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Constructive Delivery Did Not Exist When Husband Deeded House to Himself and His Wife, Informed His Wife, and Placed the Unrecorded Deed in Couple’s Shared Filing Cabinet

Daniels v. Daniels
--- A.3d ---, 2014 WL 2873937 (Maryland Court of Special Appeals, June 24, 2014)
by Morgan N. Gough, Summer Associate
Semmes, Bowen & Semmes (www.semmes.com)

Available at http://www.mdcourts.gov/opinions/cosa/2014/0415s12.pdf

In Daniels v. Daniels, the Maryland Court of Special Appeals affirmed the decision of the Baltimore County Circuit Court in favor of the personal representative of the decedent’s estate. The personal representative brought suit against the decedent’s surviving spouse seeking to quiet title to a residence and have the residence included as an asset of the estate. Although the surviving spouse proved donative intent and acceptance of the gifted deed, she was unable to establish the other necessary elements of conveyance: delivery and relinquishment. Judge Sharer authored the opinion, to which Judges Meredith and Nazarian joined.

James H. Daniels (Decedent) and Lana Daniels (Appellant) were married for forty (40) years and resided together on Hammonds Ferry Road. Decedent also owned a house on Frederick Road (Residence), which is the property at issue. Recorded in 1987, Decedent and his mother owned the Residence as joint tenants. Upon the mother’s death in 2005, Decedent became the surviving owner. On March 3, 2006, Decedent executed a new deed to the Residence, naming himself and Appellant as tenants by the entireties. Although advised to do so, Decedent failed to record the deed; rather, he placed the paper in a filing cabinet in the Hammonds Ferry home with the couple’s other important documents, such as insurance policies and the deed to their Hammonds Ferry home. Appellant proffered that the deed went unrecorded because, as there was no lien on the property, Decedent may have assumed that recordation was not necessary. After executing the deed, which was witnessed and notarized, Decedent informed Appellant that he “had added her name to the deed.” While searching the filing cabinet upon Decedent’s death for his life insurance policy, Appellant discovered the unrecorded deed. Appellant then recorded the deed after Decedent’s death. As Decedent died intestate, his daughter from a former marriage, Brenda (Appellee), qualified to be the personal representative of his estate. After recordation of the deed, Appellee filed suit to quiet title on the grounds that the unrecorded deed was not effective for lack of delivery, therefore the property should be an asset of the estate.

In conveying a valid and effective title to real property, each element is equally indispensable, thereby requiring the donee to prove execution, donative intent, delivery, acceptance by the donee, and full relinquishment of control. Delivery of the title documents, presumably a deed, may be actual or constructive. Neither party disputed the execution of the deed and Appellant conceded that there was no actual delivery. There is a common law presumption in favor of a gift to the other spouse when a spouse titles property as tenants by the entireties. Coupled with Appellee’s acknowledgement of the executed deed, the court found that she had accepted the gift. Further, appellate court maintained the trial court’s findings that donative intent existed. The trial judge stated, “I, I am sorry because . . . [t]here’s been no question in the Court’s mind that [Decedent] intended to transfer the interest to his, his spouse of forty years. But I am without power to change that under the law.”

Appellant argued that Decedent’s actions constituted constructive delivery; more specifically, she argued that “construct delivery of a deed occurs when the husband deeds his property to himself and his wife, as tenants by the entireties, informs his wife, and places the unrecorded deed with the couple’s important papers.” In rejecting this argument, the court explained that delivery requires some act by the grantor that puts the deed beyond his power to revoke. If the grantor retained some control over the deed, there was no delivery. It is immaterial whether the grantor passed the instrument to the grantee or a third party, so long as the grantor relinquished all dominion and control over the deed.

Decedent did not fully divest himself of control over the deed, thus maintaining a right of recall because he could have, at any time, taken the deed back from the filing cabinet and tore it up. The court explained that, in order to accomplish relinquishment, Decedent could have given the deed to Appellant with instructions for future recordation, Decedent could have handed over the deed for placement in her own files or own safety deposit box, or Decedent could have given the deed to his step-daughter with instructions for future recordation. Instead, Decedent placed the deed in a cabinet to which he had equal access, without completely divesting himself of and completely investing Appellant with control of the deed. The lack of constructive delivery rendered the deed void and inoperative, thus it was properly an asset of the estate.