The Oklahoma Bar Journal October 2025

McGinnity and goes in the wrong direction by failing to recognize that there are two types of enforce able title: legal and equitable. The buyer under the contract for deed was admittedly in possession in Butterfield ; therefore, any prospec tive third-party buyer from the seller must make reasonable inquiry of the party in possession as to the occupant’s claim of interest, and – to be acting in good faith – cannot rely on self-serving representa tions by the seller. Again, as explained in McGinnity , the seller under a con tract for deed only retains “bare legal title,” and therefore, any “assignment of the contract for deed [by the seller] ... was an assignment of a mortgage for the purpose of foreclosure proceedings.” 13 The buyer under a contract for deed has the enforceable right to compel the seller to convey legal title to the buyer upon such buyer’s full payment of the agreed-upon purchase price. If a buyer under a contract for deed defaults on making such timely payments of the contract, then the seller cannot extinguish the equitable title of the buyer without conducting a formal mortgage foreclosure proceeding, providing the buyer with all the due process protections held by a mortgagor. It is perhaps possible that in lieu of a foreclosure action, the seller might be permitted to secure a judgment for money damages for a breach of contract – other than for missed purchase payments. Another recent Court of Civil Appeals opinion was issued that properly acknowledged the immediate equitable rights held by the buyer under a signed and delivered contract for deed: Hartless v. Cline . 14

In conclusion, the holding of Butterfield and its progeny, Long , that a buyer under a contract for deed has no interest either legal or equitable in the subject real property appears to be an erroneous statement of the law in Oklahoma.

to a mortgage for the purpose of guaranteeing pay due under the contract.” 10, 11 The Court of Civil Appeals in Butterfield , ¶¶18-19, acknowledges: Whether Butterfield’s possession was sufficient to put the McCoy Trust on notice of his claim is material only to the extent Butterfield actually has a legal interest in the property because possession does not create a legal interest. Butterfield’s posses sion serves only to provide notice of such interest as he actually has . Accordingly, the dispositive issues in this case are whether Butterfield has a legal interest in the property, and assuming he has an interest, whether that interest is superior to the McCoy Trust’s interest. 12 Therefore, the Butterfield court admitted that any prospective third-party buyer will – due to the possession of the buyer under the contract for deed – have “notice of such interest as he [the occupier] actually has.” But then the court in Butterfield ignores the holding in

by the Neeces was equivalent to a mortgage for the purpose of guaranteeing payment due under the contract. The effect of the assignment of the contract for deed to the McGinnitys was an assignment of a mortgage for the purpose of foreclosure proceedings. 9 The Kirks (the buyer) bought a house from the Neeces (the seller) under a contract for deed. The Neeces then sold the land to the McGinnitys, and the Neeces assigned the contract for deed to the McGinnitys. The McGinnitys sued the Kirks to foreclose the contract for deed due to alleged multiple nonmonetary breaches. The trial court’s foreclosure judg ment was affirmed by the Court of Civil Appeals and the Oklahoma Supreme Court. In its analysis, the Supreme Court stated, “When the contract for deed was prop erly executed, equitable title to the real property passed to the Kirks as buyers, the Neeces as sellers retained only the bare legal title, and the interest retained by the Neeces was equivalent

Statements or opinions expressed in the Oklahoma Bar Journal are those of the authors and do not necessarily reflect those of the Oklahoma Bar Association, its officers, Board of Governors, Board of Editors or staff.

38 | OCTOBER 2025

THE OKLAHOMA BAR JOURNAL