Reed v. Keatley

356 P.2d 1004, 187 Kan. 273, 1960 Kan. LEXIS 431

• Court: Supreme Court of Kansas
• Decided: November 12, 1960
• Docket: 41,907 and 41,934
• Status: Published

Opinions

The opinion of the court was delivered by

Fatzer, J.:

This was an action to quiet title to 155 acres in the Southwest Quarter of Section 15, Township 18 South, Range 22, Ness County, Kansas. The plaintiff, Guy C. Reed, alleged he was the owner in fee simple and in possession of the entire quarter section. The defendant, Elsie G. Keatley, answered and cross-petitioned, alleging ownership in an undivided one-half interest (less a certain five-acre tract) by virtue of the law of intestate succession, and prayed for partition. In his reply the plaintiff asserted title to the property as grantee in a deed dated May 10, 1946, from A. H. Reed, the father of both parties. Trial was by the court which found in favor of the plaintiff and rendered judgment quieting his title. Following the overruling of the defendant’s motions to set aside findings of fact and conclusions of law and for a new trial, the defendant appealed.

On May 10, 1946, A. H. Reed, Martha Reed, his wife, and Guy C. Reed went to the office of P. W. Lundy, Secretary-Treasurer of the National Farm Loan Association in Ness City, to discuss the division of Reed’s land. During the conversation it developed that Reed was going to give Guy five acres of land in the quarter section on which to build some improvements. The question was raised whether Guy should make a substantial investment on five acres of land in the country, and Lundy suggested to Guy that if he were going to build a home he should build it in town where it would have a better resale value. Guy indicated he would not build in the country unless he had title to the five-acre tract and also be assured that he was going to get more than five acres. At that time Reed spoke up and stated that Guy was to get the remaining 155 acres “when he was through with it.” In accordance with that understanding and at Reed’s direction, Lundy prepared two deeds in which Guy was grantee, one for the five-acre tract, and the other for the balance of the quarter section, or 155 acres of land. Roth deeds were signed and acknowledge by Reed and Martha, and Lundy laid them on the table, pointing out the deed for the five-acre tract, and the one for the 155 acres. Reed handed Guy the deed to the five-acre tract, and took the other deed and stated “he was going to take it to the bank and put it in the bank so it would be there for Guy when he was through with it and gone.”

Within a few days after the deeds were executed, Guy commenced the building of improvements on the five-acre tract and built a barn and put down a stock well on tbe remaining 155 acres, expending some $7,500.

During the lifetime of Reed, Guy occupied the quarter section as his home but Reed paid the taxes, received oil lease rentals, and leased the premises to Guy.

The defendant and her husband were indebted to Reed in the sum of $4,000 for which one or both had executed a promissory note to him. Sometime after May 10, 1946, Reed put the deed to the 155 acres in an envelope and the defendant’s note in another and placed both in escrow in a bank in Ness City. Thereafter, Reed told numerous witnesses that he had executed the deed and placed it in the bank to be delivered to Guy when he was gone; that “The note was to go to Elsie,” and “the deed was to be given to Guy when he died,” that “after I’m gone there’ll be no trouble, Guy’s will be handed to him and Elsie’s will be handed to her, and there’ll be no settling up any estate,” and that “he had things fixed up. A deed to Guy for the Ringe Place and the note to Elsie.” Further, “When I’m dead and gone there won’t be any trouble to settle my estate, because I have a deed for Guy for the Ringe Place and this note of-four thousand dollars that Elsie owes in the place, and they’re in escrow in the bank to be divided when I’m gone.” One of Reed’s granddaughters testified to a conversation she had with her grandfather and he said, “that he had the deed in the bank but he could take it out any time he wanted to and nobody could touch it, not even Martha, just him.” O. J. Weir, president of the bank at the time Reed deposited the deed and note in the bank, was not present to testify and there was no direct evidence as to what instructions Reed gave the bank at that time. Roy Krug, president of the bank, testified that at the time Reed left the envelopes the bank apparently did not keep any record to show when such items were deposited or who brought them in, but the “escrow book” the bank presently kept had the following entry: “Six-X, Reed, A. H. Par. P., Fee Paid, sealed envelopes, taken out by A. H. Reed, 6-11-55,” and that he personally delivered the envelopes to Reed. The defendant’s husband testified that Reed brought the envelopes to the 'defendant’s home and stated one contained the deed and the other the promissory note and he wanted Elsie to destroy them, but she refused to do so. Reed threw the envelope in a trash can and later asked the defendant’s husband to burn them, which he did.

