This is a three-hour closed-book and closed-notes Property II examination consisting of three one-hour questions. Each answer will be graded separately and so must stand alone. Thus, in writing any single answer, please do not refer to anything in any other answer. You may refer to statements made within the same answer.
Each answer will be weighted in proportion to the time allotted for it. Thus, it may be unwise to spend more than the recommended time for any single answer.
Please discuss all issues reasonably presented, even if resolution of any particular issue would by itself dispose of the problem. Please specify all reasons supporting your conclusions, including alternative grounds and possible contrary arguments.
If you believe that, with respect to any particular issue, there are insufficient facts to warrant drawing any conclusion, please indicate what additional facts would be relevant and explain why.
If you believe that any of the statements of fact is ambiguous, please resolve the ambiguity for yourself, briefly describing its nature and your method of resolution.
Please write on only one side of each page and use complete sentences. Thank you and good luck.
QUESTION I (one hour)
Assume the following facts. The applicable recording act is a Race-Notice Act. The applicable law requires every county recorder to maintain a grantor-grantee index and also provides that any county recorder may, but is not required, to maintain a tract index. All recordings mentioned in this problem were filed in a county maintaining a grantor-grantee index, but no tract index.
On Jan. 5, 2003, A took possession of a parcel of rural undeveloped real estate, Parcel P, located in the northern part of State X. At the time, the parcel was owned by State X. A took possession of the parcel pursuant to the State’s Homestead Act. Under that Homestead Act, an individual could acquire title to a parcel of land owned by the State by first applying to the State for permission to take possession of the parcel and then by improving the parcel by taking such actions as clearing trees, constructing a house, installing a septic tank, and other measures. If such an applicant successfully completed these improvements, then, at the end of a two-year period measured from the applicant’s first day of possession, the State promised to convey title to the parcel to the applicant by means of executing and delivering a general warranty deed. By June 2, 2004, A had cleared the trees on Parcel P, built a house and barn, constructed a septic tank system, and completed all of the other requirements. Of course, the two-year period had not yet run, and so A was not yet eligible to get a deed to Parcel P from State X. Indeed, the State was not obligated to deed the land to A until two years after Jan. 5, 2003, that is, on Jan. 5, 2005.
A short time later, A found herself in immediate need of money and so decided to sell Parcel P to B. At the time, B assumed that A owned Parcel P and failed to examine the title records to make sure. On July 8, 2004, A executed and delivered a quit-claim deed to Parcel P in favor of B for a cash payment of $25,000. The market-value of Parcel P at that time was $400,000. B recorded the deed on the same day. A vacated Parcel P. B did not move onto Parcel P at that time, but did park a large truck filled with B’s furniture and other possessions in the driveway to the house A had built on Parcel P.
On Jan. 5, 2005, two years after A had taken possession of Parcel P, State X executed and delivered a general-warranty deed to Parcel P to A. A recorded the deed on the same day. A few weeks later, A again began having financial difficulties.
On March 1, 2005, A executed and delivered a quit-claim deed to Parcel P in favor of C in exchange for a payment of $100,000. C recorded the deed on that same day. At that time, C had no actual knowledge of A’s prior deed to B.
On April 1, 2005, C executed and delivered a quit-claim deed to Parcel P in favor of D in exchange for a payment of $400,000. D did not record the deed from C at that time. D had no actual knowledge of the prior deed from A to B.
On May 1, 2005, D executed and delivered a quit-claim deed to Parcel P to E in exchange for a payment of $40,000. E recorded the deed from D on the same day. At that time, E had no actual knowledge of the prior deed from A to B.
On June 5, 2005, E executed and delivered a quit-claim deed to Parcel P in favor of F in exchange for a payment of $350,000. The deed was notarized, but the notary public forgot to fill in the date on the line for a date in the notarization statement. F recorded the deed on the same day, together with the deed from C to D. The recorder failed to notice the omission of a date on the notarization statement. At that time, F had no actual knowledge of A’s prior deed to B.
On July 1, 2005, F executed and delivered a quit-claim deed to Parcel P to G in exchange for a payment of $275,000. G recorded the deed from F on that same day. At that time, G had no actual knowledge of the prior deed form A to B.
