of this Act to such distributions. Cf. Model Business Corporation Act § 152 (optional provision added in 1979 preempting the application of “any other statutes of this state with respect to the legality of distributions”; deleted 1984). Such a preemptive statute of course must be respected if applicable, but choice of law considerations may well render it inapplicable. See, e.g., Faulkner v. Kornman (In re The Heritage Organization, L.L.C.) , 413 B.R. 438, 462-63 (Bankr. N.D. Tex. 2009) (action under the Texas enactment of this Act challenging a distribution by a Delaware limited liability company to its members; held, a provision of the Delaware LLC statute imposing a three-year statute of repose on an action under “any applicable law” to recover a distribution by a Delaware LLC did not apply, because choice of law rules directed application of the voidable transfer law of Texas).

10. Subsection (c) was added in 2014. Sections 2(b), 4(c), 5(c), 8(g), and 8(h) together provide uniform rules on burdens and standards of proof relating to the operation of this Act.

Pursuant to subsection (c), proof of intent to “hinder, delay, or defraud” a creditor under § 4(a)(1) is sufficient if made by a preponderance of the evidence. That is the standard of proof ordinarily applied in civil actions. Subsection (c) thus rejects cases that have imposed an extraordinary standard, typically “clear and convincing evidence,” by analogy to the standard commonly applied to proof of common-law fraud. That analogy is misguided. By its terms, § 4(a)(1) applies to a transaction that “hinders” or “delays” a creditor even if it does not “defraud,” and a transaction to which § 4(a)(1) applies need not bear any resemblance to common-law fraud. See Comment 8. Furthermore, the extraordinary standard of proof commonly applied to common-law fraud originated in cases that were thought to involve a special danger that claims might be fabricated. In the earliest such cases, a court of equity was asked to grant relief on claims that were unenforceable at law for failure to comply with the Statute of Frauds, the Statute of Wills, or the parol evidence rule. In time, extraordinary proof also came to be required in actions seeking to set aside or alter the terms of written instruments. See Herman & MacLean v. Huddleston , 459 U.S. 375, 388-89 (1983) and sources cited therein. Those reasons for extraordinary proof do not apply to claims for relief under § 4(a)(1).

For similar reasons, a procedural rule that imposes extraordinary pleading requirements on a claim of “fraud,” without further gloss, should not be applied to a claim for relief under § 4(a)(1). The elements of a claim for relief under § 4(a)(1) are very different from the elements of a claim of common-law fraud. Furthermore, the reasons for such extraordinary pleading requirements do not apply to a claim for relief under § 4(a)(1). Unlike common-law fraud, a claim for relief under § 4(a)(1) is not unusually susceptible to abusive use in a “strike suit,” nor is it apt to be of use to a plaintiff seeking to discover unknown wrongs. Likewise, a claim for relief under § 4(a)(1) is unlikely to cause significant harm to the defendant’s reputation, for the defendant is the transferee or obligee, and the elements of the claim do not require the defendant to have committed even an arguable wrong. See Janvey v. Alguire , 846 F. Supp. 2d 662, 675-77 (N.D. Tex. 2011); Carter-Jones Lumber Co. v. Benune , 725 N.E.2d 330, 331-33 (Ohio App. 1999). Cf. Federal Rules of Civil Procedure, Appendix, Form 21 (2010) (illustrative form of complaint for a claim for relief under § 4(a)(1) or similar law, which Rule 84 declares sufficient to comply with federal pleading rules).

11. Subsection (c) allocates to the party making a claim for relief under § 4 the burden of persuasion as to the elements of the claim. Courts should not apply nonstatutory presumptions that reverse that allocation, and should be wary of nonstatutory presumptions that would dilute it. The command of § 13 — that this Act is to be applied so as to effectuate its purpose of making uniform the law among states enacting it — applies with particular cogency to nonstatutory presumptions. Given the elasticity of key terms of this Act ( e.g. , “hinder, delay, or defraud”) and the potential difficulty of proving others ( e.g. , the financial condition tests in § 4(a)(2) and § 5), employment of divergent nonstatutory presumptions by enacting jurisdictions may render the law nonuniform as a practical matter. It is not the purpose of subsection (c) to forbid employment of any and all nonstatutory presumptions. Indeed, in some instances a judicially-crafted presumption applied under this Act or its predecessors has won such favor as to be codified as a separate statutory creation. Examples include the bulk sales laws, the absolute priority rule applicable to reorganizations under Bankruptcy Code § 1129(b)(2)(B)(ii) (2014), and the so-called “constructive fraud” provisions of § 4(a)(2) and § 5(a) of this Act itself. However, subsection (c) and § 13 mean, at the least, that a nonstatutory presumption is suspect if it would alter the statutorily-allocated burden of persuasion, would upset the policy of uniformity, or is an unwarranted carrying-forward of obsolescent principles. An example of a nonstatutory presumption that should be rejected for those reasons is a presumption that the transferee bears the burden of persuasion as to the debtor’s compliance with the financial condition tests in § 4(a)(2) and § 5, in an action under those provisions, if the transfer was for less than reasonably equivalent value (or, as another example, if the debtor was merely in debt at the time of the transfer). See Fidelity Bond & Mtg. Co. v. Brand , 371 B.R. 708, 716-22 (E.D. Pa. 2007) (rejecting such a presumption previously applied in Pennsylvania).

Prior Laws.

Former§ 55-914 was repealed. See Prior Laws,§ 55-910.

Amendments.

The 2015 amendment, by ch. 342, rewrote the section heading, which formerly read: “Transfers fraudulent as to present creditors”; substituted “voidable” for “fraudulent” near the beginning of subsections (1) and (2); and added subsection (3).

Applicability.

This section applies when an insolvent debtor transfers assets to an insider for an antecedent debt and the insider had reasonable cause to believe the debtor was insolvent. Alcan Bldg. Prods. v. Peoples, 124 Idaho 338, 859 P.2d 374 (Ct. App. 1993).

This section and§§ 55-913 and 55-918 apply under much the same circumstances as does 11 U.S.C.S. § 548(a)(2), except that they permit creditors to avoid transfers made as much as four years before the filing of a bankruptcy petition. In re Hodge, 220 Bankr. 386 (Bankr. D. Idaho 1998). Summary judgment was proper where there was no genuine issue of fact concerning the presumption of insolvency and the district judge properly determined that each element of a fraudulent transfer under paragraph (1) was met. Post v. Idaho Farmway, Inc., 135 Idaho 475, 20 P.3d 11 (2001).

Because a debtor and his wife purchased a vehicle during their marriage, it was presumed to be community property under§ 32-906, and they did not rebut this presumption by testifying that the vehicle was purchased with funds from the wife’s separate bank account. A Chapter 7 trustee could avoid a transfer of the vehicle from debtor to his wife, as constructively fraudulent under 11 U.S.C.S. § 548(a)(1)(B),§ 55-913(1)(b), and subsection (1) of this section, as the transfer occurred within the applicable reach back period, the debtor was insolvent at the time, and he transferred the vehicle for less than reasonably equivalent value. Rainsdon v. Kirtland (In re Kirtland), 2011 Bankr. LEXIS 3828 (Bankr. D. Idaho Sept. 30, 2011).

Where a debtor and his wife purchased a motorcycle prior to their marriage, it was not community property under§ 32-906; so when the debtor transferred his interest in the motorcycle to his wife after their marriage, it was her separate property from that time forward under§ 32-903. Because the motorcycle became her separate property at that time, the debtor did not transfer an interest in the motorcycle to his wife within the applicable reach back period in 11 U.S.C.S. § 548(a) or in the four-year period provided in§ 55-918, as applicable to the fraudulent transfer provisions in§ 55-913(1)(a) and (1)(b) and subsection (a) of this section. Rainsdon v. Kirtland (In re Kirtland), 2011 Bankr. LEXIS 3828 (Bankr. D. Idaho Sept. 30, 2011).

Compelling Government Interest.

The application of avoidance statutes to debtors’ church tithing payments “substantially burdened” the free exercise of their religious beliefs and, although the avoidance statutes may be justified by a “compelling governmental interest,” they were not the “least restrictive means” of furthering that interest; the Religious Freedom Restoration Act (42 USCS § 2000bb et seq.) provided a defense to Chapter 7 trustee’s action to recover tithing payments as “fraudulent transfers.” In re Hodge, 220 Bankr. 386 (Bankr. D. Idaho 1998).

Elements.

The inquiry whether a transfer of assets is fraudulent under subsection (2) of this section is satisfied by affirmative answers to the following elements: (1) Did the creditor’s claim arise before the transfer was made? (2) Was the transfer made to an insider? (3) Was the transfer made for an antecedent debt? and (4) Was the debtor insolvent at the time the transfer was made and did the insider have reasonable cause to believe that the debtor was insolvent? Alcan Bldg. Prods. v. Peoples, 124 Idaho 338, 859 P.2d 374 (Ct. App. 1993).

A bankruptcy trustee cannot challenge a leveraged buy-out of a debtor’s assets as a fraudulent conveyance under state law as to future creditors of the debtor, where there is no actual intent to defraud shown to exist. Rakozy v. Murphy (In re Ace Mfg. & Supply), 1995 Bankr. LEXIS 2240 (Bankr. D. Idaho Feb. 21, 1995).

Preemption.

Cited

Claim brought under this section or§ 55-913, concerning an alleged fraudulent transfer, was not preempted by federal bankruptcy law when bankruptcy trustee was time-barred from bringing the claim. Christian v. Mason, 148 Idaho 149, 219 P.3d 473 (2009). Cited Dunham v. Dunham, 128 Idaho 55, 910 P.2d 169 (Ct. App. 1994); High Valley Concrete, L.L.C. v. Sargent, 149 Idaho 423, 234 P.3d 747 (2010); Klein v. Capital One Fin. Corp., 2011 U.S. Dist. LEXIS 83905 (D. Idaho July 29, 2011).

Official Comment

1. Subsection (a) is derived from § 4 of the Uniform Fraudulent Conveyance Act. It adheres to the limitation of the protection of that section to a creditor whose claim arose before the transfer or obligation described. As pointed out in Comment 3 accompanying § 4, this Act substitutes “reasonably equivalent value” for “fair consideration.”
2. Subsection (b) renders a preferential transfer — i.e. , a transfer by an insolvent debtor for or on account of an antecedent debt — to an insider voidable when the insider had reasonable cause to believe that the debtor was insolvent. This subsection adopts for general application the rule of such cases as Jackson Sound Studios, Inc. v. Travis , 473 F.2d 503 (5th Cir. 1973) (security transfer of corporation’s equipment to corporate principal’s mother perfected on eve of bankruptcy of corporation held to be voidable); In re Lamie Chemical Co. , 296 F. 24 (4th Cir. 1924) (corporate preference to corporate officers and directors held voidable by receiver when corporation was insolvent or nearly so and directors had already voted for liquidation); Stuart v. Larson , 298 F. 223 (8th Cir. 1924), noted 38 Harv. L. Rev. 521 (1925) (corporate preference to director held voidable). See generally 2 G. Glenn, Fraudulent Conveyances and Preferences 386 (Rev. ed. 1940). Subsection (b) overrules such cases as Epstein v. Goldstein , 107 F.2d 755, 757 (2d Cir. 1939) (transfer by insolvent husband to wife to secure his debt to her sustained against attack by husband’s trustee); Hartford Accident & Indemnity Co. v. Jirasek , 254 Mich. 131, 139, 235 N.W. 836, 839 (1931) (mortgage given by debtor to his brother to secure an antecedent debt owed the brother sustained as not voidable).
3. Subsection (b) does not extend as far as § 8(a) of the Uniform Fraudulent Conveyance Act and Bankruptcy Code § 548(b) (1984) in rendering voidable a transfer made by an insolvent partnership to a partner. A general partner is an insider of the partnership, but a transfer by the partnership to the partner nevertheless is not vulnerable to avoidance under § 5(b) unless the transfer is for an antecedent debt and the partner has reasonable cause to believe that the partnership is insolvent. By contrast, the cited provisions of the Uniform Fraudulent Conveyance Act and the Bankruptcy Code make any transfer by an insolvent partnership to a general partner voidable. Avoidance of the partnership transfer without reference to the partner’s state of mind and the nature of the consideration exchanged would be unduly harsh treatment of the creditors of the partner and unduly favorable to the creditors of the partnership.
4. Subsection (c) was added in 2014. Sections 2(b), 4(c), 5(c), 8(g), and 8(h) together provide uniform rules on burdens and standards of proof relating to the operation of this Act. The principles stated in Comment 11 to § 4 apply to subsection (c).

Prior Laws.

Former§ 55-915 was repealed. See Prior Laws,§ 55-910.

Amendments.

The 2015 amendment, by ch. 342, substituted “record, when the record signed” for “writing, when the writing executed” in paragraph (5)(b).

Compiler’s Notes.

The term “this act” refers to S.L. 1987, ch. 202, which is compiled as§§ 55-910 to 55-918 and 55-920 to 55-922.

Cited

1. One of the uncertainties in the law governing the avoidance of transfers and obligations of the nature governed by this Act is the time at which the cause of action arises. Section 6 clarifies that point in time. For transfers of real property other than a fixture, paragraph (1)(i) fixes the time as the date of perfection against a good-faith purchaser from the transferor. For transfers of fixtures and assets constituting personalty, paragraph (1)(ii) fixes the time as the date of perfection against a judicial lien creditor not asserting rights under this Act. Perfection under paragraph (1) typically is effected by notice-filing, recordation, or delivery of unequivocal possession. See U.C.C.§§ 9-310, 9-313 (2014) (security interest in personal property generally is perfected by notice-filing or delivery of possession to transferee); 4 American Law of Property §§ 17.10-17.12 (1952) (recordation of transfer or delivery of possession to grantee required for perfection against bona fide purchaser from grantor). The provision for postponing the time a transfer is made until its perfection is an adaptation of Bankruptcy Code § 548(d)(1) (1984). When no steps are taken to perfect a transfer that applicable law permits to be perfected, the transfer is deemed by paragraph (2) to be perfected immediately before the filing of an action to avoid it; without such a provision to cover that eventuality, an unperfected transfer arguably would be immune to attack. Some transfers may not be amenable to perfection as against a bona fide purchaser or judicial lien creditor. In the event that a transfer may not be perfected as provided in paragraph (1), paragraph (3) provides that the transfer occurs for the purpose of this Act when the transferor effectively parts with an interest in the asset.
2. Paragraph (4) requires the transferor to have rights in the asset transferred before the transfer is made for the purpose of this section. This provision makes clear that the purpose of this section may not be circumvented by notice-filing or recordation of a document evidencing an interest in an asset to be acquired in the future. Cf. Bankruptcy Code § 547(e) (1984); U.C.C.§ 9-203(b)(2) (2014).
3. Paragraph (5) had no analogue in the Uniform Fraudulent Conveyance Act. It is intended to resolve uncertainty arising from Rubin v. Manufacturers Hanover Trust Co. , 661 F.2d 979, 989-91, 997 (2d Cir. 1981), insofar as that case holds that an obligation of guaranty may be deemed to be incurred when advances covered by the guaranty are made rather than when the guaranty first became effective between the parties. Compare Rosenberg, Intercorporate Guaranties and the Law of Fraudulent Conveyances: Lender Beware , 125 U. Pa. L. Rev. 235, 256-57 (1976).

An obligation may be avoided under this Act if it is incurred under the circumstances specified in § 4(a) or § 5(a). The debtor may receive reasonably equivalent value in exchange for an obligation incurred even though the benefit to the debtor is indirect. See Rubin v. Manufacturers Hanover Trust Co. , 661 F.2d at 991-92; Williams v. Twin City Co. , 251 F.2d 678, 681 (9th Cir. 1958); Rosenberg, supra , at 243-46.

Under paragraph (5), an oral obligation is incurred when it becomes effective between the parties, and later confirmation of the oral obligation by a record does not reset the time of incurrence to that later time.

Prior Laws.

Former§ 55-916 was repealed. See Prior Laws,§ 55-910.

Amendments.

The 2015 amendment, by ch. 342, rewrote paragraph (1)(b), which formerly read: “An attachment or other provisional remedy against the asset transferred or other property of the transferee in accordance with the procedure prescribed in chapter 5, title 8, Idaho Code”.

Compiler’s Notes.

The term “this act” in the introductory paragraph of subsection (1) refers to S.L. 1987, ch. 202, which is compiled as§§ 55-910 to 55-918 and 55-920 to 55-922.

Alternative Right to Payment.

Equitable Remedies.

In the face of a fraudulent conveyance, a creditor can either recover the actual property transferred, or a money judgment against the transferee for the property’s equivalent value. This is clearly an alternative right to payment beyond the equitable remedy of avoidance of the transfer and recovery of the asset. As such, prospective purchaser is considered to have a claim for purposes of Section 101(5)(B) of the Bankruptcy Code (11 USCS § 101(5)(B)) and cannot void the transfer as against the bankruptcy estate and the trustee. TKO Properties v. Young, 214 Bankr. 905 (Bankr. D. Idaho 1997). Equitable Remedies.

One who purchased property at an execution or tax sale received legal title and could bring an action to remove a cloud on the title created by a fraudulent transfer. Therefore, the district court had the equitable power to clear tax sale purchaser’s title by setting aside the tax debtors’ deeds to the family trust, which deeds were void and unenforceable against the tax sale purchaser. Haney v. Molko, 123 Idaho 132, 844 P.2d 1382 (Ct. App. 1992).

Once it has been established that a fraudulent transfer has occurred, subsection (2) of this section allows a creditor who already has a judgment against the debtor to levy execution on the asset transferred, if the court so orders. In addition, where the transfer in question is found to be fraudulent and thus voidable, the creditor may recover judgment against the transferee for the value of the asset transferred, subject to equitable adjustment under subsection (3) of§ 55-917, or for the amount necessary to satisfy the creditor’s claim, whichever is less. Alcan Bldg. Prods. v. Peoples, 124 Idaho 338, 859 P.2d 374 (Ct. App. 1993).

Prejudgment Interest.

The relief that a defrauded creditor is entitled to, in an action to set aside a fraudulent conveyance, is limited to setting aside the conveyance of the property. There is nothing in the uniform fraudulent transfer act which suggests that prejudgment interest should be awarded in addition to the value of the asset. Clarke v. Latimer, — Idaho —, 437 P.3d 1 (2018).

