New York Law Review

Tag: Deed Delivery

  • M&T Real Estate Trust v. Doyle, 20 N.Y.3d 533 (2013): Delivery of Deed Requires Acceptance for Deficiency Judgment

    M&T Real Estate Trust v. Doyle, 20 N.Y.3d 533 (2013)

    For the purposes of determining the timeliness of a motion for a deficiency judgment under RPAPL 1371(2), “consummation of the sale by the delivery of the proper deed” occurs only when the grantee accepts the deed, not merely when the grantor presents it.

    Summary

    M&T Real Estate Trust sought a deficiency judgment after foreclosing on commercial mortgages. The defendants argued that M&T’s motion was untimely because it was filed more than 90 days after the referee initially mailed the deed to M&T’s attorney. M&T argued that the 90-day period started later, when the referee re-executed and delivered the deed which was then accepted. The New York Court of Appeals held that the 90-day period under RPAPL 1371(2) begins only upon acceptance of the deed by the grantee, reversing the Appellate Division’s decision and reinstating the County Court’s order and judgment.

    Facts

    M&T obtained a foreclosure judgment against James Doyle and Jim Doyle Ford, Inc. At auction, M&T purchased the property and planned to assign the bid to MAT Properties, Inc. The referee executed a deed naming MAT as the grantee and mailed it to M&T’s attorney. Before the deed arrived, M&T’s attorney, learning of a potential higher bidder, told the referee that MAT would not accept the deed and that the documents would be returned, which they were. Later, M&T instructed the referee to record the deed. The referee then re-executed a new deed, which was accepted and subsequently recorded.

    Procedural History

    County Court granted M&T’s motion for a deficiency judgment, holding that the motion was timely because it was filed within 90 days of the re-executed deed. The Appellate Division reversed, concluding that the 90-day period began with the initial delivery attempt. The Court of Appeals granted M&T leave to appeal.

    Issue(s)

    Whether, for purposes of RPAPL 1371(2), the “consummation of the sale by the delivery of the proper deed of conveyance to the purchaser” occurs when the referee (grantor) first executes and mails the deed, or only when the grantee (or its agent) accepts the deed?

    Holding

    No, the consummation of the sale occurs when the grantee accepts the deed, because acceptance is a necessary component of delivery under New York real property law.

    Court’s Reasoning

    The Court of Appeals relied on Real Property Law § 244, which states that a grant takes effect only from its delivery, and on common law principles requiring both presentment and acceptance for delivery. The court stated, “[t]he delivery of a deed without acceptance is nugatory…An intention to deliver on the one hand and to accept on the other, is necessary to give effect to the instrument.” The court emphasized that no statutory basis exists to treat a referee’s deed differently from other deeds. In this case, M&T’s attorney twice declined to accept the initially delivered deed. The court found this to be “opposing evidence” sufficient to rebut any presumption of delivery in May 2010. Only when the deed was re-executed and then accepted did the transfer occur, making M&T’s motion timely. The court distinguished this case from situations where the grantee accepts and retains the deed without objection, as in Crossland Sav. v Patton. The court emphasized that the key is not merely physical transfer, but the intention to accept the conveyance, quoting Ten Eyck v Whitbeck, “[t]he delivery of a deed is essential to the transfer of title, and there can be no delivery without an acceptance by the grantee”.

  • Myers v. Key Bank, 68 N.Y.2d 744 (1986): Establishing Presumption of Deed Delivery Through Recording

    Myers v. Key Bank, 68 N.Y.2d 744 (1986)

    Recording a deed creates a presumption of delivery and thus valid transfer of ownership, which must be overcome by sufficient evidence to the contrary.

    Summary

    This case addresses the presumption of deed delivery when a deed is recorded. Key Bank sought to enforce a lien on property owned by Myers based on a judgment against Dolores Clark, who had guaranteed a loan. Myers had purchased the property from Clark, who had received the property via a deed from her deceased husband. Myers argued the deed to Clark was never delivered, making it void and thus preventing Key Bank’s lien from attaching. The court held that the recording of the deed created a presumption of delivery and ownership in favor of Clark, and Myers failed to provide sufficient evidence to overcome this presumption.

    Facts

    Dolores Clark guaranteed a loan from Key Bank to 340 Main Street Corp.
    Clark had previously included the subject property in a list of her assets provided to Key Bank as part of the loan application.
    A title search would have revealed a recorded deed transferring the property from her deceased husband, Robert Clark, to her.
    Myers purchased the property from Clark in her capacity as executrix of her husband’s estate.
    Key Bank initiated procedures to enforce a lien on the property to satisfy a default judgment against Clark.

