Johnson v. Ramsey
817 S.W.2d 200, 307 Ark. 4 (1991)
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Rule of Law:
A deed is inoperative, despite being executed and recorded, if the grantor lacks the intention to immediately pass title and relinquish all dominion and control over the property.
Facts:
- On July 15, 1970, Alice Ramsey purchased a lot on Poplar Street in Osceola, Arkansas.
- On August 10, 1970, Ramsey, believing she was terminally ill, executed a warranty deed for the property to Allen Walters, intending for him to manage it for her children if she died.
- The executed deed contained an incorrect property description.
- Ramsey continued to make all payments on the property's note and paid all property taxes after executing the deed.
- Walters never paid anything toward the property and testified that he never claimed ownership, understanding the property was only in his name because Ramsey was sick.
- On April 2, 1990, Robert Johnson obtained a default judgment against Allen Walters in a case arising from a motor vehicle collision.
- On June 22, 1990, after a writ of execution was issued against the Poplar Street property, Walters executed a quitclaim deed to Ramsey, stating the property had been 'held in trust'.
Procedural Posture:
- Robert Johnson obtained a default judgment against Allen Walters in the Mississippi Circuit Court.
- The court issued a writ of execution to seize Walters's assets, including the Poplar Street property to which Walters held record title.
- Alice Ramsey filed a suit for declaratory judgment in the Mississippi Chancery Court (trial court), asking the court to declare her the true owner of the property.
- Johnson filed a counter-claim against Ramsey and a third-party complaint against Walters, alleging the reconveyance from Walters to Ramsey was a fraudulent transfer to avoid the judgment.
- The chancery court found that Ramsey was the owner in fee simple of the Poplar Street property.
- Robert Johnson, the appellant, appealed the chancery court's ruling regarding the Poplar Street property to this court.
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Issue:
Is a deed validly delivered when, despite its execution and recording, evidence shows the grantor did not intend to immediately pass title or give up control of the property?
Opinions:
Majority - Steele Hays, Justice
No. A deed is not validly delivered if the grantor lacks the requisite intent to immediately pass title and relinquish control. While the recording of a deed creates a presumption of delivery, this presumption can be rebutted by evidence demonstrating the grantor's contrary intent. In this case, the testimony from both the grantor, Alice Ramsey, and the grantee, Allen Walters, clearly established that Ramsey never intended to give up dominion over her property. She executed the deed only as a contingency because she was ill, and her subsequent actions of paying the mortgage and taxes, along with Walters's admission that he never owned the property, sufficiently rebut the presumption of delivery. Therefore, the deed was inoperative, and Walters never acquired any interest in the property for a creditor like Johnson to attach.
Analysis:
This case reinforces the critical legal principle that intent is the paramount element in the delivery of a deed. It clarifies that the physical act of executing and even recording a deed is not conclusive proof of a valid property transfer. The decision establishes that courts can look beyond the four corners of the instrument to extrinsic evidence, such as the parties' testimony and conduct, to determine the grantor's true intent. This precedent empowers courts to prevent inequitable outcomes where a creditor could seize property that was never truly intended to be conveyed to the debtor, thereby protecting the grantor's actual ownership rights.
