Opinion ID: 1314079
Heading Depth: 1
Heading Rank: 2

Heading: Existence of Express Trust.

Text: The first assignment of error by Nancy on appeal is the trial court's determination that she took title to the property subject to a trust in the proceeds for the benefit of Dilley's surviving children. Nancy claims the deed was delivered to her and title transferred before the letter creating the trust was signed. She argues her mother could not retroactively restrict her rights in the property by the creation of a trust after title had passed. In order for a transfer of title to take place under a deed, there must be actual or symbolic delivery accompanied by the grantor's intention to transfer title at that time without any reservation of control. Orud I, 652 N.W.2d at 451; Lathrop v. Knoop, 202 Iowa 621, 623, 210 N.W. 764, 766 (1926) (stating delivery may be made by the grantor to a third person so long as there is a present intent to pass title without any reservation of control). Nancy claims the deed executed by her mother was symbolically delivered on May 25 because, according to Nancy, Dilley left the deed with her attorney on that date for recording. Nancy also relies on the presumption that delivery occurred on the date the deed was executed, which in this case was May 25. [2] See Conway v. Rock, 139 Iowa 162, 164, 117 N.W. 273, 274 (1908) (stating delivery is presumed to have occurred on date deed was signed). Although this presumption supports Nancy's argument, it is not conclusive and may be overcome by clear, convincing and satisfactory evidence to the contrary. See Jones v. Betz, 203 Iowa 767, 768, 210 N.W. 609, 609 (1926). The decisive factual issue in the present case is whether there is clear, convincing and satisfactory evidence that the deed was not delivered until after Dilley restricted Nancy's right to the proceeds from a sale of the property. As we noted in Orud I, if the deed was delivered before Dilley's direction to Nancy that the proceeds be divided among the siblings, Dilley could not later impose such a restriction on Nancy's ownership. 652 N.W.2d at 451; accord Klein v. Klein, 239 Iowa 40, 52, 29 N.W.2d 163, 169 (1947). On the other hand, if delivery took place after Dilley imposed the conditions under which Nancy took title, Nancy's title was subject to a trust on the proceeds from a sale of the property. Orud I, 652 N.W.2d at 451. We agree with the district court and the court of appeals that there is clear, convincing and satisfactory evidence that Dilley's intent that Nancy hold the proceeds from a sale of the property in trust for Dilley's surviving children was made known to Nancy before delivery of the deed. [3] Nancy testified she accompanied her mother to the attorney's office on May 25, and there was a discussion about the letter at that time. Dilley signed the deed on May 25, but the letter was not ready on that day. Consequently, Dilley and Nancy returned on May 29 so Dilley could review and sign the letter. Importantly, as the court of appeals observed, Dilley's letter is written in the present tense, indicating Dilley had not delivered the deed or transferred her interest in the property prior to executing the letter. (Dilley stated in the letter, I . . . am filing a Quit Claim Deed from me . . . to Nancy and me as joint tenants. This Deed will place the property in joint tenancy with Nancy. . . . (Emphasis added.)). Moreover, the deed was not recorded until after Dilley signed the letter. We think this evidence is sufficient to rebut the presumption that delivery occurred on the date the deed was signed. Therefore, Nancy took title to the property subject to the obligation to carry out the terms of the express trust created by Dilley's letter. Nancy argues this result undermines our system of land title examination by permitting a party to challenge the clear terms of a deed with extrinsic evidence. This argument misconstrues the nature of the trust created by Dilley. Dilley did not restrict Nancy's ability to deal with the property during the time that Nancy held title, including Nancy's right to mortgage the property or to transfer title to a third person. The trust merely required that if Nancy chose to sell the property, the proceeds from the sale should be divided equally among Dilley's children. Enforcing this obligation in no way undermines the reliability of our land title system. In any event, the restriction on Nancy's ownership imposed by the trust would not have prevented transfer of title to a bona fide purchaser with no notice of the trust. See Restatement (Second) of Trusts § 284, at 47-48 (1959).