Official Comment

1. This section is derived from §§ 9 and 10 of the Uniform Fraudulent Conveyance Act. Section 9 of that Act specified the remedies of creditors whose claims have matured, and § 10 enumerated the remedies available to creditors whose claims have not matured. A creditor holding an unmatured claim may be denied the right to receive payment from the proceeds of a sale on execution until the claim has matured, but the proceeds may be deposited in court or in an interest-bearing account pending the maturity of the creditor’s claim. The remedies specified in this section are not exclusive.
2. The availability of an attachment or other provisional remedy has been restricted by amendments of statutes and rules of procedure in response to Connecticut v. Doehr , 501 U.S. 1 (1991), Sniadach v. Family Finance Corp. , 395 U.S. 337 (1969), and their progeny. This judicial development and the procedural changes that followed in its wake do not preclude resort to attachment by a creditor in seeking avoidance of a transfer or obligation. See, e.g., Britton v. Howard Sav. Bank , 727 F.2d 315, 317-20 (3d Cir. 1984); Computer Sciences Corp. v. Sci-Tek Inc. , 367 A.2d 658, 661 (Del. Super. 1976); Great Lakes Carbon Corp. v. Fontana , 54 A.D.2d 548, 387 N.Y.S. 2d 115 (1st Dep’t 1976). Section 7(a)(2) continues the authorization for the use of attachment contained in § 9(b) of the Uniform Fraudulent Conveyance Act, or of a similar provisional remedy, when applicable law provides therefor, subject to the constraints imposed by the due process clauses of the United States and state constitutions. 3. Subsections (a) and (b) of § 10 of the Uniform Fraudulent Conveyance Act authorized the court, in an action on a voidable transfer or obligation, to restrain the defendant from disposing of his property, to appoint a receiver to take charge of his property, or to make any order the circumstances may require. Section 10, however, applied only to a creditor whose claim was unmatured. There is no reason to restrict the availability of these remedies to such a creditor, and the courts have not so restricted them. See, e.g., Lipskey v. Voloshen , 155 Md. 139, 143-45, 141 A. 402, 404-05 (1928) (judgment creditor granted injunction against disposition of property by transferee, but appointment of receiver denied for lack of sufficient showing of need for such relief); Matthews v. Schusheim , 36 Misc. 2d 918, 922-23, 235 N.Y.S. 2d 973, 976-77, 991-92 (Sup. Ct. 1962) (injunction and appointment of receiver granted to holder of claims for fraud, breach of contract, and alimony arrearages; whether creditor’s claim was mature said to be immaterial); Oliphant v. Moore , 155 Tenn. 359, 362-63, 293 S.W. 541, 542 (1927) (tort creditor granted injunction restraining alleged tortfeasor’s disposition of property).

4. As under the Uniform Fraudulent Conveyance Act, a creditor is not required to obtain a judgment against the debtor-transferor or to have a matured claim in order to proceed under subsection (a). See §§ 1(3) and 1(4) ; American Surety Co. v. Conner , 251 N.Y. 1, 166 N.E. 783, 65 A.L.R. 244 (1929); 1 G. Glenn, Fraudulent Conveyances and Preferences 129 (Rev. ed. 1940).

5. The provision in subsection (b) for a creditor to levy execution on a transferred asset continues the availability of a remedy provided in § 9(b) of the Uniform Fraudulent Conveyance Act. See, e.g., Doland v. Burns Lbr. Co. , 156 Minn. 238, 194 N.W. 636 (1923); Montana Ass’n of Credit Management v. Hergert , 181 Mont. 442, 449, 453, 593 P.2d 1059, 1063, 1065 (1979); Corbett v. Hunter , 292 Pa. Super. 123, 128, 436 A.2d 1036, 1038 (1981); see also American Surety Co. v. Conner , 251 N.Y. 1, 6, 166 N.E. 783, 784, 65 A.L.R. 244, 247 (1929) (“In such circumstances he [the creditor] might find it necessary to indemnify the sheriff and, when the seizure was erroneous, assumed the risk of error”); McLaughlin, Application of the Uniform Fraudulent Conveyance Act , 46 Harv. L. Rev. 404, 441-42 (1933).

6. The remedies specified in § 7, like those enumerated in §§ 9 and 10 of the Uniform Fraudulent Conveyance Act, are cumulative. Lind v. O. N. Johnson Co. , 204 Minn. 30, 40, 282 N.W. 661, 667, 119 A.L.R. 940 (1939) (Uniform Fraudulent Conveyance Act held not to impair or limit availability of the “old practice” of obtaining judgment and execution returned unsatisfied before proceeding in equity to set aside a transfer); Conemaugh Iron Works Co. v. Delano Coal Co., Inc. , 298 Pa. 182, 186, 148 A. 94, 95 (1929) (Uniform Fraudulent Conveyance Act held to give an “additional optional remedy” and not to “deprive a creditor of the right, as formerly, to work out his remedy at law”); 1 G. Glenn, Fraudulent Conveyances and Preferences 120, 130, 150 (Rev. ed. 1940).

7. If a transfer or obligation is voidable under § 4 or § 5, the basic remedy provided by this Act is its avoidance under subsection (a)(1). “Avoidance” is a term of art in this Act, for it does not mean that the transfer or obligation is simply rendered void. It has long been established that a transfer avoided by a creditor under this Act or its predecessors is nevertheless valid as between the debtor and the transferee. For example, in the case of a transfer of property worth $100 by Debtor to Transferee, held voidable in a suit by Creditor-1 who is owed $80 by Debtor, “avoidance” of the transfer leaves the $20 surplus with Transferee. Debtor is not entitled to recover the surplus. Nor is Debtor’s Creditor-2 entitled to pursue the surplus by reason of Creditor-1’s action (though Creditor-2 may be entitled to bring its own avoidance action to pursue the surplus). The foregoing principle is embedded in the language of subsection (a)(1), which prescribes “avoidance” only “to the extent necessary to satisfy the creditor’s claim.” Section 9(a) of the Uniform Fraudulent Conveyance Act was similarly limited. See, e.g., Becker v. Becker , 416 A.2d 156, 162 (Vt. 1980); De Martini v. De Martini , 52 N.E.2d 138, 141 (Ill. 1943); Markward v. Murrah , 156 S.W.2d 971, 974 (Tex. 1941); Society Milion Athena, Inc. v. National Bank of Greece , 22 N.E.2d 374, 377 (N.Y. 1939); National Radiator Corp. v. Parad , 8 N.E.2d 794, 796-97 (Mass. 1937); 1 G. Glenn, Fraudulent Conveyances and Preferences § 114, at 225 (Rev. ed. 1940). The transferee’s mental state is irrelevant to the foregoing, but a good-faith transferee may also be afforded protection by § 8.

It follows that “avoidance” of an obligation under subsection (a)(1) likewise should not mean its cancellation, but rather a remedy that recognizes the existence of the obligation and the superiority of the plaintiff creditor’s interest over the obligee’s interest. Ordinarily that should mean subordination of the obligation to the plaintiff creditor’s claim against the debtor. That would entail disgorgement by the obligee of any payments received or receivable on the obligation, to the extent necessary to satisfy the plaintiff creditor’s claim, with the obligee being subrogated to the plaintiff creditor when the latter’s claim is paid. Of course, if the obligation is unenforceable for reasons other than contravention of this Act, contravention of this Act does not render the obligation enforceable.

This Comment relates to the meaning of subsection (a)(1). If this Act is invoked in a bankruptcy proceeding, the remedial entitlements provided by the Bankruptcy Code may differ from those provided by this Act.

Prior Laws.

Former§ 55-917 was repealed. See Prior Laws,§ 55-910.

Amendments.

The 2015 amendment, by ch. 342, added “or obligee” to the end of the section heading; in subsection (1), inserted “given the debtor”; rewrote subsection (2), which formerly read: “(2) Except as otherwise provided in this section, to the extent a transfer is voidable in an action by a creditor under section 55-916(1)(a), Idaho Code, the creditor may recover judgment for the value of the asset transferred, as adjusted under subsection (3) of this section, or the amount necessary to satisfy the creditor’s claim, whichever is less. The judgment may be entered against: (a) The first transferee of the asset or the person for whose benefit the transfer was made; or (b) Any subsequent transferee other than a good-faith transferee or obligee who took for value or from any subsequent transferee or obligee”; added “other than acceptance of collateral in full or partial satisfaction of the obligation it secures” at the end of paragraph (5)(b); and added subsections (7), (8), and (9).

Compiler’s Notes.

The term “this act” in subsection (4) refers to S.L. 1987, ch. 202, which is compiled as§§ 55-910 to 55-918 and 55-920 to 55-922.

Alternative Right to Payment.

In the face of a fraudulent conveyance, a creditor can either recover the actual property transferred, or a money judgment against the transferee for the property’s equivalent value. This is clearly an alternative right to payment beyond the equitable remedy of avoidance of the transfer and recovery of the asset. As such, prospective purchaser is considered to have a claim for purposes of Section 101(5)(B), 11 U.S.C.S. § 101(5)(B), of the Bankruptcy Code (11 USCS § 101(5)(B)) and cannot void the transfer as against the bankruptcy estate and the trustee. TKO Properties v. Young, 214 Bankr. 905 (Bankr. D. Idaho 1997).

Equitable Remedies.

One who purchased property at an execution or tax sale received legal title and could bring an action to remove a cloud on the title created by a fraudulent transfer. Therefore, the district court had the equitable power to clear tax sale purchaser’s title by setting aside the tax debtors’ deeds to the family trust, which deeds were void and unenforceable against the tax sale purchaser. Haney v. Molko, 123 Idaho 132, 844 P.2d 1382 (Ct. App. 1992).

Once it has been established that a fraudulent transfer has occurred, subsection (2) of this section allows a creditor who already has a judgment against the debtor to levy execution on the asset transferred, if the court so orders. In addition, where the transfer in question is found to be fraudulent and, thus, voidable, the creditor may recover judgment against the transferee for the value of the asset transferred, subject to equitable adjustment under subsection (3) of this section, or for the amount necessary to satisfy the creditor’s claim, whichever is less. Alcan Bldg. Prods. v. Peoples, 124 Idaho 338, 859 P.2d 374 (Ct. App. 1993).

Non-creditors.

Limited liability company and estate of one of its two manager/members had no cause of action against the other manager/member for transferring property to defraud creditors since neither plaintiff was a creditor of the limited liability company. Estate of E.A. Collins v. Geist, 143 Idaho 821, 153 P.3d 1167 (2007).

Prejudgment Interest.

The relief that a defrauded creditor is entitled to, in an action to set aside a fraudulent conveyance, is limited to setting aside the conveyance of the property. There is nothing in the uniform fraudulent transfer act which suggests that prejudgment interest should be awarded in addition to the value of the asset. Clarke v. Latimer, — Idaho —, 437 P.3d 1 (2018).

Official Comment

1. Subsection (a) sets forth a complete defense to an action for avoidance under § 4(a)(1). The subsection is an adaptation of the exception stated in § 9 of the Uniform Fraudulent Conveyance Act. Pursuant to subsection (g), the person invoking this defense carries the burden of establishing good faith and the reasonable equivalence of the consideration exchanged.
2. Subsection (b) is derived from Bankruptcy Code §§ 550(a), (b) (1984). The value of the asset transferred is limited to the value of the levyable interest of the transferor, exclusive of any interest encumbered by a valid lien. See § 1(2). The requirement of Bankruptcy Code § 550(b)(1) (1984) that a transferee be “without knowledge of the voidability of the transfer” in order to be protected has been omitted as inappropriate. Knowledge of the facts rendering the transfer voidable would be inconsistent with the good faith that is required of a protected transferee. Knowledge of the voidability of a transfer would seem to involve a legal conclusion. Determination of the voidability of the transfer ought not to require the court to inquire into the legal sophistication of the transferee.
3. Subsection (c) has no analogue in Bankruptcy Code § 550(a), (b) (1984). The measure of the recovery of a creditor against a transferee is usually limited to the value of the asset transferred at the time of the transfer. See, e.g., United States v. Fernon , 640 F.2d 609, 611 (5th Cir. 1981); Hamilton Nat’l Bank of Boston v. Halstead , 134 N.Y. 520, 31 N.E. 900 (1892); cf. Buffum v. Peter Barceloux Co. , 289 U.S. 227 (1932) (transferee’s objection to trial court’s award of highest value of asset between the date of the transfer and the date of the decree of avoidance rejected because an award measured by value as of time of the transfer plus interest from that date would have been larger). The premise of § 8(c) is that changes in value of the asset transferred that occur after the transfer should ordinarily not affect the amount of the creditor’s recovery. Circumstances may require a departure from that measure of the recovery, however, as the cases decided under the Uniform Fraudulent Conveyance Act and other laws derived from the Statute of 13 Elizabeth illustrate. Thus, if the value of the asset at the time of levy and sale to enforce the judgment of the creditor has been enhanced by improvements of the asset transferred or discharge of liens on the property, a good-faith transferee should be reimbursed for the outlay for such a purpose to the extent the sale proceeds were increased thereby. See Bankruptcy Code § 550(d) (1984); Janson v. Schier , 375 A.2d 1159, 1160 (N.H. 1977); Anno., 8 A.L.R. 527 (1920). If the value of the asset at the time of the transfer has been diminished by severance and disposition of timber or minerals or fixtures, the transferee should be liable for the amount of the resulting reduction. See Damazo v. Wahby , 269 Md. 252, 257, 305 A.2d 138, 142 (1973). If the transferee has collected rents, harvested crops, or derived other income from the use or occupancy of the asset after the transfer, the liability of the transferee should be limited in any event to the net income after deduction of the expense incurred in earning the income. Anno., 60 A.L.R.2d 593 (1958). On the other hand, adjustment for the equities does not warrant an award to the creditor of consequential damages alleged to accrue from mismanagement of the asset after the transfer. 4. Subsection (d) is an adaptation of Bankruptcy Code § 548(c) (1984). An insider that receives property or an obligation from an insolvent debtor as security for or in satisfaction of an antecedent debt of the transferor or obligor is not a good-faith transferee or obligee if the insider has reasonable cause to believe that the debtor was insolvent at the time the transfer was made or the obligation was incurred. If a foreclosure sale is voidable and does not qualify for the benefit of § 3(b) or § 8(e)(2) because it was not conducted in accordance with the requirements of applicable law, the buyer, if in good faith, will still be entitled to the benefit of subsection (d) to the extent of the price paid by the buyer.

A transfer of property by the transferee of a voidable transfer might, on appropriate facts, be avoidable for reasons independent of the original voidable transfer. In such a case the subsequent transferee may be entitled to a defense under § 8(b) to an action based on the original voidable transfer, but that defense would not apply to an action based on the subsequent transfer that is independently voidable. For example, suppose that X transfers property to Y in a transfer voidable under this Act, and that Y later transfers the property to Z, who is a good-faith transferee for value. In general, C-1, a creditor of X, would have the right to a money judgment against Y pursuant to § 8(b), but C-1 could not recover under this Act from Z, who would be protected by § 8(b)(1)(ii)(A). However, it might be the case that Y’s transfer to Z is independently voidable as to Y’s creditors (including C-1, as creditor of Y by dint of its rights under this Act). Such might be the case if, for example, the value received by Y in exchange for the transfer is not reasonably equivalent and Y is in financial distress, or if Y made the transfer with intent to hinder, delay, or defraud any of its creditors. In such a case creditors of Y may pursue remedies against Z with respect to that independently voidable transfer, and the defense afforded to Z by § 8(b)(1)(ii)(A) would not apply to that action. Of course choice of law must be considered in such a situation: the jurisdiction whose law governs the voidability of the original transfer from X to Y and the consequent liability of Y and subsequent transferees need not be the same as the jurisdiction whose law governs the voidability of the independently voidable transfer from Y to Z and the consequent liability of Z and subsequent transferees.

5. Subsection (e)(1) rejects the rule adopted in Darby v. Atkinson (In re Farris) , 415 F. Supp. 33, 39-41 (W.D. Okla. 1976), that termination of a lease on default in accordance with its terms and applicable law may constitute a voidable transfer.

Subsection (e)(2) protects a transferee that acquires a debtor’s interest in an asset as a result of the enforcement by a secured party (which may but need not be the transferee) of rights pursuant to and in compliance with the provisions of Part 6 of Article 9 of the Uniform Commercial Code. Cf. Calaiaro v. Pittsburgh Nat’l Bank (In re Ewing) , 33 B.R. 288, 9 C.B.C.2d 526, CCH B.L.R. /P 69,460 (Bankr. W.D. Pa. 1983) (sale of pledged stock held subject to avoidance under § 548 of the Bankruptcy Code), rev’d , 36 B.R. 476 (W.D. Pa. 1984) (transfer held not voidable because deemed to have occurred more than one year before bankruptcy petition filed). The global requirement of Article 9 that the secured party enforce its rights in good faith, and the further requirement of Article 9 that certain remedies be conducted in a commercially reasonable manner, provide substantial protection to the other creditors of the debtor. See U.C.C.§§ 1-304, 9-607(b), 9-610(b) (2014). The exemption afforded by subsection (e)(2) does not extend to acceptance of collateral in full or partial satisfaction of the obligations it secures. That remedy, contemplated by U.C.C.§§ 9-620 — 9-622 (2014), is sometimes referred to as “strict foreclosure.” An exemption for strict foreclosure is inappropriate because compliance with the rules of Article 9 relating to strict foreclosure may not sufficiently protect the interests of the debtor’s other creditors if the debtor does not act to protect equity the debtor may have in the asset.

6. Subsection (f) provides additional defenses against the avoidance of a preferential transfer to an insider under § 5(b).

Paragraph (1) is adapted from Bankruptcy Code § 547(c)(4) (1984), which permits a preferred creditor to set off the amount of new value subsequently advanced against the recovery of a voidable preference by a trustee in bankruptcy to the debtor without security. The new value may consist not only of money, goods, or services delivered on unsecured credit but also of the release of a valid lien. See, e.g., In re Ira Haupt & Co. , 424 F.2d 722, 724 (2d Cir. 1970); Baranow v. Gibraltor Factors Corp. (In re Hygrade Envelope Co.) , 393 F.2d 60, 65-67 (2d Cir.), cert. denied , 393 U.S. 837 (1968); In re John Morrow & Co. , 134 F. 686, 688 (S.D. Ohio 1901). It does not include an obligation substituted for a prior obligation. If the insider receiving the preference thereafter extends new credit to the debtor but also takes security from the debtor, the injury to the other creditors resulting from the preference remains undiminished by the new credit. On the other hand, if a lien taken to secure the new credit is itself voidable by a judicial lien creditor of the debtor, the new value received by the debtor may appropriately be treated as unsecured and applied to reduce the liability of the insider for the preferential transfer. Paragraph (2) is derived from Bankruptcy Code § 547(c)(2) (1984), which excepts certain payments made in the ordinary course of business or financial affairs from avoidance by the trustee in bankruptcy as preferential transfers. Whether a transfer was in the “ordinary course” requires a consideration of the pattern of payments or secured transactions engaged in by the debtor and the insider prior to the transfer challenged under § 5(b). See Tait & Williams, Bankruptcy Preference Laws: The Scope of Section 547(c)(2) , 99 Banking L.J. 55, 63-66 (1982). The defense provided by paragraph (2) is available, irrespective of whether the debtor or the insider or both are engaged in business, but the prior conduct or practice of both the debtor and the insider-transferee are relevant.

