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Docket Number

Opinion No. 2603

Attorney(S)

Robert Y. Knowlton and John F. Emerson, both of Sinkler Boyd, of Columbia, for appellant. S. Jahue Moore, of Kirkland, Wilson, Moore, Allen, Taylor O'Day, of West Columbia, for respondent.

Judges

PER CURIAM:

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Smart Summary

Opinion Summary: First Union National Bank of South Carolina (as Personal Representative of the Estate of William J. Shealy) v. Wilson Shealy, Opinion No. 2603 (Ct. App. S.C., filed Dec. 9, 1996)

Factual and Procedural Background

The facts are essentially undisputed. A 65-acre tract (the Roland Place) descended in equal one-quarter shares to four brothers, including Dr. William J. Shealy and respondent Wilson Shealy, after the death of Dr. Shealy's mother in 1965. In 1975 Dr. Shealy executed a deed purporting to convey his one-quarter interest to Wilson, placed that deed in a sealed envelope marked "Safekeeping," and gave the envelope to his brother Charles (then Lexington County Clerk of Court) without revealing its contents or delivering it to Wilson. Dr. Shealy told Charles he would later indicate when to act with respect to the envelope.

Dr. Shealy took no further action regarding the deed during his lifetime. After Dr. Shealy's death in 1987, Charles opened the envelope, informed Wilson of the deed, and recorded it on December 3, 1987. Wilson first learned of the deed only after Dr. Shealy's death.

In 1994 First Union (as trustee/personal representative) sued to recover title to the interest, alleging the 1975 deed was never effectively delivered and that the interest instead passed into a testamentary trust. Wilson counterclaimed for slander of title. The parties agreed to resolve the case on cross-motions for summary judgment. The trial court granted Wilson's motion, finding the deed was effectively delivered (but denying the slander claim); First Union appealed. The Court of Appeals reversed the trial court's summary judgment ruling for Wilson.

Legal Issues Presented

Whether the 1975 deed from Dr. Shealy to Wilson was effectively delivered during Dr. Shealy's lifetime such that title passed to Wilson prior to Dr. Shealy's death.
Whether a deed that does not become effective until after the grantor's death can constitute a valid inter vivos conveyance.

Arguments of the Parties

Appellant (First Union) — Principal Arguments

The 1975 deed was never effectively delivered because Dr. Shealy retained control over the deed and did not intend to divest himself of title during his lifetime.
The facts (sealed envelope, instructions to Charles not to open or act absent further instructions, continued receipt of income from the property) show absence of the requisite contemporaneous intent and act to effect delivery.
A grantor may not use a deed to transfer an interest that will take effect after the grantor's death; a valid deed must transfer an interest during the grantor's lifetime.