Assume that litigation arises between G and B over title to Parcel P. Discuss and resolve the issues of Property Law which might reasonably arise in this lawsuit. Do not discuss any issue of breach of title covenants. Do not discuss any claim G or B may have against A.
QUESTION II (one hour)
On Feb. 1, 2000, A purchased a 2,000 acre tract of undeveloped land. Call it ‘Parcel P.’ The tract was bounded on the north by a public highway, on the west by Parcel Q, which was owned by B, and on the east by Parcel R, which was owned by C. Adjacent to the southern boundary of Parcel P was a 3,000 acre lake, named Lake Trout. C had been operating a sawmill in the north-eastern corner of Parcel R since 1963. She used pine tar in the sawmill process. The pine tar gave off a very strong and unpleasant odor, but there had been no complaints about the odor from anyone living in the vicinity since the area within 10 miles of the sawmill on all sides contained very few residents. A had no easement rights over either Parcel Q or Parcel R.
After purchasing Parcel P, A built a three-bedroom house, a barn, a machine shed, and a garage on the southern boundary of Parcel P, near the shore of Lake Trout. She purchased a few cows and horses and planted 50 acres of corn and 75 acres of beans on Parcel P. She also constructed a one-lane gravel driveway linking her house to the public road on the northern boundary of Parcel P.
On June 13, 2001, A sold the northern half of Parcel P to a person named D, retaining the southern half herself. The deed A gave to D said nothing about easement rights. After selling the northern half of Parcel P to D, A continued to use the driveway to get to and from the public road to the north. D did not object to A’s practice at that time.
On August 23, 2002, A began building a large enclosure for raising turkeys next to her barn on Parcel P. In the 6-month process of building the enclosure, A repeatedly used the driveway across the northern half of Parcel P to bring in building materials by truck. D knew about the construction, but did not object to A’s using the driveway to bring in materials.
On March 1, 2003, D sold the northern half of Parcel P to a person named E. E subdivided the northern half of Parcel P into 1,000 one-acre lots and built a large house on each lot. The lots stretched from the western boundary of the northern half of Parcel P to its eastern boundary. E began selling the lots near the western boundary and then over time gradually began selling lots nearer and nearer the eastern boundary. Finally, when E began selling the lots located near the north-eastern boundary of the northern half of Parcel P, he began to experience sales resistance on the part of prospective buyers because the lots near the north-eastern boundary of Parcel P were close enough to C’s sawmill operation on Parcel R to be within the scope of the obnoxious pine-tar odors emanating from it.
On November 25, 2003, A sold the southern half of Parcel P to a person named F. F subdivided the southern half of Parcel P into 2,000 lots and constructed a house on each one. F planned to give each buyer the right to use the driveway connecting the southern half of Parcel P to the public road to the north. F began rapidly selling the lots on the southern half of Parcel P. In just a few months, F had sold over 1000 of the lots. Each of the persons who had purchased one of those 1000 lots owned a least one vehicle and regularly drove it over the driveway crossing the northern half of Parcel P from 2 to 5 times daily.
Two legal proceedings were initiated. [1] E sued C, seeking an order enjoining C from continuing to operate his sawmill. [2] E sued F and all those persons who had purchased lots on the southern half of Parcel P, seeking an order enjoining them from continuing to use the driveway for any purpose.
Discuss and resolve the issues of Property Law which might reasonably arise in these two proceedings. Do not discuss any issues of Prescriptive Easements, Legal Covenants, or Equitable Servitudes.
QUESTION III (one hour)
Consider the following three real-estate transactions.
[1] On March 1, 2003, A executed and delivered a deed to Parcel P in favor of B. B paid no consideration. The deed was unconditional on its face. As A handed the deed to B, A said: “Tomorrow I am going to the hospital to undergo a very serious operation. If I die during the operation, take this deed to the County Recorder’s Office and record it. On the other hand, if I survive the operation, then return the deed to me.” A survived the operation, but B refused to return the deed. A sued B, alleging that title to Parcel P was in A. B argued that title to Parcel P was in B.