Paragraph (3) has no analogue in Bankruptcy Code § 547 (1984). It reflects a policy judgment that an insider who has previously extended credit to a debtor should not be deterred from extending further credit to the debtor in a good-faith effort to save the debtor from a forced liquidation in bankruptcy or otherwise. A similar rationale has sustained the taking of security from an insolvent debtor for an advance to enable the debtor to stave off bankruptcy and extricate itself from financial stringency. Blackman v. Bechtel , 80 F.2d 505, 508-09 (8th Cir. 1935); Olive v. Tyler (In re Chelan Land Co.) , 257 F. 497, 5 A.L.R. 561 (9th Cir. 1919); In re Robin Bros. Bakeries, Inc. , 22 F. Supp. 662, 663-64 (N.D. Ill. 1937); see Dean v. Davis , 242 U.S. 438, 444 (1917). The amount of the present value given, the size of the antecedent debt secured, and the likelihood of success for the rehabilitative effort are relevant considerations in determining whether the transfer was in good faith.

7. Subsections (g) and (h) were added in 2014. Sections 2(b), 4(c), 5(c), 8(g), and 8(h) together provide uniform rules on burdens and standards of proof relating to the operation of this Act. The principles stated in Comment 11 to § 4 apply to subsections (g) and (h).

8. The provisions of § 8 are integral elements of the rights created by this Act. Accordingly, they should apply if this Act is invoked in a bankruptcy proceeding pursuant to Bankruptcy Code § 544(b) (2014). That follows from the fundamental principle that property rights in bankruptcy should be the same as outside bankruptcy, unless a federal interest compels a different result. See Butner v. United States , 440 U.S. 48, 55 (1979). Section 8(b) limits damages under this Act to the amount of the plaintiff creditor’s claim, and that limitation is overridden in bankruptcy by the rule of Moore v. Bay , 284 U.S. 4 (1931), which Congress unmistakably maintained when it enacted the Bankruptcy Code. In the absence of a clear override by the Bankruptcy Code or other federal law, however, other aspects of § 8 should apply if this Act is invoked in bankruptcy. See, e.g., Decker v. Tramiel (In re JTS Corp.) , 617 F.3d 1102, 1110-16 (9th Cir. 2010) (holding that § 8(d) applies to a claim for relief brought under this Act in a bankruptcy proceeding pursuant to Bankruptcy Code § 544(b)).

Prior Laws.

Former§ 55-918 was repealed. See Prior Laws,§ 55-910.

Amendments.

The 2015 amendment, by ch. 342, deleted “fraudulent” preceding “transfer” in the introductory paragraph and substituted “not later than” for “within” in subsections (1) (twice), (2), and (3).

Compiler’s Notes.

The term “this act” in the introductory paragraph refers to S.L. 1987, ch. 202, which is compiled as§§ 55-910 to 55-918 and 55-920 to 55-922.

Official Comment

1. This section had no analogue in the Uniform Fraudulent Conveyance Act. Its purpose is to make clear that lapse of the statutory periods prescribed by the section bars the right and not merely the remedy. The section rejects the rule applied in United States v. Gleneagles Inv. Co. , 565 F. Supp. 556, 583 (M.D. Pa. 1983) (state statute of limitations held not to apply to action by United States based on Uniform Fraudulent Conveyance Act). Another consequence of barring the right and not merely the remedy is that, under Restatement (Second) of Conflict of Laws § 143 (1971), if an action is brought in jurisdiction A and the action is determined to be governed by this Act as enacted in jurisdiction B, the action cannot be maintained if it is time-barred in jurisdiction B. The 1988 revision of §§ 142 and 143 of the Restatement (Second) of Conflict of Laws , which eliminated the right/remedy distinction, should not be applied to this Act. Because a voidable transfer or obligation may injure all of a debtor’s many creditors, there is need for a uniform and predictable cutoff time.
2. Statutes of limitations applicable to the avoidance of transfers and obligations vary widely from state to state and are frequently subject to uncertainties in their application. See Hesson, The Statute of Limitations in Actions to Set Aside Fraudulent Conveyances and in Actions Against Directors by Creditors of Corporations , 32 Cornell L.Q. 222 (1946); Annos., 76 A.L.R. 864 (1932), 128 A.L.R. 1289 (1940), 133 A.L.R. 1311 (1941), 14 A.L.R.2d 598 (1950), and 100 A.L.R.2d 1094 (1965). Together with § 6, this section should mitigate the uncertainty and diversity that have characterized the decisions applying statutes of limitations to actions to avoid transfers and obligations. The periods prescribed apply, whether the action under this Act is brought by a creditor or by a purchaser at a sale on execution levied pursuant to § 7(b) and whether the action is brought against the original transferee or subsequent transferee. The prescription of statutory periods of limitation does not preclude the barring of an avoidance action for laches. See § 12 and the accompanying Comment.
3. Subsection (a) provides that the four-year period ordinarily applicable to a claim for relief under § 4(a)(1) is extended to “one year after the transfer or obligation was or could reasonably have been discovered by the claimant.” Antecedents to that “discovery rule” have long existed in common law and in other statutes, and courts may take different approaches to filling out the meaning of subsection (a) by reference to such precedents. Thus, subsection (a) literally starts the one-year period when the transfer was or could reasonably have been discovered by the claimant, but cases applying subsection (a) have held that the period starts only when the transfer and its wrongful nature were or could reasonably have been discovered. See, e.g., Freitag v. McGhie , 947 P.2d 1186 (Wash. 1997); State Farm Mut. Auto. Ins. Co. v. Cordua , 834 F. Supp. 2d 301, 306-08 (E.D. Pa. 2011). A recurring situation to which that distinction may be relevant is Spouse X’s transfer of assets beyond the reach of creditors, made in anticipation of divorcing Spouse Y after the four-year period has elapsed and made for the purpose of thwarting Spouse Y’s economic interests in the divorce. Spouse Y may well know of the transfer long before Spouse Y learns its wrongful purpose. Of course, even if the period specified in subsection (a) is held to have lapsed in a given case, law other than this Act might allow the transferred assets to be considered in making a division of assets in the ensuing divorce case.

Prior Laws.

A former§ 55-919 was repealed. See Prior Laws,§ 55-910.

Compiler’s Notes.

Former§ 55-919 was redesignated as§ 55-920 by S.L. 2015, ch. 342, § 10.

Official Comment

1. Section 10, added in 2014, is a simple and predictable choice of law rule applicable to claims for relief of the nature governed by the Act. It provides that a claim for relief in the nature of a claim for relief under the Act is governed by the local law of the jurisdiction in which the debtor is “located” at the time the challenged transfer is made or the challenged obligation is incurred. “Local” law means the substantive law of the referenced jurisdiction, and not its choice of law rules. Section 6 determines the time at which a transfer is made or obligation is incurred for purposes of the Act, including this section. Section 10 applies equally to a candidate jurisdiction that is a sister state and to a candidate jurisdiction that is a foreign nation.

Basing choice of law on the location of the debtor is analogous to the rule set forth in U.C.C.§ 9-301 (2014), which provides that the priority of a security interest in intangible property is generally governed by the local law of the jurisdiction in which the debtor is located. The analogy is apt, because the substantive rules of this Act are a species of priority rule, in that they determine the circumstances in which a debtor’s creditors, rather than the debtor’s transferee, have superior rights in property transferred by the debtor. In keeping with that analogy, the definition of the debtor’s “location” in subsection (a) is identical to the baseline definition of that term in U.C.C.§ 9-307(b) (2014). Subsection (a) does not include any of the exceptions to the baseline definition that are set forth in Article 9 of the Uniform Commercial Code, such as U.C.C.§ 9-307(e) (2014) (providing that the location of a domestic corporation or other “registered organization” is its jurisdiction of organization), and U.C.C.§ 9-307(c) (2014) (providing in effect that if the baseline definition would locate a debtor in a jurisdiction that lacks an Article 9-style filing system, then the debtor is instead located in the District of Columbia). Those exceptions are not included in subsection (a) because their primary purpose relates to the operation of Article 9’s perfection rules, which have no analogue in this Act. 2. The choice of law rule set forth in § 10(b) applies to any claim for relief in the nature of a claim for relief under this Act — in other words, any claim for relief sufficiently similar to a claim for relief under this Act as to warrant the application of this Act’s choice of law rule. “This Act” of course refers to the enactment of this Act that is in force in the jurisdiction whose enactment of § 10(b) is being applied. Section 10(b) could not properly have been written to apply merely to “a claim for relief under this Act,” for such a formulation would presuppose the applicability of the substantive provisions of this Act as in force in that jurisdiction. If a question should arise as to whether a given claim for relief is sufficiently similar to a claim for relief under this Act that § 10(b) should apply to it, the answer is left to judicial determination.

3. As used in subsection (a), the terms “principal residence,” “place of business,” and “chief executive office” are to be evaluated on the basis of authentic and sustained activity, not on the basis of manipulations employed to establish a location artificially ( e.g. , by such means as establishing a notional “chief executive office” by use of straw-man officers or directors in a jurisdiction in which creditors’ rights are substantially debased, or establishing a notional “principal residence” for a short term in such a jurisdiction for the purpose of making an asset transfer while there). Notwithstanding the adaptation of subsection (a) from U.C.C.§ 9-307(b) (2014), the foregoing terms need not necessarily have the same meanings in both statutes. Debtors are likely to have greater incentive and ability to employ “asset tourism” for the purpose of seeking to evade the substantive rules of this Act than for the purpose of seeking to manipulate the perfection and priority rules of secured transactions law. Interpretation and application of this Act should so recognize.

4. “Location” under this Act is completely independent from the concept of “center of main interests” (“COMI”), as that term is used in Chapter 15 of the Bankruptcy Code. Chapter 15, which applies to transnational insolvency proceedings, requires United States courts to defer in various ways to a foreign proceeding in the jurisdiction of the debtor’s COMI. Those consequences are quite different from the consequences of “location” under this Act. Furthermore, if the debtor is an organization, the debtor’s jurisdiction of organization has no bearing on the debtor’s “location” under subsection (a), by contrast to the presumption in Bankruptcy Code § 1516(c) (2014) that the jurisdiction in which the debtor has its registered office (i.e., its jurisdiction of organization) is its COMI.

5. Section 10(b) determines the governing law only for a claim for relief in the nature of a claim for relief under this Act. Furthermore, this Act, like the earlier Uniform Fraudulent Conveyance Act, has never purported to be an exclusive law on the subject of voidable transfers and obligations. See Comment 2 to § 15. Accordingly, the choice of law rule set forth in this § 10 is by no means applicable to all assertions that a transfer was made or an obligation incurred in contravention of law.

For example, suppose that the principal residence of Spouse X is State A and the principal residence of Spouse Y is State B. Spouse Y, anticipating a future divorce, transfers assets to Transferee for the purpose of thwarting X’s economic interests in the divorce. Later a divorce action between X and Y is properly brought in the courts of State A, which has enacted this Act. Law other than this Act (presumably the family law of State A) will govern such matters as the classification of the transferred property as marital or separate and the remedies available against Y for wrongful dissipation of assets, such as awarding a larger share of marital property to X or imposing a lien on the separate property of Y. The choice of law rule set forth in § 10 does not apply to those matters, for they do not involve a claim for relief in the nature of a claim for relief under this Act. However, if Transferee is subject to personal jurisdiction in State A and X brings an action in State A against Transferee seeking avoidance of the transfer, or a money judgment against Transferee in lieu of avoidance, on the ground that the transfer had been made by Y with intent to hinder, delay, or defraud X, the choice of law rule set forth in § 10 would apply to that action, and as a result that action would be governed by the voidable transfer law of State B.

Prior Laws.

A former§ 55-920 was repealed. See Prior Laws,§ 55-910.

Compiler’s Notes.

The term “this act” refers to S.L. 1987, ch. 202, which is compiled as§§ 55-910 to 55-918 and 55-920 to 55-922.

This section was formerly compiled as§ 55-919.

Former§ 55-920 was redesignated as§ 55-921 by S.L. 2015, ch. 342, § 11.

Official Comment

This section is derived from § 11 of the Uniform Fraudulent Conveyance Act and Uniform Commercial Code§ 1-103 (1984) (later§ 1-103(b) (2014)). The section adds a reference to “laches” in recognition of the particular appropriateness of the application of this equitable doctrine to an untimely action to avoid a transfer under this Act. See Louis Dreyfus Corp. v. Butler , 496 F.2d 806, 808 (6th Cir. 1974) (action to avoid transfers to debtor’s wife when debtor was engaged in speculative business held to be barred by laches or applicable statutes of limitations); Cooch v. Grier , 30 Del. Ch. 255, 265-66, 59 A.2d 282, 287-88 (1948) (action under the Uniform Fraudulent Conveyance Act held barred by laches when the creditor was chargeable with inexcusable delay and the defendant was prejudiced by the delay).

Prior Laws.

A former§ 55-921 was repealed. See Prior Laws,§ 55-910.

Compiler’s Notes.

The term “this act” refers to S.L. 1987, ch. 202, which is compiled as§§ 55-910 to 55-918 and 55-920 to 55-922.

This section was formerly compiled as§ 55-920.

Former§ 55-921 was amended and redesignated as§ 55-922 by S.L. 2015, ch. 342, § 12.

Prior Laws.

A former§ 55-922, was repealed. See Prior Laws,§ 55-910.

Amendments.

The 2015 amendment, by ch. 342, rewrote and redesignated this section, formerly designated as§ 55-921, which read: “This act may be cited as the ‘Uniform Fraudulent Transfer Act.’”

Compiler’s Notes.

The term “this act” refers to S.L. 1987, ch. 202, which is compiled as§§ 55-910 to 55-918 and 55-920 to 55-922.

This section was formerly compiled as§ 55-921.

Official Comment

1. The 2014 amendments change the short title of the Act from “Uniform Fraudulent Transfer Act” to “Uniform Voidable Transactions Act.” The change of title is not intended to effect any change in the meaning of the Act. The retitling is not motivated by the substantive revisions made by the 2014 amendments, which are relatively minor. Rather, the word “Fraudulent” in the original title, though sanctioned by historical usage, was a misleading description of the Act as it was originally written. Fraud is not, and never has been, a necessary element of a claim for relief under the Act. The misleading intimation to the contrary in the original title of the Act led to confusion in the courts. See, e.g. , § 4, Comment 10. The misleading insistence on “fraud” in the original title also contributed to the evolution of widely-used shorthand terminology that further tends to distort understanding of the provisions of the Act. Thus, several theories of recovery under the Act that have nothing whatever to do with fraud (or with intent of any sort) came to be widely known by the oxymoronic and confusing shorthand tag “constructive fraud.” See §§ 4(a)(2), 5(a). Likewise, the primordial theory of recovery under the Act, set forth in § 4(a)(1), came to be widely known by the shorthand tag “actual fraud.” That shorthand is misleading, because that provision does not in fact require proof of fraudulent intent. See § 4, Comment 8.

In addition, the word “Transfer” in the original title of the Act was underinclusive, because the Act applies to incurrence of obligations as well as to transfers of property. 2. The Act, like the earlier Uniform Fraudulent Conveyance Act, has never purported to be an exclusive law on the subject of voidable transfers and obligations. See Prefatory Note (1984), /P5; § 1, Comment 2, /P6; § 4, Comment 9, /P1; § 10, Comment 5. It remains the case that the Act is not the exclusive law on the subject of voidable transfers and obligations.

3. The retitling of the Act should not be construed to affect references to the Act in other statutes or international instruments that use the former terminology. See, e.g. , Convention on International Interests in Mobile Equipment, art. 30(a)(3), opened for signature Nov. 16, 2001, S. Treaty Doc. No. 108-10 (referring to “any rules of law applicable in insolvency proceedings relating to the avoidance of a transaction as a . . . transfer in fraud of creditors”).

4. The 2014 amendments also make a correction to the text of the Act that is consonant with the change of the Act’s title. As originally written, the Act inconsistently used different words to denote a transfer or obligation for which the Act provides a remedy: sometimes “voidable” (see original § 2(d), §§ 8(a), (d), (e), (f)), and sometimes “fraudulent” (see original § 4(a), §§ 5(a), (b), § 9). The amendments resolve that inconsistency by using “voidable” consistently or deleting the word as unnecessary. No change in meaning is intended.

5. The Act does not address the extent to which a person who facilitates the making of a transfer or the incurrence of an obligation that is voidable under the Act may be subject to liability for that reason, whether under a theory of aiding and abetting, civil conspiracy, or otherwise. The Act leaves that subject to supplementary principles of law. See § 12. Cf . § 8(b)(1)(i) (imposing liability upon, inter alia , “the person for whose benefit the transfer was made”). Other law also governs such matters as (i) the circumstances in which a lawyer who assists a debtor in making a transfer or incurring an obligation that is voidable under the Act violates rules of professional conduct applicable to lawyers, (ii) the circumstances in which communications between the debtor and the lawyer in respect of such a transfer or obligation are excepted from attorney-client privilege, and (iii) the extent to which criminal sanctions apply to a debtor, transferee, obligee, or person who facilitates the making of a transfer or the incurrence of an obligation that is voidable under the Act. Neither the retitling of the Act, nor the consistent use of “voidable” in its text per Comment 4, effects any change in the meaning of the Act, and those amendments should not be construed to affect any of the foregoing matters.

Cross References.

Exemption of property from attachment or levy,§ 11-601 et seq.

Prior Laws.

Former§§ 55-1001 to 55-1008, which comprised 1863, p. 575, §§ 1, 2; reen. 1897, p. 10, § 1; reen 1899, p. 293, § 1; R.S., §§ 3036 to 3042; reen. R.C. & C.L., §§ 3173 to 3180; C.S., §§ 5437 to 5444; am. 1923, ch. 20, § 1, p. 20; I.C.A.,§§ 54-1001 to 54-1008; am. 1984, ch. 53, § 1, p. 93, were repealed by S.L. 1989, ch. 371, § 1.

Effective Dates.

Section 3 of S.L. 2000, ch. 226 provided that the act shall be in full force and effect on and after July 1, 2000.

Appliances.

Appliances purchased by Chapter 7 debtors with exempt proceeds from the sale of their old homestead for installation in their new homestead were not exempt under§ 55-1008, because the definition of homestead in subsection (2) does not include fixtures or appliances. In re Cerchione, 398 B.R. 699 (Bankr. D. Idaho 2009).

Lots Used as Single Parcel.

The statutes contain no restriction on the area of the property subject to the homestead, rather, the law utilizes a value limitation in restricting the extent of the exemption and since the unimproved lot physically “surrounds” the improved lot, and the two lots have been utilized by its owner as a single parcel, it is of no consequence that the parcel is legally or physically capable of being divided and sold as two tracts. In re Millsap, 122 Bankr. 577 (Bankr. D. Idaho 1991).

