State Savings & Loan Association v. Kauaian Development Co.
Supreme Court of Hawaii
445 P.2d 109 (1968)
Kauaian Development Company (Kauaian, defendant) contracted to sell land and not-yet-built condominium units to various purchasers, and State Savings & Loan Association (State Savings, plaintiff), aware of these sales agreements, subsequently issued Kauaian a construction loan; when Kauaian defaulted, State Savings foreclosed on the condominium properties, including the purchasers' interests under their sales contracts, and the purchasers argued their rights were superior to State Savings's mortgage. The trial court ruled for State Savings, and the purchasers appealed.
Whether the rights of a purchaser of an interest in land and a condominium to be constructed on the land are superior to those of a subsequent construction mortgagee receiving its mortgage with knowledge of the purchaser's interest.