University of Montana School of Law

Toelle, J. Howard

English

Workmen\u27s Compensation in Montana

Constructive Delivery of Deeds Dependent Upon Death of Granto

Holt, Ben

Montana Law Review
Volume 1
Issue 1 Spring 1940 Article 8
1940
Constructive Delivery of Deeds Dependent upon
Death of Grantor
Ben Holt
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Recommended Citation
Ben Holt, Constructive Delivery of Deeds Dependent upon Death of Grantor, 1 Mont. L. Rev. (1940).
Available at: https://scholarship.law.umt.edu/mlr/vol1/iss1/8
MONTANA LAW REVIEW
will continue for an indefinite period. Payments upon or prop-
er acknowledgement of the debt will prevent the statute of lim-
itations running; the debt may remain enforceable for an indef-
inite period of time and the mortgage lien apparently will be
extended accordingly as against all who are not purchasers for
value and in good faith. The longer a mortgage is kept off the
record, then, the more advantageous the position of the mort-
gagee, insofar as concerns duration of his lien.
In order to prevent this anomalous situation, the Montana
Court, in the absence of legislative action, would be compelled
to overlook the wording of Sec. 8267, which by its terms applies
only to a recorded mortgage. A proper solution of the problem
is action on the part of the Montana legislature.
William F. Browning.
CONSTRUCTIVE DELIVERY OF DEEDS DEPENDENT
UPON DEATH OF GRANTOR
In Carnahan v. Gupton,' recently decided by the Montana
Supreme Court, an owner of an undivided one-half interest in
certain land, after executing deeds to his nephew and the lat-
ter's wife, placed the deeds in his safety deposit box, to which
he alone had access, in an envelope addressed to the grantees,
and wrote his nephew informing him of these acts and instruct-
ing him that the deeds would be delivered to him upon presen-
tation of the letter to the depositary bank after the grantor's
death. The bank had notice of this arrangement. The grantor
continued until his death to farm the land and to render annual
accounts to his co-owner. After the death of the grantor, his
administrator delivered the deeds to the grantees, who recorded
them, but the other heirs brought suit to have them declared in-
valid. Held, the deeds had not been delivered, were formally
insufficient as a will, and so were without legal effect.
Authorities are agreed that "a grant takes effect, so as to
vest the interest intended to be transferred, only upon its de-
livery by the grantor."' The concept of delivery, however, is
one of uncertain and varying content. This, of course, is due to
the fact that the term is used, not to indicate a physical act,
but to describe a legal result. While all Courts, including the
Montana court in the principal case, doubtless recognize that
fact, nevertheless much of the confusion in the application of
the concept may be charged to failure of the Courts to make
clear whether it is relinquishment of control over the instrument
or over its legal effect, or both, which they consider essential to
delivery. The usual statement is simply that the grantor must
'96 P. (2d) 513 (Mont. 1939).Sec. 6843, R. C. M., 1935; 4 TIFFANY, REAT PROP. (3d Ed.), Sec. 1033.
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Holt: Constructive Delivery of Deeds Dependent Upon Death of Grantor
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NOTE AND COMMENT
part with control over the deed. But the Courts may reason-
ably be expected to be articulate as to why decisive importance
is sometimes given to control over the document, as was true in
the principal case, whereas in other cases this factor is regard-
ed as virtually immaterial.
There is a tendency to minimize the importance of actual
manual delivery.' The prevailing attitude was well stated by
the Montana Court in Hayes v. Moffatt': "There is no universal
test applicable to all cases whereby the sufficiency of delivery
may be established; there may be a legal delivery without man-
ual delivery, and there may be no delivery although the in-
strument is placed in the hands of the grantee. The intention
of the parties is the essence of delivery and is the crucial test
where constructive delivery is relied upon." Thus, on the one
hand, the mere fact that the grantor retains possession of the
deed does not invalidate delivery, as where he has it merely for
safekeeping,' or where he as well as the grantee has access to it.'