Mobile Home.

A mobile home may be claimed as a homestead exemption in bankruptcy proceedings, but may not be claimed as a personal property exemption. In re Rogers, 225 Bankr. 755 (Bankr. D. Idaho 1998).

Motor Home.

Motor home, purchased with proceeds from debtors’ residence, in which debtors physically reside and intend to continue to reside, qualified for a homestead exemption. In re Peters, 168 Bankr. 710 (Bankr. D. Idaho 1994).

Period Residence.

Although debtor and his family resided only periodically in a particular dwelling, since he did not intend to abandon the residence as his home, and any temporary absences from the residence were occasioned by reasonable causes, the absences were not inconsistent with debtor’s right to the homestead exemption. In re Tiffany, 106 Bankr. 213 (Bankr. D. Idaho 1989).

Principal Home of Owner.

Where debtor claimed cabin as exempt and he did spend considerable time at the cabin, and entertained his family and friends there, his living arrangements elsewhere could be adequately explained as being closer to his workplace and did not show he intended to abandon his residence. In re Millsap, 122 Bankr. 577 (Bankr. D. Idaho 1991).

Debtor attempted to claim an exemption in her joint interest in a mobile home under 11 U.S.C.S. § 522(b)(3)(B); Idaho law permitted the debtor’s creditors to reach her interest in the mobile home because the debtor could not use her mother’s homestead exemption to protect her own interest in the mobile home when she already claimed a homestead exemption in another home where she resided, and the debtor could not circumvent the prohibition against claiming multiple homestead exemptions under subsection (2) of this section. In re Antonie, 447 B.R. 610 (D. Idaho 2011). Bankruptcy debtor improperly claimed a homestead exemption in unimproved real property where, aside from filing declarations of abandonment and homestead, respectively, on her occupied home and the unimproved property, the debtor failed to show that the unimproved property was actually intended as her principal home. Lynn v. Gugino (In re Lynn), 2013 Bankr. LEXIS 5097 (9th Cir. BAP Dec. 2, 2013).

A Chapter 7 debtor who filed a declaration of homestead, pursuant to§ 55-1004, in unimproved land that he owned in Idaho Falls was not precluded from claiming the land as his homestead just because he owned improved property in Roberts at the time he that filed his declaration. However, the court sustained the trustee’s objection to the debtor’s homestead exemption claim, where the declaration of homestead that the debtor filed did not state that he intended to reside on the Idaho Falls property. In re Banta, 2018 Bankr. LEXIS 346 (Bankr. D. Idaho Feb. 8, 2018).

Remainder Interest.

Since a life estate constitutes an adequate ownership interest to establish a homestead under this section, then a fee simple remainder interest, already granted and awaiting only the eventual passing of the life tenant, is also sufficient. The homestead statutes contemplate an ownership interest in property with a corresponding monetary value that a debtor could claim as exempt; the fee simple remainder interest could be sold and thus had a monetary value. In re Thomason, 2013 Bankr. LEXIS 886 (Bankr. D. Idaho Feb. 19, 2013).

Residence Outside of State.

Under 11 U.S.C.S. § 522(b)(3)(A), Chapter 7 debtors who resided in Idaho were required to apply the Idaho homestead exemption,§§ 55-1003, 55-1004, and this section. The debtors could not apply the Idaho homestead exemption to a home located in Washington state and could not apply Washington state homestead law to their case in Idaho. In re Harris, 2010 Bankr. LEXIS 2020 (Bankr. D. Idaho June 23, 2010).

Idaho law does not permit a debtor to claim a homestead exemption on real property located outside of the state. In re Stephens, 2011 Bankr. LEXIS 1689 (Bankr. D. Idaho May 10, 2011).

Single Exemption.

This section contemplates only one dwelling, subject to only one homestead claim of exemption, and the land on which it is situated. In re Tiffany, 106 Bankr. 213 (Bankr. D. Idaho 1989).

Tenants.

The fact a tenant is renting a portion of debtor’s property and is living in a mobile home on that property is a material factor in determining the extent of debtor’s homestead, since the tenant could conceivably also declare a homestead exemption on the property under this section. In re Tiffany, 106 Bankr. 213 (Bankr. D. Idaho 1989).

Cited In re Cavanaugh, 175 Bankr. 369 (Bankr. D. Idaho 1994); In re Kline, 350 B.R. 497 (Bankr. D. Idaho 2005); Thorp v. Gugino (In re Thorp), 2009 U.S. Dist. LEXIS 71435 (D. Idaho Aug. 12, 2009); In re Capps, 438 B.R. 668 (Bankr. D. Idaho 2010); In re Hassler, 2011 Bankr. LEXIS 1880 (Bankr. D. Idaho May 17, 2011); In re Ashton, 2013 Bankr. LEXIS 321 (Bankr. D. Idaho Jan. 18, 2013); In re Johns, 504 B.R. 657 (Bankr. D. Idaho 2014).

Cited

Am. Jur. 2d.

C.J.S.

§ 55-1002. From what property selected.

If the owner is married, the homestead may consist of the community or jointly owned property of the spouses or the separate property of either spouse: Provided, that the same premises may not be claimed separately by the husband and wife with the effect of increasing the net value of the homestead available to the marital community beyond the amount specified in section 55-1003, Idaho Code. When the owner is not married, the homestead may consist of any of his or her property.

History.

I.C.,§ 55-1002, as added by 1989, ch. 371, § 2, p. 933.

Prior Laws.

Former§ 55-1002 was repealed. See Prior Laws,§ 55-1001.

Prior Laws.

Former§ 55-1003 was repealed. See Prior Laws,§ 55-1001.

Amendments.

The 2006 amendment, by ch. 262, substituted “one hundred thousand dollars” for “fifty thousand dollars.”

The 2020 amendment, by ch. 232, substituted “shall not exceed the sum of one hundred seventy-five thousand dollars ($175,000)” for “shall not exceed the lesser of (i) the total net value of the lands, mobile home, and improvements as described in section 55-1001, Idaho Code, or (ii) the sum of one hundred thousand dollars ($100,000).”

Effective Dates.

Section 2 of S.L. 2006, ch. 262 declared an emergency. Approved March 30, 2006.

Section 3 of S.L. 2020, ch. 232 declared an emergency and made the amendments to this section applicable to bankruptcy petitions filed on and after March 23, 2020. Approved March 23, 2020.

Bankruptcy.

Where debtor claimed cabin as exempt and he did spend considerable time at the cabin, and entertained his family and friends there, his living arrangements elsewhere could be adequately explained as being closer to his workplace and did not show he intended to abandon his residence. In re Millsap, 122 Bankr. 577 (Bankr. D. Idaho 1991).

Although this section provides for a homestead exemption of up to $30,000 [now $100,000] in value and§ 55-1001 defines a homestead to include a mobile home, where debtor voluntarily gave finance company a security interest in the mobile home, the lien arose from an agreement between the parties rather than through a judgment; because the debtor freely consented to imposition of the lien upon the mobile home, the lien was thus not avoidable under 11 U.S.C.S. § 522(f). In re Jensen, 141 Bankr. 733 (Bankr. D. Idaho 1992). Where bankruptcy debtors were the sole principals of a closely held corporation, and the debtors were the majority owners of a limited liability company (LLC) which purchased real property with a mobile home and leased the property to the corporation, the debtors could not claim a homestead exemption since the property was owned by the LLC rather than the debtors; although the debtors resided in the mobile home, the debtors were merely at-will subtenants of the mobile home under an oral lease with the corporation, and the debtors were precluded from claiming a homestead exemption in the leasehold. In re LaVelle, 350 B.R. 505 (Bankr. D. Idaho 2005).

Chapter 7 debtors were entitled to a $100,000 homestead exemption on their home under construction under§ 55-1008(1) and this section, because, within one year of receipt, they used identifiable funds from the sale of their old homestead to help finance construction of their new homestead. In re Cerchione, 398 B.R. 699 (Bankr. D. Idaho 2009).

Bankruptcy court found no clear or unmistakable act or series of acts indicating a married debtor’s intent to abandon debtor’s homestead because the factors considered by the court evinced the debtor’s intent on the date when the debtor filed for bankruptcy not to abandon the marital home, despite the debtor’s marital problems and temporary job related residence in another state. In re Forshee, 2010 Bankr. LEXIS 3044 (Bankr. D. Idaho Sept. 16, 2010).

Chapter 7 debtor who moved to Idaho, where she lived in an apartment, so that she could continue to be employed by the employer for whom she had worked in Colorado, where she still owned a home in which her mother lived, was not entitled to claim a homestead exemption under this section for the Colorado home. In re Capps, 438 B.R. 668 (Bankr. D. Idaho 2010).

Since a life estate constitutes an adequate ownership interest to establish a homestead under this section, then a fee simple remainder interest, already granted and awaiting only the eventual passing of the life tenant, is also sufficient. The homestead statutes may be applied to any ownership interest in property with a monetary value; because the fee simple remainder interest could be sold, it had a monetary value that a debtor could claim as exempt. In re Thomason, 2013 Bankr. LEXIS 886 (Bankr. D. Idaho Feb. 19, 2013).

Trustee failed to meet his burden of showing that Chapter 7 debtors should not be allowed to include $99,020 in equity that they had in their residence as part of a homestead exemption they claimed under this section. Wife debtor used part of the separate proceeds that husband debtor derived from selling his liquor license to pay down community debt that they owed on their residence after a default judgment had been obtained against them. Although wife converted nonexempt property into exempt property when she made the payment, the evidence did not show that she did so with the intent to hinder, delay, or defraud the judgment creditor. In re Halinga, 2013 Bankr. LEXIS 5050 (Bankr. D. Idaho Nov. 27, 2013).

Idaho laws protect debtors’ homestead property, no matter the size or the number of legal parcels, as long as that property is contiguous and used as a whole. In this case, the fact that a house on the middle parcel was rented out did not negate the exemption, since other buildings on that parcel were used in conjunction with the other two. In re Johns, 504 B.R. 657 (Bankr. D. Idaho 2014).

Exemption Denied.

Where the debtors sought to claim a vacant parcel as their homestead, but failed to state in their certificate of homestead of record at the time of their bankruptcy filing that they intended to reside there, the certificate did not meet the strict requirements of§ 55-1004(3) and was defective. In re Taggart, 2009 Bankr. LEXIS 3509 (Bankr. D. Idaho Oct. 27, 2009).

Under 11 U.S.C.S. § 522(b)(3)(A), Chapter 7 debtors who resided in Idaho were required to apply the Idaho homestead exemption,§§ 55-1001, 55-1004, and this section. The debtors could not apply the Idaho homestead exemption to a home located in Washington state and could not apply Washington state homestead law to their case in Idaho. In re Harris, 2010 Bankr. LEXIS 2020 (Bankr. D. Idaho June 23, 2010).

Chapter 7 debtor who owned a trailer, which he used as his residence while he worked in Nevada, was not allowed to exempt the value of the trailer, as his homestead, from his bankruptcy estate, because the trailer was not his principal residence. The debtor rented an apartment in Boise, Idaho, where his wife and daughter lived while he was in Nevada, he returned to Idaho while he was not working in Nevada, he voted in Idaho, paid taxes in Idaho, and licensed all his vehicles (including the trailer) in Idaho. In re Ashton, 2013 Bankr. LEXIS 321 (Bankr. D. Idaho Jan. 18, 2013).

Chapter 13 debtor was not allowed to claim a homestead exemption in a home he used as his residence before he was divorced, because he had not lived in the home for more than six months and he did not show that he intended to reoccupy the home. In re Lugo, 2015 Bankr. LEXIS 2085 (Bankr. D. Idaho June 25, 2015).

Failure to Abandon Original Homestead.

Debtors were not entitled to the validation of their homestead exemption by default; their failure to comply with the requirement of abandoning their original homestead was fatal to their exemption claim under this section. Judgment lien creditors had enforceable claims under 11 U.S.C.S. § 522(f), and one was entitled to relief from the automatic stay under 11 U.S.C.S. § 362(d)(2). In re Gardner, 417 B.R. 616 (Bankr. D. Idaho 2009).

Homestead Outside of State.

Idaho law does not permit a debtor to claim a homestead exemption on real property located outside of the state. In re Stephens, 2011 Bankr. LEXIS 1689 (Bankr. D. Idaho May 10, 2011).

Prior Laws.

Former§ 55-1004 was repealed. See Prior Laws,§ 55-1001.

Acknowledgment.

Because debtors’ homestead declaration does not contain a sufficient acknowledgment, it does not satisfy the clear, statutory requirements to establish a homestead via declaration In re Davis, 2012 Bankr. LEXIS 197 (Bankr. D. Idaho Jan. 17, 2012).

Automatic Homestead.

Where Chapter 7 debtors sought a homestead exemption on their home under construction, the debtors did not qualify for a homestead exemption under subsection (2), because they neither executed nor recorded a declaration of homestead as to the property and because they did not occupy the property as their residence. In re Cerchione, 398 B.R. 699 (Bankr. D. Idaho 2009).

Where a debtor and her husband purchased a property as a married couple and resided there as their principal residence, the property was automatically protected by a homestead exemption under this section, and a creditor’s judgment, which was recorded thereafter, did not attach as a judgment lien pursuant to§ 10-1110. However, when the debtor quitclaimed her interest to her husband and then he later quitclaimed her interest back, the judgment lien attached to her new interest at the same that she reacquired that interest. Because those acts occurred simultaneously, the debtor did not have an ownership interest, or a homestead exemption, prior to the lien affixing, and the property was subject to the judgment lien under§ 55-1005. In re Hassler, 2011 Bankr. LEXIS 1880 (Bankr. D. Idaho May 17, 2011).

Declared Homestead.

Debtors failed to establish that they acquired a homestead exemption on real property where they did not actually reside, where they failed to formally declare an abandonment of their automatic homestead on the property where they did reside or to estimate the cash value of the nonresidence, as required by this section. Thorp v. Gugino (In re Thorp), 2009 U.S. Dist. LEXIS 71435 (D. Idaho Aug. 12, 2009).

Even if a Chapter 7 debtor who resided in an apartment in Idaho, where she worked, might otherwise have been entitled to claim a homestead exemption as to a home that she owned in Colorado, her failure to execute and file a declaration of homestead pursuant to this section foreclosed the successful assertion of any such claim in a bankruptcy court. In re Capps, 438 B.R. 668 (Bankr. D. Idaho 2010). Debtors’ vested remainder interest, coupled with their proper filing and recording of a declaration of abandonment of their present residence and a declaration of homestead as to the home in which they had a remainder interest, was adequate to establish a valid homestead exemption under this section. There is no requirement that the debtors reside in the property in order to claim the exemption. In re Thomason, 2013 Bankr. LEXIS 886 (Bankr. D. Idaho Feb. 19, 2013).

Although debtor never established an automatic homestead on his property, he had an ownership interest in the property when he filed his declaration that he intended to occupy the property as a homestead, raising a presumption of a homestead exemption. To overcome that presumption, objectors/creditors carry the initial burden of proof. In re Colafranceschi, 577 B.R. 817 (Bankr. D. Idaho 2017).

Interrupted Occupation.

Chapter 13 debtor was not allowed to claim a homestead exemption in a home he used as his residence before he was divorced, because he had not lived in the home for more than six months and he did not show that he intended to reoccupy the home. In re Lugo, 2015 Bankr. LEXIS 2085 (Bankr. D. Idaho June 25, 2015).

Exemption Denied.

Where the debtors sought to claim a vacant parcel as their homestead pursuant to§ 55-1003, but failed to state in their certificate of homestead of record at the time of their bankruptcy filing that they intended to reside there, the certificate did not meet the strict requirements of this section. In re Taggart, 2009 Bankr. LEXIS 3509 (Bankr. D. Idaho Oct. 27, 2009).

Under 11 U.S.C.S. § 522(b)(3)(A), Chapter 7 debtors who resided in Idaho were required to apply the Idaho homestead exemption,§§ 55-1001, 55-1003, and this section. The debtors could not apply the Idaho homestead exemption to a home located in Washington state and could not apply Washington state homestead law to their case in Idaho. In re Harris, 2010 Bankr. LEXIS 2020 (Bankr. D. Idaho June 23, 2010).

Chapter 7 debtor who owned a trailer, which he used as his residence while he worked in Nevada, was not allowed to exempt the value of the trailer, as his homestead, from his bankruptcy estate, because the trailer was not his principal residence. The debtor rented an apartment in Boise, Idaho, where his wife and daughter lived while he was in Nevada, he returned to Idaho while he was not working in Nevada, he voted in Idaho, paid taxes in Idaho, and licensed all his vehicles (including the trailer) in Idaho. In re Ashton, 2013 Bankr. LEXIS 321 (Bankr. D. Idaho Jan. 18, 2013).

Bankruptcy debtor improperly claimed a homestead exemption in unimproved real property where, aside from filing declarations of abandonment and homestead, respectively, on her occupied home and the unimproved property, the debtor failed to show that the unimproved property was actually intended as her principal home. Lynn v. Gugino (In re Lynn), 2013 Bankr. LEXIS 5097 (9th Cir. BAP Dec. 2, 2013).

Failure to Abandon Original Homestead.

A Chapter 7 debtor who filed a declaration of homestead, pursuant to this section, in unimproved land that he owned in Idaho Falls was not precluded from claiming the land as his homestead just because he owned improved property in Roberts at the time he that filed his declaration. However, the court sustained the trustee’s objection to the debtor’s homestead exemption claim, where the declaration of homestead that the debtor filed did not state that he intended to reside on the Idaho Falls property. In re Banta, 2018 Bankr. LEXIS 346 (Bankr. D. Idaho Feb. 8, 2018). Failure to Abandon Original Homestead.

Debtors were not entitled to the validation of their homestead exemption by default; their failure to comply with the requirement of abandoning their original homestead was fatal to their exemption claim In re Gardner, 417 B.R. 616 (Bankr. D. Idaho 2009).

If an owner with a valid exemption by declaration later wishes to take advantage of the “automatic” homestead in a newly established principal residence, he must first record a declaration of abandonment as to his homestead by declaration. Otherwise, lest the public be misled, the homestead by declaration continues in effect, and the second exemption is not established. In re Davis, 2012 Bankr. LEXIS 197 (Bankr. D. Idaho Jan. 17, 2012).

When debtors recorded their homestead declaration in 2000 for property that they owned in Shoup, they owned and occupied property in Monteview. While they recorded the homestead declaration, they did not record a declaration of abandonment for the Monteview property. Thus, they did not meet the specific technical requirements of this section and did not establish an exemption by declaration in the Shoup Property. In re Davis, 2012 Bankr. LEXIS 197 (Bankr. D. Idaho Jan. 17, 2012).

