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The Insidious Bargain and Sale Deed

May 6, 2011

in PLTA News,Title Policies

A Very Brief History of the Origin of the Deed and Recording System in the United States.

By Dave Jenkins, Senior Claims Counsel – Mid-Atlantic Region, Fidelity National Title Group

In feudal England, as in modern America, it was quite common for those who own land to donate it to churches or affiliated organizations.  Church land then, as now, was largely exempt from taxation.  A large number of such property donations in the time of the Crusades prompted Edward I of England to devise ways to avoid further losses to his tax revenue.  His primary solution to the perceived problem was the passage of the Statutes of Mortmain and Quia Emptores toward the end of the 13th century.  These statutes prevented the conveyance of real property to religious bodies without state approval.

Clever jurists, however, soon came up with an alternative method of donating land to religious bodies without running afoul of the new prohibitions and their severe penalties.  Instead of conveying title to the property, the donors would instead convey only the use of the property while theoretically retaining title.  In this way, the landowners could achieve their goals while specifically avoiding the prohibitions imposed by the state.  At the time, however, the primary method for conveying title to the real property was through the use of the “livery of seisen” ceremony.  This was a straightforward and mostly undocumented public ritual in which a symbolic token of the property, typically a twig or clod of dirt, was presented from the seller to the buyer in front of several witnesses at or near the property being conveyed.  This method of conveyance was created as part of the Common Law legal system, which was imposed in England after the Norman Conquest.  Rather than attempting to modify this simple ceremony to fit their needs, landowners and their lawyers resorted to the employment of written documents, likely based on much older Roman deeds and trusts, which would carefully spell out that only the use of the land, but not the title, was being conveyed.

The most common form of these new instruments were called “bargain and sales,” which would  promise to convey everything associated with a property as well as vest the grantee with an equitable interest in the property, much like a modern agreement of sale.  The document itself was typically imprinted with the official seal of the donor, imparting it with the legal significance of being a “deed” (i.e. the official act) of the grantor.  The equitable interest created by such a deed was called a “Use” because, as described above, it did not convey title, but only the use of the land.  Also, as an equity matter, any dispute regarding a Use would typically be heard in England’s courts of equity as opposed to its courts of law.  This was significant because the courts of equity were primarily run by Catholic Church officials, while the courts of law were largely in the hands of appointees of the Crown.  Then, as now, the practice of forum shopping for legal disputes was quite common.

And it appears there were some disputes, prompting successive changes to the language of these documents.  As time went on, these deeds grew in verbiage to include elaborate lists of both physical amenities located on the land, as well as legal privileges associated with the land.  The practice became to list everything that could possibly be included with land such as “ways, waters, courses, streams, etc.” as well as catch-all legal terms such as “hereditaments and appurtenances” in an effort to demonstrate that everything but actual title was intended to be conveyed.  In theory, this would prevent the heirs of donors from going to court to reclaim anything associated with the property that was not specifically mentioned in the deed.

The use of bargain and sale deeds for donating land to the Church was successful and apparently tolerated for some time, but quickly came to an end as a result of the machinations of Henry VIII.  In an effort to supplement his already innovative marital dispute resolution practices, Henry had himself made the head of the Church in England with the passage of the first Act of Supremacy in 1534.  In the same year, likely in anticipation of the expenses associated with prolonged warfare and conflict with the Papacy and most of Catholic Europe, Henry had his agents catalog the assets of the Church in England.  These assets included the property of several monasteries that held land by virtue of bargain and sale deeds.

Aware of the vast wealth that these monasteries held, Henry devised a devious and thorough method to prepare the monasteries for liquidation.  In 1535 Parliament passed both the Statute of Uses and the Statute of Enrolments [sic].  The first statute converted all bargain and sale deeds into outright conveyances of fee simple title.  The second required all such deeds to be enrolled (i.e. recorded) in a central office in Westminster within a certain time period or the grantee (e.g. the monastery) would suffer the complete loss of title.  The monasteries, either unaware of Henry’s intent, or simply realizing they had no choice, complied and enrolled their deeds of bargain and sale, lease and release, and other similar forms in London.  And so, in 1536, equipped with a list of all the assets of all of the monasteries in England, the agents of Henry VIII carried out the process known to historians as the Dissolution of the Monasteries.  This consisted of seizing monastery property, both land and objects, as property of the state, along with the slaying of any recalcitrant church officials.  This ranks as one of History’s most effective “stand up and we won’t shoot you” ruses.

Despite its ominous beginnings, the increasing ascendant merchant and landowning classes in England were quick to take advantage of the newly devised system to facilitate the exchange of real property and attendant trade.  A central registry and laws regarding legal priority facilitated exchanges and borrowing by introducing greater certainty in ownership and repayment of secured debts.  The livery of seisen ceremony began to fall into disuse as deeds proved much more convenient and certain in their terms.  These two statutes, with minor modifications, continued to be the basis of real property exchanges in England and its colonies during the Colonial Period.  Although some colonies, such as Pennsylvania, had early failed attempts to create alternative systems for registering land, most eventually adopted the Statutes of Uses and Enrollments as a model for their recording systems.  The bargain and sale deed, more by force of custom than any pressing legal need, remained the primary method of conveyance due to its widespread use and legal recognition in these well-established recording systems.

Many deeds in Pennsylvania, as well as many other states, continue to carry these ponderous phrases from ancient bargain and sale deeds.  Several of these cumbersome phrases have received substantive judicial interpretation over the years, and so there is significant reluctance to remove them from deeds.  The trend, however, both in statutes and custom, has been to reduce deeds to a bare minimum of language, stating simply who the parties are and what land is being conveyed.  The end result of this process will likely be that the once elaborate bargain and sale deed will come to resemble the much more direct charter by which the Saxon rulers of England, who ruled before the Norman imposition of the Common Law, had the exclusive privilege of conveying real property.

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