Land Transfer and the Title System
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Valid Deed MUST Include:
Deeds: minimum requirements and typical contents
The delivery requirement
Conditional delivery (escrow)
Deed warranties
The recording system and the process of title search
Title insurance
• Names of the grantor and grantee (required to satisfy
statute of frauds, and for the indexing that is necessary for
recording system to be searchable)
• Words demonstrating grantor’s intent to convey (typically,
a granting clause) [“conveys and warrants,” p. 149]
• “Legal” description of land being conveyed
• Signature of the grantor (but not the grantee)
Bale v. Allison — Was the Deed Valid?
• Deed was valid even if there was no legal consideration
• Owner, whose will left a cabin to his stepsons, made and
delivered a deed to the same cabin to his nephews
• Trial court found:
– Deed “fails to state what consideration, if any, was given”
– “There were blanks left [in the form] as to whom the property
was conveyed.”
– Grantees later filled in the blanks and re-recorded the deed
• Given these findings, why does appellate court uphold the
deed as valid?
– Deed is an instrument of conveyance and not a contract;
consideration not required for deed to be valid
– In sale transaction, the underlying contract for sale would have
to be supported by consideration
• “To” blank in deed was not filled in, but deed otherwise
identified the nephews as “Grantees” (handwritten)
• Modification/re-recording of deed was of no effect (deed
had already effected transfer)
Quasi-Requirement
Deeds MAY (but Do Not Have to) Include:
• Marital status of individual grantor and/or grantee (can you explain
why?)
• Recital of consideration (no consideration required; Bale v. Allison)
• Date
• Warranties regarding quality of grantor’s title conveyed (i.e., deed
covenants or deed warranties)
• Any exclusions (called “exceptions”) from deed covenants
Types of Deeds
• Quitclaim deed: grantor makes no warranty of title
• General warranty deed: grantor warrants title, even as
against defects that arose before the grantor acquired
his/her title
• Special warranty deed: grantor warrants against any title
defects caused by grantor or arising during grantor’s
ownership
• For grantee’s claim of title to be valid against subsequent
purchasers and mortgagees claiming through the grantor,
the deed must be recorded, and thus it must also be
“acknowledged” or notarized
– Unacknowledged deed cannot be accepted for recording
– Unrecorded deed is still valid between the parties, but not vs. a
BFP from the grantor
• A deed delivers the same quality of title to the grantee,
whether it is a quitclaim or a warranty deed
– Some courts have held that having a quitclaim deed in your
chain of title is a cause for suspicion, but this is incorrect
(having a quitclaim deed in your chain of title should NOT call
into question the marketability of your title)
• Questions
– When is a quitclaim deed appropriate?
– Why aren’t quitclaim deeds more commonly used? Why
wouldn’t a grantor always use a quitclaim deed?
• Quitclaims are most commonly used in
– Gift transactions (where grantor is receiving no consideration)
– Transactions involving settlements, releases, etc. (where grantor
wants to “wash her hands” of issues relating to title and have no
residual liability vis-a-vis grantee)
• By contrast, buyers paying FMV expect Seller to “stand
behind” Seller’s title, so warranty is customary in ordinary
sale transactions
– Likewise, title insurer expects warranty deed (insurer is subrogated
to insured’s right to pursue grantor for breach of deed warranty)
• Litton contracts to sell his home, at 3615
Falmouth Dr. in Columbia, to Mitchell
• At closing, Litton tenders a deed, in
writing, signed by Litton, and notarized
– Granting language and description: “Grantor
does hereby grant, bargain and sell, to
Grantee and his heirs, successors, and
assigns, all of 3615 Falmouth Drive.”
• Has there been a valid transfer?
Problem 2
Types of Land Descriptions
• Metes and bounds: boundaries given by course (i.e.,
direction) and distance, from a defined point of beginning
located by reference to a defined monument
• Government survey: boundaries identified relative to
national grid
• Lot/block number, as shown on recorded plat
Street Address as Valid Description?
• Courts in a few states do not permit street address as valid
legal description [e.g., Martin v. Siegel (Wash. 1949), p. 40]
– In re Rivera (Colo. 2012) (deed of trust containing street address
held invalid)
• Most courts are more flexible
– Missouri: A deed is void due to an uncertain property description
only if, after resort to extrinsic proof, the intention of parties remains
a “mere matter of conjecture” [Hamburg Realty v. Woods (1959)]
Granting Language and Title Warranties
• In many states, use of certain statutorily prescribed language
in the granting clause gives rise to all title warranties
• E.g., Problems 2 and 3: R.S. Mo. § 442.420 (if deed uses the
words “grant, bargain, and sell,” grantor is deemed to have
made all of the deed warranties recognized at common law)
– Thus, in Problem 3 (where Litton warranted that he was seized of title
in fee simple, but Litton had only a life estate), Mitchell would have a
claim vs. Litton’s estate for breach of deed warranty
In re Estate of Ward (Delivery and Gifts)
• Doris Ward’s will devised all her land to her spouse Bobby
• After Doris’s death, her daughter Dwana alleged that while
alive, Doris had executed and delivered a deed conveying the
family farm to Dwana (so that Dwana owned the farm, which
did not pass to Bobby under Doris’s will)
• Problems:
– Deed was destroyed prior to its recording. Does/should this matter?