Homestead Outside of State.

Idaho law does not permit a debtor to claim a homestead exemption on real property located outside of the state. In re Stephens, 2011 Bankr. LEXIS 1689 (Bankr. D. Idaho May 10, 2011).

Interrupted Occupation.

Where the debtors resided in a residence before a lien attached and before moving to another town for six months, the homestead exemption was established in the property from and after the time they occupied it as their principal residence, unless they later abandoned or lost it. In re Koopal, 226 Bankr. 888 (Bankr. D. Idaho 1998).

Lien Subject to Exemption.

Where the court found that debtor occupied property claimed in homestead exemption in the sense contemplated by the statute, as an occupant, the homestead exemption automatically came into existence when the new statute became effective on July 1, 1989; a judgment lien not legally effective until recorded on July 5, 1989, was subordinate and subject to debtor’s homestead exemption claim. In re Millsap, 122 Bankr. 577 (Bankr. D. Idaho 1991).

Motor Home.

Motor home, purchased with proceeds from debtors’ residence, in which debtors physically reside and intend to continue to reside, qualified for a homestead exemption. In re Peters, 168 Bankr. 710 (Bankr. D. Idaho 1994).

Residential Requirement.

Since a life estate constitutes an adequate ownership interest to establish a homestead under this section, then a fee simple remainder interest, already granted and awaiting only the eventual passing of the life tenant, is also sufficient. There is no requirement that the debtors currently reside in the property for which they are requesting the homestead exemption. In re Thomason, 2013 Bankr. LEXIS 886 (Bankr. D. Idaho Feb. 19, 2013). Bankruptcy debtors were entitled to an exemption in their homestead, even though one of two dwellings on the homestead property was rented by tenants, since there was no restriction on what sort of additional buildings or improvements were permitted on the homestead. In re Egbert, 2000 Bankr. LEXIS 2227 (Bankr. D. Idaho June 13, 2000).

Termination of Exemption.

There are several ways in which an established homestead exemption may terminate. First, a property owner may file a declaration of abandonment of homestead with the county recorder where a homestead is located. Second, a presumption of abandonment arises if a property owner vacates a homestead for a continuous period of at least six months, and does not record a declaration of nonabandonment. Third, where a debtor claims a homestead exemption in property in which he is residing, Idaho’s statutes limit the exemption to his principal residence. In re Davis, 2012 Bankr. LEXIS 197 (Bankr. D. Idaho Jan. 17, 2012).

A.L.R.

Reduction, under § 522(o) of Bankruptcy Code, 11 U.S.C.S. § 522(o), of value of interest in property claimed by debtor as homestead. 48 A.L.R. Fed 2d 569.

Construction and application of Bankruptcy Abuse Prevention and Consumer Protection Act’s (BAPCPA) limitation of homestead exemption, 11 U.S.C.S. § 522(p). 52 A.L.R. Fed 2d 541.

Prior Laws.

Former§ 55-1005 was repealed. See Prior Laws,§ 55-1001.

Recordation of Mortgage.

Where a mortgage was recorded in 1979, prior to the homestead declaration in 1982, the homestead exemption was not superior to the mortgage which had been filed of record prior to the declaration of homestead. Federal Land Bank v. Parsons, 118 Idaho 324, 796 P.2d 533 (Ct. App. 1990).

Where creditor recorded a judgment in the county recorder’s office in July 2010, a judgment lien in favor of the creditor would attach to all of debtor’s after-acquired property in that county until the judgment is satisfied or lapses. When debtor purchased a home in the county in September 2010, creditor’s lien affixed to the property immediately. Thus, although debtor filed a homestead declaration two days later, the property was not exempt from execution because of the priority of the judgment lien. In re Bailey, 2011 Bankr. LEXIS 1528 (Bankr. D. Idaho Apr. 26, 2011).

Timing of lien.

Cited

Where a debtor and her husband purchased a property as a married couple and resided there as their principal residence, the property was automatically protected by a homestead exemption under§ 55-1004, and a creditor’s judgment, which was recorded thereafter, did not attach as a judgment lien pursuant to§ 10-1110. However, when the debtor quitclaimed her interest to her husband and then he later quitclaimed her interest back, the judgment lien attached to her new interest at the same that she reacquired that interest. Because those acts occurred simultaneously, the debtor did not have an ownership interest, or a homestead exemption, prior to the lien affixing, and the property was subject to the judgment lien under this section. In re Hassler, 2011 Bankr. LEXIS 1880 (Bankr. D. Idaho May 17, 2011). Cited University of Utah Hosp. ex rel. Scarberry v. Board of County Comm’rs, 116 Idaho 434, 776 P.2d 443 (1989).

A.L.R.

Reduction, under § 522(o) of Bankruptcy Code, 11 U.S.C.S. § 522(o), of value of interest in property claimed by debtor as homestead. 48 A.L.R. Fed 2d 569.

Construction and application of Bankruptcy Abuse Prevention and Consumer Protection Act’s (BAPCPA) limitation of homestead exemption, 11 U.S.C.S. § 522(p). 52 A.L.R. Fed 2d 541.

Prior Laws.

Former§ 55-1006 was repealed. See Prior Laws,§ 55-1001.

Abandonment.

Because the debtor moved from Idaho to Utah around October 1, 2009, and filed a bankruptcy petition on December 22, 2009, the statutory presumption of abandonment under this section did not apply. However, an absence of any length, presuming the debtor intended to make another residence his principal residence and to abandon a previous one, could have constituted an abandonment. In re Forshee, 2010 Bankr. LEXIS 3044 (Bankr. D. Idaho Sept. 16, 2010).

Chapter 7 debtor who resided in an apartment in Idaho, where she worked, visiting her “permanent residence” in Colorado every six months, was not entitled to exempt her interest in the Colorado property as her homestead given the presumption, albeit rebuttable, created by this section, that absence from a residence for six months or more constituted “abandonment” of such a purported homestead. In re Capps, 438 B.R. 668 (Bankr. D. Idaho 2010). The factors a court will consider when determining whether a homestead has been abandoned include: 1) whether there is evidence of the debtor’s actual intent to abandon the homestead; 2) whether the debtor asserted the homestead exemption in the bankruptcy schedules, suggesting an intent not to abandon; and 3) whether the debtor’s current residence is in the nature of a short-term rental. In re Marcovitz, 2011 Bankr. LEXIS 4132 (Bankr. D. Idaho Oct. 25, 2011).

Bankruptcy.

Where debtor claimed cabin as exempt and he did spend considerable time at the cabin, and entertained his family and friends there, his living arrangements elsewhere could be adequately explained as being closer to his workplace and did not show he intended to abandon his residence. In re Millsap, 122 Bankr. 577 (Bankr. D. Idaho 1991).

Where prior to filing their bankruptcy petition, debtors did not live in the residence for a continuous period of over six months and their declaration of nonabandonment was filed over six months after they ceased to reside in the residence, where they did not file their declaration until after they filed their bankruptcy petition, and at the time they filed their declaration, the residence was the property of the estate and not property of the debtors, and where it was thus questionable whether they had standing to file the declaration and they did not file their declaration until after the creditor filed its objection to their claim of homestead, this section applied and the debtors were presumed to have abandoned the homestead. In re Cavanaugh, 175 Bankr. 369 (Bankr. D. Idaho 1994).

Declaration of Nonabandonment.

Nonabandonment declaration filed by debtor was not only unnecessary, it had no effect on the existence or nonexistence of a homestead exemption in the property, because the evidence did not establish that debtor, at any time, created a homestead in the property by virtue of his occupation of it as a principal residence. In re Colafranceschi, 577 B.R. 817 (Bankr. D. Idaho 2017).

Homestead Outside of State.

Idaho law does not permit a debtor to claim a homestead exemption on real property located outside of the state. In re Stephens, 2011 Bankr. LEXIS 1689 (Bankr. D. Idaho May 10, 2011).

Lots Used as Single Parcel.

The statutes contain no restriction on the area of the property subject to the homestead, rather, the law utilizes a value limitation in restricting the extent of the exemption and since the unimproved lot physically “surrounds” the improved lot, and the two lots have been utilized by its owner as a single parcel, it is of no consequence that the parcel is legally or physically capable of being divided and sold as two tracts. In re Millsap, 122 Bankr. 577 (Bankr. D. Idaho 1991).

Rebuttal of Presumption.

There is no indication in this section that the presumption of nonabandonment of a homestead is irrebuttable. In re Cavanaugh, 175 Bankr. 369 (Bankr. D. Idaho 1994).

Where there was no indication that creditors relied upon the presumption of nonabandonment of a homestead in allowing debtors to become indebted to them, where debtors’ declaration of nonabandonment failed and debtors were deemed to have abandoned the homestead, where evidence showed that the debtors executed a contract to sell the residence and, pursuant to the contract, debtors vacated the property and the buyers moved in prior to closing but the sale fell through, where debtors never established another homestead, and where after the sale fell through, the buyers refused to vacate the premises, whereupon debtors immediately took steps to have the buyers evicted and debtors subsequently reoccupied the residence, such evidence was sufficient to show debtors did not intend to abandon the residence as a homestead to rebut the presumption of abandonment of a homestead. In re Cavanaugh, 175 Bankr. 369 (Bankr. D. Idaho 1994).

Where testimony reflected that the debtors did not give any thought one way or the other as to abandonment of the homestead property when hope of employment elsewhere led them to move to a temporary, rented, residence, it was sufficient to rebut the presumption of abandonment. In re Koopal, 226 Bankr. 888 (Bankr. D. Idaho 1998).

Debtor had an automatic homestead under§ 55-1004(a) because she owned and resided in her house for several years, but the property was presumed abandoned under this section, when she vacated it under a state court order that was issued pursuant to a divorce. However, she rebutted the presumption of abandonment, as there was no indication that she actually intended to abandon her homestead exemption, she amended her bankruptcy schedules to assert the homestead exemption, and she indicated that she intended to move back into the house until it was sold. In re Marcovitz, 2011 Bankr. LEXIS 4132 (Bankr. D. Idaho Oct. 25, 2011).

Prior Laws.

Former§ 55-1007 was repealed. See Prior Laws,§ 55-1001.

Execution by One Spouse.

Where debtors’ testimony did not prove that they had entered into a common law marriage prior to 1996, when the Idaho legislature prohibited such relationships, the chapter 7 trustee could not avoid deeds of trust executed only by the putative husband. Hopkins v. Countrywide Home Loans, Inc. (In re Nakamura), 2008 Bankr. LEXIS 4854 (Bankr. D. Idaho Jan. 22, 2008).

Prior Laws.

Former§ 55-1008 was repealed. See Prior Laws,§ 55-1001.

Construction.

The statute clearly states that the terms “attachment,” “execution” and “forced sale” involve judicial proceedings, and by no stretch of its plain language can it be deemed to include a voluntary, contractual right of setoff. Lares v. West One Bank, 188 F.3d 1166 (9th Cir. 1999).

Proceeds of Voluntary Sale.

Although this section exempts the proceeds of the voluntary sale of a homestead for one year from receipt, where at time bankruptcy case was reopened and the adversary proceeding to avoid judicial liens commenced, the proceeds from the sale of mobile home had already been disbursed to the lien creditors, and the liens extinguished, debtors had no interest in the proceeds at that time and, therefore, had no right to avoid any liens. In re Kudrna, 173 Bankr. 934 (Bankr. D. Idaho 1994).

Bankruptcy court found that a debtor who lived two to three days a week in a house he owned, and the rest of the time at his fianc/Aee’s house, did not intend to abandon the house he owned until he sold it, and it allowed the debtor to claim $79,916 he received from the sale of the house as exempt property derived from the sale of a homestead. In re Younger, 373 B.R. 111 (Bankr. D. Idaho 2007). Chapter 7 debtors were entitled to a $100,000 homestead exemption on their home under construction under§ 55-1003 and this section, because, within one year of receipt, they used identifiable funds from the sale of their old homestead to help finance construction of the new homestead. In re Cerchione, 398 B.R. 699 (Bankr. D. Idaho 2009).

Appliances purchased by Chapter 7 debtors with exempt proceeds from the sale of their old homestead for installation in their new homestead were not exempt under this section, because the definition of homestead in§ 55-1001(2) does not include fixtures or appliances. In re Cerchione, 398 B.R. 699 (Bankr. D. Idaho 2009).

Although this section did not provide for equitable tolling of the one-year period for reinvesting proceeds from a sale of a homestead, it was applied where a debtor did not have unrestricted access to the proceeds, first because of a divorce action, then because of the automatic stay, and then because a trustee’s objection to the debtor’s claim of exemption in the sale proceeds was filed. In re Marriott, 427 B.R. 887 (Bankr. D. Idaho 2010).

While debtor had an initially valid claim to an exemption under this statute for payments she received in divorce proceedings, for her interest in a homestead, because she commingled and spent some of the funds, the debtor did not handle and treat the funds in such a manner as to preserve a valid claim of the exemption. In re Kierig, 2000 Bankr. LEXIS 2251 (Bankr. D. Idaho Feb. 10, 2000).

Proceeds from the voluntary sale of a home may only be claimed exempt if they are held for the purpose of acquiring a new homestead. If the proceeds are to be used for any other purpose, they may not be validly claimed as exempt. In re Kierig, 2000 Bankr. LEXIS 2251 (Bankr. D. Idaho Feb. 10, 2000).

Prior Laws.

Former section which comprised I.C.,§ 55-1010, as added by 1989, ch. 371, § 2, p. 933; am. 1992, ch. 67, § 1, p. 201; am. 2000, ch. 226, § 2, p. 622, was repealed by S.L. 2004, ch. 123, § 5 and ch. 131, § 1.

Federal References.

Sections 401(a), 403(a), 403(b), 408, 408A, 409, and 414(p) of the Internal Revenue Code of 1986, referred to in subsections (1) and (2), are compiled as 26 U.S.C.S. §§ 401(1), 403(a), 403(b), 408, 408A, 409, and 414(p).

Compiler’s Notes.

This section was formerly compiled as§ 55-1201A.

Cross References.

Homestead, general provisions,§ 55-1001 et seq.

Amendments.

The 2012 amendment, by ch. 20, substituted “district court” for “probate judge”.

Compiler’s Notes.

The phrase “within the classes before enumerated” refers to provisions originally enacted by S.L. 1863, p. 575, §§ 1 and 2, which were eventually compiled as§§ 55-1001 to 55-1008 and which were repealed by S.L. 1989, ch. 371, § 1.

Jurisdiction of Bankruptcy Court.

Where bankruptcy proceedings were begun before sale of homestead, bankruptcy court acquired jurisdiction to determine time and manner of setting aside homestead. Bank of Nez Perce v. Pindel, 193 F. 917 (9th Cir. 1912).

Where bankrupt’s homestead was worth $9,000, property should be sold if he were unable or refused to pay the $4,000 surplus to the estate. Bank of Nez Perce v. Pindel, 193 F. 917 (9th Cir. 1912) (decided under $5000 homestead limit).

Amendments.

The 2012 amendment, by ch. 20, substituted “district court” for “probate court”.

Jurisdiction of Bankruptcy Court.

Where bankruptcy proceedings were begun before sale of homestead, bankruptcy court acquired jurisdiction to determine time and manner of setting aside homestead. Bank of Nez Perce v. Pindel, 193 F. 917 (9th Cir. 1912).

Where bankrupt’s homestead was worth $9000, property should be sold if he were unable or refused to pay the $4000 surplus to the estate. Bank of Nez Perce v. Pindel, 193 F. 917 (9th Cir. 1912) (decided under $5000 homestead limit).

Ability to Acquire Homestead.

The filing of a complaint for turnover does not “freeze” homestead proceeds so as to render a debtor unable to purchase a replacement homestead. If the funds remain in the hands of the debtor, he is not inhibited from acquiring a homestead any more than he would be in the absence of the turnover action. Trustee Servs. Corp. v. Deglopper, 53 Bankr. 95 (Bankr. D. Idaho 1985).

Intent to Establish Homestead.

A debtor’s homestead exemption did not extend to the value of an automobile and ring allegedly purchased by a third person for the debtor with proceeds from the sale of the debtor’s homestead, where such purchase demonstrated that the debtor did not intend to use those proceeds to establish a new homestead. Trustee Servs. Corp. v. Deglopper, 53 Bankr. 95 (Bankr. D. Idaho 1985).

Where the debtor’s use of about 60 percent of the money from the sale of her homestead for the purchase of nonexempt goods reflected a general lack of concern on her part as to establishing a second homestead, the remaining cash proceeds in her possession were also nonexempt. Trustee Servs. Corp. v. Deglopper, 53 Bankr. 95 (Bankr. D. Idaho 1985).

Compiler’s Notes.

This section, which comprised 1863, p. 575, § 1; R.S., § 3058; reen. R.C. & C.L., § 3196; C.S., § 5460; I.C.A.,§ 54-1201; am. 1953, ch. 10, § 1, p. 11; am. 1963, ch. 31, § 1, p. 174; am. 1979, ch. 296, § 1, p. 779; am. 1984, ch. 234, § 1, p. 563, was repealed by S.L. 1989, ch. 371, § 1. For present law, see§§ 55-1001 to 55-1011.

Compiler’s Notes.

Former§ 55-1201A was amended and redesignated as§ 55-1011 by § 3 of S.L. 1989, ch. 371.

Compiler’s Notes.

These sections, which comprised 1863, p. 575, § 4; R.S., §§ 3059, 3070 to 3073; reen. R.C. & C.L., §§ 3197 to 3201; C.S., §§ 5461 to 5465; I.C.A.,§§ 54-1202 to 54-1206, were repealed by S.L. 1989, ch. 371, § 1. For present law, see§§ 55-1001 to 55-1011.

Compiler’s Notes.

These sections, which comprised R.S., §§ 3085 to 3088; reen. R.C. & C.L., §§ 3202 to 3205; C.S., §§ 5466 to 5469; I.C.A.,§§ 54-1301 to 54-1304, were repealed by S.L. 1989, ch. 371, § 1. For present law, see§§ 55-1001 to 55-1011.

Cross References.

Disposition of unclaimed property,§ 14-501 et seq.

Compiler’s Notes.

The words enclosed in parentheses so appeared in the law as enacted.

Compiler’s Notes.

The term “this act” refers to S.L. 1965, ch. 225 which is compiled as§§ 55-1501 to 55-1527.

Am. Jur. 2d.

C.J.S.

ALR.

Adequacy and application of guidelines relating to condominium association’s requisite approval of individual unit of owner’s improvements or decorations. 25 A.L.R.4th 1059.

Validity and construction of condominium bylaws or regulations placing special regulations, burdens, or restrictions on nonresident owners. 76 A.L.R.4th 295.

Property taxation of residential time-share or interval-ownership units. 80 A.L.R.4th 950.

Assessment.

