Caseflicks

Michigan Supreme Court • 1904

Fischer v. Union Trust Co.

138 Mich. 612 | 68 L.R.A. 987 | 101 N.W. 852 | 1904 Mich. LEXIS 906

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Takeaway

In short, delivering a deed can complete a gift of mortgaged land, but the donor's unpaid promise to clear the mortgages is not enforceable merely because it appears in the deed.

Background

A father signed and acknowledged a deed conveying land to his daughter subject to mortgages. The deed also promised that he would pay the mortgages. He handed the deed to his daughter, who gave it to her brother for safekeeping. A dollar changed hands, but the family treated it as a joke rather than the price of the land.

The father died without paying the mortgages. After the daughter paid them, she sought recovery from his estate. The lower court entered judgment in her favor.

Issues

Issue #1

Whether a daughter who received mortgaged land as a gift can enforce her father's promise in the deed to pay the mortgages, or recover from his estate after paying them herself.

Holding

No. The deed conveyed the land, but the father's unpaid promise lacked valuable consideration and could not support either a claim for payment or subrogation against his estate.

Reasoning

The deed was delivered when the father handed it to his daughter without retaining control or a right to withdraw it. That completed the gift and passed title to her, subject to the mortgages and the rights of the father's creditors.

A completed gift of land can rest on love and affection, but an unperformed promise requires valuable consideration to be enforceable. The dollar was not genuine payment; the father's real motive was to provide for his daughter. Putting his promise in the deed did not make it enforceable.

Because the deed conveyed land subject to the mortgages, the daughter received the father's interest after those liens, not land free of them. His existing liability to the mortgage lenders remained, but it did not give her a right to make him—or his estate—bear the cost as between them.

Subrogation could not accomplish indirectly what the daughter could not demand under the promise itself. The father could have completed the additional gift by paying the mortgages, but he did not. The Court therefore reversed the judgment and ordered a new trial.