– Was deed validly delivered? If so, by what “act” of delivery?
Deeds and Delivery
• An effective transfer requires the grantee to establish (1)
intent; (2) delivery; (3) acceptance
– Grantor must have had the intent to make a present transfer
(i.e., a transfer that took place immediately upon deed’s
delivery, rather than at some future date)
– Grantor must have made sufficient delivery of the deed
– Grantee must have accepted the deed (typically presumed)
In re Estate of Ward
• Problem: destruction of the deed prior to its
recording is irrelevant, if the grantee can
prove that (1) execution and contents of the
deed and (2) intent, delivery, acceptance
occurred prior to destruction
• Here, Dwana proved deed’s execution and
contents by clear and convincing evidence
In re Estate of Ward
• Consider two possible variations on the
facts of Ward
– 1) Jury believes that Bobby took the deed off
the kitchen table and tore it up
– 2) Jury believes that Doris (the grantor) took
the deed off the kitchen table and tore it up
• Does it matter who tore up the deed?
• In fact, jury appears to have believed it was Bobby (not
Doris) that destroyed the deed
• Based on this, court holds there was a valid delivery
– Doris executed deed, told Dwana, placed it on kitchen table (an
area to which Dwana had access). Less than perfect, but ...
– Doris made numerous statements to 3rd parties consistent with
her intent she’d already transferred the land to Dwana
• E.g., Doris instructed Hollibaugh (tenant of family farm) to make
his 2009 lease payments to Dwana rather than to Doris
• If the grantor has present intent to transfer and delivers a
deed to grantee, but later destroys the deed, the act of
destroying it is irrelevant
– Transfer occurred upon delivery + acceptance)
• But if the jury believed that Doris had destroyed the
deed, jurors might question whether Doris really had the
necessary intent to transfer
– Concern: if she didn’t put the deed “beyond her dominion and
control,” did she really have the intent to make a present
transfer at the time she put the deed on the kitchen table?
• Estate of Ward case is consistent with large volume of case
law that subordinates the physical act of delivery to compelling
evidence of grantor’s intent [Note 1, p. 167]
– E.g., Barker v. Nelson — grantor kept original of deed but provided
grantees with photocopies; held, sufficient delivery given other
extrinsic proof of grantor’s intent
• Also, handing over of deed is not sufficient if intent is lacking
– E.g., Martinez v. Martinez — no transfer where deed was handed to
grantee for deposit into escrow
– E.g., Cusick v. Mayer — no transfer where grantor remained in
possession (i.e., where grantor’s intent was testamentary)
Conditional Delivery
• Sometimes, Grantor wants to make effectiveness of a
deed subject to certain conditions. Problems:
– 1) If the condition is expressed on face of deed (e.g., “to
Grantee, as long as Grantee pays the required purchase
price”), the condition may create a potential “cloud” on title (i.e.,
how does one know the condition was satisfied?)
– 2) If the condition is not expressed on face of deed, but is oral,
court may say that deed became effective unconditionally!
Benefits of Escrow
• Facilitates closing by providing a neutral person to whom
Seller and Buyer can each tender conditional performance
• Facilitates “absentee” closings (convenience/cost saving)
• If escrow is a “true” escrow, the delivery out of escrow
(and the effectiveness of the transfer) relates back to the
date of delivery into escrow
– This can be important in cases of (1) grantor’s death, or (2)
entry of judgment vs. grantor
Conditional Delivery and Escrow
• Conditional delivery is typically made (safely) through the
use of escrow
– Grantor delivers a deed that is absolute/unconditional on its face to
the escrow agent (who is a “conduit” to facilitate the transfer)
– Escrow agent holds deed, pending satisfaction of specified
conditions of escrow; by best practice, these conditions are
expressed in written escrow agreement
– Once the escrow conditions are satisfied, the escrow agent
completes the delivery by releasing the deed to grantee
“True” Escrow and “Relation Back”
• Escrow is a “true escrow” if depositor/Seller cannot
revoke the escrow and withdraw the deed without
breaching its agreement with Buyer
– If escrow is a “true escrow,” then the escrow agent’s delivery to
Buyer relates back to time of Seller’s deposit of deed into
escrow
– If escrow is not a “true escrow,” then transfer is deemed to
occur, if it all, only when escrow agent delivers deed to Buyer
Wiggill [p. 169] and the “Death Escrow”
• June 1958: Lillian Cheney executed a deed (absolute on its face)
purporting to convey land to Flora Cheney
– Deed was placed in safe deposit box of Lillian Cheney and Francis Wiggill
– Lillian instructed Wiggill “upon my death ... give it to Flora”
• In 1970s, when Lillian Cheney died, Wiggill followed her
instructions, took deed from box, and delivered it to Flora
• Court: deed was “testamentary” in nature, was invalid, no title
passed to Flora (instead, land went into Lillian’s estate)
Beneficiary (TOD) Deeds
• More than 15 states (including MO) now have statutes that allow
a “beneficiary deed” or “transfer on death” deed
– Such a deed makes no immediate transfer of title (during grantor’s
remaining life, grantor holds title)
– At grantor’s death, grantee (“beneficiary”) becomes owner (thus,
transfer is testamentary in nature)
– While grantor is alive, grantor may sell or give away the land,
practically nullifying the beneficiary deed
– Missouri statute: RSMo. § 461.025
Problem 5: Wiggill — Questions
• Why does court conclude that Lillian’s
intent was testamentary in nature?