A developer’s filing of a declaration of condominium for the apartment complex triggered a new classification of its property, a discrete classification which rendered adjusted assessment on the basis of the altered classification constitutionally valid. Fairway Dev. Co. v. Bannock County, 113 Idaho 933, 750 P.2d 954 (1988).

Am. Jur. 2d.

C.J.S.

Compiler’s Notes.

The term “this act” refers to S.L. 1965, ch. 225 which is compiled as§§ 55-1501 to 55-1527.

Am. Jur. 2d.

C.J.S.

ALR.

§ 55-1504. Requirements to qualify.

The requirements of this act shall apply to condominiums only (a) if there shall be recorded in the county in which such condominiums are located or to be located a declaration, as provided in this act, together with a plat or plats, and (b) if said documents, or either of them, contain an expression of intent to create a project which is subject to the provisions of this act, and (c) if at least one (1) of such documents contains:

The declaration and the plat or plats may, prior to the first sale of a condominium, be amended or revoked by a subsequently recorded instrument executed and acknowledged by the then record owner and the then holder of any recorded security interest in such property. Until such recordation of such a revocation, the provisions of this act shall continue to apply to such property. The term “record owner” as used in this section means the owner or owners of the property; or, in the case of property held under a recorded lease, the lessee; or, in the case of property held under a recorded sublease of such a lease, the sublessee; or, in the case of property held under a recorded assignment of such a lease or such a sublease, the assignee, but does not include holders or owners of unrecorded interests, or mineral interests, of easements or of rights of way.

History.

1965, ch. 225, § 4, p. 515.

Compiler’s Notes.

The term “this act” refers to S.L. 1965, ch. 225 which is compiled as§§ 55-1501 to 55-1527.

Applicability.

Reliance by owners and building associations on the condominium property act for the proposition that they were entitled to fee simple ownership of certain disputed properties was misplaced because the covenants, conditions, and restrictions for the development recorded by the original owner and developer did not reference the act; additionally, no plat was recorded, so any development could not have qualified under this section, which requires recording of a declaration and a plat. West Wood Invs. v. Acord, 141 Idaho 75, 106 P.3d 401 (2005).

Control by Developer.

The Idaho law governing development and sales of condominiums does not prohibit or restrict the developer from retaining control over the managing body of condominium owners by reason of the developer’s ownership of built but unsold units; the Idaho act is simply silent on the subject. Investors Ltd. v. Sun Mt. Condominiums, Phase I, Inc., 106 Idaho 855, 683 P.2d 891 (Ct. App. 1984).

Default Judgment.

The trial court’s decision refusing to set aside a default judgment was not clearly erroneous where defendant in a real property dispute was not a lienholder of record and, thus, defendant’s signature was not required upon the amended master condominium declarations. McFarland v. Curtis, 123 Idaho 931, 854 P.2d 274 (Ct. App. 1993).

Am. Jur. 2d.

C.J.S.

Amendments.

The 2013 amendment, by ch. 192, in paragraph (1)(c), inserted “either” following “fixed” near the beginning and inserted “or by taking as a basis the square footage of the interior floor area of each unit in relation to the square footage of the interior floor area of all the units as a whole” at the end of the second sentence, inserted “depending upon the method used for allocation” in the fourth sentence, and substituted “five (5) years and, if square footage is used in determining the percentage of ownership interest, only if a substantial change is made to the size of at least one (1) unit” for “three (3) years” at the end of the fifth sentence; and substituted “Subsection (2)” for “Subpart (2)” at the beginning of subsection (3).

Compiler’s Notes.

The term “this act” in paragraphs (2)(n) and (2)(q) refers to S.L. 1965, Chapter 225 which is compiled as§§ 55-1501 to 55-1527.

Amendment of Declaration and Plats.

After the first sale of a condominium, the declaration and plats can be amended only if the proposed amendment is consented to by the requisite percentage of the voting power of the owners of the project, always more than 50 percent, as specified in the declaration. Investors Ltd. v. Sun Mt. Condominiums, Phase I, Inc., 106 Idaho 855, 683 P.2d 891 (Ct. App. 1984).

Control by Developer.

Master Deed.

The Idaho law governing development and sales of condominiums does not prohibit or restrict the developer from retaining control over the managing body of condominium owners by reason of the developer’s ownership of built but unsold units; the Idaho act is simply silent on the subject. Investors Ltd. v. Sun Mt. Condominiums, Phase I, Inc., 106 Idaho 855, 683 P.2d 891 (Ct. App. 1984). Master Deed.

The declaration which must be filed to create a condominium project is essentially a master deed which defines the rights and duties of the developer, the owners of the individual condominium units, and the management body of the project. Investors Ltd. v. Sun Mt. Condominiums, Phase I, Inc., 106 Idaho 855, 683 P.2d 891 (Ct. App. 1984).

Am. Jur. 2d.

C.J.S.

ALR.

§ 55-1506. Administration — By-laws — Articles of incorporation — Recordation required to modify or amend.

Except when a domestic corporation has been formed and is designated in the declaration to serve as a management body and to administer the project, the administration of every project shall be governed by by-laws, which may either be embodied in the declaration or in a separate instrument which shall be recorded with the declaration. When a domestic corporation is so formed and designated the owner or owners shall append to and record with the declaration a certified copy of its articles of incorporation from which it must appear (a) that the purpose for which such corporation was formed and its powers are consistent with the provisions of this act and (b) that the members or stockholders of the corporation must be and remain owners of condominiums within the said project and include all owners of condominiums within the project. When a corporate organization is so utilized, the administration of the project need not be governed by by-law provisions hereinafter set forth but shall be subject to the law of corporations. No modification or amendment of the declaration, of such articles or of recorded by-laws shall be effective until the same is recorded in the county where the original document was first recorded.

History.

1965, ch. 225, § 6, p. 515.

Compiler’s Notes.

The term “this act” refers to S.L. 1965, ch. 225 which is compiled as§§ 55-1501 to 55-1527.

Am. Jur. 2d.

C.J.S.

Amendments.

The 2018 amendment, by ch. 205, in subsection (h), substituted “after notice received by” for “upon 10 days’ notice to” and “within five (5) business days thereafter” for “payment of a reasonable fee” and added “and other amounts set forth in section 55-1528, Idaho Code” at the end.

Am. Jur. 2d.

C.J.S.

Cross References.

County recorder,§ 31-2401 et seq.

Compiler’s Notes.

The term “this act” refers to S.L. 1965, ch. 225 which is compiled as§§ 55-1501 to 55-1527.

The bracketed insertion in this section was added by the compiler to conform to the statutory citation style.

Am. Jur. 2d.

C.J.S.

Compiler’s Notes.

The bracketed insertion in subsection (b) was added by the compiler to conform to the statutory citation style.

Am. Jur. 2d.

C.J.S.

Compiler’s Notes.

The term “this act” refers to S.L. 1965, ch. 225 which is compiled as§§ 55-1501 to 55-1527.

The bracketed insertion in he first sentence was added by the compiler to conform to the statutory citation style.

Am. Jur. 2d.

§ 55-1512. Actions relating to common areas — Persons designated to receive process — New designation filed — Service on auditor — Copy from auditor to management body — Application of corporate law.

Except when a domestic corporation has been formed and designated in the declaration to serve as the management body to administer the project, at the time the declaration is recorded one (1) or more persons shall be designated to receive service of process in any action relating to the common areas and facilities. Such designation shall be filed with the county auditor in the county in which the project is located together with an acknowledgment in writing of acceptance of such designation by the person so designated. The person so designated shall be a resident of the state of Idaho, and service upon such person shall be the exclusive method of service in any action relating to the common areas and facilities. Upon termination of such person’s capacity or authority to receive service, a new designation shall be made by the management body of the project, and such designation shall be filed with the county auditor in the county in which the project is located together with an acknowledgment in writing of acceptance of such designation by the person so designated. Upon failure to so designate a person to receive service of process and to file such designation and acceptance of such designation, service may be made upon the county auditor with like effect as though said service were made upon a person designated, and it shall be the duty of the county auditor to forward a copy of such summons served on him by registered mail to the management body of the project at the address or location last known, but no failure on the part of the county auditor to mail such copy of summons shall affect the validity of the service thereof. When a corporate organization is formed and designated as the management body, service of process on the corporation shall be as permitted by law, and the Idaho rules of civil procedure.

History.

1965, ch. 225, § 12, p. 515; am. 2005, ch. 110, § 1, p. 362.

Cross References.

County auditor,§ 31-2301 et seq.

Am. Jur. 2d.

C.J.S.

ALR.

Self-dealing by developers of condominium project as affecting contracts or leases with condominium association. 73 A.L.R.3d 613.

Am. Jur. 2d.

ALR.

Compiler’s Notes.

The term “this act” refers to S.L. 1965, ch. 225 which is compiled as§§ 55-1501 to 55-1527.

Am. Jur. 2d.

ALR.

ALR.

Proper party plaintiff in action for injury to common areas of condominium development. 69 A.L.R.3d 1148.

Personal liability of owner of condominium unit to one sustaining personal injuries or property damage by condition of common areas. 39 A.L.R.4th 98.

Compiler’s Notes.

The term “this act” refers to S.L. 1965, ch. 225 which is compiled as§§ 55-1501 to 55-1527.

Am. Jur. 2d.

§ 55-1517. Insurance of individual units by management body.

The management body, if required by the declaration, by-laws or otherwise, or at the request of a mortgagee or a beneficiary of a deed of trust having a first mortgage or first deed of trust of record covering a unit or any part of the project, shall have the authority and an insurable interest to insure the project or any portion thereof against loss or damage by fire or other hazard or casualty. Such insurance coverage may be written in the name of the management body, as trustee for each of the condominium owners in the percentages established in the declaration or as otherwise provided in the declaration or provided by the management body, and premiums may be treated as common expenses. Provision for such insurance shall be without prejudice to the right of each condominium owner to insure his own unit for his own benefit. This provision shall not be construed to limit the power of such body to secure and maintain other insurance coverage or to treat the cost thereof as a common expense.

History.

1965, ch. 225, § 17, p. 515.

Am. Jur. 2d.

§ 55-1518. Assessment and other charges a lien — Notice recorded — Payment and release — Priority of liens — Expiration — Extension — Enforcement by sale — Purchase by management body.

An assessment upon any condominium made in accordance with the declaration, any recorded by-laws, or any duly promulgated project regulation, shall be a debt of the owner thereof at the time the assessment is made. The amount of any such assessment, together with those other charges thereon, such as interest, costs (including attorney’s fees), and penalties, which may be provided for in the declaration, shall be and become a lien upon the condominium assessed when the management body causes to be recorded with the county recorder of the county in which such condominium is located a notice of assessment, which shall state the amount of such assessment and such other charges thereon as may be authorized by the declaration, a description of the condominium against which the same has been assessed, and the name of the record owner thereof. Such notice shall be signed by an authorized representative of the management body or as otherwise provided in the declaration. Upon payment of said assessment and charges in connection with which such notice has been so recorded, or other satisfaction thereof, the management body shall cause to be recorded a further notice stating the satisfaction and the release of the lien thereof.

Such lien shall be prior to all other liens filed or recorded subsequent to the recordation of said notice of assessment except that the declaration may provide for the subordination thereof to other liens either generally or specifically described and except further that labor or materialmen’s liens arising under the law of Idaho and timely and duly filed shall have priority if the date fixed by statute for such lien to arise is prior to recording as provided in this section. Unless sooner satisfied and released or the enforcement thereof initiated as hereafter provided such lien shall expire and be of no further force or effect one (1) year from the date of recordation of said notice of assessment; provided, however, that said one-year period may be extended by the management body for not to exceed one (1) additional year by recording a written extension thereof.

Such lien may be enforced by sale by the management body, its attorney or other person authorized to make the sale, after failure of the owner to pay such an assessment in accordance with its terms, such sale to be conducted in the manner permitted by law for the exercise of powers of sale in deeds of trust or any other manner permitted by law. Unless otherwise provided in the declaration the management body shall have the power to purchase the condominium at foreclosure sale and to hold, lease, encumber and convey the same.

History.

1965, ch. 225, § 18, p. 515.

STATUTORY NOTES

Cross References.

Deeds of trust,§ 45-1502 et seq.

Compiler’s Notes.

The words enclosed in parentheses so appeared in the law as enacted.

Am. Jur. 2d.

ALR.

Am. Jur. 2d.

§ 55-1520. Personal property acquired, held and disposed of by management body — Beneficial interest proportionate — Transfer.

Unless otherwise provided for in a declaration recorded pursuant to section 55-1505[, Idaho Code], a management body may acquire and hold, for the benefit of the condominium owners, tangible and intangible personal property and may dispose of the same by sale or otherwise; the beneficial interest in such personal property shall be owned by the condominium owners in the same proportion as their respective interests in the common areas, and shall not be transferable by such owners except with a transfer of a condominium. A transfer of a condominium shall transfer to the transferee ownership of the transferor’s beneficial interest in such personal property.

History.

1965, ch. 225, § 20, p. 515.

Cross References.

“Personal property” defined,§ 55-102.

Compiler’s Notes.

The bracketed insertion in the first sentence was added by the compiler to conform to the statutory citation style.

Am. Jur. 2d.

§ 55-1521. Liberal construction of deeds, declarations or plans for condominium projects.

Any deed, declaration or plan for a condominium project shall be liberally construed to facilitate the operation of the project, and provisions thereof shall be presumed to be independent and severable.

History.

1965, ch. 225, § 21, p. 515.

Cross References.

Limitation on successive life estates,§ 55-203.

Rule in Shelley’s case abolished,§ 55-206.

Suspension of power of alienation,§ 55-111A.

Compiler’s Notes.

The term “this act” refers to S.L. 1965, ch. 225 which is compiled as§§ 55-1501 to 55-1527.

Am. Jur. 2d.

§ 55-1523. Refusal to approve project or record plat forbidden.

No city council, board of trustees, or other governing body of the county, town, village or city in which a project is created pursuant to this act shall have the right to refuse acceptance or approval of nor may any county refuse for recordation a plat or plats prepared pursuant to this act solely because a project is or condominiums are thereby created.

History.

1965, ch. 225, § 23, p. 515.

Compiler’s Notes.

The term “this act” refers to S.L. 1965, ch. 225 which is compiled as§§ 55-1501 to 55-1527.

Compiler’s Notes.

The term “this act” refers to S.L. 1965, ch. 225 which is compiled as§§ 55-1501 to 55-1527.

ALR.

§ 55-1525. “Blue Sky Law” inapplicable.

The provisions of title 26, chapter 18, Idaho Code, shall not apply to the creation, issuance, sale, offer for sale, solicitation of an offer to buy, conveyance, transfer, or other disposition, or encumbrance or other hypothecation, or management, of condominiums or projects created pursuant to this act, or of evidences of membership in or ownership of or stock in any entity created solely to manage the affairs of a project, or to the negotiation or taking of subscriptions in respect of any of the foregoing.

History.

1965, ch. 225, § 25, p. 515.

Compiler’s Notes.

The Blue Sky Law, referred to in the section heading and formerly compiled as§§ 26-1801 to 26-1822, was repealed by S.L. 1967, ch. 394, § 59.

The term “this act” refers to S.L. 1965, ch. 225 which is compiled as§§ 55-1501 to 55-1527.

Compiler’s Notes.

The term “this act” refers to S.L. 1965, ch. 225 which is compiled as§§ 55-1501 to 55-1527.

Section 28 of S.L. 1965, ch. 225, read: “If any provision of this act or any section, sentence, clause, phrase or word, or the application thereof in any circumstance, is held invalid, the validity of the remainder of the act and of the application of any such provision, section, sentence, clause, phrase or word in any other circumstances shall not be affected thereby.”

ALR.

§ 55-1528. Statement of account — Disclosure of fees.

1. A management body or its agent shall provide a unit owner and the owner’s agent, if any, a statement of the unit owner’s account not more than five (5) business days after receipt of a request by the unit owner or the unit owner’s agent received by the management body, the management body’s manager, president, board member, or other agent, or any combination thereof. The statement of account shall include, at a minimum, the amount of annual charges against the unit, the date when said amounts are due, and any unpaid assessments or other charges due and owing from such owner at the time of the request. The management body shall be bound by the amounts set forth within such statement of account.
2. On or before January 1 of each year, a management body or its agent shall provide unit owners a disclosure of fees that will be charged to a unit owner in connection with any transfer of ownership of a unit. Fees imposed by a management body for the calendar year following the disclosure of fees shall not exceed the amount set forth on the annual disclosure, and no surcharge or additional fees shall be charged to any unit owner in connection with any transfer of ownership of the unit. No fees may be charged for expeditiously providing a unit owner’s statement of account as set forth in this section.

History.

I.C.,§ 55-1528, as added by 2018, ch. 205, § 3, p. 457.

Lost or Obliterated Corners.

Bureau of land management publications are not statutes and they may not be utilized to establish burdens of proof in real property disputes involving lost or obliterated corners. State ex rel. Evans v. Barnett, 116 Idaho 429, 776 P.2d 438 (1989).

In a dispute concerning the location of the section line forming the legal boundary between the land owned by the state and the adjoining property owners, the state had the initial burden of coming forward with evidence showing the original survey point of the corner could not be determined and its location could be restored only by reference to adjacent corners. If this burden is met, the adjoining property owners, in order to sustain their contention that the corner is obliterated, must come forward with evidence showing although there are no remaining traces of the original monument, either the location has been perpetuated or the point may be recovered beyond reasonable doubt by other acceptable evidence. State ex rel. Evans v. Barnett, 114 Idaho 355, 757 P.2d 218 (Ct. App. 1988).

Where neither expert witness believed beyond a reasonable doubt that the place marked by a timber cruiser in or near the fence was an obliterated corner, the state met its burden of proving the corner was lost and was properly restored through proportional measurements derived from the original surveyor’s field notes. State ex rel. Evans v. Barnett, 114 Idaho 355, 757 P.2d 218 (Ct. App. 1988).

Am. Jur. 2d.

C.J.S.

Cross References.

Board of licensure of professional engineers and professional land surveyors,§ 54-1203.

Amendments.

The 2008 amendment, by ch. 378, deleted subsection (2), which was the definition for “Adequate evidence of the existence of a land survey monument,” and redesignated the subsequent subsections accordingly; and in subsection (2), substituted “licensure” for “registration.”

The 2011 amendment, by ch. 136, in subsection (1), substituted “reference points” for “reference monuments”; added subsections (2) and (4) and redesignated the subsequent subsections accordingly; in subsection (9), substituted “property corner, reference point or witness corner that controls” for “or any property corner, which does not lie on a property line of the property in question, but which controls”; in subsection (12), substituted “Reference point’” for “Reference monument,’” “special monumented point” for “special monument” and “and where the spatial relationship to the corner is recorded, and which serves to locate the corner” for “but whose spatial relationship to the corner is recorded, and which serves to witness the corner”; and added subsection (13).

