## Facts

- Dean and Pamela Aafedt executed three promissory notes and three mortgages (each $15,150) to finance three townhouse purchases.
- The mortgages were assigned to CUNA Mortgage.
- After the Aafedts defaulted, CUNA commenced foreclosure actions on the three mortgages.
- The Aafedts offered to convey the properties back to CUNA in lieu of foreclosure; CUNA rejected the proposal, citing lack of insurer (HUD) approval.
- The Aafedts then executed and recorded a quitclaim deed naming CUNA as grantee, without CUNA’s knowledge, physical receipt of the deed, or any indication of acceptance by CUNA.
- The Aafedts sought summary judgment, arguing the recorded quitclaim deed made CUNA the owner and barred foreclosure.
- The district court denied the Aafedts’ motion and granted summary judgment for CUNA, treating the deed as ineffective for lack of knowledge and consent; the Aafedts appealed.

## Issues

1. Whether a quitclaim deed executed and recorded by mortgagors, naming the mortgagee as grantee but done without the mortgagee’s knowledge or consent, validly conveyed title and barred foreclosure.
2. Whether the deed was effectively delivered under North Dakota law, including whether delivery requires acceptance by the grantee and whether recording can supply a presumption of delivery/acceptance despite a lack of acceptance.

## Decision

- The North Dakota Supreme Court affirmed the judgment for CUNA.
- The court held the quitclaim deed did not transfer title because there was no acceptance by CUNA and therefore no valid delivery.
- The court concluded that any presumption of delivery associated with recording did not apply, or was rebutted, where the grantee lacked knowledge and had rejected the proposed transfer.
- Because title did not pass to CUNA, CUNA remained a mortgagee and was entitled to proceed with foreclosure.

## Legal Principles

- A deed is not effectively delivered unless the grantee accepts it; an estate cannot be imposed on a grantee against the grantee’s will.
- Delivery of a deed requires both the grantor’s present intent to divest title and acceptance by the grantee.
- Recording may create a rebuttable presumption of delivery and acceptance, but the presumption does not arise or is overcome when the evidence shows the grantee did not accept and lacked knowledge of the purported conveyance.
- A mortgagor’s unilateral recordation of a deed naming the mortgagee as grantee does not convert the mortgagee into an owner or defeat foreclosure when acceptance is absent.

## Conclusion

The court held that the borrowers’ unilateral recording of a quitclaim deed did not convey title to the mortgagee because delivery was incomplete without the mortgagee’s acceptance; the mortgagee therefore retained its status and could foreclose on the mortgages.


CUNA Mortg. v. Aafedt, 459 N.W.2d 801 (N.D. 1990)