[2] On April 1, 2003, C and D were playing golf together. On the seventh fairway, C asked D whether D was interested in purchasing Parcel Q, which C owned. D said that she was interested. C responded by saying, “Would you agree to pay $200,000 for it?” D responded by saying, “Sure, but I won’t have the money to pay you until two months from now.” C said, “That’s alright.” C and D then shook hands on the agreement. When going their separate ways after the round of golf, C told D that she would execute a deed to Parcel Q in D’s favor and give the deed to her attorney, E, to hold for safekeeping until such time as D had assembled the $200,000. D agreed to that arrangement. On April 5, 2003, C handed to her attorney, E, an executed deed to Parcel P in D’s favor. As C handed the deed to her attorney, she said, “Give this deed to D when she gives you a certified check for $200,000 payable to me, unless I have asked you to return the deed to me before then.” E agreed to hold the deed under those conditions. On June 1, 2003, D drove to E’s law office with a certified check for $200,000 in her briefcase. Upon arriving at E’s office, D was told that C had died in a swimming accident the day before. D handed the check to E and E handed the deed to D. Several months later, the administrator of C’s estate sued D, seeking a judicial declaration that Parcel Q was an asset of C’s estate.
[3] On May 1, 2003, F was the 80-year-old owner of Parcel R. After thinking about how to arrange his affairs before his death, F decided to give Parcel R to his niece, G. F executed a deed to Parcel R in favor of G and placed the deed in the right-hand drawer in the desk in his home. F did not tell G what he had done. F then telephoned a friend named H and told H what he had just done and asked H to do the following things immediately after F’s death: “Go to my house, take the deed out of the right-hand desk drawer, if it is still there, and then give it to G.” H agreed. F died 8 weeks later. Shortly after F’s death, H entered F’s house, found the deed in the desk drawer, and delivered the deed to G. Several weeks later, the administrator of F’s estate sued G, alleging that Parcel R was an asset of F’s estate.
Discuss and resolve the issues of Property Law which might reasonably arise in these three proceedings. Do not discuss any issue of breach of title covenants.
********
[Property II, Spring, 2006, Q.1]
G vs. B
[A] Type of recording act - The problem states that the applicable recording statute is a race-notice act. What is that?
[1] Under a race-notice act, a subsequent taker prevails over an earlier unrecorded interest if the subsequent taker (1) takes without notice, (2) gives value, and (3) records first.
[B] Types of notice
[1] Law
[a] Actual
[b] Record
[c] Inquiry
[C] What rule applies if the applicable recording act does not?
[1] Law
[a] If the subsequent taker is not protected by the applicable recording act, the common law rule “First in time, first in right” applies.
{1} Exception: A prior equitable interest is subordinate to a subsequent bfp with a legal interest.[2] Application [As the earlier grantee, B would prevail over G.]
[D] Types of indexes
[1] Law
[a] Grantor-grantee
[b] Tract[2] Application [Only a grantor-grantee index]
[E] G vs. B, in G’s own right
[1] Who is the subsequent taker? [G]
[2] Did G take without notice of B’s interest?
[a] Did G have actual notice of B’s interest? [No]
[b] Did G have record notice of B’s interest?
{1} Law
{a} Estoppel-by-deed issue: Suppose that a grantor purports to convey title to a grantee by means of a deed making a representation about title at a time when the grantor has no title to convey. The grantor later acquires title from the true owner and a conveyance is eventually made to a bfp. Who prevails - the first grantee or the subsequent bfp? [See 702 in Text]
{b} Our Text states: “Estoppel by deed originated in cases involving warranty deeds, but it has been extended by courts to quitclaim deeds if the deed represents that the grantor had title.” [633]
{c} The majority of cases, especially the most recent, protect the subsequent bfp. [702 in Text]
{d} But a minority protect the earlier grantee under the doctrine of estoppel by deed. [702 in Text]{2} Application
{a} Under the majority rule, G would prevail.
{b} Under the minority rule, B would prevail.
<1> Of course, that conclusion depends upon the assumption that the conditions of the Estoppel-by-deed rule were satisfied. In particular, it depends ukpon the assumption that the deed A gave B contained some kind of “representation about title”. The deed was a quitclaim deed, which, by definition, contains no title warranties. However, there may have been some language in the deed which made a representation about title. Whether there was is an unresolved question on these facts.
[c] Did G have inquiry notice of B’s interest?
