Turner v. Mallernee
1982 Mo. App. LEXIS 3208, 640 S.W.2d 517 (1982)
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Rule of Law:
A conditional delivery of a deed to a third-party depository (an escrow), with instructions that it be delivered to the grantee upon the satisfaction of a future condition, constitutes a valid and irrevocable delivery if the grantor relinquishes all dominion and control over the instrument.
Facts:
- Arthur Mallernee owned a 160-acre farm and had previously conveyed an adjacent farm to his son, Roy Mallernee.
- In November 1975, Arthur, accompanied by his daughter Mildred Turner, her husband Harold, and his son Roy, went to an attorney's office.
- Arthur signed and acknowledged a deed conveying the farm to the Turners.
- In Arthur's presence and with his consent, the attorney handed the deed to Mildred.
- After Mildred received the deed, Roy suggested he hold it in his safety deposit box, and Mildred agreed, giving the deed to Roy.
- Mildred and Roy agreed the deed would not be recorded and would be returned to Mildred upon Arthur's death, with an understanding that Arthur could use the property as collateral if he incurred major medical expenses.
- Arthur never incurred such medical expenses, and the condition for using the property as collateral never arose.
- In 1978, shortly before Arthur's death, Roy burned the 1975 deed after Arthur executed a new deed conveying the same farm to Roy and his wife.
Procedural Posture:
- Harold and Mildred Turner sued Roy and Thelma Mallernee in a Missouri trial court to quiet title to a farm.
- The Turners' petition included counts to establish their title under a 1975 deed and to invalidate a 1978 deed.
- The trial court, sitting without a jury, found the 1975 deed was ineffective due to lack of delivery, ruling against the Turners on that claim.
- The trial court found the 1978 deed was ineffective due to undue influence and the grantor's incompetence, ruling in favor of the Turners on that claim.
- Both the Turners and the Mallernees appealed the trial court's judgment to the Missouri Court of Appeals, Southern District.
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Issue:
Does a conditional delivery of a deed to a third party, subject to a future condition that is ultimately satisfied, constitute a valid legal delivery sufficient to transfer title, even if the deed is not recorded and is later destroyed by the third party?
Opinions:
Majority - Flanigan, J.
Yes, a conditional delivery of a deed to a third party is a valid legal delivery. When a grantor delivers a deed to a third person with instructions that it become operative upon the occurrence of a future condition, and the grantor relinquishes all dominion and control, the delivery is valid and irrevocable. The court determined that even if the initial manual transfer to Mildred was followed by a conversation creating a condition, the subsequent transfer to Roy constituted a valid delivery in escrow. Roy became a depository, or trustee, holding the deed for the Turners, subject to the condition that Arthur might need the property for major medical expenses. Since that condition never occurred, the delivery became absolute. Under the 'relation back' doctrine, the effective date of the transfer is the date of the initial deposit in escrow. Therefore, the 1975 deed was an operative conveyance, and Roy's subsequent destruction of it was legally ineffective.
Analysis:
This case clarifies the doctrine of conditional delivery, or delivery in escrow, particularly in the context of a gratuitous transfer. It establishes that the grantor's intent to permanently relinquish control over the deed is the critical element, even if the ultimate transfer of possession or full enjoyment of the property is contingent upon a future event. By applying the 'relation back' doctrine, the court protects the grantee's interest from the moment of the escrow delivery, making the transfer immune to the grantor's subsequent change of mind, death, or the depository's wrongful acts. The decision reinforces that a formal contract of sale is not required for a valid escrow, extending its protection to gifts and other family arrangements.