The district court prepared a written memorandum, the pertinent portions of which read:

“Mr Reed and Guy came to Mr. Lundy’s office for the purpose of having him prepare a deed for five acres of the quarter in question. Guy was to erect improvements on these five acres. Mr. Lundy suggested that if Guy only got five acres, the improvements, since they would be in the country, would not be as desirable and have as much sale value as the same improvements placed on a tract in town. Mr. Reed, then stated he wanted Guy to have the rest of the quarter after he was dead. Mr. Lundy suggested the making of a deed to be left at the bank. Why a deed? And, why leave it at the bank? All parties must have agreed that this would protect Mr. Reed’s income for life from the real estate, and Guy’s title to the rest of the quarter when he placed the improvements on the five acres. In order to protect Guy in the building of the improvements, title would have to pass to the deed when it was left at the bank.

“In accordance with the agreement made that day, Mr. Reed placed the deed in the bank with instructions to deliver the deed to Guy at his death, and Guy placed the improvements on the five acres.

“After the deed was left at the bank, Mr. Reed told witnesses in substance his estate was all settled. He had left the deed and Elsie’s note at the bank and it would deliver the deed to Guy and the note to Elsie after he was gone. In order to settle everything before his death he must have given Guy title to the deed and Elsie title to the note when he left them at the bank.

“Mr. Reed, years later, secured the deed and note from the bank. He settled his estate when he left the deed and note at the bank, and this was a futile attempt on his part to unsettle his already settled estate, or, title to the deed having already passed to Guy, Mr. Reed could not by taking the deed from the bank thereby destroy Guy’s title. This would be contrary to the promise made to Guy that day in Mr. Lundy’s office.

“Later, the deed and note were destroyed by Elsie’s husband. The court is unable to determine from the evidence whether the destruction was with or without Mr. Reed’s consent and direction. The law of evidence raises a strong presumption against one destroying such papers; this is especially true when the instrument is a deed to the real estate in question.”

The sole question presented is succinctly stated in the appellant’s brief as follows:

“The only question involved is whether or not there was substantial competent evidence before the trial court to support its finding and conclusion that the deed in question was effectively delivered within the lifetime of the grantor, A. H. Reed.”

It is well settled in this jurisdiction that before a deed can operate as a valid transfer of title there must be a delivery of the instrument which becomes effective during the life of the grantor. (Wuester v. Folin, 60 Kan. 334, 56 P. 490; In re Estate of Hulteen, 170 Kan. 515, 227 P. 2d 112.) What constitutes sufficient delivery is largely a matter of intention, which is a question of fact unless the evidence is uncontroverted. The whole matter of delivery is one of intent on the part of the grantor, and if the grantor, by words or acts, manifests an intention to divest himself of title and vest it in another, it is sufficient to constitute a valid delivery. (Smith v. Dolman, 120 Kan. 283, 243 P. 323; Johnson v. Cooper, 123 Kan. 487, 255 P. 1112; Roberts v. McCoach, 145 Kan. 407, 65 P. 2d 289; Stump v. Smarsh, 153 Kan. 804, 113 P. 2d 1058; Burgin v. Newman, 160 Kan. 592, 164 P. 2d 119.) See, also, Balin v. Osoba, 76 Kan. 234, 91 P. 57; Doty v. Baker, 78 Kan. 636, 97 P. 964; Zeitlow v. Zeitlow, 84 Kan. 713, 115 P. 573, and McLain v. Barr, 125 Kan. 286, 289, 264 P. 75. It is not necessary that the divestment of title or the delivery of the deed be made directly to the grantee. The grantor may effectively divest himself of title if he deposits the deed with a third person to receive and hold the same for delivery to the grantee after the death of the grantor, with a declared or manifest intention to place it beyond the custody and control of the grantor and thereby to give it effect as a present conveyance. (Zeitlow v. Zeitlow, supra; Harmon v. Bowers, 78 Kan. 135, 96 P. 51, 17 L.R.A. [NS] 502; Nolan v. Otney, 75 Kan. 311, 89 P. 690, 9 L. R. A. [NS] 317; Hush v. Reeder, 150 Kan. 567, 95 P. 2d 313; Estate of Hulteen, supra; Hicklin v. DeVore, 179 Kan. 345, 295 P. 2d 668.) In Wuester v. Folin, supra, the usual test was said to be:

“Did the grantor by his acts or words, or both, manifest an intention to make the instrument his deed, and thereby divest himself of title? When the deed has passed beyond the control of the grantor, and he has placed it in the hands of a third person with a declared or manifest purpose to make a present transfer of the title, a formal acceptance by the grantee is not required." (1. c. 337.)

