Opinion ID: 777016
Heading Depth: 3
Heading Rank: 2

Heading: Property Transfer

Text: 26 In the final paragraph of its ruling, the bankruptcy court noted that it did not believe the conveyance of the deeds was valid under Illinois law because the McWilliamses did not physically deliver the deeds to their grandchildren. Under Illinois law, delivery of a deed is essential to the operation and validity of a conveyance, but physical delivery is only one means of completing the transfer. See, e.g., Calcutt v. Gaylord, 415 Ill. 390, 114 N.E.2d 340, 343 (1953). Delivery is determined by the intention of the grantor manifested by words and acts or the circumstances surrounding the transaction, and [t]he intent to deliver may be shown by direct evidence or presumed from acts and declarations of the parties.... Id.; Herron v. Underwood, 152 Ill.App.3d 144, 105 Ill.Dec. 105, 503 N.E.2d 1111, 1118 (1987). The McWilliamses have consistently maintained that they intended to make an innocent gift of the properties to their grandchildren. If we accept the bankruptcy court's interpretation, it would have been unnecessary for the McWilliamses to have their grandchildren properly execute and file deeds reconveying the properties back to the McWilliamses. 27 Moreover, we believe that the term transfer in the Code is defined broadly enough to encompass the transfer in this case. Cf. Grogan, 498 U.S. at 284, 289, 111 S.Ct. 654 (Congress amended the Bankruptcy Act in 1970 to make nondischargeability a question of federal law independent of the issue of the validity of the underlying claim.). Transfer is defined as: every mode, direct or indirect, absolute or conditional, voluntary or involuntary, of disposing of or parting with property or with an interest in property, including retention of title as a security interest and foreclosure of the debtor's equity of redemption. 11 U.S.C. § 101(54). `Under this definition, any transfer of an interest in property is a transfer, including a transfer of possession, custody, or control even if there is not transfer of title....' In the Matter of Smiley, 864 F.2d at 565 (quoting S.REP. No. 95-989, 95th Cong., 2d Sess. 26-27 (1978), reprinted in 1978 U.S.C.C.A.N. 5787, 5813, on the Bankruptcy Reform Act); see also In re Bajgar, 104 F.3d at 498-99 ([T]he legislative history of Section 101(54), which defines `transfer,' explains that `[t]he definition of transfer is as broad as possible.' Limiting the definition of `transferred' to `transferred and remained transferred,' in fact, would contradict the drafters' intent.) (quoting S.REP. No. 989, 95th Cong.) (citations omitted); In re Davis, 911 F.2d at 562. The recording of the deeds and acceptance of consideration demonstrates that the conveyance in this case was a transfer under the definition in 11 U.S.C. § 101(54). 28 Whether the McWilliams' actions are defined as a transfer or concealment, it is clear that they attempted to hide the property from their creditors. The recording, but failure to deliver the deeds, demonstrates the McWilliamses attempted to create the appearance that they no longer owned the property. Thus, even if the property was not found to have been transferred, it could be found to have been concealed. See In re Keeney, 227 F.3d 679, 682-83 (6th Cir.2000) (quoting the bankruptcy court's finding that the debtor concealed property by having it titled `in his parents' names' while retaining a beneficial interest in it); Friedell v. Kauffman (In re Kauffman), 675 F.2d 127, 128 (7th Cir.1981) (per curiam) (The transfer of title with attendant circumstances indicating that the bankrupt continues to use the property as his own is sufficient to constitute a concealment.). However, the fact that the McWilliamses did later disclose the transfer when they filed their petition might, in other circumstances, mitigate the concealment. See Gullickson v. Brown (In re Brown), 108 F.3d 1290, 1293 (10th Cir.1997) (distinguishing between concealment and transfer in section 727(a)(2), and finding that the debtor transferred but did not conceal the transaction because he placed it on his bankruptcy schedules). In this case, it is more likely that the disclosure was prompted by the fact that the Village had discovered the transfer and moved to have it set aside under the UFTA. 29 The McWilliamses are certainly unfortunate debtors, yet they are not exactly honest debtors either. From the transcript of the hearing and the bankruptcy court's ruling, there is little doubt that the judge empathized with the McWilliamses, and because they disclosed the conduct and reconveyed the properties the judge felt there was no harm done. The counsel for the Village was also quite displeased with this outcome, and despite the judge's admonishment that an appeal would be a waste of money, pursued the action with two appeals. As the bankruptcy judge, we are confounded as to the Village's vigorous pursuit of this case because it is unlikely that the Village will see any financial gain, and any benefits will likely be offset by attorney's fees. The McWilliamses appeared pro se at oral arguments before this court and we too were not unmoved by their plight, but the Village's objections are clearly valid under the law. 5