Respondent (Wilson) — Principal Arguments

Wilson argued the act of placing the deed in Charles's custody coupled with Dr. Shealy's statement that he had "done something for someone" evidenced an intent that delivery had been completed and was not subject to later change of mind.
Implicitly, Wilson relied on the recorded deed and Charles's subsequent recording as effectuating the conveyance.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Johnson v. Johnson, 44 S.C. 364, 22 S.E. 419 (1895)	Establishes that a deed is not legally effective until it has been delivered.	The court invoked this foundational rule to frame the threshold requirement for an effective conveyance: delivery is essential.
Durham v. Blackard, 313 S.C. 432, 438 S.E.2d 259 (Ct.App. 1993)	Supports the proposition that a deed is not effective until delivery.	Used with Johnson to restate the principle that delivery is required for legal effect.
May v. Jeter, 245 S.C. 529, 141 S.E.2d 655 (1965)	Delivery does not require manual transfer into grantee's hand; manual transfer is neither required nor dispositive; and a deed must transfer its interest during the grantor's lifetime.	The court relied on May to explain that physical handing over is not the only method but also to emphasize that a transfer effective only after death cannot be a valid inter vivos conveyance.
Harris v. Saunders, 21 S.C. Eq. (2 Strob. Eq.) 370 (1848)	Supports that manual transfer is not strictly required for delivery.	Cited to show the longstanding principle that delivery may be effected by means other than direct manual transfer.
Morgan v. Morgan, 116 S.C. 272, 108 S.E. 110 (1921)	Delivery is a question of intent; deeds retained by grantor while also retaining possession of the land are ineffective when no delivery is intended.	The court relied on Morgan to show that retention of control and possession negates delivery and that intent to divest must exist concurrently with the act of delivery.
Williams v. Lawrence, 194 S.C. 1, 8 S.E.2d 838 (1940)	Legal effectiveness of delivery depends on "things done and said," not merely words written.	The court used Williams to emphasize that outward acts and statements at the time control the delivery inquiry.
Little v. Little, 215 S.C. 52, 53 S.E.2d 884 (1949)	Delivery refers to the intention of the maker existing at the time of the transaction and not subject to later change of mind; delivery occurs when the grantor intends to divest title at the time of purported delivery.	The court cited Little to support the proposition that a grantor's contemporaneous intent to divest title is essential and that retention of control defeats delivery.
Powers v. Rawles, 119 S.C. 134, 112 S.E. 78 (1922)	An effective delivery contains two parts: (1) intent to deliver, and (2) an act evincing purpose to part with control of the instrument.	The court applied this two-part framework in assessing whether Dr. Shealy both intended to deliver and performed an act showing he had parted with control; it found the two parts lacking concurrently.
Carrigan v. Byrd, 23 S.C. 89 (1885)	Recognition that intent and act, standing alone, are insufficient; they must coexist.	Invoked to reinforce that concurrent existence of intent and act is required for delivery and that the record did not show concurrence.
Baptist Found. for Christian Educ. v. Baptist College at Charleston, 282 S.C. 53, 317 S.E.2d 453 (Ct.App. 1984)	Mere intention to give without delivery is unavailing; intention must be executed by complete and unconditional delivery.	The court relied on this case to explain that Dr. Shealy's mere intention (without an executed delivery) fails to effect a transfer.
Burke v. Burke, 141 S.C. 1, 139 S.E. 209 (1927)	A grantor may not use a deed to transfer an interest that will take effect after the grantor's death; a deed must transfer its interest during the grantor's lifetime.	The court used Burke to conclude that, because Wilson gained no interest until after Dr. Shealy's death, the deed could not have effected a valid inter vivos transfer.

Court's Reasoning and Analysis

The Court of Appeals began from the settled premise that delivery is essential to make a deed legally effective and that delivery is a question of intent assessed by reference to words and actions at the time of the purported delivery. The court applied established South Carolina authorities describing delivery as comprising two concurrent elements: (1) the grantor's intent to deliver and divest title at the time of the transaction, and (2) an act demonstrating a purpose to part with control of the instrument.

The court evaluated the particular facts against this framework. Although Dr. Shealy physically placed the sealed envelope containing the deed in Charles's custody, the court found that Dr. Shealy did not communicate the envelope's contents to Charles, did not authorize Charles to act with respect to the envelope, and explicitly instructed Charles that the envelope was not to be opened or acted upon until further notice. Those statements and actions, the court held, demonstrated retention of control over the instrument and an absence of contemporaneous intent to divest himself of title. The court also noted Dr. Shealy continued to receive his share of income from the property after executing the deed, which is consistent with retention of ownership and inconsistent with an intent to transfer immediately.

The court rejected Wilson's reliance on Dr. Shealy's remark that he had "done something for someone" as indicating a completed and irrevocable delivery. The court reasoned that such a statement did not negate the clear, contemporaneous evidence that Dr. Shealy retained control and conditioned any disclosure or action on a future event (which might never occur). The court emphasized that retention of control over the instrument is equivalent to retention of the instrument for purpose of the delivery analysis.

Finally, the court concluded that the trial court's simultaneous findings — that a valid delivery occurred and that Wilson did not obtain any interest until after Dr. Shealy's death — were inconsistent with controlling authority that a deed must transfer an interest during the grantor's lifetime and cannot be used to effect a transfer that only becomes effective after the grantor's death. Because the record showed the deed's operative effect did not occur until after death, the court held the requirements for an effective inter vivos delivery were not satisfied.

Holding and Implications

REVERSED.