{1} Law
{a} In general, the rule of inquiry notice provides that one who has information from any source suggesting the existence of a prior conveyance must make a reasonable investigation. A purchaser who fails to do so will be held to the knowledge that such an investigation would have disclosed.
{b} The rule of inquiry notice is triggered by persons in possession.
{c} According to some courts, the rule may also be triggered by recorded documents containing references to unrecorded instruments.
{d} Quitclaim deeds:
<1> In most jurisdictions, a purchaser by quitclaim deed is not held to be put thereby on inquiry jnotice.
<2> However, in a few jurisdictions the rule is otherwise with respect to the immediate recipient of a quitclaim deed.
<3> And it may even be held that a quitclaim deed in the chain of title puts all subsequent purchasers on inquiry notice. They must make further investigation about the deed.{2} Application
{a} Persons in possession? [What about B’s parked truck?]
{b} Inquiry notice triggered by the prior quitclaim deeds?
<1> Under majority rule?
<2> Under minority rules?[3] Did G give value?
[a] Law
There is some disagreement as to how much a grantee must pay to be deemed a purchaser. Most courts require more than a nominal value, such as a “substantial” amount or an amount “not grossly inadequate.” [706 in Text]
[b] Application [G paid $275 for a parcel whose market value was $400,000]
[4] Did G record first [i.e., before B recorded]?
[a] “Duly recorded” issue:
{1} Law
{a} The law re fact that B’s deed was literally recorded before G’s
<1> At least in a Woods v. Garnett setting, the ALP argues that in such cases the subsequent taker cannot win because the earlier taker has already literally recorded. Some courts have followed this reasoning, at least in a Woods v. Garnett setting.
<2> But other courts disagree, holding that in such cases the prior interest was not “duly” recorded.
<3> Of course, the same issue arises in an Estoppel-by-deed situation. Courts which want to protect the subsequent purchaser must hold that the prior instrument was not “duly” recorded.
{2} Application
{a} Under the ALP rule, G would lose because B’s deed was literally recorded first.
{b} Under the contrary rule, G would prevail because B’s deed was not “duly” recorded.
[b] Messersmith issue
{1} Law
{a} Messersmith held that a subsequent taker was defeated by the occurrence of a defectively acknowledged deed [a latent defect] recorded earlier in his own chain of title.
{2} Application
{a} Under Messersmith, G wold presumably lose. Note that, whereas the defect in Messersmith was latent, the defect here was patent. One might suppose that this fact would make it even more difficult for G to prevail under the Messersmith approach.
{b} Under contrary authority? [Presumably, G would prevail on this issue.]
[F] Is G protected by the Shelter Rule?
[1] Law
[a] Under the Shelter Rule, one who takes (directly or indirectly) from a bfp who would have been protected by the applicable recording act as against the earlier grantee, has the same rights as that prior purchaser wold have had against that earlier grantee.
[2] Application
[a] Would F have been protected as against B?
{1} Did F take without notice?
{a} Actual notice? [No]
{b} Record notice? [Same estoppel-by-deed issue as for G]
{c} Inquiry notice? [Same inquiry notice issues as for G]
{2} Did F give value? [Paid $350,000 out of $400,000 MV]
{3} Did F record first?
{a} Same “duly” recorded issue as for G.
{b} But would F be defeated by an extension of the Messersmith rule? One might argue that if G is defeated by that rule then, a fortiori, F should also be defeated by it. For, F presumably knew, or at least should have known, about the patent defect.
[b] Would E have been protected as against B?
{1} Did E take without notice?
{a} Actual notice? [No]
{b} Record notice? [Same estoppel-by-deed issue as for G]
{c} Inquiry notice? [Same inquiry notice issues as for G]
{2} Did E give value? [$40,000 out of $400,000 MV]
{3} Did E record first?
{a} Same “duly” recorded issue as for G.
{b} In addition, there is a Zimmer issue.
<1> Law
<a> A race-notice act protects a subsequent purchaser only if all prior conveyances in that purchaser’s own chain are also recorded. This rule is followed in “several” jurisdictions.
<2> Application
<a> Under Zimmer, E would lose because, when E recorded, the C –> D deed was unrecorded.
[c] Would D have been protected as against B?