• What purpose did it serve for the court
to hold Lillian’s deed invalid?
• What should Lillian have done
differently?
The Effect of Fraud and
Other Wrongdoing
• When the execution and/or
delivery of a deed is the
product of fraud or other
wrongdoing, what is the legal
effect (if any) of the deed?
• Daily News story included with
this assignment discusses how
its reporter “stole” and returned
the Empire State Building by
executing and recording a
deed, ostensibly from the
building’s owner
• What (if anything) is legally
wrong about this story?
Problem 6
• Deed was forged deed, and thus it was absolutely void and
passed no title to Nelots Properties LLC (the bogus grantee
ostensibly created by the Daily News)
– Empire State Land Associates (the actual owner of Empire State
Building) did not sign deed, and thus lacked any intent to transfer
– No intent, no transfer → Nelots Properties LLC has no title
• Suppose that Nelots Properties had taken out a $10MM loan
from Bank, and had signed a mortgage to Bank (covering the
Empire State Building). Could Bank enforce that mortgage?
Void/Voidable Distinction
• Some defects render a deed void
– The grantee receives no title
– Further, no one claiming through the grantee (e.g., a
subsequent buyer from the grantee) can receive title, even if
they are a BFP unaware of the defect
• Other defects may render a deed voidable
– If grantee later transfers title to a BFP before grantor has taken
action to invalidate title, BFP takes good title
Daily News
• “Real thieves get the mortgage cash, ripping off
banks and leaving the properties’ owners with
mortgage debt and ruined credit. ‘Mortgages stay
with properties,’ Farrell explained. When the victims
don’t pay the mortgages they didn’t take out, lending
banks foreclose on the properties....”
• The statement “leaving the properties’ owners with mortgage
debt” is legally incorrect
• The Bank’s mortgage would be invalid, even if Bank did not
know or have reason to know the deed to Nelots was forged
– Nelots had no title (deed to Nelots was forged, void)
– Under derivative title, Bank’s interest as mortgagee is derivative of
Nelots’s interest
• Bank’s ostensible mortgage lien is thus void, unenforceable
– In turn, if the Bank foreclosed believing its mortgage was valid, the
buyer at the foreclosure sale (even if a BFP) likewise gets no title!
• Smith contracted to sell his home to
Jones for $250K, with closing to occur
on September 1
Problem 7(a)
– Smith places the deed into escrow with
First Title (escrow company)
A. Yes, Jones
has good title
• Jones pays $250K to First Title, who
releases the deed to Jones, but Davis
(officer of First Title) steals the money
instead of paying it to Smith
• Does Jones have good title?
B. No, b/c no
valid delivery
occurred
• Similar result in Problem 7(b)
– Buyer (Jones) bribed the escrow agent to release the deed even though
Buyer had not tendered performance as required by escrow agreement
– In that case, escrow agent’s delivery is wrongful (condition precedent not
satisfied), so no valid delivery occurred (and no title passed to Jones)
• Likewise, when Jones turned around and purported to convey title
to Williams (who otherwise looks like a BFP), Williams does not
receive a good title [Note 9, p. 183]
• How can Williams (the remote buyer) protect against the risk that
a deed in its chain of title was undelivered?
Problem 7(a): Delivery from Escrow
• Note 9, p. 183: if the escrow agent wrongfully releases the deed
from escrow, when escrow conditions have not been satisfied,
there is no intent and thus no valid delivery (deed is thus invalid)
• But, here, delivery by escrow agent may not be wrongful!
– If escrow was conditioned upon Jones’s payment of the purchase
price into escrow, then escrow condition was satisfied, and Jones
was entitled to delivery of deed
– Title passed to Jones, and the loss due to escrow agent’s theft
would falls on Smith (grantor) absent collusion [note 8, p. 182]