The 2020 amendment, by ch. 127, added the last sentence in subsection (11).

Compiler’s Notes.

For additional information on the U.S. general land office and the bureau of land management, referred to in subsection (11), see https://glorecords.blm.gov/default.aspx .

The abbreviation enclosed in parentheses so appeared in the law as enacted.

Am. Jur. 2d.

C.J.S.

Amendments.

The 2020 amendment, by ch. 127, in the first paragraph, substituted “establishment, reestablishment, or rehabilitation of a corner monument and its accessories” for “establishment or restoration, of a corner” at the end of the first sentence and inserted “center one-quarter (1/4) corner” near the middle and deleted “restored” following “remonumented” near the end of the second sentence; and, in the last paragraph, substituted “electronically” for “by photographic process.”

Lost or Obliterated Corners.

Bureau of land management publications are not statutes and they may not be utilized to establish burdens of proof in real property disputes involving lost or obliterated corners. State ex rel. Evans v. Barnett, 116 Idaho 429, 776 P.2d 438 (1989).

In a dispute concerning the location of the section line forming the legal boundary between the land owned by the state and the adjoining property owners, the state had the initial burden of coming forward with evidence showing the original survey point of the corner could not be determined and its location could be restored only by reference to adjacent corners. If this burden is met, the adjoining property owners, in order to sustain their contention that the corner is obliterated, must come forward with evidence showing although there are no remaining traces of the original monument, either the location has been perpetuated or the point may be recovered beyond reasonable doubt by other acceptable evidence. State ex rel. Evans v. Barnett, 114 Idaho 355, 757 P.2d 218 (Ct. App. 1988). Where neither expert witness believed beyond a reasonable doubt that the place marked by a timber cruiser in or near the fence was an obliterated corner, the state met its burden of proving the corner was lost and was properly restored through proportional measurements derived from the original surveyor’s field notes. State ex rel. Evans v. Barnett, 114 Idaho 355, 757 P.2d 218 (Ct. App. 1988).

Am. Jur. 2d.

C.J.S.

Amendments.

The 2011 amendment, by ch. 136, deleted “property corner” and “reference monument” preceding and following “property controlling corner,” respectively.

Amendments.

The 2020 amendment, by ch. 127, deleted “However, all corners, monuments and their accessories established prior to the effective date of this chapter, for which a written record is completed as required herein, and which are offered for filing or recording within six (6) months of the effective date of this chapter, shall be accepted and filed by the county clerk without requiring the payment of fees therefor” from the end of subsection (c).

Amendments.

The 2008 amendment, by ch. 378, in the first paragraph, deleted “so that it will be as permanent a monument as is reasonably possible to provided and so that it may be located with facility at any time in the future” from the end; and in the last paragraph, rewrote the first sentence, which formerly read: “Any monument set shall be permanently marked or tagged with the certificate number of the professional land surveyor in responsible charge.”

The 2011 amendment, by ch. 136, added the subsection (1) designation to the existing first paragraph; added the subsection (2) designation to the existing second paragraph and therein, in the first sentence, added the language beginning “and shall be surmounted with a cap” through to the end, and added the second sentence; and added subsection (3).

The 2020 amendment, by ch. 127, rewrote the section to the extent that a detailed comparison is impracticable.

Compiler’s Notes.

For more on the manual of surveying instructions for the bureau of land management, referred to in subsection (2), see http://www.blmsurveymanual.org .

C.J.S.

§ 55-1609. To be signed by professional land surveyor or government agent.

No corner record shall be filed or recorded unless the same is signed by a professional land surveyor as defined herein, or, in the case of an agency of the United States government, the certificate may be signed by the survey party chief making the survey.

History.

1967, ch. 215, § 9, p. 647; am. 1972, ch. 162, § 6, p. 363; am. 1993, ch. 206, § 8, p. 564.

Compiler’s Notes.

This section, which comprised 1967, ch. 215, § 10, p. 647; am. 1972, ch. 162, § 7, p. 363, was repealed by S.L. 1993, ch. 206, § 9, effective July 1, 1993.

Amendments.

The 2008 amendment, by ch. 378, deleted “and professional engineers who prepare plans which do not indicate the presence of corners for which adequate evidence exists” following “provisions hereof,” and the last sentence, which pertained to the penalties prescribed in section 54-1234, Idaho Code.

Compiler’s Notes.

Section 13 of S. L. 1967, ch. 215, read: “Severability. — If any provision of this act shall be declared invalid, such invalidity shall not affect any other portion of this act which can be given effect without the invalid portion, and to this end the provisions of this act are declared to be severable.”

Amendments.

The 2008 amendment, by ch. 378, rewrote the section to the extent that a detailed comparison is impracticable.

The 2011 amendment, by ch. 136, rewrote the section, revising procedures and requirements relating to monuments disturbed by construction or related activities.

Amendments.

The 2010 amendment, by ch. 256, added the subsection (1) through (5) designations; in subsection (1), in the first sentence, deleted “formerly the United States coast and geodetic survey” following “geodetic survey,” “on the surface of the earth” following “location of points,” and “and the ‘Idaho coordinate system of 1927’” from the end, and deleted the second sentence, which formerly read: “The Idaho coordinate system of 1927’ may be used through December 31, 1995”; in subsection (2), inserted “either” and added “or alternatively, a state comprehensive ‘single zone’”; in subsections (3) through (5), deleted “now” preceding “included”; and added subsection (6).

Compiler’s Notes.

For more on the national geodetic survey, see http://www.ngs.noaa.gov .

For more on the national ocean service, see http://www.oceanservice.noaa.gov .

Amendments.

The 2010 amendment, by ch. 256, rewrote the section, designating the existing provisions as subsections (1) to (3), deleting references to “the Idaho coordinate system of 1927”, and adding subsection (4).

Amendments.

The 2010 amendment, by ch. 256, rewrote the section to the extent that a detailed comparison is impracticable.

Compiler’s Notes.

For more on the national geodetic survey, see http://www.ngs.noaa.gov .

For more on the national ocean service, see http://www.oceanservice.noaa.gov .

Amendments.

The 2010 amendment, by ch. 256, rewrote the section to the extent that a detailed comparison is impracticable.

Amendments.

The 2010 amendment, by ch. 256, rewrote the section to the extent that a detailed comparison is impracticable.

Compiler’s Notes.

The abbreviations enclosed in parentheses so appeared in the law as enacted.

Amendments.

The 2010 amendment, by ch. 256, inserted “of the United States public land surveys” in the first sentence.

Compiler’s Notes.

Section 10 of S.L. 1967, ch. 275, read: “Severability. — If any provision of this act shall be declared invalid, such invalidity shall not affect any other portion of this act which can be given effect without the invalid portion, and to this end the provisions of this act are declared to be severable.”

Amendments.

The 2010 amendment, by ch. 214, substituted “chapter” for “act.”

Application.

The Subdivided Lands Disposition Act (§§ 55-1801 to 55-1823) relates to the sale or disposition of land located outside of the state of Idaho. Lowe v. Lym, 103 Idaho 259, 646 P.2d 1030 (Ct. App. 1982).

Cross References.

Idaho real estate commission,§ 54-2025 et seq.

Amendments.

The 2010 amendment, by ch. 214, in the introductory language substituted “chapter” for “act”; in the introductory language in subsection (7), substituted “or” for “and” and added “and includes the following”; in paragraph (7)(b), deleted “In addition to the definition stated in subsection 7.a. above, ‘subdivision’ and ‘subdivided lands’ mean” from the beginning; and in subsection (8), added “whether such use or occupancy rights are granted by deed, contract or share certificate.”

Cross References.

Idaho real estate commission,§ 54-2025 et seq.

Amendments.

The 2010 amendment, by ch. 214, in the section heading and in text, substituted “chapter” for “act.”

Amendments.

The 2010 amendment, by ch. 214, in the introductory paragraph, inserted “to make”; in subsections (1) and (3), substituted “Any offer or disposition” for “To offer or to dispose” or similar language and “chapter” for “act”; deleted subsection (2), which formerly read: “To dispose of any interest in subdivided lands unless a current public offering statement is delivered to the purchaser and the purchaser is afforded a reasonable opportunity to examine the public offering statement prior to the disposition” and redesignated former subsection (3) as present subsection (2); and added subsection (3).

Amendments.

The 2010 amendment, by ch. 214, in the introductory paragraphs in subsection (1) and in subsection (2), twice substituted “chapter” for “act”; in subsection (2), substituted “Idaho department of finance” for “Idaho commissioner”; and deleted the paragraph (2)a designation and paragraph (2)b, which read: “A subdivision to which the commission has granted an exemption as provided in section 55-1811.”

Cross References.

Surety companies,§ 41-2603 et seq.

Amendments.

The 2010 amendment, by ch. 214, in paragraph (1)(a), substituted “chapter” for “act”; in paragraph (1)(e), added “If a corporation, partnership or other legal entity” and substituted “every director, officer, general partner, member, manager or person” for “every director and officer of the applicant or person”; added paragraph (1)(f) and redesignated the subsequent paragraphs in subsection (1); in the introductory paragraph in subsection (4), in the first sentence, deleted “use, benefit, and” preceding “protection” and “regulations” following “rules,” substituted “this chapter” for “this act, as amended,” and added the language beginning “including any order to pay the costs” through to the end, in the second sentence, deleted “indemnity” preceding “bond” and “and shall be in such amount” following “such form,” and substituted “to comply with the provisions of this subsection and shall be in the amount of one hundred thousand dollars ($100,000)” for “to protect purchasers when the volume of business of the subdivider and other relevant factors are taken into consideration, but in no event less than ten thousand dollars ($10,000),” and added the last sentence; and added paragraphs (4)(a) though (4)(d) and subsection (5).

Compiler’s Notes.

The bracketed insertion in paragraph (4)(b) was added by the compiler to supply the probable intended term.

Amendments.

The 2010 amendment, by ch. 214, added subsection (2) and redesignated former subsections (2) and (3) as present subsections (3) and (4); in subsection (3), substituted “except as required by statute or rule of the commission” for “unless the commission requires it”; and added subsection (5).

Amendments.

The 2010 amendment, by ch. 214, rewrote the section heading, which formerly read: “Inquiry and examination”; in the introductory paragraph, inserted “of the application for registration”; in subsection (1), inserted “requirements of section 55-1806, Idaho Code, have been satisfied, the”; deleted former subsections (3) and (4) which read: “3. The advertising material and the general promotional plan are not false or misleading and comply with the standards prescribed by the commission in its rules and regulations and afford full and fair disclosure; 4. The subdivider has not, or if a corporation, its officers, directors, and principals have not been convicted of a crime involving land dispositions or any aspect of the land sales business in this state, the United States, or any other state or foreign country within the past ten (10) years and has not been subject to any injunction or administrative order within the past ten (10) years restraining a false or misleading promotional plan involving land dispositions;” and redesignated former subsections (5) and (6) as present subsections (3) and (4); in subsection (3), inserted “partnership or other legal entity,” “individual,” “general partners, members, managers,” and “other such”; and in subsection (4), substituted “chapter” for “act.”

Cross References.

Special real estate fund,§ 54-2021.

State board of examiners,§ 67-2001 et seq.

State controller,§ 67-1001 et seq.

Amendments.

The 2010 amendment, by ch. 214, rewrote the section to the extent that a detailed comparison is impracticable, adding present subsections (2) and (8).

Compiler’s Notes.

Effective Dates.

Section 241 of S.L. 1994, ch. 180 provided that such act should become effective on and after the first Monday in January, 1995 [January 2, 1995] if the amendment to the Constitution of Idaho changing the name of the state auditor to state controller [1994 S.J.R. No. 109, p. 1493] was adopted at the general election held on November 8, 1994. Since such amendment was adopted, the amendment to this section by § 106 of S.L. 1994, ch. 180 became effective January 2, 1995.

Amendments.

The 2010 amendment, by ch. 214, rewrote the section heading, which formerly read: “Annual report”; added the subsection (1) designation and therein, in the first sentence, deleted “Within thirty (30) days after each annual anniversary date of an order registering subdivided lands” from the beginning and inserted “renewal,” in the second sentence, inserted “renewal,” and added the last sentence; and added subsections (2) and (3).

Cross References.

Fraudulent conveyances of land,§ 55-901 et seq.

Amendments.

The 2010 amendment, by ch. 214, in subsection (1), substituted “materially false statement” for “material false statement” and “chapter” for “act”; and in subsections (2) through (4), deleted “or purchase” following “disposition.”

Cross References.

Depositions in civil cases, Idaho R. Civ. P. 27 to 32.

Subpoenas in civil cases, Idaho R. Civ. P. 45.

Witness fees and expenses, Idaho R. Civ. P. 45(e)(1).

Amendments.

The 2010 amendment, by ch. 214, rewrote the section to the extent that a detailed comparison is impracticable.

The 2020 amendment, by ch. 87, substituted “department of veterans affairs” for “veterans administration” near the middle of paragraph (1)(a) and deleted “and IDAPA 33.01.02, rules of practice and procedure of the Idaho real estate commission governing contested cases” from the end of subsection (4).

Compiler’s Notes.

For more on the federal housing administration, referred to in paragraph (1)(a), see https://www.hud.gov/federalhousingadministration .

Amendments.

The 2010 amendment, by ch. 214, rewrote the section to the extent that a detailed comparison is impracticable.

Amendments.

The 2010 amendment, by ch. 214, in the introductory paragraph in subsection (1), inserted “by the commission”; added paragraph (1)(a) and redesignated the subsequent paragraphs in subsection (1); rewrote present paragraph (1)(c), which read: “been convicted, or found liable in any court subsequent to the filing of the application for registration of a crime or tort involving fraud, deception, false pretenses, misrepresentation, false advertising, or dishonest dealing in real estate transactions”; and in subsection (2), substituted “commission” for “district court” and “committed a violation” for “been guilty of a violation.”

Amendments.

The 2010 amendment, by ch. 214, twice substituted “salesperson” for “salesman”.

Amendments.

The 2010 amendment, by ch. 214, substituted “chapter” for “act.”

Amendments.

The 2010 amendment, by ch. 214, throughout the section, substituted “chapter” for “act”; in the second sentence in subsection (1), substituted “salesperson” for “salesman”; and in subsection (3), deleted “or regulation” following “rule.”

Amendments.

The 2010 amendment, by ch. 214, designated the formerly undesignated first paragraph as subsection (1) and therein twice substituted “chapter” for “act”; redesignated former subsections 1 and 2 as paragraphs (1)(a) and (1)(b); and added subsection (2).

Amendments.

The 2010 amendment, by ch. 214, deleted the subsection 1 designation, and redesignated former paragraphs 1.a and 1.b as subsections (1) and (2).

Compiler’s Notes.

The words enclosed in parentheses so appeared in the law as enacted.

Amendments.

The 2010 amendment, by ch. 214, twice substituted “chapter” for “act.”

Cross References.

Punishment for felony not otherwise provided,§ 18-112.

Amendments.

The 2010 amendment, by ch. 214, throughout the section, substituted “chapter” for “act”; and deleted “or regulation” following “rule.”

Effective Dates.

Section 24 of S.L. 1972, ch. 276 provided the act should take effect on and after July 1, 1972.

Section 2 of S.L. 1972, ch. 387 provided the act should take effect on and after July 1, 1972.

Illegal Subdivision of Land.

The record before the magistrate did not support his conclusion that a criminal act occurred in 1985 because the document filed by the defendant in 1985 was a land survey and not a plat. For a subdivision to have occurred under the ordinance there must have been a division of land for the purpose of transfer of ownership for development. A land survey does not divide land, nor does the filing of such a survey indicate with what intent the landowner surveyed his property, and because there was no support in the record for the conclusion that a criminal act occurred in 1985, the statute of limitations for the misdemeanor charges of illegal subdivision brought against the defendant had not run and the magistrate erred in dismissing the complaint. State v. Bilbao, 130 Idaho 500, 943 P.2d 926 (1997).

Amendments.

The 2011 amendment, by ch. 136, added subsections (5) and (10), and redesignated the subsequent subsections accordingly; in subsection (7), substituted “reference point or witness corner that controls” for “which does not lie on a property line of the property in question, but which controls”; and deleted former subsection (9), which was the definition for “Survey.” The 2017 amendment, by ch. 86, inserted “two (2) monumented” preceding “corners” in subsection (1).

Compiler’s Notes.

The United States general land office, referred to in subsection (9), was created in 1812 and merged with the United States grazing service in 1946 to form the bureau of land management.

For more on the bureau of land management, referred to in subsection (9), see http://www.blm.gov .

Cross References.

Corner perpetuation and filing act,§ 55-1601 et seq.

County recorders,§ 31-2401 et seq.

Amendments.

The 2006 amendment, by ch. 136, added present subsection (3) and redesignated former subsection (3) as present subsection (4).

The 2011 amendment, by ch. 136, inserted the first occurrence of “land” in the introductory paragraph and added subsection (5).

Amendments.

The 2015 amendment, by ch. 48, substituted the first sentence in subsection (1) for: “The record of survey shall be a map, prepared in black opaque image upon stable base drafting film with a minimum base thickness of .003 inches by either a photographic process using a silver image emulsion or by use of black opaque drafting film ink, by mechanical or handwritten means. The drafting film and image thereon shall be waterproof, tear resistant, flexible and capable of withstanding repeated handling, as well as providing archival permanence. If ink is used on drafting film, the ink surface shall be coated with a suitable substance to assure permanent legibility. The drafting film must be of a type which can be reproduced by either a photographic or diazo process.”

Amendments.

The 2015 amendment, by ch. 48, in subsection (2), substituted “of the most current corner records related to the survey being submitted and instrument numbers of corner records” for “any corner records which have been recorded previously and corner records”, deleted “any” preceding “corners which”, and inserted “graphic” near the end.

The 2019 amendment, by ch. 58, inserted “at a minimum” in the introductory paragraph and added subsection (6).

Amendments.

The 2010 amendment, by ch. 256, rewrote the section, revising requirements relating to coordinates shown on certain maps and plats.

Amendments.

The 2011 amendment, by ch. 136, added subsection (4).

Amendments.

The 2011 amendment, by ch. 136, inserted “each area bounded by property lines within the survey of” and substituted “not more than one” for “not less than one.”

Amendments.

The 2011 amendment, by ch. 184, substituted “Manufactured Home Residency Act’” for “Mobile Home Park Landlord Tenant Act’”.

ALR.

Liability of owner or operator of trailer camp or park for injury or death from condition of premises. 41 A.L.R.3d 546.

Landlord supplying electricity, gas, water, or similar facilities to tenant as subject to utility regulation. 75 A.L.R.3d 1204.

