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Alby v. Banc One Financial

156 Wash. 2d 367, 128 P.3d 81 (2006)

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Alby v. Banc One Financial

Washington Supreme Court

156 Wash. 2d 367, 128 P.3d 81 (2006)

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Facts

In 1992, Eugene and Susan Alby (plaintiffs) sold a portion of their family farm to their niece, Lorri Brashler, and her husband. The parcel was valued at $100,000 but the Albys sold the farm to the Brashlers for $15,000. Both the contract and the deed contained a reservation granting the Albys an automatic reverter if the Brashlers ever mortgaged or encumbered the property within either Eugene or Susan’s lifetime. The Albys included this reservation for the purpose of keeping the land under family ownership while the Albys were alive. In 1999, notwithstanding the reservation, the Brashlers obtained two loans secured by the property. In 2000, the Brashlers defaulted on payments for the first loan. The lender held a trustee’s sale, at which Banc One (defendant) purchased the property. On April 18, 2002, Susan Alby sued to quiet title in the property, arguing that the property had automatically reverted to her when the Brashlers encumbered the property. The trial court ruled that the reservation in the contract was void against public policy and an unreasonable restraint against alienation. The Court of Appeals reversed, holding that the reservation clause was valid because it was not a restraint on alienation and, even if it was, it was nevertheless reasonable.

Rule of Law

Issue

Holding and Reasoning (Johnson, J.)

Dissent (Alexander, C.J.)

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