Recording of the deed,' signing and sealing in the presence of
the grantee,* recitals in the attestation clause," and acknowl-
edgement,u raise presumptions of delivery in some jurisdictions;
and where the grantor acquiesces in the grantee's taking pos-
session, paying taxes, and otherwise treating the property as
his own, circumstances tend to show a delivery. '  These pre-
sumptions may, however, be rebutted by other facts or pre-
sumptions, such as the presumption of nondelivery raised when
the deed is found in the possession of the grantor." On the
other hand, possession of the deed by the grantee raises only a
presumption of delivery, " and there may be no delivery even
though there has been a complete manual transfer of the in-
strument, as where the grantee has obtained the deed by fraud,'
or where it has been given to the grantee for safekeeping." While
'1 DEVLIN ON DEEDS (3d Ed.), Sec. 260a; Bury v. Young, 98 Cal. 446,
33 Pac. 338 (1893) ; Shipley v. Shipley, 274 Ill. 506, 113 N.E. 906 (1916).4WALSH, PROP. (2d Ed.), Sec. 335; Moore v. Hazleton, 91 Mass. 102
(1864) ; Vought v. Vought, 50 N. J. Eq. 177, 27 Atl. 489 (1884).
'83 Mont. 214, 271 P. 443 (1928).
' Stone v. Daily, 181 Cal. 571, 185 P. 665 (1919).
'Wilson v. Wilson, 32 Utah 169, 89 Pac. 643 (1907).
'4 TIFFANY, REAL PROP. (3d Ed), Sec. 1044; Robbins v. Rascoe, 120
N. C. 79, 38 L. R. A. 238 (1897).
'4 TIFFANY, REAL PROP. (3d Ed), Sec. 1041; Wallace v. Berdell, 97 N.
Y. 13 (1884).
"TIFFANY, REAL PROP. (3d Ed), Sec. 1042; Hall v. Sears, 210 Mass.
185, 96 N. E. 141 (1911).
4 TIFFANY, REAL PROP. (3d Ed), Sec. 1043; Wilmarth v. Hill, 55 S. D.
410, 226 N.W. 557 (1929).
"Rodemeier v. Brown, 169 Ill. 347, 48 N.E. 468 (1897).
"4 THOMPSON, REAL PROP., Se . 3887; Springhorn v. Springer, 75 Mont.
294, 243 Pac. 803 (1926).
4 THoMPsoN, REAL PROP., Sec. 3887; Stewart v. Silva, 192 Cal. 405,
221 Pac. 191 (1923).
'Cox v. Schnerr, 172 Cal. 371, 156 Pac. 509 (1916).
"Ball v. Sandlin, 176 Ky. 537, 195 S.W. 1089 (1917).
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MONTANA LAW REVIEW
the grantor may make an actual manual transfer to the grantee
which would not constitute a delivery, yet the grantor may not
make a conditional delivery to the grantee, for the instrument
takes effect discharged of any condition." This is regarded by
some as a striking instance of a survival of a formalistic doc-
trine, originating in primitive modes of conveyance." In an
analogous situation, negotiable instruments generally may be de-
livered to the payee on conditions good between the parties,"
and it is not apparent why the same should not be true in the
case of deeds.
Inasmuch as manual delivery is not required under either
common law or the Montana statutes, it is difficult to see why
the lack of it was so emphasized in the principal case. See.
6848, R.C.M., 1935, provides that "though a grant be not actually
delivered into the possession of the grantee, it is yet to be deemed
constructively delivered in the following cases: (1) when the in-
strument is, by the agreement of the parties at the time of ex-
ecution understood to be delivered, and under such circum-
stances that the grantee is entitled to immediate delivery; or,
(2) where it is delivered to a stranger for the benefit of the
grantee, and his assent is shown or may be presumed." The
decision, of course, was that there was no delivery in the legal
sense, i.e., that an intention to give the deeds presently operdti
effect was not sufficiently manifested. But the fact remains that
retention of control over the document was the only plausible
ground for refusal to find the requisite intention and the only
ground relied upon by the Court. The intention of the parties
being the essence of delivery," however, the grantor's intent to
make a delivery in the principal case might have been shown
by his letter to the grantee and the notice given to the bank.
The case can hardly be said to have depended upon the fact
that the notice given by the grantor was only that the grantee
could get the deeds upon the grantor's death, and not that the
deeds passed the fee to the grantee at once, for there is the pos-
sibility that a life estate may have been impliedly reserved in
the grantor,' or that the intent may have been that a fee in
futuro should be created in the grantee." While the intent of
the grantor must be to convey a present interest to the grantee,"
"Sec. 6845, R. C. M., 1935; Wilson v. Jinks, 63 Ind. App. 615, 115 N.E. 67
(1917).
"18 MIcH. L. REv. 314 (1920).
'R. C. M., 1935, Sec. 8423 (N. I. L., Sec. 16) ; Baroch v. Greater Mont.
Oil Co., 70 Mont. 93, 225 Pac. 800 (1924) ; BRANNoN's Nm. INST. LAw
(6th Ed), pp. 254-266.
