Article by San Diego Attorney Ethan Watts on Issues In The Delivery Of Deeds Under California Law

Issues In The Delivery Of Deeds Under California Law

2005

By Ethan Watts

Delivery of Deeds Generally

A deed takes effect when delivered, and whether or not delivery has occurred depends on the intention of the grantor. Civ. Code § 1054; Miller v. Jansen (1943) 21 Cal. 2d 473, 477; Williams v. Kidd (1915) 170 Cal. 631, 642; Knudson v. Adams (1934) 137 Cal. App. 261, 267. Delivery occurs if and only if the grantor, in parting with possession of the deed, intended to presently convey title to the grantee. Williams v. Kidd (1915) 170 Cal. 631. Whether or not such intent was present is a question of fact. Ivancovich v. Sullivan (1957) 149 Cal. App. 2d 160, 164. Generally, if a deed has not been delivered, then it is void and ineffective. Bank of Healdsburg v. Bailhace (1884) 65 Cal. 327, 329-332; Reina v. Erassarret (1949) 90 Cal. App. 2d 418, 426-427; Meyer v. Wall (1969) 270 Cal. App. 2d 24, 27. Thus, whether or not a deed took effect will depend on the trial court’s findings regarding the grantor’s intent at the time the grantor allegedly gave a deed to the grantee.

Conditional Delivery of Deeds

If a deed expressly contains conditions precedent to the transfer of title, then the title does not pass until the conditions are satisfied. Civ. Code § 1110; City of Stockton v. Weber (1893) 98 Cal. 433, 439-441. However, if the quitclaim deed is absolute and without express conditions, then oral conditions, understandings or agreements expressed by the grantor or grantee will have no effect on the conveyance of title. Civ. Code § 1056; Blackledge v. McIntosh (1927) 85 Cal. App. 475, 482; Ivancovich v. Sullivan (1957) 149 Cal. App. 2d 160, 164. The key issue, therefore, is the grantor’s intent at the time the deed (or quitclaim deed) is given to the grantee.

Presumptions and Inferences in the Delivery of Deeds

It should first be noted that when a deed has been recorded, there is a rebuttable presumption of delivery. Ev. Code § 1600. In such a case, a grantor attempting to set aside a deed will therefore have the burden of proving that she did not deliver the deed. Id. Furthermore, when a grantee is in possession of a deed, there is an inference of delivery. However, this inference is easily surmounted, as it was in Blackburn v. Drake (1963) 211 Cal. App. 2d 806. In Blackburn, a grantor overcame the inference where the trial court found the testimony of the grantor more credible than that of the grantee. Id. at 813-814. Even though the grantee's testimony had not been directly impeached, the Court of Appeal upheld the trial court's finding stating that the trial court is not bound to accept as true the sworn testimony of a witness, and "[i]n passing upon [the grantee]'s credibility, the court was authorized to consider her interest in the case." Id. at 814. Thus, an inference of delivery can be overcome if the trial court finds the grantor lacked the requisite intent. The trial court could base such findings on the testimony of the grantor alone, and even if the grantor ’s testimony contradicts the grantee ’s. Id.

The Grantor's Intent

Under California law, the trial court’s finding regarding the grantor’s intent will determine whether delivery occurred. If the court finds that the grantor handed, or otherwise gave the deed to the grantee (“manual delivery”), then the decisive issue becomes the grantor’s intent at the time of manual delivery.

If, at the time of manual delivery, the grantor intended to presently convey title to the grantee, the deed will have been effective upon manual delivery regardless of any conditions. If, however, the grantor intended the deed to take effect at some point in the future, or if the grantor thought the deed would not be effective until some subsequent act was performed, then a delivery may not have occurred. For example, if the grantor manually delivers a deed to the grantee with the intent that interest will pass only upon the grantor’s death, then the deed is ineffective and void because the intent to presently pass title did not exist at the time of manual delivery. Kenney v. Parks (1902) 137 Cal. 527, 531-532; Counter v. Counter (1951) 104 Cal. App. 2d 786, 789-790; Henneberry v. Henneberry (1958) 164 Cal. App. 2d 125, 130-131.

A deed may also be found void and ineffective because the grantor thought some act subsequent to manual delivery was necessary. In Hotaling v. Hotaling (1924) 193 Cal. 368, the grantor (a corporation) signed, acknowledged and manually delivered a deed to real property to the grantee. 193 Cal. 368, 373. The grantor, however, “believed and understood that a deed to real property had no validity or effect unless and until it was recorded,” and the grantee had agreed not to record the deed “except in the event of [his sister-in-law]’s remarriage.” Id. at 373-374. After the manual delivery, the parties continued to treat the property as if it still belonged to the grantor. Id. at 374. The property continued to be carried upon the grantor’s books and financial statements as one of its assets. Id. The grantor continued to pay the taxes and other expenses while nothing was charged to the grantee. Id.

Based on these facts, the trial court in Hotaling found that there was no delivery. Id. at 381. The grantee challenged the finding as inconsistent with the finding that there was a manual delivery. Id. The grantee cited Civil Code Section 1056 and case law for the rule that there is no such thing as a delivery of a grant to the grantee conditionally. Id. To this, the Court of Appeal stated that “[t]he validity of this rule is not open to question, but it comes into application only when there has been a delivery. The question whether or not such delivery has taken place is a question of fact involving the intent of the parties.” Id. at 381-382. Continuing, the court reasoned that:

[The grantor] believed that the deed would be of no effect whatever until recorded. Under that belief the manual tradition of the deed would be but one step, and not the final step, in the process of the execution thereof. Under that belief tradition without recordation would be no more effective than would signature without delivery. Id.

The court therefore concluded that the essential intent to presently convey title was lacking and that there was no delivery. Id. at 385.

The same result was reached in Kimbro v. Kimbro (1926) 199 Cal. 344 where the grantor believed that a deed was not valid unless acknowledged. 199 Cal. 344, 350. Although the grantor had manually delivered the deed to the grantee, the grantor had not acknowledged it, and therefore believed that he had not conveyed title to the grantee. Id. at 350-351. Based on these facts, the court found that there was no delivery because the grantor lacked the intent to presently convey title. Id. at 351.

Under the cases discussed above, if a trial court finds a grantor did not intend to presently convey title to the grantee because he either intended the deed to take effect at some point in the future or because he thought the deed would not be effective until some subsequent act was performed, then there was no delivery and the deed is void and ineffective.

Conclusion

The key issue in whether or not a deed is effective is whether or not the deed was delivered. Delivery requires the grantor’s intent to presently convey title. In addition to the testimony of the grantor and grantee, the trial court will look to all the evidence in determining the grantor’s intent at the time of an alleged manual delivery. If the trial court finds the grantor intended the deed to take effect at some point in the future, or if the trial court finds the grantor thought the deed would not be effective until some subsequent act was performed, then there was no delivery and the deed is void and ineffective.

 

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The above discussion is intended to be a general commentary on legal issues. Each situation is different and this article is not intended as legal advice. Further, nothing in this article is intended to create an attorney-client relationship.

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