Property 3—Conveyancing—Delivery & Acceptance

Question 1

What does it mean for a deed to be delivered in order to be effective to transfer an interest in realty?

Answer 1

A deed is not effective to transfer an interest in realty unless it has been delivered. Physical transfer of a deed is not necessary for a valid delivery. Nor does physical transfer alone establish delivery (although it might raise a presumption thereof). Rather, “delivery” refers to the grantor’s intent; it is satisfied by words or conduct evidencing the grantor’s intention that the deed have some present operative effect; i.e., that title pass immediately and irrevocably, even though the right of possession may be postponed until some future time.

Examples:
1) O drafts an instrument conveying Blackacre to A and hands the instrument to A “for safekeeping.” Although handed to the named grantee, this is not a valid delivery. There is no evidence that O intended the instrument to have any present operative effect.

2) O drafts an instrument conveying Blackacre to A. O attempts to give the instrument to A personally but is unable to find A; nevertheless, O quits possession of Blackacre and thereafter treats A as the owner thereof. Nearly all courts would hold that there has been a sufficient delivery.

Under some circumstances (i.e., when a third party is involved), conditional delivery is permissible. This type of delivery becomes effective only upon the occurrence of a condition, but the transfer then relates back to the time of the conditional delivery. The grantor has only limited rights to revoke prior to the occurrence of the condition. (See further discussion of conditional deliveries, 3., infra.)

Property>Conveyancing>Delivery and Acceptance>Delivery—In General

Question 2

How can a person manually deliver a deed?

Answer 2

A physical delivery of the deed to the grantee. It can be accomplished by means of the mail, by the grantor’s agent or messenger, or by physical transfer by the grantor’s attorney in the grantor’s presence.

Property>Conveyance>Delivery and Acceptance

Question 3

A deed is presumed transferred if?

Answer 3

1) handed to the grantee, 2) acknowledged by the grantor before a notary and recorded, 3) the grantee has possession of the properly executed deed.

Property>Conveyance>Delivery and Acceptance

Question 4

A deed is presumed NOT transferred if the grantor has done what?

Answer 4

Grantor maintains continued possession of the deed.

Property>Conveyance>Delivery and Acceptance

Question 5

Does physically returning the deed to the grantor cancel delivery?

Answer 5

No, you cannot cancel delivery once it has taken place.

Property>Conveyance>Delivery and Acceptance

Question 6

The majority rule is that any type of parol evidence, including conduct or statements made by the grantor before or after the alleged delivery, is admissible to prove her intent.

Answer 6

What is the majority rule regarding parol evidence?

Question 7

If a deed is unconditional on its face and is given directly to the grantee, in most jurisdictions parol evidence is not admissible to show that the delivery was subject to a condition.

Answer 7

Is parol evidence admissible to show that the delivery of the deef was subject to a condition?

Question 8

But while parol evidence is not admitted to prove that a delivery was subject to an oral condition, parol evidence is admissible to prove that the grantor did not intend the deed to have any present effect at all. For example, O tells A, “I want you to have Blackacre when I die, but and I’m giving you this deed to Blackacre so that you can have it at that time.” Most courts would hold that O’s statements are admissible, and that despite the unconditional nature of the deed itself, they show that O did not intend the deed to have any present effect.

Answer 8

Is parol evidence admissible to show that the grantor did not intend the deed to have a present effect?

Question 9

Parol evidence is always admissible to show that a deed absolute on its face was intended by the parties to be a mortgage; i.e., there was no intent to convey title outright.

Answer 9

When is parol evidence admissible to show that the deed was intended to be a mortgage?

Question 10

Suppose O gives A a deed for examination by A’s attorney (deed not intended to be effective at this point). A wrongfully records it and sells to B, a bona fide purchaser (“BFP”). On these facts, O would prevail against B unless estopped to assert lack of delivery. In other words, absent estoppel, a subsequent BFP is not protected; if there was no delivery, the BFP’s grantor had no power to convery.

Answer 10

Transfer of deed to bona fider purchaser?

Question 11

Even though the grantor is allowed to show that no delivery at all was intended against the grantee, Can the grantor be estopped?