"4 THOMPSON, REAL PROP., Sec. 3858; WALSH, PROP. (2d Ed.), Sec.
335; Hayes v. Moffatt, supra, note 5.
11 DEVLIv oN DEns (3d Ed.), Sec. 280; Bury v. Young, upra, note 3.
N TIFFANY, R.nAL Pnop. (3d Ed.), Sec. 1054; Osgood v. McKee, 343 IlL
470, 175 N.E. 786 (1931).
"4 THOMPSON, RrAL Puop., Sec. 3858; Follmer v. Rohrer, 158 Cal. 755,
112 Pac. 544 (1910).
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Holt: Constructive Delivery of Deeds Dependent Upon Death of Grantor
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NOTE AND COMMENT
otherwise it is testamentary,' this does not mean that the fee.
must pass at once, for it is essential only that the deed operate
to create an executory future interest.
The decision in the principal case may have been required by
See. 6848, R.C.M., 1935, supra, which provides that the grantee
must be "entitled to immediate delivery." The question again
arises as to whether manual delivery or legal delivery is meant.
Do the quoted words mean that the grantee must have the right
to immediate possession of the instrument, or that the grantee
must be entitled to the status of a grantee of a delivered in-
strument? It is arguable that the clause can hardly refer to a
right to immediate possession of the document, since there
would be no such right unless there had already been a legal
delivery, and if there had already been a legal delivery, it
would be immaterial whether there were a. right to the docu-
ment, i.e., the problem would have been already solved. On
the other hand, it is difficult to give any effect to the provision
unless it is held to refer to possession of the instrument. The
Montana Court has not, however, relied upon this theory that
the grantee must be entitled to possession of the instrument,
and the statement above quoted that the intention of the parties
is the crucial test implies rejection of such a theory.
If a grantor delivers a deed to a third party absolutely
as his deed, though it is not to be delivered to the grantee until
the grantor's death, the deed is valid.' Thus, if the grantor in
the principal case had given the deed to a bank official, in-
stead of placing it in his own safety deposit box, and the cir-
cumstances had otherwise been the same, the delivery would
have been upheld. In Plymale v. Keene" the Montana Court
held there was a good delivery when the grantor placed the
deeds in an envelope and gave them to the cashier of a bank to
be delivered to the grantee upon the grantor's death. In Martin
v. Flaharty** the grantor executed a deed, the grantee executing
at the same time a life lease to the grantor, and the grantor gave
the deed and lease to a bank with instructions to redeliver to
the grantor upon request, or, in case of her death without hav-
ing made such a request, to deliver to the grantee. The Court
held that, the grantor having died without requesting redelivery,
the deed was valid. This case, if still law, is logically incon-
sistent with the principal case, since the delivery there was ex-
pressly revocable. "A delivery which the grantor can, at his
option, treat as not a delivery, is incomprehensible, and in so far
as the conveyance may still be subject to the grantor's control,
in the sense that he may treat it as a legal nullity, it must be
'Williams v. Kidd, 170 Cal.. 631, 151 Pac. 1 (1915).
254 THOMPSON, REAL PROP., Sec. 3872; Plymale v. Keene, 76 Mont. 403,
247 Pac. 554 (1926) ; Smith v. Smith, 173 Cal. 725, 161 Pac. 495 (1916).
"Cited in note 25.
"13 Mont. 96, 32 Pac. 287 (1892).
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MONTANA LAW REVIEW
considered that there has been no delivery.' The fact that
the instrument in the principal case remained under the control
of the grantor does not make it any more testamentary than
where the grantor expressly reserves the right to recall it.
Authorities generally recognize this, but repudiate the result
reached in the Martin case rather than that reached in the
principal case." However, even if the Martin case be not ac-
cepted, there is still a possibility of upholding delivery in the
principal case, since possession of the instrument does not neces-
sarily imply revocability or control over the title.
"The fact that the grantor reserves possession, use, en-
joyment or profits of the property during his life does not
make the instrument a will."o When the grantor hands a deed
to a third person to be given to the grantee upon the grantor's
death many Courts .hold that there is an implied reservation of
a life estate." The Montana Court in the principal case reject-
ed this theory on the question-begging ground that there could
be no implied reservation of a life estate because there had
been no delivery. It is more properly criticized in that the
execution of a deed purporting to create only an estate in fee
simple shows no intent to create two estates, and further, that
it gives to delivery a function, that of determining what es-
tates are created, to which it is not entitled." Another theory
finding acceptance in the cases is that a deed so delivered is a
present grant of a future estate," the fee simple remaining in
the grantor, upon whose death the prospect of an estate ripens
into a vested estate in the grantee. This theory may be applied
in Montana under Sec. 6729 and 6735, R. C. M., 1935, providing
for creation of a freehold estate in futuro. The Montana Court
in Plymale v. Keene implicitly recognized both theories by quo-
tations from other Courts. Clearly, then, continued use of the
land by the grantor was not decisive in the principal case and
the Court wrongly stressed it. The grantor would have had that
right under either of the above theories.