Landlord’s fraud, deceptive trade practices, and the like, in connection with mobile home owner’s lease or rental of land site. 39 A.L.R.4th 859.

Landlord’s liability to third person for injury resulting from attack on leased premises by dangerous animal kept by tenant. 87 A.L.R.4th 1004.

Nonwritten Rental Agreements.

In order to give force and effect to the requirement of a written rental agreement in the case of mobile home parks, nonwritten rental agreements, including implied at-law-contracts, are unenforceable. Fuhrman v. Wright, 125 Idaho 421, 871 P.2d 838 (Ct. App. 1994).

Prerequisite to Benefits.

A written rental agreement signed by both parties is a prerequisite to claiming benefits under this chapter but this chapter does not require a tenant to sign the agreement within the time allotted by the landlord; instead it imposes a duty of good faith upon the tenant and the landlord to sign a written rental agreement. Post Falls Trailer Park v. Fredekind, 131 Idaho 634, 962 P.2d 1018 (1998).

Cross References.

Department of transportation,§ 40-501 et seq.

Amendments.

The 2011 amendment, by ch. 184, rewrote the section to the extent that a detailed comparison is impracticable.

The 2017 amendment, by ch. 134, substituted “for purposes of this chapter only, a park model recreational vehicle” for “a park model” in subsection (5); deleted former subsection (11), which defined “park model,” and redesignated former subsection (12) as present subsection (11); and inserted present subsection (12).

Compiler’s Notes.

The abbreviation enclosed in parentheses so appeared in the law as enacted.

Amendments.

The 2011 amendment, by ch. 184, in the first sentence, substituted “resident regarding a lot” for “tenant regarding a mobile home lot,” added the clause (i) designation, and substituted “home to the resident” for “mobile home to the tenant,” and added clause (ii); and, in the last sentence, substituted “landlord or resident” for “park owner or tenant.”

The 2017 amendment, by ch. 134, added “recreational vehicle” at the end of the first sentence.

Nonwritten Rental Agreements.

In order to give force and effect to the requirement of a written rental agreement in the case of mobile home parks, nonwritten rental agreements, including implied at-law-contracts, are unenforceable. Fuhrman v. Wright, 125 Idaho 421, 871 P.2d 838 (Ct. App. 1994).

Amendments.

The 2011 amendment, by ch. 184, rewrote the first two sentences in subsection (1), which formerly read: “From and after the effective date of this chapter, any landlord offering mobile home lot for rent shall provide the prospective tenant a written rental agreement. This agreement must be executed by both parties”; substituted “community” for “mobile home park” at the beginning of paragraph (2)(a); substituted “resident” for “tenant” at the end of paragraph (2)(b); and added the last sentence in subsection (3).

Compiler’s Notes.

The phrase “the effective date of this act” in subsection (3) refers to the effective date of S.L. 1980, ch. 177, which was July 1, 1980.

The phrase “the date of the enactment of this section” in subsection (3) was added to the section by S.L. 1988, ch. 185, § 5, but probably refers to the original enactment of this section by S.L. 1980, ch. 177, effective July 1, 1980.

Landlord’s Duty.

The landlord’s duty is not complete once it provides a tenant with a written rental agreement; this chapter clearly requires the rental agreement be executed by both parties. Post Falls Trailer Park v. Fredekind, 131 Idaho 634, 962 P.2d 1018 (1998).

Nonwritten Rental Agreements.

In order to give force and effect to the requirement of a written rental agreement in the case of mobile home parks, nonwritten rental agreements, including implied at-law-contracts, are unenforceable. Fuhrman v. Wright, 125 Idaho 421, 871 P.2d 838 (Ct. App. 1994).

Prerequisite to Benefits.

A written rental agreement signed by both parties is a prerequisite to claiming benefits under this chapter but this chapter does not require a tenant to sign the agreement within the time allotted by the landlord; instead it imposes a duty of good faith upon the tenant and the landlord to sign a written rental agreement. Post Falls Trailer Park v. Fredekind, 131 Idaho 634, 962 P.2d 1018 (1998).

Amendments.

The 2011 amendment, by ch. 184, in subsection (1), in the first sentence, inserted “after expiration of the lease term, but” and substituted “with ninety (90) days’ written notice to the residents” for “after ninety (90) days’ written notice to the tenants,” and added the last sentence; in subsection (2), twice substituted “community” for “mobile home park”; rewrote subsection (3), which formerly read: “A landlord shall give written notice of such change to each affected mobile home owner at least ninety (90) days prior to any increase in lot rental amount, reduction in services or utilities provided by the landlord or changes in rules or regulations not to exceed one (1) change in each category per six (6) month period”; added subsection (4); and redesignated former subsection (4) as subsection (5), and therein substituted “community’s ad valorem taxes” for “mobile home park’s ad valorem taxes” in the first sentence and substituted “resident” for “tenant” in the last sentence.

Amendments.

The 2011 amendment, by ch. 184, inserted “rental agreement” in the section heading; throughout the section, substituted “resident” for “tenant” and “community” for “mobile home park,” or similar language; in paragraph (1)(d), deleted “where the mobile home park is located” following “state”; in paragraphs (3)(a) through (3)(c), deleted “mobile” preceding “home”; and in paragraphs (3)(b) and (3)(e), deleted “mobile home” preceding “lot.”

The 2017 amendment, by ch. 134, inserted “and, in the case of a mobile or manufactured home, the base shall be” in paragraph (3)(a).

Written Rental Agreement.

Rental agreement terms, required by this section, were not allowed to be provided by supplemental oral agreements; the landlord did not satisfy his burden of showing, as an essential element of his eviction claim, a valid written rental agreement in compliance with the provisions of this chapter. Connolly v. Powell, 141 Idaho 844, 118 P.3d 1232 (Ct. App. 2005).

Amendments.

The 2010 amendment, by ch. 168, added the subsection designations; and added the last sentence in subsection (2).

The 2011 amendment, by ch. 184, throughout the section, substituted “community” for “park” and “resident” for “tenant”; and, in subsection (2), updated the section reference in the first sentence and deleted “mobile” preceding “home” in the last sentence.

Amendments.

The 2011 amendment, by ch. 184, in the section heading, deleted “mobile” preceding “homes” and substituted “lots” for “mobile home spaces”; throughout the section, substituted “resident” for “tenant” or similar language and deleted “mobile” preceding “home”; throughout subsections (1) and (4), substituted “lot” for “space”; in the last sentence in subsection (2), added “and only if the landlord is licensed if licensure is required by law”; in subsections (3) and (5), substituted “community” for “park”; and, in subsection (5), substituted “rent” for “rental payments” and inserted “together with all other charges specified in the rental agreement.”

Amendments.

The 2011 amendment, by ch. 184, added “Abandonment” in the section heading; in subsection (1), deleted “mobile” preceding “home”; in subsection (2), in the first sentence, twice substituted “resident” for “tenant” and substituted “lot” for “mobile home space” and substituted “notify in writing the lienholder and legal owner of the home and to communicate to the lienholder and legal owner the liability for any rent and other charges specified in the rental agreement” for “notify the lienholder or legal owner of the mobile home unit and to communicate to him his liability for any costs incumbered for the mobile home space for such mobile home unit, including rent owing,” in the third sentence, deleted “mobile” preceding “home,” and, in the last sentence, substituted “home” for “mobile home unit” and “lot” for “mobile home space” and deleted “mobile home park” preceding “landlord” and “owner” preceding “or manager.”

Cross References.

Abandoned vehicle trust account,§ 49-1818.

Cross References.

Abandoned vehicle trust account,§ 49-1818.

Amendments.

The 2011 amendment, by ch. 184, rewrote the section, revising and providing additional provisions relating to the termination of a rental agreement.

Amendments.

The 2011 amendment, by ch. 184, in subsections (1) and (2), deleted “mobile home” preceding “lot”; in subsection (1), substituted “resident’s freedom of choice” for “tenant’s freedom of choice”; and, in subsection (2), twice substituted “resident” for “tenant.”

Amendments.

The 2011 amendment, by ch. 184, throughout the section, substituted “resident” for “tenant”; deleted former subsection (3), which read: “The provisions of sections 6-320 and 6-321, Idaho Code, shall apply to landlords and tenants governed by this chapter”; redesignated former subsections (4) and (5) as present subsections (3) and (4); and, in subsection (3), substituted “community” for “mobile home park.”

Amendments.

The 2011 amendment, by ch. 184, substituted “Community resident” for “Tenant” in the section heading; and rewrote the section, which formerly read: “The tenants in a mobile home park have the right to organize a tenant or homeowner’s association to further their mutual interest and to conduct any other business and programs which the association shall determine. An association shall have the right to use the facilities of the park to conduct its business and programs. When an association is organized it shall notify the landlord.”

Cross References.

Department of environmental quality,§ 39-104.

Local adoption of international building code,§ 39-4116.

Prior Laws.

Former§ 55-2014, which comprised I.C.,§ 55-2014, as added by 1980, ch. 177, § 1, p. 375; am. 1988, ch. 196, § 11, p. 369, was repealed by S.L. 1993, ch. 380, § 3, effective July 1, 1993.

Amendments.

The 2011 amendment, by ch. 184, in the section heading and throughout the section, substituted “resident” for “tenant”; throughout subsection (1), substituted “community” for “mobile home park”; and added subsection (7).

Compiler’s Notes.

The international fire code is promulgated by the international code council, which is dedicated to building safety and fire prevention. See http://www.iccsafe.org .

Amendments.

The 2011 amendment, by ch. 184, in the introductory paragraph, twice substituted “resident” for “tenant” and deleted “mobile home” preceding “lot”; redesignated the subsections numerically; in subsections (1) and (2), substituted “community” for “mobile home park” or similar language; in subsection (2), deleted “and regulations” from the end; and in subsection (3), substituted “community resident association” for “homeowner’s association.”

Applicability.

Tenant presented evidence and argument that the landlord was seeking his eviction because of the tenant’s complaints to the landlord about excessive electrical rate charges and late fees; thus, the tenant raised the defense of a violation of subsection (b), and the magistrate erred by not referencing this code section or making any findings on the defense in his oral ruling at trial or in his subsequent written judgment. Connolly v. Powell, 141 Idaho 844, 118 P.3d 1232 (Ct. App. 2005).

Legislative Intent.

The enactment of this section indicated legislative intent to provide protection to a tenant who seeks enforcement of housing laws and the legislature’s failure to amend unrelated code sections did not necessarily imply its intent to exclude the principles contained in the new legislation from application elsewhere in the code. Wright v. Brady, 126 Idaho 671, 889 P.2d 105 (Ct. App. 1995).

Amendments.

The 2011 amendment, by ch. 184, added “and mediation” in the section heading; and rewrote the section, which formerly read: “The landlord and tenant may agree in writing to submit a controversy arising under the provisions of this chapter to arbitration through the better business bureau, or similar private association, or as elsewhere provided in Idaho law.”

Compiler’s Notes.

Former§ 55-2016 was amended and redesignated as§ 55-2017 by § 6 of S.L. 1993, ch. 380.

Compiler’s Notes.

This section was formerly compiled as§ 55-2016.

Former§ 55-2017 was amended and redesignated as§ 55-2019 by § 8 of S.L. 1993, ch. 380.

Specific Findings Not Required.

The court is not required to make specific findings demonstrating how it employed any of the factors in Idaho R. Civ. P. 54 in reaching the award amount; therefore such failure does not by itself constitute an abuse of discretion. Post Falls Trailer Park v. Fredekind, 131 Idaho 634, 962 P.2d 1018 (1998).

Amendments.

The 2011 amendment, by ch. 184, deleted “mobile home” preceding “lot.”

Compiler’s Notes.

This section was formerly compiled as§ 55-2017.

Section 2 of S.L. 1980, ch. 177 read: “The provisions of this act are hereby declared to be severable and if any provision of this act or the application of such provision to any person or circumstance is declared invalid for any reason, such declaration shall not affect the validity of remaining portions of this act.”

ALR.

§ 55-2105. Applicability of this chapter.

1. This chapter applies to any interest created after its effective date which complies with this chapter, whether designated as a conservation easement or as a covenant, equitable servitude, restriction, easement, or otherwise. The instrument creating the conservation easement shall state it was created under the provisions of this chapter.
2. This chapter applies to any interest created before its effective date if it would have been enforceable had it been created after its effective date unless retroactive application contravenes the constitution or laws of this state or the United States.

This chapter does not invalidate any interest, whether designated as a conservation or preservation easement or as a covenant, equitable servitude, restriction, easement, or otherwise, that is enforceable under other law of this state.

History.

I.C.,§ 55-2105, as added by 1988, ch. 222, § 1, p. 422.

Compiler’s Notes.

As enacted the section heading of this section read, “Applicability of the act.”

This chapter was enacted by S.L. 1988, ch. 222, the effective date of which was July 1, 1988.

Compiler’s Notes.

This chapter was enacted by S.L. 1988, ch. 222, the effective date of which was July 1, 1988.

Amendments.

The 2016 amendment, by ch. 325, rewrote the section, which formerly read: “It is the intent of the legislature in enacting this chapter to assign responsibilities for locating and keeping accurate records of underground facility locations, for protecting and repairing damage to existing underground facilities, and for protecting the public health and safety from interruption in services caused by damage to existing underground facilities”.

ALR.

§ 55-2202. Definitions.

As used in this chapter:

1. “Administrator” means the administrator of the division of building safety.
2. “Board” means the damage prevention board.
3. “Business day” means any day other than Saturday, Sunday, or a legal, local, state, or federal holiday.
4. “Damage” means any impact or exposure that results in the substantial weakening of structural or lateral support of an underground facility, or the penetration, impairment, or destruction of any underground protective coating, housing, or other protective device, or the partial or complete destruction of the facility, or the severance, partial or complete, of any underground facility to the extent that the project owner or the affected underground facility owner determines that repairs are required.
5. “Emergency” means any sudden or unforeseen condition constituting a clear and present danger to life, health or property, or a customer service outage, or the blockage of roads or transportation facilities that requires immediate action.
6. “End user” means any customer or consumer of any utility service or commodity provided by an underground facility owner.
7. “Excavation” means any operation in which earth, rock, or other material in the ground is moved or otherwise displaced by any means including, but not limited to, explosives.
8. “Excavator” means any person who engages directly in excavation.
9. “Excavator downtime” means lost time for an excavation project due to failure of one (1) or more stakeholders to comply with applicable damage prevention regulations.
10. “Hand digging” means any excavation involving nonmechanized tools or equipment that when used properly will not damage underground facilities. Hand digging includes, but is not limited to, hand shovel digging, manual posthole digging, vacuum excavation, and soft digging.
11. “Identified but unlocatable underground facility” means an underground facility that has been identified but cannot be located with reasonable accuracy.
12. “Identified facility” means any underground facility that is indicated in the project plans as being located within the area of proposed excavation.
13. “Locatable underground facility” means an underground facility that can be field-marked with reasonable accuracy.
14. “Locator” means a person who identifies and marks the location of an underground facility owned or operated by an underground facility owner.
15. “Marking” means the use of stakes, paint, or other clearly identifiable materials to show the field location of underground facilities, in accordance with the current color code standard of the American public works association. Markings shall include identification letters indicating the specific type of the underground facility.
16. “One-number notification service” means a service through which a person can notify owners of underground facilities and request field-marking of their underground facilities.
17. “Person” means an individual, partnership, association, corporation, a state, a city, a county, or any subdivision or instrumentality of a state, and its employees, agents, or legal representatives.
18. “Public right-of-way” means the area on, below, or above a public roadway, highway, street, lane, path, sidewalk, alley, or other right-of-way dedicated for compatible uses. (19) “Reasonable accuracy” or “reasonably accurate” means location within twenty-four (24) inches horizontally of the outside dimensions of each side of an underground facility.

(20) “Rural underground facility owner” means an underground facility owner that is a public utility or a member-owned cooperative that serves fewer than five thousand (5,000) total customers in a county or counties with populations that do not exceed fifty thousand (50,000) people.

(21) “Service lateral” means any underground facility located in a public right-of-way or underground facility easement that is used to convey water (unless being delivered primarily for irrigation), stormwater, or sewage and connects an end user’s building or property to an underground facility owner’s main utility line.

(22) “Soft digging” means any excavation using tools or equipment that utilize air or water pressure as the direct means to break up soil or earth for removal by vacuum excavation.

(23) “Stakeholder” means any party with an interest in protecting underground facilities including, but not limited to, persons, property owners, underground facility owners, excavators, contractors, cities, counties, highway districts, railroads, public entities that deliver irrigation water and those engaged in agriculture.

(24) “Underground facility” means any item buried or placed below ground for use in connection with the storage or conveyance of water (unless being delivered primarily for irrigation), stormwater, sewage, electronic, telephonic or telegraphic communications, cable television, electric energy, petroleum products, gas, gaseous vapors, hazardous liquids, or other substances and including, but not limited to, pipes, sewers, conduits, cables, valves, lines, wires, manholes, attachments, and those parts of poles or anchors belowground.

(25) “Underground facility easement” means a nonpossessory right to operate, control, bury, install, maintain, or access an underground facility.

(26) “Underground facility owner” means any person who owns or operates an underground facility or who provides any utility service or commodity to an end user via an underground facility.

History.

I.C.,§ 55-2202, as added by 1990, ch. 351, § 1, p. 939; am. 1991, ch. 170, § 1, p. 409; am. 2016, ch. 325, § 2, p. 894; am. 2019, ch. 182, § 1, p. 586; am. 2019, ch. 256, § 1, p. 763; am. 2020, ch. 82, § 35, p. 174.

Amendments.

The 2016 amendment, by ch. 325, added subsections (1), (2), (8), (16) and (17), and redesignated the remaining subsections accordingly; in present subsection (4), substituted “means any impact or exposure that results in” for “includes” near the beginning and inserted “or the partial or complete destruction of the facility” near the middle; in subsection (5), inserted “sudden or unforeseen” and “health” and added “or the blockage of roads or transportation facilities that requires immediate action”; and substituted “notification” for “locator” near the beginning of present subsection (13).

This section was amended by two 2019 acts which appear to be compatible and have been compiled together. The 2019 amendment, by ch. 182, inserted present subsections [(10)](9), [(15)](13) and [(22)]19, and redesignated the remaining subsections accordingly.

The 2019 amendment, by ch. 256, inserted present subsections (6), [(18)](16), [(21)](19), and [(25)](22), and redesignated the remaining subsections accordingly; inserted “stormwater” near the middle of present subsection [(24)](21); and added “or who provides any utility service or commodity to an end user via an underground facility” at the end of subsection [(26)](23).

The 2020 amendment, by ch. 82, corrected the designation issue in this section, created by the multiple 2019 amendments.

Compiler’s Notes.

For more on the American public works association, referred to in subsection (15), see https://www.apwa.net .

The words enclosed in parentheses so appeared in the law as enacted.