Blancett v. Blancett - 2004-NMSC-038, 136 N.M. 573, 102 P.3d 640

Rule:

There may be no legal delivery of a deed without intent to make a present transfer. Nonetheless, physical delivery of a deed to a grantee creates a presumption of legal delivery, which a grantor may then rebut with evidence that he or she lacked intent to make a present transfer.

Facts:

This case concerns the delivery of two deeds executed by Richard Blancett, a 79-year-old rancher in San Juan County. One of the deeds reserved a life estate in Richard and conveyed to Linn a remainder in the surface estate of much of Richard's property. The other reserved a life estate in Richard and conveyed a remainder in the mineral estate of the same property to both Linn and his brother Ed. In 1993 Richard physically delivered the two deeds ("the 1993 deeds") to Linn's wife. Although Richard had some difficulty reading, he nevertheless understood the deeds, though apparently he failed to notice that the property described encompassed more land than he in fact owned. Richard testified that he had the deeds drafted solely as a "stop-gap estate planning tool" until he could prepare more formal estate documents, and he indicated to Linn that he intended the delivery to be a conditional rather than an immediate conveyance. Specifically, Richard testified that he told Linn not to record the deeds unless Richard died or did something "crazy" before creating formal estate planning documents. While Linn disputes the context of this discussion and claims that the statement was made in jest, the trial judge found Richard's version to be  credible and deemed Richard's statement to be an oral condition that precluded legal delivery of the deeds. Four years following delivery of the deeds, with Linn's knowledge, Richard began an extensive process of formal estate planning, including drafting a will and limited family partnership agreement, which disposed of some of the same property covered by the 1993 deeds. Richard testified that during that time he continued to believe that he owned the property at issue in the deeds. Linn did not record the 1993 deeds for over eight years, until after Richard executed his estate documents, which conveyed to Linn less property than did the deeds. In 2001, Richard filed a complaint to nullify the 1993 deeds, claiming that because he expressly conditioned the conveyance, the physical transfer to Linn did not constitute legal delivery. The trial court denied Linn's motion to dismiss and alternative motion for summary judgment. The trial court also denied Linn's motion in limine to exclude evidence of Richard's conduct subsequent to the delivery. After finding that Richard orally conditioned the delivery of the deeds and did not intend a present conveyance, the trial court entered an order nullifying and rescinding the deeds. The Court of Appeals affirmed.

Issue:

Was there effective legal delivery of the deed to Linn, thereby granting him ownership of the lands in question?

Answer:

No.

Conclusion:

Here, both parties concede that a grantee's possession of a validly executed deed ordinarily raises a presumption of legal delivery, which a grantor may rebut with evidence negating his or her intent to make a present transfer. Linn urges the Court, however, to hold that when a grantor physically delivers a deed to a grantee and no conditions of delivery appear on the face of the deed, the presumption becomes irrebuttable. Under such a rule, derived from common law, any oral conditions made by the grantor become void and legal delivery is absolute, regardless of the grantor's intent. The rule that Linn advocates stands in direct contrast to established case law on deed delivery, which requires a threshold showing of a grantor's intent to irrevocably transfer title. While Linn attempts to distinguish previously ruled cases because they did not involve oral instructions by the grantor not to record until a future occurrence, the distinction Linn draws is inapposite. In Den-Gar, for instance, the court upheld the trial court's finding that physical delivery to the grantee was ineffective because the grantor lacked the requisite intent to make a present transfer of title. Linn argues that Den-Gar turned not on the grantor's intent to deliver but on the fact that the grantor had already issued a conflicting deed to his mother. The court's holding, however, clearly rested on the grantor's lack of present intent to divest himself of title in the second deed. Similarly, Waters upheld a lower court's ruling that the grantor lacked the necessary intent to deliver a deed to his brother, the grantee, by considering extrinsic evidence such as the grantee's insistence that he would not record the deed during the grantor's lifetime. In summarily attributing the court's holding to the fact that the deed was found in the grantor's possession after his death, Linn overlooks the fact that possession was only one of the many factors the court examined in concluding the grantor lacked intent to make an irrevocable transfer when he passed the deed to the grantee. Further, in Martinez, this Court expressly rejected the theory that there can be no conditional delivery to a grantee unless the conditions are expressed in the deed itself. There the purchaser in a real estate contract argued that the deed was legally delivered when his parents, the sellers, handed it to him to deliver to a mortgagee to hold in escrow until the mortgage had been fully paid. This Court upheld the lower court's findings that the parents' statements made the delivery conditional and prevented legal delivery. Linn argues that the holding in Martinez is consistent with a rule against conditional deliveries of deeds because the parents gave the deed to their son "to transmit to a depositary to hold in escrow," rather than to the grantee to hold with conditions. However, the Martinez court in fact relied on the same reasoning the present Court reiterates today: a grantor's intent is controlling, regardless of whether a deed is physically transferred to a grantee.

Linn also argues that in delivering the deed to Linn's wife, Richard made an effective delivery because the deed was no longer in Richard's control, which is wrong. The fact that Richard handed the deed to someone acting on Linn's behalf does not alter our analysis: again, the issue is whether Richard intended to make an irrevocable, present transfer to Linn when he physically handed the deed to Linn's wife.