When the grantor reserves a life estate by the terms of the
deed, although he retains possession of the instrument, it is fre-
quently held that a presumption of nondelivery does not arise
because there is no object in such a reservation unless the in-
strument is to operate before the grantor's death." Tiffany,
however, points out that it may as well be said that any instru-
"4 TIFFANY, REAL PROP. (3d Ed.), Sec. 1050.
u4 THOMPSON, REAL PROP., Sec. 2905; 1 DEVLIN ON DEEDS (3d Ed.),
Sec. 260a.
" DnVLIN ON DEEDS, (3d Ed.), Sec. 309a; 4 THOMPSON, REAL PROP., Sec.
3870; Plymale v. Keene, aupra, note 25.
814 TIFFANY, REAL PROP. (3d Ed.), Sec. 1054, Bury v. Young, aupra,
Note 3; Prustman v. Baker, 30 Wis. 644, 11 Am. Rep. 592 (1872).
04 TIFFANY, REAL PROP. (3d Ed.), Sec. 1054.
"id.; Osgood v. McKee, supra, note 24.
"18 C. J. 414; Singleton v. Kelly, 61 Utah 277, 212 Pac. 63 (1923).
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Holt: Constructive Delivery of Deeds Dependent Upon Death of Grantor
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NOTE AND COMMENT
ment in the form of a conveyance inter tivos, as distinguished
from a will, is presumed to have been delivered, even though still
in the grantor's possession, since the very form of the instru-
ment indicates an intention that it shall operate before the
grantor's death.' This criticism is perhaps not fully justified,
for a deed with an express reservation of a life estate would
seem to be a better indication of the grantor's intent to convey
a present estate than is a deed, absolute on its face, found in the
grantor's possession after his death. The decision in Martin
v. Flaharty, in which the grantee executed a life lease to the
grantor, perhaps may be supported on this ground, although the
express power to revoke would still seem fatal.
By way of summary, then, it may be said that, while the
principal case is supported by the weight of authority," it seems
doubtful on principle, and is difficult to reconcile with Martin
v. Flaharty. The decision must be supported, if at all, on the
ground that an objective standard is properly required in order
to prevent fraud and perjury against a deceased grantor, rather
than upon the effect of retention of the instrument as amount-
ing to control over its legal operation, or upon the view that an
instrument so retained is necessarily testamentary in character.
Justice Angstman in a concurring opinion in the principal
case criticized the result reached as defeating the wishes of the
deceased with respect to the disposition of the property at his
death, and expressed the view that while there was little reason
for the rule followed, any change desired should emanate from
the legislature.
Ben Holt.
DO PROPERTY TAXES CONSTITUTE PERSONAL
LIABILITY IN MONTANA?
The Montana Supreme Court not long ago held that, inas-
much as taxes cannot be collected by civil action, one who by
mistake pays taxes upon land of another cannot, by means of a
personal judgment, obtain restitution from the latter unless rat-
ification of the payment is shown. The decision suggests inter-
esting questions as to the nature of tax liability, the remedies
54 TIFFANY, REAL PROP. (3d Ed.), Sec. 1039.
"8 R. C. L., "Deeds", Sec. 60, p. 995; Note to Jackson v. Jackson, Ann.
Cas. 1915C, pp. 378, 380; note to Munro v. Bowles, 54 L. R. A. 882, 883;
Moore v. Trott, 156 Cal. 353, 104 Pac. 578 (1909) ; Noble v. Tipton, 219
Ill. 182, 76 N. E. 151 (1905). Contra: Belden v. Carter, 4 Day 66, 4
Am. Dec. 185 (Conn., 1810) ; but Grilly v. Atkins, 78 Conn. 380, 62 Atl.
337 (1905) stated that rule would probably not be followed today;
Davis v. John E. Brown College, 208 Ia. 480, 222 N.W. 858 (1929) ; but
see Orris v. Whipple, 224 Ia. 1157, 280 N. W. 617 (1938), where the
Iowa court- announced its intention "to return to the long and well
established rule and be in step with our sister states."
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