Relating to Real Estate
Deed Was Not Effective When Husband Put it in a Cabinet
InDaniels v. Daniels, 217 Md. App. 406, 94 A.3d 121 (2014), the Court of Special Appeals held that constructive delivery of a deed did not occur where the grantor kept the executed deed in a filing cabinet, and therefore maintained control over the deed such that he could revoke or destroy it.
The grantor, who had fee simple title to the subject property, executed a deed naming himself and his wife as tenants by the entirety. The grantor did not record the deed, but instead told his wife that he added her to the deed and put it in a bedroom filing cabinet that contained all of the couple’s important papers. On the day of the grantor’s death, his wife was looking through the filing cabinet and discovered the unrecorded deed. Upon consulting with counsel a few weeks later, she recorded the deed.
The grantor’s daughter, as personal representative of his estate, filed suit to quiet title, alleging that the unrecorded deed was of no effect and that the property was an asset of the estate. The grantor’s wife argued that there had been constructive delivery of the deed, so the property was hers. The Circuit Court for Baltimore County held that the deed was insufficiently delivered, and it was therefore invalid and of no force and effect.
Judge J. Frederick Sharer, writing for the Court of Special Appeals, noted that in order for the conveyance to be effective, all necessary elements of a gift must occur, including the intent to transfer the property, relinquishment of control, delivery, and acceptance by the donee. Under Maryland law, delivery is consummated only when the instrument passes from the grantor, without any right of recall, to the grantee or to a third party for the use of the grantee.
In this instance, the Court held that the delivery of the deed was not effective because the grantor had access to the filing cabinet where the deed was kept, so he could have revoked the deed at any time. Had the grantor, for example, given the deed to his wife to keep in a lockbox to which only she had the key, or given the deed to a third party with instructions for future recordation, the Circuit Court could have found effective delivery. Therefore, the Court of Special Appeals affirmed, awarding the property to the grantor’s estate.
NOTE: The Court of Special Appeals distinguished this situation from a transfer of real property for consideration because in that case a court would be compelled by equitable principles to enforce the deed. It cited a 1943 Court of Appeals case where the court had strained to find that there was delivery on very tenuous facts.
For questions, please contact Richard Topaz (410) 576-4004.
November 03, 2014