Code of Civil Procedure (CCP) Section 874.240 – Conveyance or Transfer Has Binding Effect of Judgment

Code of Civil Procedure section 874.240 operates similarly to section 874.210. It gives a binding and conclusive effect to the conveyances that occur as part of partition actions. Like with section 874.210, this is needed to ensure that persons who purchase or acquire properties as part of official court proceedings do not find themselves back in litigation over the property.

Code of Civil Procedure section 874.240 states:

A conveyance or transfer pursuant to Sections 873.750 and 873.790 or Section 873.960 is binding and conclusive, in the same manner as a judgment.

“Shawn” and “Julie” are siblings who inherit property from their parents. Even though they own equal shares, Shawn treats the home as his own, and refuses to allow Julie onto the property. Fed up with being denied the benefits of the home, Julie sues for partition.

Eventually, following extended litigation, the Court orders the property to be sold in a partition by sale. After the sale is confirmed, the liens are paid off, and the sales proceeds are distributed, the Court is able to issue a final judgment of partition. As part of the final judgment, the property is officially conveyed via deed to a third-party purchaser.

When the Court does so, the judgment binds all persons who were parties to the action with known or unknown property interests under section 874.210. And the conveyance itself is binding under section 874.240. It even binds non-parties, if their interests were not of record when the lis pendens was filed as part of the lawsuit. The exception to this is in section 874.225, and that requires that the plaintiff, here Julie, to have known about the non-record interest when she filed her lawsuit.

Law Revision Commission Comments (CCP § 874.240)

1976 Addition.

Section 874.240 continues the substance of former Section 787 which provided the effect of a conveyance of the property in the partition action.

Section 874.240 is one of the few statutes that contains an “official” Assembly Committee Comment from the California Legislature. However, it is a word-for-word repetition of Law Revision Commission Comment above. This is because the Legislature endorsed an overall adoption of the Law Revision Commission suggestions when it passed the new partition statutes in 1976.

In fact, the introduction to Assembly Bill 1671 (the bill that contained the new partition laws) states that the Revision Commission’s recommendations “reflect the intent of the Assembly Committee… in approving the various provisions of Assembly Bill 1671.” This demonstrates that the intent of the Legislature was essentially in line with that of the Revision Commission.

Turning to the statute and comment, they merely state that when a piece of property is transferred in a partition action, that conveyance is binding and conclusive like a judgment, meaning section 874.240 incorporates many statutes simultaneously.

Under section 873.750, the courts order the referee to execute a conveyance or other instrument of transfer, once the sale is confirmed. Under section 873.790, that conveyance is to occur upon fulfillment of the terms of sale. Finally, under section 873.960, a conveyance is executed pursuant to a partition by appraisal agreement where one party buys out the other.

As to the “binding” effect of those conveyances, sections 874.210 and 874.225 spell out who is and who is not bound by partition judgments.

“The policy behind a partition action is to permanently end all disputes about property and to remove all obstructions to its free enjoyment.” (LEG Investments v. Boxler (2010) 183 Cal.App.4th 484, 497.) As such, if the judgment of partition was not binding on all interest holders in the property, then the owners would find themselves in court all over again.

Thus, judgments (and the conveyances) are binding on most persons. The only big exceptions are spelled out in section 874.225, which revolve around the parties receiving proper notice of the action. Without proper notice, a party cannot be bound by a judgment.

Here at Underwood Law Firm, our knowledgeable attorneys are here to help navigate the complex web of case law and statutes surrounding partitions. If you are thinking of filing a partition, are already in the midst of a partition suit, or just have any questions, please do not hesitate to reach out to our office.