Answer 11

Yes, even though the grantor is allowed to show that no delivery at all was intended as against the grantee, he often is estopped to assert lack of delivery against an innocent purchaser.

Estoppel in Favor of Innocent Purchaser.

Question 12

Comment on Estoppel. (not really sure how to make this a true flashcard)

Answer 12

Obviously, the above rules give the courts flexibility to find either delivery or non delivery in many situations. It is also evident that there exists a theoretical inconsistency in admitting parol evidence to show that no delivery was intended, but not to show that deliver was “conditional.” This inconsistency has been criticized by numerous commentators

Comment

Question 13

Problems arise when the grantor attempts to retain _____ or when he attempts to make the passage of title dependent upon the _______ or ________.

Answer 13

an interest in the property, happening of a condition, event other than delivery.

Retention of Interest by Grantor or Conditional Delivery

Question 14

What happens if the grantor executes a deed but fails to deliver it during his lifetime?

Answer 14

No conveyance of title takes place. Without adequate delivery, the title does not pass to the intended grantee.

No Delivery – Title does not pass

Question 15

What does it mean for there to be no recording, for the title to pass?

Answer 15

If the grantor executes and delivers a deed but fails to have it recorded, title passes.

Property>Conveyancing>Delivery and Acceptance>Retention of Interest by Grantor or Conditional Delivery

Question 16

In a deed, hat is the effect of an express provision that the title will not pass until the grantors death?

Answer 16

The effect is to create a present possessory life estate in the grantor and future estate in the grantee.

Property>Conveyancing>Delivery and Acceptance>Retention of Interest by Grantor or Conditional Delivery

Question 17

What is the traditional view if a deed is absolute on its face, but is delivered to the grantee with an oral condition?

Answer 17

The condition dropped out and the delivery became absolute.

Property>Conveyancing>Delivery and Acceptance>Retention of Interest by Grantor or Conditional Delivery

Question 18

What is the test, relinquishment of control?

Answer 18

To make an effective delivery, the grantor must relinquish absolute and unconditional control.

Property>Conveyancing>Delivery and Acceptance>Retention of Interest by Grantor or Conditional Delivery

Question 19

What is permissible when a grantor gives the deed to a 3rd party?

Answer 19

Conditional delivery

Property>Conveyancing>Delivery and Acceptance>Where Grantor gives deed to 3rd party

Question 20

Does delivery occur when there is a transfer to a third party with no conditions?

Answer 20

When O gives B a deed naming A as grantee and instructs B to give the deed to A. . .
-most courts say yes, delivery occurred, because O indicated an intent to make the deed presently operative.
:. A has a right to the deed and O should not be able to
get it back

HOWEVER if O told B to retain the deed and give it to A upon O’s later instructions, no delivery occurs.

Property>conveyancing>delivery and acceptance>where grantor gives deed to third party>transfer to third party with no conditions

Question 21

Does delivery occur when there is a transfer to a third party with no conditions if there are no instructions? (majority and minority)

Answer 21

Where there are no specific instructions regarding delivery, the question is one of O’s intent.

If B is A’s attorney –> clear delivery

If B is O’s attorney –> court might infer that B was just O’s
agent and O thus retained power to
recall the deed

a FEW courts hold that B is to be treated as O’s agent in all circumstances, even if O manifests a clear intention of present effectiveness. As such, no delivery occurs.

Property>conveyancing>delivery and acceptance>where grantor gives deed to third party>transfer to third party with no conditions

Question 22

What occurs when there is a transfer to a third party with conditions (commercial transaction)?

Answer 22

Under a true escrow situation, there is true conditional delivery. When a valid conditional delivery occurs, the deed has a present operative effect in that title will transfer automatically upon the occurrence of the condition.

O ONLY retains title if the condition does not occur.

Example: O gives B a deed naming A as grantee and tells B to transfer the deed to A when A has paid $5,000 on O’s account on or before Sept. 1.

Property>conveyancing>delivery and acceptance>where grantor gives deed to third party>transfer to third party with conditions (commercial transaction)

Question 23

Is Parol Evidence admissible to show conditions?

Answer 23

Even though a deed is unconditional, the general rule is that parol evidence is admissible to show the conditions and terms upon which a deed was deposited with escrow.