Once there is a valid delivery, either to a grantee or to a third party, with an intention to effect a present conveyance, it makes no difference if the grantor reacquires the deed because title vested at the time of the delivery and the grantor is powerless to defeat this vesting of the title (Zeitlow v. Zeitlow, supra: Stump v. Smarsh, supra; Hutton v. Hutton, 184 Kan. 560, 337 P. 2d 635; Cole, Administrator v. Hoefflin, 187 Kan. 66, 354 P. 2d 362). In the Cole case, supra, it was said:

“It is true that in 1951 the mother requested that Lavema get the deeds for her, mentioning that she intended to sell her Kansas properties. Laverna did as requested and gave her the Kansas deeds. From then until her death the mother was in possession of them. But, even though they came into her possession, such fact would not — and did not — defeat the delivery previously made in 1947. . . .”(l.c. 70.)

In Stump v. Smarsh, supra, it was said:

. . Where a deed is effectively delivered, the fact that it is handed back to the grantor for some purpose dos not defeat the delivery. . .” (1. c. 809, 810.)

The appellant contends that the absence of direct evidence that Reed gave instructions to the bank and his withdrawal of the deed without procuring Guy’s consent indicate he had the right to withdraw it, which right could only be reserved by him at the time he deposited the deed, hence, he did not surrender all control over the deed when he delivered it to the bank. The contention is the crux of this lawsuit and reaches to the very heart of the case, whether an effective delivery of the deed was made so as to effect a valid transfer of title during the lifetime of the grantor, and points directly to the sufficiency of all the evidence to support the findings of the district court that such a delivery occurred.

As previously indicated, delivery is largely a matter of intention, and ordinarily the question is one of fact to be determined by the jury or the trial court from all the evidence, but where the facts are not controverted, it is a question of law to be determined by the court. (Hoard v. Jones, 119 Kan. 138, 237 P. 888.) The fact that Reed continued to pay taxes, collect oil lease rentals and lease the property during his lifetime is not inconsistent, but supports the district court’s finding that he intended to divest himself of title and presently vest it in Guy, reserving to himself a life estate in the quarter section. All tire circumstances tend to show an intention on Reed’s part that there should be an immediate vesting of title in Guy, the enjoyment alone being postponed until his death. The defendant and her husband were aware of tire grantor’s intention and the purpose for which the deed was deposited in the bank. In fact, the appellant herself acknowledged that the land was Guy’s, and “she was afraid that after her father was gone he (Guy) would sell it to the neighbors and she wanted the land.”

All that is lacking fully to establish delivery is a showing of instructions given the banker when Reed deposited the deed and note in the bank at Ness City. The then president of the bank was not present to testify nor was his deposition taken, but this may be supplied by presumption or inference from tire attendant circumstances. (Young v. McWilliams, 75 Kan. 243, 252, 89 P. .) Indeed, the repeated express declarations of the grantor himself that the deed and note were in the bank to be delivered to Guy and Elsie when he was gone; that there would be no settling of his estate because he had things fixed up — the bank would hand Guy his deed to the quarter section and Elsie her $4,000 note, compel the conclusion that when Reed deposited the deed and note in the bank he intended at that time to divest himself of title to the quarter section and vest it in Guy, reserving to himself a life estate in the property. All the known facts are consistent with the theory of an effective delivery. Moreover, his reacquistion and destruction of the deed did not defeat the valid constructive delivery of it to Guy nor impair his title to the quarter section. (Stump v. Smarsh, supra; Cole, Administrator v. Hofflin, supra.)

While there was no direct evidence that Guy proceeded to improve the quarter section in reliance upon the deed to the 155 acres, there was ample evidence to support the district court’s finding that he did. Whenever it appears that the contract or arrangement between the parties has been so far executed or completed that they must have understood that the grantor divested himself of title and that the grantee was invested with it, delivery will be considered complete although the instrument itself remains in the hands of the grantor (Zeitlow v. Zeitlow, supra).

Considering all the circumstances, we think the district court was fully justified in finding there was an effective delivery of the deed in question, and that when Reed left the deed at the bank he intended to transfer title to die quarter section to Guy, reserving to himself a life estate. This conclusion compels an affirmance of the judgment of the district court.

It is so ordered.