    Procedural History

    Myers and Dime Savings Bank brought a proceeding against Key Bank pursuant to CPLR 5239 to determine the parties’ rights in the property.
    The lower courts ruled in favor of Key Bank, upholding the validity of the lien.
    The Appellate Division affirmed the lower court’s decision.
    The case was appealed to the New York Court of Appeals.

    Issue(s)

    Whether the evidence presented by Myers was sufficient to overcome the presumption of delivery of the deed to Dolores Clark resulting from its recording, and thus invalidate Key Bank’s lien on the property.

    Holding

    No, because the evidence submitted by Myers was insufficient to overcome the presumption of delivery of the deed and Dolores Clark’s record ownership of the subject property resulting from the recording of the deed to her from Robert Clark.

    Court’s Reasoning

    The court relied on the established legal principle that recording a deed creates a presumption of delivery. The court cited Sweetland v Buell, 164 NY 541, 552 and Rametta v Kazlo, 68 AD2d 579, 581, affirming this principle.
    The Court stated, “The evidence submitted by petitioners is insufficient to overcome the presumption of delivery of the deed and Dolores Clark’s record ownership of the subject property resulting from the recording of the deed to her from Robert Clark… together with her other conduct with respect to the property.”
    The court highlighted that along with the recorded deed, Dolores Clark acted as if she owned the property. She included the property as an asset on her loan application. This further supported the presumption of delivery.
    Since Myers failed to present sufficient evidence to rebut this presumption, the court upheld the validity of the deed to Clark. As a result, Key Bank’s lien against Clark was valid and could be enforced against the property Myers purchased.
    This case reinforces the importance of properly challenging a recorded deed with sufficient evidence to overcome the presumption of delivery. Absent such evidence, the recorded deed stands as proof of ownership.

  • Manhattan Life Ins. Co. v. Continental Ins. Co., 33 N.Y.2d 370 (1974): Deed Delivery Requires Intent to Transfer Title

    Manhattan Life Ins. Co. v. Continental Ins. Co., 33 N.Y.2d 370 (1974)

    Delivery of a deed, essential for transferring title, requires more than mere physical transfer; it necessitates the grantor’s intent to immediately and irrevocably pass title to the grantee.

    Summary

    This case addresses whether the transfer of an executed deed to the grantor’s attorney constitutes legal delivery, effectively transferring title and thus insurance liability. Manhattan Life, the insured property owner, executed a deed to the Secretary of Housing & Urban Development (HUD) and delivered it to their attorney. Before the attorney recorded the deed, the property was destroyed by fire. The court held that delivering the deed to the grantor’s attorney, absent clear intent to transfer title to the grantee, does not constitute legal delivery. Therefore, Manhattan Life still held title at the time of the fire and was entitled to insurance coverage.

    Facts

    Manhattan Life Insurance Company acquired property through foreclosure and insured it with Continental Insurance Company. Manhattan’s mortgage was insured under the National Housing Act, requiring them to execute a deed to the Secretary of HUD upon foreclosure. On June 7, 1970, Manhattan executed a deed to HUD and delivered it to its own attorney “to be held by him.” On June 28, 1970, the property was destroyed by fire. The deed was recorded on June 29, 1970, by Manhattan’s attorney.

    Procedural History

    The trial court held that the deed delivery was sufficient to pass title before the fire. The Appellate Division reversed this decision. The New York Court of Appeals then reviewed the Appellate Division’s ruling.

    Issue(s)

    Whether the transmittal of an executed deed to the grantor’s attorney, to be held by the attorney, constituted legal delivery sufficient to transfer title to the grantee prior to the fire.

    Holding

    No, because delivering a deed to the grantor’s attorney, absent evidence of intent to immediately transfer title to the grantee, does not constitute legal delivery.

    Court’s Reasoning

    The court emphasized that transferring title requires delivering an executed deed, and that execution alone is insufficient under Real Property Law § 244. While there’s a presumption of delivery and acceptance as of the deed’s date, this presumption is rebuttable. The key factor was that the deed was delivered to Manhattan’s attorney to be held, without clear instructions or conditions for its release to HUD. The court distinguished this case from Williams v. Ellerbe, where the attorney received the deed as the agent for both grantor and grantee with instructions to record it. The court stated, “Possession of the executed instrument by Manhattan’s attorney constituted continued possession by Manhattan as grantor.” Because there was no effective delivery before the fire, title remained with Manhattan Life, which therefore had an insurable interest in the property. The court found that because there was no effective delivery, they did not need to address arguments about whether HUD’s regulations on assumption of maintenance costs rebutted a presumption of acceptance.