Holding: The Court of Appeals reversed the trial court's grant of summary judgment to Wilson, concluding the 1975 deed was not effectively delivered during Dr. Shealy's lifetime because Dr. Shealy retained control over the instrument and did not concurrently intend to divest himself of title.

Implications: The direct effect is that the trial court's determination that the deed effected a valid inter vivos conveyance is overturned. The opinion does not purport to establish a new rule beyond applying established South Carolina precedent regarding delivery of deeds; it applies existing principles to the facts and finds delivery lacking. The opinion does not discuss broader policy consequences beyond its application to the parties' rights under the cited authorities.

Judges Cureton, Goolsby, and Anderson concurred in the opinion. The court also noted that oral argument was deemed unnecessary under Rule 215, SCACR.

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First Union National Bank of South Carolina, as Personal Representati v. ofthe Estate of William J. Shealy, Appellant,

PER CURIAM:

First Union National Bank of South Carolina (First Union), in its capacity as trustee of two trusts established by Dr. William J. Shealy (Dr. Shealy) for the benefit of his wife and children, brought this action against Wilson Shealy (Wilson), seeking recovery of title to an interest in real property. First Union appeals from the trial court's grant of Wilson's motion for summary judgment. We reverse.

Because oral argument would not aid the court in resolving any issue on appeal, we decide this case without oral argument pursuant to Rule 215, SCACR.

Facts

The facts of this case are essentially undisputed. Upon the death of Dr. Shealy's mother in 1965, a 65-acre tract of real property located in Lexington County (the Roland Place) descended in equal one-quarter shares to Dr. Shealy and his three brothers, Frank Shealy, Charles Shealy, and Wilson Shealy. Dr. Shealy died in 1987.

Prior to his death, Dr. Shealy executed a deed dated August 11, 1975, purporting to convey his one-quarter interest in the Roland Place to Wilson. However, Dr. Shealy did not inform Wilson of the conveyance, nor did he deliver the deed to him; rather, Dr. Shealy placed the deed in a sealed envelope marked "Safekeeping" and gave it to Charles Shealy, who was at that time the Clerk of Court for Lexington County. Dr. Shealy did not tell Charles what the sealed envelope contained. According to Charles, the following colloquy occurred when Dr. Shealy handed him the sealed envelope:

He [Dr. Shealy] said, "Keep this for me. I'll let you know when to do something with it or when I want it known," something to that effect. I said, "Well, what is it?" He said, "If I had wanted you to know, I would have told you, but I have done something for somebody that's done so much for me."

Dr. Shealy also told Charles that: "You'll be told when to open it, and you'll know what to do with it."

Dr. Shealy never took any further action regarding the deed during his lifetime. Several months after Dr. Shealy's death in 1987, Charles opened the envelope, informed Wilson of its contents, and, on December 3, 1987, recorded the deed in Lexington County. It is undisputed Wilson first learned of the deed after Dr. Shealy's death.

First Union brought this suit in 1994 alleging that Wilson's title to Dr. Shealy's interest in the Roland Place was defective inasmuch as the deed purporting to convey the interest was never effectively delivered and that Dr. Shealy's interest actually passed into a testamentary trust. Wilson answered alleging the deed was effectively delivered and counterclaimed alleging slander of title. Prior to trial, both parties moved for summary judgment and agreed to have the case resolved on the summary judgment motions. By order dated September 8, 1995, the trial court granted Wilson's motion for summary judgment on First Union's claim, finding the deed was effectively delivered but denying his claim for slander of title. This appeal followed.

Discussion

On appeal, First Union argues the trial court erred in finding the 1975 deed purporting to convey Dr. Shealy's interest in the Roland Place to Wilson was effectively delivered. We agree.

