Fischer v. Union Trust Co.

Michigan Supreme Court · Contracts

Contractsexecutory promisegift deeddelivery of deedlove and affectionmeritorious considerationvaluable considerationsubrogation

Facts

After signing and acknowledging a deed, the father manually delivered it to his daughter, who then handed it to her brother to keep for her; the father reserved no control and never attempted to withdraw it. The deed conveyed land to the daughter subject to existing mortgages and included the father's promise to pay those mortgages. The stated dollar consideration was treated by the parties as a joke, and the court found that the real and only consideration was the father's love and affection and desire to provide for his daughter. After the father's death, the daughter sought to enforce the promise against his estate or recover by subrogation.

Issue

Can a donee who receives land by deed of gift subject to mortgages enforce the donor's promise in the deed to pay those mortgages, or obtain subrogation against the donor's estate, when the promise rests only on love and affection and not on valuable consideration? Also, was the deed effectively delivered so that title passed?

Rule

Manual delivery of a deed is complete when the grantor parts with control and retains no right to withdraw or cancel it. Natural love and affection or other merely meritorious consideration is sufficient to support an executed gift by deed, but it is not sufficient to enforce a purely executory promise; such a promise is legally void until performed. A donee who takes land by gift subject to a mortgage takes only the donor's interest and cannot use the donor's unenforceable promise to pay the encumbrance as a basis for damages, specific enforcement, or subrogation.

🔒

See the holding & full analysis

Create a free KwikCourt account to unlock the rest of this brief — and practice the case.

The court's holding and reasoning
Doctrine tests, pitfalls & exam hypotheticals
10 practice questions + 4 AI-graded essays on this case

Free sample · practice this case

Test yourself

One of 10 multiple-choice questions for this case. Pick an answer to see why.

In Grand Rapids, Owen Mercer signed and acknowledged a deed conveying a vacant lot to his niece, Dana Mercer. He handed the deed directly to Dana, who immediately placed it with her friend Lila Chen for safekeeping; Owen kept no copy, reserved no right to reclaim it, and never asked for it back.

Was the deed effectively delivered?

Explanation. Manual delivery is complete when the grantor parts with control and retains no right to withdraw or cancel the deed. Here, Owen handed the deed to Dana and reserved no control, so title passed even though Dana then entrusted the document to another person for her own safekeeping. Recording and valuable consideration are not required for delivery of an executed gift deed. (Derived from Fischer v. Union Trust Co. (n.d.).)