{1} Did D take without notice?
{a} Actual notice? [No]
{b} Record notice? [Same estoppel-by-deed issues as for G]
{c} Inquiry notice? [Same inquiry notice issues as for G]
{2} Did D give value? [Paid full MV of $400,000]
{3} Did D record first? [D did not record at all]
[d] Would C have been protected as against B?
{1} Did C take without notice?
{a} Actual notice? [No]
{b} Record notice? [Same estoppel-by-deed issue as for G]
{c} Inquiry notice? [Same inquiry notice issues as for G]
{2} Did C give value? [Paid $100,000 out of $400,000 MV]
{3} Did C record first? [Same “duly” recorded issue as for G]
[e] Would A have been protected as against B?
{1} Presumably, A would lose to B on the basis of a non-controversial application of the estoppel-by-deed rule. However, as noted earlier, that conclusion depends upon the assumption that the A–>B deed, although a quitclaim deed, nevertheless contained some kind of representation of title.
[G] Other?
[Property II, Spring, 2006, Q.II]
E vs. C
[A] Nuisance
[1] Liability
[a] Law
{1} Threshold-level test
{2} Restatement test
{a} Liability if gravity of harm outweighs utility of actor’s conduct
{b} Factors re gravity of harm
(1) Extent and character of harm
(2) Social value of plaintiff’s use
(3) Suitability to locality
(4) Burden on plaintiff of avoiding harm
{c} Factors re utility of actor’s conduct
(1) Social value
(2) Suitability to locality
(3) Impracticality of actor preventing harm
[b] Application
{1} Under threshold-level test?
{2} Under Restatement test?
{a} Gravity of harm?
(1) Extent and character of harm?
(2) Social value of plaintiff’s use?
{3} Suitability to locality?
{4} Burden on plaintiff of avoiding harm?
{b} Utility of actor’s conduct?
(1) Social value?
(2) Suitability to locality?
(3) Impracticality of actor preventing harm?
[2] Remedies
[a] Law
{1} Automatic injunction rule
{2} Balancing of equities approach [If injury to plaintiff is slight in comparison to injury caused to defendant and public by enjoining the nuisance, then injunctive relief is ordinarily denied]
{a} It seems that if the Restatement rule on liability has already been applied then the equities would necessarily already have been balanced. Hence, it seems that balancing of the equities makes sense only if the threshold-level test was applied on the liability issue.
{3} Coming-to-the-nuisance issue: In most jurisdictions, it is only a factor for consideration.
{4} Spur Industries approach: Grant injunctive relief, but only on the condition that the plaintiff pays damages to defendant.
[b] Application
{1} Under automatic injunction rule?
{2} Under balancing of the equities approach?
{3} Under the usual rule for a coming to the nuisance issue?
{4} Under Spur Industries approach?
[B] Other?
E vs. F
[A] Was an easement expressly created by A (in the June 13, 2001, transaction with D) in favor of A herself?
[1] Law
[a] Easements may be created expressly by a writing.
[b] Whatever formal requirements exist in the jurisdiction for the transfer of property interests are generally also applicable to the creation of easements.
[c] Such a writing may create an easement either by express grant or by express reservation.
[2] Application
[a] Express grant? [No]
[b] Express reservation? [No, but that would have been the appropriate action]
[B] Was an easement by implication from prior usage created by A (in the June 13, 2001, transaction with D) in favor of A herself?
[1] Law
[a] When parties are situated so that an easement could have been expressly granted or reserved expressly but was not then under certain circumstances courts may hold that the parties impliedly created an easement.
[b] Such an implication may create either a grant or a reservation.
[c] There must be a severance of an earlier ownership by a single owner.
[d] There must have been a prior usage [quasi-easement].
[e] The prior usage must have been (1) apparent, (2) continuous or permanent [according to many older cases], and (3) necessary, or at least beneficial, to the use of the dominant parcel.
[f] “Continuous” means only that there were indications that the usage would continue after severance.
[g] Some courts require strict necessity before implying a reserved easement, whereas they require only a reasonable benefit to the dominant parcel in the case of a granted easement.
[h] But for most courts the fact that an alleged easement would be an implied reservation rather than an implied grant is only a factor to be taken into account, in the sense that the degree of necessity required to imply a reservation in favor of the grantor is greater than that required to imply a grant in favor of the grantee.
