Monday, November 25, 2013

Sebastian v. Floyd case brief

Sebastian v. Floyd case brief summary
585 S.W.2d 381 (Ky. 1979)

Appellant buyer and appellee sellers executed an installment land sale contract providing for forfeiture of the buyer's payments upon default. The sellers brought suit action against the buyer when she failed to make several installments. The buyer counterclaimed for all payments made pursuant to the contract. A circuit court granted judgment for the sellers. The Court of Appeals (Kentucky) affirmed. The buyer appealed.


  • The court noted that in a typical installment land contract, legal title to the property remained in the seller until the buyer had paid the entire contract price, at which time the seller tendered a deed to the buyer. 
  • However, equitable title passed to the buyer when the contract was entered. 
  • The seller held nothing but the bare legal title, as security for the payment of the purchase. 
  • There was no practical distinction between the land sale contract and a purchase money mortgage. 
  • The court added that the trend was to treat land sale contracts as analogous to conventional mortgages, thus requiring a seller to seek a judicial sale of the property upon the buyer's default. 
  • The court further held that a rule treating the sellers' interest as a lien would best protect the interests of both buyer and sellers. 
  • Ordinarily, a seller would receive the balance due on the contract, plus expenses, thus fulfilling the expectations he had when he agreed to sell his land. In addition, the buyer's equity in the property would be protected. 
  • Accordingly, the sellers' remedy for breach of the contract was to obtain a judicial sale of the property.

The court reversed the judgment of the trial court and the opinion of the court of appeals and remanded.

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