## Facts

- Russell H. Nelson owned certain real property and, about three months before his death, executed a warranty deed addressing post-death ownership.
- The deed’s granting language conveyed the property to Russell during his lifetime, with the property to pass to his son, Daniel G. Nelson, upon Russell’s death.
- A separate “subject to” clause stated the conveyance was subject to easements, liens, and a “life estate in Irene Parker,” Russell’s long-term companion.
- Irene Parker had lived with Russell on the property for approximately thirteen years, remained in possession after his death, and claimed a life estate under the deed.
- Daniel sued to eject Parker, asserting the deed did not validly create a life estate in her.
- On cross-motions for summary judgment, the trial court entered judgment for Parker, construing the deed as creating a life estate consistent with the grantor’s intent.
- On appeal, Daniel argued the “life estate in Irene Parker” was an invalid reservation to a “stranger to the deed” under prior Indiana authority.

## Issues

1. Whether Indiana law permits a deed to create an interest in a third party through language stating the conveyance is “subject to” a life estate in that third party.
2. Whether the common-law “stranger to the deed” rule (invalidating reservations in favor of nonparties) should remain part of Indiana law.
3. Whether the deed, read as a whole, manifested a clear intent to create a life estate in Irene Parker with a remainder to Daniel Nelson.

## Decision

- The Indiana Supreme Court affirmed summary judgment for Parker.
- The Court held the deed validly created a life estate in Irene Parker and a remainder in fee simple in Daniel Nelson, subject to that life estate.
- The Court rejected the common-law “stranger to the deed” rule in Indiana and overruled prior inconsistent authority, including *Ogle v. Barker* to that extent.
- The Court construed the deed to effect the grantor’s intent, treating the “subject to … life estate” language as operative to create Parker’s interest.

## Legal Principles

- The primary objective of deed construction is to ascertain and give effect to the grantor’s intent, determined from the deed’s language read as a whole and, when appropriate, surrounding circumstances at execution.
- A deed may create a present or future property interest in a third party if the instrument’s language clearly expresses that intent; technical conveyancing formalism does not control where it defeats clear intent.
- The “stranger to the deed” doctrine, which barred reservations for third parties on the theory that reservation language could not operate as a grant, is not applied in Indiana after this decision.
- “Subject to” language can operate as effective interest-creating language when used to carve out and recognize a life estate in a named third person.

## Conclusion

The court enforced the deed’s express allocation of interests by recognizing Irene Parker’s life estate and Daniel Nelson’s remainder, holding that Indiana law honors clearly expressed grantor intent even when the interest benefits a third party previously characterized as a “stranger to the deed.”


Nelson v. Parker, 687 N.E.2d 187 (Ind. 1997)