Title Tips by Tute
Volume 1, Number 2
It was intended that Title Tips would become a column in which title examiner could enlighten Tute, as well as the other way around. The question last time about John Doe certainly created follow up questions, of which the following is an example.
Please take a look at Dunn v. Terry, 216 Va. 234 (1975), page 239, specifically, "Convicts are not civilly dead in Virginia, and they may freely execute contracts and deeds."
Haynes v. Peterson, 125 Va. 730 (1919)." Both seem to suggest that if convicts can be sued civilly in Virginia, they can sign a deed, unless they are mentally disabled.
Once upon a time, Tute thought Dunn v. Terry was a judicial ruling applying common sense and logic to the seemingly harsh result imposed by §8.01-2. Then a wise attorney (truly an eminence gris), well-versed in legislative history and research techniques, pointed out that §8.01-2 was enacted in 1977, two years after the Dunn v. Terry case, and that Tute should be aware of the principle of legislative repeal of judicial decisions. Not wanting to practice law, Tute checked with other attorneys, and found agreement with the opinion that the legislature, whether it intended to or not, overruled the principle you recite in the case by declaring "a person convicted of a felony during the period he is confined," was a person under a disability.
Now it is possible that the definition is limited only to matters contained in Title 8.01 of the Code of Virginia, and most real estate matters are contained in Title 55, but Tute does not believe that it would be prudent to insure a title coming from a known convicted felon during incarceration without the blessing of a judge in the form of an order or decree pursuant to the proceedings set out in §8.01-67 to §8.01-80.
(Being kind and charitable, Tute is embarrassed to point out to the Honorable and Highly Esteemed Editor that the reference to the citation for the legal proceeding to sell the property of a person under a disability was the victim of a scandalous and horrifying attack in the typesetting process, resulting in a misprint.)
-- Our apologies. Editor
I thought the General Assembly abolished dower and curtesy. Why do some attorneys and title companies still require that a spouse join in a deed from a seller who took title in his or her own name alone?
Patsy in S.C.
Tute would never say an unkind word about those hard-working underpaid public servants in Richmond who write the laws. These fine gentlepersons reached a conclusion that there were too many ways to defeat a spousal interest in real estate, leaving widows and children destitute. So, they repealed the whole nine yards, and replaced it with the augmented estate.
The statutes setting out the augmented estate rules contain the word "value" in many places, leads some experts to say that the land itself is never subject to the spousal interest. Others point to the remedy section of the statute, which allows a court to order delivery of the land itself to the unhappy surviving spouse, a remedy that title insurers feel may adversely affect one of the insuring provisions of the title policy.
There are a number of exemptions in the statute to a surviving spouse's claim. The first, and probably the only one a title examiner will ever see, is the "written consent or joinder of the surviving spouse." §64.1-16.1(3)(d)(i). If the spouse signs the deed, no potential spousal claim is left.
The second exemption is property received by the decedent by gift, will, or inheritance during the marriage, "to the extent such property . . . [was] . . . maintained by the decedent as separate property." How is the title examiner to know if the property was maintained as separate property. If the equitable distribution cases in the divorce area are any indication, any use of "marital" property in connection with "separate" property converts the separate property into marital property. Some examples reported include paying real estate or mortgage payments from a joint checking account, or from an account title only in the name of the owner, but funded with both spouse's regular paychecks (a "marital" asset).
The third exemption is for transfers prior to January 1, 1991, which doesn't help you today. Prior to that date, you would apply the existing dower and curtesy rules.
There is some other language that seems to prevent the claim of an augmented estate interest. You have to read in the negative, because it says that the value of property transferred to anyone other than a bona fide purchaser . . . to the extent that the decedent did not receive adequate and full consideration in money or money's worth . . . " is included within the augmented estate. The title companies and banks were worried about this property and went back to the General Assembly for a clarification.
What they got was §64.1-01, which defines a bona fide purchaser as "a purchaser of property for value who has acted in the transaction in good faith. The statute clearly makes a lender a bona fide purchaser. The statute says that "any consideration sufficient to support a simple contract," would be "value."
How is a title examiner to know if any consideration was really paid? Many deeds recite $10 and other good and valuable consideration." There is certain no mention in most deeds Tute has read that the parties acted in good faith.
In an effort to be fair to everyone, Tute raises the "missing spouse" issue (mostly, one does have to be flexible) on 1) deeds of gift less than 6 years old; 2) deeds to family members, regardless of what is paid; 3) deeds of trust to secure previously unsecured debts; and 4) deeds from or creating survivorship estates with someone other than the spouse.