[i] A more relaxed standard of reasonable necessity is the approach most courts take.
[2] Application
[a] Would it be an implied reservation or an implied grant? [Reservation]
[b] Severance? [Yes - by A]
[c] Prior usage? [Yes]
[d] Apparent? [Yes]
[e] Permanent-continuous? [Yes]
[f] Necessary-beneficial? [Significance of fact that it was an implied reservation?]
[C] Was an implied easement by necessity created by A (in the June 13, 2001 transaction with D) in favor of A herself?
[1] Law
[a] When a parcel is subdivided so that one part is left without access to a public road, an easement of passage is implied across the other part(s).
[b] The implication does not depend upon the acts of the parties or the circumstances or any pre-existing usage.
[c] The claimant cannot make out necessity if she has access over other land of hers that adjoins the would-be dominant parcel.
[d] But she can make out necessity if a stranger owns an adjoining parcel; she has no right of access over a stranger’s parcel which reduces the necessity.
[e] There is some conflict in the cases over the degree of necessity required.
[f] Most courts require strict necessity.
[g] But some courts have granted easements by necessity where access to the land exists, but is inadequate difficult or costly.
[h] In a few jurisdictions a surface way of necessity will not be implied if the tract has access over navigable water.
[i] Necessity for the easement must exist at the moment of severance.
[j] Location
{1} Owner of servient parcel is given first choice.
{2} If owner fails to specify, the other party may choose.
{3} If parties cannot agree a court of equity will fix the location, having regard for not only the shortest route but all other factors bearing on the must suitable and convenient route.
[2] Application
[a] Severance? [Yes]
[b] Landlocked?
{1} Strict necessity? [Apparently]
{2} Landlocked at moment of severance? [Yes]
{3} Significance of other privately owned parcels? [A had no easement rights over them]
{4} Significance of the lake? [Only a few cases find this a bar to implication by necessity. But, even then, we don’t know whether there is a public road abutting the lake somewhere.]
[D] Was an easement created by estoppel by D (after A started construction of additional buildings) in favor of A herself?
[1] Law
[a] A license is permission given by the occupant of land allowing licensee to do an act which would otherwise be a trespass.
[b] Licenses are revocable [in contrast to easements].
[c] Exception to revocability rule: A license that becomes irrevocable under the rules of estoppel. [Maj. Rule]
{1} One may acquire a license to use a roadway where, with the knowledge of the licensor, she has in the exercise of the privilege spent money in improving the way or for other purposes connected with its use on the faith or strength of the license. Under such conditions, the license becomes irrevocable and continues for so long a time as its nature calls for.
[2] Application
[a] License? [A never asked for D’s permission, but D knew that A was using the lane]
[b] Detrimental reliance? [Yes]
[c] Was the reliance reasonable? [Controversial]
[d] Knowledge of licensor? [Yes]
[e] For how long would it be irrevocable, if it is? [Controversial]
[E] If an easement in favor of A was created in at least one of the foregoing ways, was its benefit transferred from A to F (in the Nov. 25, 2003 sale transaction)?
[1] Law
[a] In general, the benefit of an appurtenant easement is transferred along with the transfer of the dominant parcel.
[2] Application
[a] Appurtenant easement? [Yes - app. to the southern half of Parcel P]
[b] Transfer of the dominant parcel? [Yes - from A to F]
[F] If an easement in favor of A was created in at least one of the foregoing ways, was its burden transferred from D to E (in the March 1, 2003 transaction), putting aside for the moment the question of surcharge and/or divisibility?
[1] Law
[a] In general, the burden of an appurtenant easement is transferred along with the transfer of the servient parcel.
[2] Application
[a] Appurtenant easement? [Yes - app. to the southern half of Parcel P and burdening the northern half of Parcel P]
[b] Transfer of the servient parcel? [Yes - from D to E]
[G] If an easement in favor of A was created in at least one of the foregoing ways, and if its benefit was transferred from A to F, was its benefit subdivisible by F?
[1] Law
[a] In general, the benefit of an appurtenant easement is subdivided when the dominant parcel is subdivided, unless either the terms of the original grant prohibit subdivision, or the terms of the subdividing grants restrain the transfer of the benefit.