IF the escrow custodian has violated parol conditions
—> no valid delivery

Property>conveyancing>delivery and acceptance>where grantor gives deed to third party>transfer to third party with conditions (commercial transaction)>Parol Evidence admissible to show conditions

Question 24

What happens when a parol or non-parol condition occurs?

Answer 24

Once the condition occurs (parol or not!):

(1) title automatically vests in the grantee, and
(2) the escrow holds the deed as the grantee’s agent.

Property>conveyancing>delivery and acceptance>where grantor gives deed to third party>transfer to third party with conditions (commercial transaction)>Parol Evidence admissible to show conditions

Question 25

What are the majority and minority positions on a grantor’s right to recover a deed?

Answer 25

Majority: Grantor can only recover if no written contract.

Minority: Grantor has no right to recovery.

Property>conveyancing>delivery and acceptance>where grantor gives deed to third party>transfer to third party with conditions (commercial transaction)>grantor’s right to recover deed

Question 26

What is the majority view of a grantor’s right to recover a deed?

Answer 26

Under the majority view, if the grantor seeks to recover the deed prior to the occurrence of the condition, the grantee can object only if there is an enforceable written contract to convey. (On the other hand, once the condition occurs, title passes even in the absence of an enforceable contract.)

(1) The requirement of a written contract is based on the State of Frauds consideration that oral contracts to convey realty should not become enforceable simply because the deed has been deposited with a third party.
(2) Ordinarily, the contract to convey will be a buy-sell land contract. However, written escrow instructions are often a sufficient memorandum of the contract to satisfy the Statute of Frauds.

Property>Conveyancing>Delivery and Acceptance>Grantor Gives Deed to Third Party>Transfer With No Conditions>Grantor’s Right to Recover Deed>Majority View

Question 27

What is the minority view of a grantor’s right to recover a deed?

Answer 27

A strong minority prohibits revocation even in the absence of an enforceable underlying contract. Deposit of the deed with a third party on stated conditions is seen to obliviate most possibilities of fraud.

Property>Conveyancing>Delivery and Acceptance>Grantor Gives Deed to Third Party>Transfer With No Conditions>Grantor’s Right to Recover Deed>Minority View

Question 28

What happens to the title when a grantee wrongfully acquires the deed from the escrow holder prior to performance of the conditions of the escrow?

Answer 28

The title does not pass under these circumstances. Therefore, even though the grantee is in possession of the deed, she cannot convey any interest in the land to a subsequent transferee, even a bona fide purchaser.

Property>Conveyancing>Delivery and Acceptance>Grantor Gives Deed to Third Party>Transfer With No Conditions>Breach of Escrow Conditions

Question 29

When can a grantor be estopped to deny a valid delivery and passage of title to a grantee?

Answer 29

A few cases have held that where the escrow holder was chosen by the grantor, the grantor is bound by the escrow holder’s acts and is estopped to deny a valid delivery and passage of title to the grantee. Thus, an innocent purchaser (bona fide purchaser) from the grantee may acquire good title. An important factor is whether the grantor has allowed the grantee to take possession of the property prior to completion of the conditions of the escrow. If the grantor has remained in possession, the purchaser may be held to have notice of the grantor’s interest and cannot be a bona fide purchaser.

Property>Conveyancing>Delivery and Acceptance>Grantor Gives Deed to Third Party>Transfer With No Conditions>Breach of Escrow Conditions>Estoppel Cases

Question 30

When does the relation-back doctrine apply to escrow transactions?

Answer 30

In an escrow transaction, title does not pass to the grantee until performance of the named conditions. However, where justice requires, the title of the grantee will “relate back” to the time of the deposit of the deed in escrow. Generally, the relation-back doctrine will be applied if any of the following circumstances apply:

(1) The grantor dies. The doctrine is applied under this circumstance to avoid the rule that the title must pass before death if the instrument is not a will.
(2) The grantor becomes incompetent. The doctrine is applied under this circumstance to avoid the rule that an incompetent cannot convey title. or
(3) A creditor of the grantor who is not a bona fide purchaser or mortgagee attaches the grantor’s title. The doctrine is applied under this circumstance to cut off the creditor’s claim.