It is a well established rule of law that a deed is not legally effective until it has been delivered. Johnson v. Johnson, 44 S.C. 364, 22 S.E. 419 (1895); Durham v. Blackard, 313 S.C. 432, 438 S.E.2d 259 (Ct.App. 1993). There is no prescribed method for an effective delivery of a deed; manual transfer of the instrument into the hand of the grantee is neither required to effectuate a valid delivery, nor is such transfer dispositive of the issue. See May v. Jeter, 245 S.C. 529, 141 S.E.2d 655 (1965); Harris v. Saunders, 21 S.C. Eq. (2 Strob. Eq.) 370 (1848). Delivery is a question of intent. Morgan v. Morgan, 116 S.C. 272, 108 S.E. 110 (1921). The legal effectiveness of a deed delivery "rests not in words written, but in things done and said." Williams v. Lawrence, 194 S.C. 1, 8 S.E.2d 838 (1940). The term delivery in this regard refers to "not so much a manual act but the intention of the maker . . . existing at the time of the transaction not subsequently and not subject to later change of mind." Little v. Little, 215 S.C. 52, 60, 53 S.E.2d 884, 888 (1949). That is, an effective delivery of a conveyance contains two parts: (1) an intention to deliver, and (2) an act evincing a purpose to part with control of the instrument. Powers v. Rawles, 119 S.C. 134, 112 S.E. 78 (1922). It has long been recognized that neither of these two parts is, standing alone, sufficient to constitute delivery; rather, the parts must exist concurrently. Carrigan v. Byrd, 23 S.C. 89 (1885).

Here, the trial court found that Dr. Shealy effectively delivered the subject deed by giving the document to Charles. The court based its ruling, in large part, on the absence of a clear statement by Dr. Shealy indicating he did not intend to deliver the deed. This was error.

Dr. Shealy's actions, both at the time he transferred the sealed envelope to Charles and thereafter, belied an immediate intent to divest himself of control over the document or to divest himself of his interest in the property. Baptist Found, for Christian Educ. v. Baptist College at Charleston, 282 S.C. 53, 58, 317 S.E.2d 453, 457 (Ct.App. 1984) (mere intention to give without delivery is unavailing, the intention must be executed by a complete and unconditional delivery). Although Dr. Shealy relinquished physical possession of the deed to Charles, he did not tell Charles the content of the envelope and did not authorize Charles to take any steps to learn of its contents. To the contrary, Dr. Shealy explicitly refused to tell Charles that the envelope contained a deed purporting to transfer his property rights to Wilson and directed him not to open the envelope or take any action regarding its content absent further instructions. In fact, the record on appeal is devoid of any evidence indicating Dr. Shealy told anyone that he intended to divest himself of his property rights at the time he executed the deed. Instead, he stated he would let Charles know, at some time in the future, when he wanted the contents of the envelope made known. See Morgan v. Morgan, 116 S.C. 272, 108 S.E. 110 (1921) (where grantor after executing deeds conveying land, retained possession of the land and continued to hold the deeds, the deeds were ineffective, there having been no delivery). Moreover, it is uncontroverted Dr. Shealy continued to receive his share of income from the property even after he executed the deed and gave it to Charles.

Wilson argues that Dr. Shealy's statement to Charles that he had "done something for someone" evidenced his belief that delivery of the deed was a completed act not subject to a later change of mind. This argument, however, ignores Dr. Shealy's retention of control over the document. Again, Dr. Shealy handed the envelope containing the deed over to Charles but forbade him to take any action regarding its contents until the occurrence of a future event. We can discern no reason why Dr. Shealy could not have, if he chose to do so, consciously decided to never instruct Charles to take any further action regarding the contents of the envelope. We find the retention of such control over the instrument paramount to retention of the instrument itself. Where a grantor retains such control over an instrument, a valid delivery cannot be said to have occurred. See Little v. Little, 215 S.C. 52, 60, 53 S.E.2d 884, 888 (1949) (delivery occurs when the grantor, at the time of the purported delivery, intends to divest himself of title and vest title in the grantee).

Finally, we agree with First Union that the trial court erred in finding that a valid delivery occurred while also finding Wilson did not gain any interest in Dr. Shealy's share of Roland Place until after Dr. Shealy's death. A grantor may not use a deed to transfer an interest which will take effect after the grantor's death. Burke v. Burke, 141 S.C. 1, 139 S.E. 209 (1927). A deed must transfer its interest, if at all, during the lifetime of the grantor. May v. Jeter, 245 S.C. 529, 141 S.E.2d 655 (1965).

Accordingly, the order of the trial court is

REVERSED.

CURETON, GOOLSBY, and ANDERSON, JJ., concur.

FIRST UNION NAT'L BANK OF S.C. v. SHEALY