Wells Corporation decided to purchase a new office building from Manu Partnership. Wells and Manu signed a purchase and sales contract, whereby Manu agreed to transfer title within two months for a purchase price of $5,000,000. During the executory period, the property was substantially damaged by fire. Neither Wells nor Manu caused the fire. The loss in value was estimated to be $3,000,000. Manu had continued its casualty insurance on the property and insurance proceeds of $3,000,000 are now available. Under the traditional doctrine of equitable conversion, which of the following is correct?

A seller put her house and lot on the market for $200,000. After receiving several offers within $5,000 of her asking price, the seller entered into a contract to sell the house and lot to a buyer for $200,000. The contract provided that the buyer put up $4,000 in earnest money, which the seller could treat as liquidated damages unless: The seller fails to tender marketable title to the buyer by the agreed-upon closing date, the seller commits a material breach of this contract, or the buyer dies prior to the closing date, in which case the earnest money shall be reimbursed to the buyer’s estate. The contract was signed on July 24, and the closing date was set for September 12. On August 5, the buyer was seriously injured in an accident. On September 10, the buyer was released from the hospital in a wheelchair. He determined that a ranch-style house would make his life much more bearable, but the seller’s home was two stories. The buyer asked the seller to cancel the contract and to refund the $4,000 earnest money. The seller refused. The buyer did not appear on the closing date. On September 16, the seller contracted to sell the home to a purchaser for $198,000. The closing occurred as planned on October 20. The buyer files suit against the seller, praying for a refund of the $4,000 earnest money. How much is the buyer likely to recover?

A merchant had a serious cash flow problem and needed cash to buy the inventory required to fill orders. A friend offered to loan the merchant $50,000 if he would put up adequate collateral to assure her that she would not lose her money. To guarantee the loan, the merchant gave the friend a deed to a property worth $100,000 that he had inherited. The friend recorded the deed. The friend gave the merchant $50,000, and the merchant signed a promissory note agreeing to repay the $50,000 within eight months. The merchant continued to occupy the property, and the friend agreed to reconvey the property to the merchant as soon as he repaid the $50,000. The merchant was unable to pay the friend when the note came due. He asked the friend for an extension, but she refused. If the friend seeks to take possession of the property, may she do so?

To secure a loan of $100,000 from a bank, the owner in fee simple of a parcel of land conveyed a deed of trust for the land to the bank. The deed of trust contained a “power of sale” clause, permitted by the jurisdiction, which allowed the bank to sell the property in the event of default without the necessity of a judicial foreclosure action. After several years, the owner defaulted on his loan payments to the bank. The bank informed the owner that it was exercising its power of sale. After appropriate notices, the bank conducted a public sale of the land. The bank was the sole bidder and obtained the property for $80,000, which was $10,000 less than the outstanding balance on the loan plus the expenses of the sale. One month later, the owner notified the bank that he wanted to pay off the loan and extinguish the deed of trust, and was prepared to tender $80,000 to do so. The bank insisted that the owner must tender $90,000 to pay off the loan. If a court in the jurisdiction will require the bank to accept only $80,000 under the circumstances above, what is the likely reason?

A cyclist was injured when a driver ran a red light. The cyclist subsequently sued the driver to recover for her injuries, and obtained a money judgment of $50,000. The state where the cyclist and the driver reside has the following statute: “Any judgment properly filed shall, for 10 years from filing, be a lien on the real property then owned or subsequently acquired by any person against whom the judgment is rendered.” The cyclist filed the judgment in the county where the driver owned a valuable ranch. Sometime later, the driver, who was also injured in the accident, undertook to remodel all the buildings on the ranch to make them wheelchair-accessible. The driver borrowed $30,000 from a bank for the improvements, securing the loan with a mortgage on the ranch. The bank properly recorded its mortgage. Before he paid any principal on the bank’s loan, the driver decided to build a new barn. He borrowed $20,000 from a financing company for this purpose, also secured by a mortgage on the ranch. The financing company properly recorded its mortgage. The driver subsequently defaulted on the bank’s mortgage, and the bank brought a foreclosure action, joining the financing company in the proceeding. The foreclosure sale resulted in $90,000 in proceeds after all expenses and fees were paid. The driver still owes the cyclist $50,000, the bank $30,000, and the financing company $20,000. How should the foreclosure proceeds be distributed?

Which of the following explanations accurately explains positive dromotropic effect?

An owner obtained a loan of $60,000 from a bank in exchange for a promissory note secured by a mortgage on his land, which the bank promptly and properly recorded. A few months later, the owner obtained another loan of $60,000 from a lender, in exchange for a promissory note secured by a mortgage on the land, which the lender promptly and properly recorded. Subsequently, the owner sold the land to a buyer for $150,000 and conveyed a warranty deed. The buyer expressly agreed with the owner to assume both mortgages, with the consent of the bank and the lender. A few years later, the bank loaned the buyer an additional $50,000 in exchange for an increase in the interest rate and principal amount of its mortgage on the land. At that time, the balance on the original loan from the bank was $50,000. Shortly thereafter, the buyer stopped making payments on both mortgages and disappeared. After proper notice to all appropriate parties, the bank instituted a foreclosure action on its mortgage, and purchased the property at the foreclosure sale. At that time the principal balance on the lender’s mortgage loan was $50,000. After fees and expenses, the proceeds from the foreclosure sale totaled $80,000. Assuming that the jurisdiction permits deficiency judgments, which of the following statements is most accurate?

Doug and Harper signed a purchase agreement for the sale of Harper’s house for $350,000, agreeing to close the following month. One week before closing, Doug and Harper met at a restaurant to discuss a few open issues. As luck would have it, they were both instantly killed when a plane crashed into the restaurant. Doug’s will left all of his real property to his son Carl and all of his personal property to his daughter Miah. Harper’s will left all of his real property to his wife Zoie and all of his personal property to his uncle Brandon. This jurisdiction is applies the common law doctrine of equitable conversion. Which of the following is correct?

A buyer entered into a contract with a seller to buy a parcel of land for $40,000. Although the buyer was expecting to receive a large inheritance in a few weeks, he had very limited funds on hand and was able to personally finance only $10,000. To cover the remaining balance, the buyer obtained a loan from the seller for $30,000, giving the seller a nonnegotiable promissory note in that amount secured by a mortgage on the land and orally promising to pay the seller in full when he received his inheritance money. A few weeks later, the seller transferred possession of the mortgage note to an investor for $25,000 without informing the buyer. The next day, the seller received a check from the buyer in the amount of $30,000. A few days later, the seller left the country with the $65,000 she had made on the sale of the land. Which of the following correctly states the investor’s rights against the buyer?

Which term describes a sudden drop in blood pressure when a person stands up?