Note that the relation-back doctrine is not applied if the intervening party is a bona fide purchaser or mortgage, and it is not applied in favor of an escrow grantee with knowledge of the prior equities of other persons.

Property>Conveyancing>Delivery and Acceptance>Grantor Gives Deed to Third Party>Transfer With No Conditions>Relation-Back Doctrine

Question 31

In an escrow transaction, title does not pass to the grantee until after performance of the named conditions.

However, where justice requires, the title of the grantee will “relate-back” to the time of the deposit of the deed escrow.

Answer 31

What is the Relation-Back Doctrine?

Question 32

Generally, the relation-back doctrine will be applied:

(1) The grantor dies (doctrine applied to avoid the rule that title must pass before death if instrument is not a will);
(2) The grantor becomes incompetent (doctrine applied to avoid the rule that an incompetent cannot convey title): or
(3) A creditor of the grantor (who is not a BFP or mortgagee) attaches the grantor’s title (doctrine applied to cut off the creditor’s claim).

Answer 32

What are the factors Courts consider when choosing whether to apply the Relation-Back Doctrine?

Question 33

1) The Relation-Back Doctrine is not applied where the intervening third party is a BFP or martgagee (However, if the sales contract is recorded, there can be no intervening BFPs because its recordation gives constructive notice.)
2) The Relation-Back Doctrine will not be applied in favor of escrow grantee who, at the time she performs the terms and conditions of the escrow, has actual or constructive knowledge of prior equities of other persons. (But if the escrow grantee has performed part of the conditions when she acquires such knowledge, she will be protected against all but BFPs or mortgagees).

Answer 33

What are the two situations in which the Relation-Back Doctrine will not be applied?

Question 34

When there is no underlying contract of sale, no “true” escrow exists. Hence, grantor can retrieve the deed early upon request from the third party.

However, if the third party delivers the deed upon the completion of the requisite conditions, the delivery will be deemed effective to convey title to the grantee as of that date.

Answer 34

If the grantor gives a deed to a third party with instructions to turn it over to the named donee only when certain conditions (unrelated to Grantor’s death) occur, is there a valid delivery or can the grantor change her mind and demand the deed back before the conditions occur?

Question 35

What happens when the condition is Grantor’s death?

Answer 35

When O executes a deed to A and hands the deed to B with instructions to give itto A upon the death of O, most courts hold that the grantor cannot get her deed
back because her intent was to presently convey a future interest to the grantee.

Property>Conveyancing>Delivery and Acceptance>Transfer to Third Party with Conditions

Question 36

What happens when the delivery is conditioned on survival?

Answer 36

When O’s instructions to B are to deliver the deed to A only if A survives O. It is generally held that there is no valid delivery because it was O’s intent to retain title and possession until her death.

Property>Conveyancing>Delivery and Acceptance>Transfer to Third Party with Conditions

Question 37

When is acceptance presumed?

Answer 37

There must be an acceptance by the grantee in order to complete a conveyance. Acceptance is presumed if the conveyance is beneficial to the grantee. In other states, acceptance is presumed only where the
grantee is shown to have knowledge of the grant and fails to indicate rejection of it. Acceptance is presumed in all states if the grantee is an infant or an incompetent.

Property>Conveyancing>Delivery and Acceptance>Acceptance

Question 38

What does acceptance “relate back” to?

Answer 38

Acceptance (presumed or otherwise) usually “relates back” to the date of “delivery” of
the deed in escrow. However, many courts refuse to “relate back” an acceptance where
it would defeat the rights of intervening third parties such as BFPs, attaching creditors
of the grantor, or surviving joint tenants. A few states will not even “relate back” an
acceptance if doing so defeats the devisees of the grantor.

Property>Conveyancing>Delivery and Acceptance>Acceptance

Question 39

What is dedication?

Answer 39

A method of transferring land to a public body (city or county)

Property>delivery and acceptance>acceptance

Question 40

How must an offer for dedication be made?

Answer 40

An offer for a dedication may be made through a written or oral statement with a submission of a map or plat of the dedication

Property>delivery and acceptance>acceptance

Question 41

How must a public body accept a dedication?

Answer 41

Acceptance of a dedication for a public body is necessary either through a formal resolution, approval of the map or plat, or through maintaining the property

Property>delivery and acceptance>acceptance