I hope underwriters, and not just examiners, can ask questions. On a recent title examination submitted to our office, the property was sold to the current owner by deed dated September 30, 1992, recorded on November 19, 1992. Our examiner reported a judgment against the seller in that deed. The judgment was originally obtained in the Henrico General District Court on July 6, 1972, and was docketed in our county on July 2, 1992, almost 20 years later. I left it out of our commitment; but its been bothering me. How long after docketing will the judgment remain a lien?
Sleepless in Seattle
Of course underwriters are welcome to ask questions. What many title examiners never realize is that they are underwriting the policy each and every time they find (or Heaven forbid, miss) an item during the title exam.
Rest easy. Every judgment becomes a lien on real estate from the time it is recorded on the judgment lien docket in the clerk's office of the city or county where the land is located, §8.01-458. No action can be brought to enforce a judgment after twenty years from the date of the judgment, unless the enforcement period is extend by a court order, §8.01-251. The extension order also needs to be docketed, §8.01-458. In your case, the judgment had four days left to run when it was docketed in your jurisdiction. Because no extension order was recorded also, the lien was unenforceable when the property was sold in September.
Here's the issue: There is a document to be recorded. It could be a deed of subdivision, or deed of conveyance, or declaration of covenants. There are multiple parties who have to sign the document, and it is signed on three separate dates. The opening paragraph of the document reads: "This Deed made this ___ day of ____, 1995." Does it matter if you insert the earlier date, or the middle date, or the later date? Does your answer change if the sentence reads: "This Deed is dated the ___ day of ____, 1995."
W.F. from Arlington
Are you from the Board of Bar Examiners? Or the Unauthorized Practice of Law Section of the Bar? So many questions in so few words! The obvious answer for the title examiner is to call the attorney who let a deed with so many blanks escape the settlement table, explain the problem, and wait for instructions.
But, realizing that title examiners may be curious as to the effect of a deed with no date, or a date which suggests the deed was written after it was signed, Tute will give it a shot.
Not wanting to be thought of as flippant, Tute hopes you won't take this the wrong way. The date of the deed is virtually immaterial. What really counts in whether or not the deed was delivered. See 2 Minor Real Property 1059 (2nd ed. Ribble 1928) This is a concept straight out of feudal English law in which the title was transferred when the grantor handed the clump of dirt (or the twig from the tree, or whatever they were using to symbolize the land) to the grantee. (For the historically-minded folks, this was called livery of seisin.)
There are many cases decided by the Virginia Courts in which the issue was not when the deed was signed, acknowledge, and recorded, but when the deed was delivered. The cases are not entirely consistent. See, for example,
Thrasher v. Thrasher, 202 Va. 594 (1961) and Hanson v. Harding, 245 Va. 424 (1993) for differing results for a deed recorded after the death of the grantor. There is a presumption that the deed was delivered at its date of acknowledgment.
Shoemaker v. Chapman Drug Co., 112 Va. 612 (1911). There are cases that say that recordation of the deed leads to a presumption of proper delivery,
Enright v. Bannister, 195 Va. 76 (1953). Other cases say there is no presumption if a deed is held for a long time before recordation without an adequate explanation.
Pocahontas Fuel Co. v. Dillion, 161 Va. 301 (1933).
As a title examiner, weeks or years or decades after the fact, you may be concerned with how you will prove delivery. You probably can't. We will all hope that no one else can disprove delivery.
What would Tute do? Tute would vote for inserting the date that the deed was drawn, regardless of the uncertainty of a delivery date, on the deed when the deed is drawn. Don't leave the blanks in the deed! If the notary uses one of the longer form of acknowledgment contained in the Virginia Code, the form of acknowledgment may include blanks for the date of the instrument. That is another reason to fill in the date. Tute notes, without comment, the challenge to logic of seeing a deed dated April 15, 1995, with acknowledgments dated March 15, 1995, referencing "the foregoing instrument, which if the deed is read literally, would be impossible. Even worse is an acknowledgment in which the notary fills in the deed information in the acknowledgment with the date that the notary took the acknowledgment, and the blank in the deed is later filled in with the settlement date. Instant contradiction within the instrument! Another risk is that the notary will not fill in the dates at all, and the omissions in the acknowledgment may lead a clerk to reject the deed.
Another possibility is the use of language, such as, "This deed is effective as of the ___ day of ____," with the settlement date inserted in the blanks. But Tute has had the sad misfortune of trying to convince a clerk not to reject such a deed when the acknowledgment came before the proposed effective date.
So, to answer the last part of your question, no, my answer doesn't really change regardless of the words you use. Good draftsmanship will prevent the issue from ever coming up, except in rarified academic discussions (such as in this column).