Property 3—Conveyancing—Delivery & Acceptance Flashcards
What does it mean for a deed to be delivered in order to be effective to transfer an interest in realty?
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
How can a person manually deliver a deed?
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
A deed is presumed transferred if?
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
A deed is presumed NOT transferred if the grantor has done what?
Grantor maintains continued possession of the deed.
Property>Conveyance>Delivery and Acceptance
Does physically returning the deed to the grantor cancel delivery?
No, you cannot cancel delivery once it has taken place.
Property>Conveyance>Delivery and Acceptance
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.
What is the majority rule regarding parol evidence?
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.
Is parol evidence admissible to show that the delivery of the deef was subject to a condition?
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.
Is parol evidence admissible to show that the grantor did not intend the deed to have a present effect?
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.
When is parol evidence admissible to show that the deed was intended to be a mortgage?
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.
Transfer of deed to bona fider purchaser?
Even though the grantor is allowed to show that no delivery at all was intended against the grantee, Can the grantor be estopped?
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.
Comment on Estoppel. (not really sure how to make this a true flashcard)
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
Problems arise when the grantor attempts to retain _____ or when he attempts to make the passage of title dependent upon the _______ or ________.
an interest in the property, happening of a condition, event other than delivery.
Retention of Interest by Grantor or Conditional Delivery
What happens if the grantor executes a deed but fails to deliver it during his lifetime?
No conveyance of title takes place. Without adequate delivery, the title does not pass to the intended grantee.
No Delivery – Title does not pass
What does it mean for there to be no recording, for the title to pass?
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
In a deed, hat is the effect of an express provision that the title will not pass until the grantors death?
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
What is the traditional view if a deed is absolute on its face, but is delivered to the grantee with an oral condition?
The condition dropped out and the delivery became absolute.
Property>Conveyancing>Delivery and Acceptance>Retention of Interest by Grantor or Conditional Delivery
What is the test, relinquishment of control?
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
What is permissible when a grantor gives the deed to a 3rd party?
Conditional delivery
Property>Conveyancing>Delivery and Acceptance>Where Grantor gives deed to 3rd party
Does delivery occur when there is a transfer to a third party with no conditions?
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
Does delivery occur when there is a transfer to a third party with no conditions if there are no instructions? (majority and minority)
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
What occurs when there is a transfer to a third party with conditions (commercial transaction)?
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)
Is Parol Evidence admissible to show conditions?
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
What happens when a parol or non-parol condition occurs?
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