[b] However, if development of the subdivided land would cause the easement to be surcharged [i.e., used beyond ways that might have been reasonably anticipated by the servient owner] then the excess usage will not be permitted.
[2] Application
[a] Would subdividing among 1000 (and potentially 2000) landowners, each making 2-5 trips a day, have been reasonably anticipated by D?
[H] Other?
[Property II, Spring, 2006, Q.III]
A vs. B
[A] Was there an effective delivery from A to B, given the oral condition?
[1] Law
[a] A deed must be delivered to be effective.
[b] Delivery means an act evincing an intent to be immediately bound.
[c] Such an act can be handing the document to the grantee.
[d] It can also be the grantor’s declaration, express or implied, that she is bound by the deed.
[e] Delivery does not require that the deed be handed over.
[f] Presumptions:
{1} There is a rebuttable presumption of delivery when the deed is in the possession of the grantee.
{2} There is a rebuttable presumption of non-delivery when the deed is in the possession of the grantor.
{3} There is a rebuttable presumption of delivery when the grantor has notarized or recorded the deed.
[g] There is a distinction between an inter vivos conveyance, requiring delivery of a signed instrument, on the one hand, and a transfer at death [testamentary transfer] which requires compliance with the Statute of Wills.
[h] Oral conditions (three approaches)
{1} Sweeney approach: A conditional oral delivery vests absolute title in the grantee. The oral condition is disregarded. [Maj.]
{2} Testamentary intent approach: When a deed is handed to a grantee, but extrinsic evidence shows that the deed was to take effect at the death of the grantor, a few courts have ruled that there was no effective delivery because there was an intent to make a testamentary transfer.
{3} Chillemi approach: Oral conditions are enforceable. If the conditions are met, there is an operative conveyance which is deemed to have been delivered at the time of the conditional delivery. On the other hand, if the conditions are not met, then there is no delivery.
[2] Application
[a] Was there a manual delivery? [Yes]
[b] Did the grantor intend to be immediately bound? [Controversial]
[c] Any presumptions apply?
[d] Outcome under Sweeney approach? [Condition disregarded. Title in B]
[e] Outcome under Testamentary intent approach? [No delivery. Title in A]
[f] Outcome under Chillemi approach? [Condition enforceable, but was not satisfied. Title in A]
[B] Other?
C vs. D
[A] Was there a valid commercial (sales) escrow with relation back?
[1] Law
[a] If a commercial escrow is valid, then the relation-back rule applies.
[b] The relation-back rule applies only if (1) there is an enforceable contract between grantor and grantee and (2) the grantor has reserved no power to recall the deed from the custodian.
[c] If these conditions are not satisfied, then (1) the grantor has the legal power to recall the deed at any time before the custodian delivers it to the grantee and (2) if the grantor remains alive and competent and does not recall the deed, and if the escrow instructions are satisfied, and if the custodian delivers the deed to the grantee, then there will be no relation back. However, such a delivery is good, as of the time it actually occurs.
[2] Application
[a] Manual delivery? [To custodian - not to grantee]
[b] Intent to be immediately bound? [Apparently not]
[c] Any presumptions apply?
[d] Valid commercial escrow?
{1} Enforceable contract?
{a} Statute of Frauds complied with? [No]
{b} Part performance exception apply?
(1) Buyer’s actions unequivocally referable to the oral agreement?
(2) Detrimental reliance? [P was prepared to pay the purchase price, but did not take possession (so far as we know) and did not improve the property (so far as we know).
{2} Did grantor reserve the power to recall the deed? [Apparently]
[B] Other?
Administrator of F’s estate vs. G
[A] Did F set up a valid death escrow?
[1] Law
[a] The grantor must place the deed beyond her control, reserving no power over it once it has been deposited.
[b] No contract is required; it may be gratuitous.
[c] If there is a valid death escrow, delivery of the instrument to the custodian works to immediately pass title to the grantee.
[2] Application
[a] Did the grantor place the deed beyond his control? [No - He did not even deliver it to the third-party, but retained possession himself]
[b] Did the grantor reserve the power to negate the transaction? [Apparently]
[B] Other?