Daily Development for Thursday, December 28, 2000

By: Patrick A. Randolph, Jr.
Professor of Law
UMKC School of Law
Of Counsel: Blackwell Sanders Peper Martin
Kansas City, Missouri
prandolph@cctr.umkc.edu

DEEDS; CONSTRUCTION; GRANTING CLAUSE: Although, ordinarily, where a deed contains both a grant of an interest and a reservation of a right over the conveyed property, the two provisions are read together and reconciled; this rule is not applied where the attempted reservation is of some right inconsistent with the nature of the estate conveyed. In such a case, the grant controls.

Lucareli v. Lucareli, 614 N.W.2d 60 (Wis. Ct. App. 2000).

Grantor's son had a durable power of attorney to act on her behalf. Under the terms of this power of attorney, the son was prohibited from exercising the power in a manner benefitting himself. Nevertheless, he conveyed to himself and to his two brothers certain of grantor's property by a warranty deed which purported to grant a fee simple interest to the grantees but also attempted to reserve in the grantor the power to appoint the subject property - that is to provide that it could be transferred to others. The court indicates that this was a scheme by which the grantor hoped to control the power to grant the property while formally divesting herself of the property for considerations of government health insurance.

The grantor, who was living with one son, subsequently executed an instrument purporting to "remove from ownership" two of her sons and to vest ownership solely in the son with whom she resided. After her death, this son brought a declaratory action to establish claim to title against his brothers. The trial court concluded that the warranty deed was invalid as to the son because he had exceeded the scope of the power of attorney. The trial court also concluded that the deed completed a transfer and gift to the brothers, and that the power of appointment could not be subsequently exercised.

The appeals court held that grantor's reservation of the power of appointment was inconsistent with the rest of the terms of the warranty deed granting fee simple in the brothers and thus the reservation of the power of appointment was void.

The appeals court, however, did not agree with the trial court's conclusion that this left the fee in the three brothers. Relying upon Wisconsin statutes dealing with durable powers of attorney, it held that, because the son's attempt to self gift was outside of the scope of the powers granted to him under the power of attorney, both the purported conveyance to himself and the conveyance to his brothers were void. The property remained in the mother's estate.

DEEDS; VALIDITY; POWERS OF ATTORNEY: Where attorney in fact exceeds the powers granted him by conveying property to a prohibited grantee, the conveyance by the same instrument to other grantees that were permitted under the power of attorney is void.

Lucareli v. Lucareli, 614 N.W.2d 60 (Wis. Ct. App. 2000), discussed under the heading: "Deeds; Construction."

Thus, where a party having a power of attorney grants property to himself and others, but reserves a "power of appointment" with respect to the property, if the reservation of such power is void, the entire deed is void, even as to the interest granted to others.

Readers are urged to respond, comment, and argue with the daily development or the editor's comments about it.

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