A declaration against interest is another type of statement received into evidence even though it is being repeated by someone who heard it out of court. It is any comment that admits something harmful to the rights of the person who made the statement. For example, a driver says to his or her passenger just before the car misses a curve and ends up in a ditch, “Iknow the brakes are bad, but don’tworry.” Later when suing to recover compensation for injuries, the passenger can testify that he or she heard the driver make a declaration against his or her interest even though that testimony is hearsay. Customs law requires all persons entering the United States to provide officers with a list of merchandise they are bringing into the country. This list is also called a declaration. Real property laws in various states require the filing of statements to disclose plans that establish certain rights in particular buildings or parcels. For example, a homeowners’ association formed by neighbors to maintain a recreation center owned by all of them together may file a declaration of covenants. A builder may be required to file a declaration of condominium before beginning to sell new units. As a preliminary step before becoming naturalized U.S. citizens, ALIENS must file a declaration of intention that states that they are honestly trying to become citizens and that they formally renounce all allegiance to any other nation where they were ever citizens or subjects. The DECLARATION OF INDEPENDENCE was a formal announcement on July 4, 1776, by which the Continental CONGRESS OF THE UNITED STATES of America proclaimed the independence of the people of the colonies from the rule of Great Britain. It explained the reasons for their assertion of political autonomy and announced to the world that the United States was a free and independent nation. INTERNATIONAL LAW recognized that nations may formally and publicly proclaim a condition of arme d conflict by a declaration of war, which in effe ct forbids all persons to aid or assist the enemy. In the United States, the Congress has the authority to declare war, and a declaration fixes a beginning date for the war. A declaration of a dividend is an act of a corporation in setting aside a portion of net or surplus income for proportional distribution as a dividend to those who hold shares of stock. DECLARATION OF INDEPENDENCE Since its creation in 1776, the DECLARATION OF INDEPENDENCE has been considered the single most important expression of the ideals of U.S. democracy. As a statement of the fundamental principles of the United States, the Declaration is an enduring reminder of the country’s commitment to popular government and equal rights for all. The Declaration of Independence is a product of the early days of the Revolutionary War. On July 2, 1776, the Second Continental Congress—the legislature of the American colonies—voted for independence from Great Britain. It then appointed a committee of five— John Adams, BENJAMIN FRANKLIN, THOMAS JEFFER- SON , ROGER SHERMAN, and Robert R. Livingston— to draft a formal statement of independence designed to influence public opinion at home and abroad. Because of his reputation as an eloquent and forceful writer, Jefferson was assigned the task of creating the document, and the final product is almost entirely his own work. The Congress did not approve all of Jefferson’s original draft, however, rejecting most notably his denunciation of the slave trade. Delegates from South Carolina and Georgia were not yet ready to extend the notion of INALIENABLE rights to African Americans. On December 8, 1941, President Franklin Delano Roosevelt signs the Congressional Declaration of War on Japan. NATIONAL ARCHIVES AND RECORDS ADMINISTRATION GALE ENCYCLOPEDIA OF AMERICAN LAW, 3RD E DITION 388 DECLARATION OF INDEPENDENCE On July 4, 1776, the day of birth for the new country, the CONTINENTAL CONGRESS approved the Declaration of Independence on behalf of the people living in the American colonies. The Declaration served a number of purposes for the newly formed United States. With regard to the power politics of the day, it functioned as a propaganda statement intended to build sup- port for American independence abroad, par- ticularly in France, from which the Americans hoped to have support in their struggle for independence. Similarly, it served as a clear message of intention to the British. Even more important for the later Republic of the United States, it functioned as a statement of gover n- mental ideals. In keeping with its immediate diplomatic purposes, most of the Declaration consists of a list of 30 grievances against acts of the British monarch George III. Many of these were traditional and legitimate grievances under British CONSTITUTIONAL LAW. The Declaration firmly announces that British actions had established “an absolute Tyranny over these States.” Britain’s acts of despotism, according to the Declaration’s list, included TAXATION of Americans without representation in Parlia- ment; imposition of standing armies on Ameri- can communities; establishment of the military above the civil power; obstruction of the right to trial by jury; interference with the oper ation of colonial legislatures; and cutting off of trade with the rest of the world. The Declaration ends with the decisive resolution that “these United Colonies are, and of Right ought to be Free and Independent States; that they are Absolved from all Allegiance to the British Crown, and that all political connection between them and the State of Great Britain, is and ought to be totally dissolved.” The first sentences of the document and their statement of political ideals have remained the Declaration’s most memorable and influen- tial section. Among these sentences are the following: We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain inalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.—That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed,— That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government. Ever since their creation, these ideas have guided the development of U.S. government, including the creation of the U.S. Const itution in 1787. The concepts of equal and inalienable rights for all, limited government, popular consent, and freedom to rebel have had a lasting effect on U.S. law and poli tics. Scholars have long debated the relative importance of the different sources Jefferson used for his ideas in the Declaration. Most agree that the natural rights philosophy of English philosopher JOHN LOCKE greatly influenced Jefferson ’s composition of the Declaration. In particular, Locke ad- vanced the ideas that a just government derives its legitimacy and power from the consent of the governed, that people possess inalienable rights The Declaration of Independence was signed July 4, 1776. This work, assembled by John Binns in 1819, surrounds a facisimile of the document’s text with portraits of George Washington, John Hancock, and Thomas Jefferson, along with the seals of the 13 original states. LIBRARY OF CONGRESS GALE ENCYCLOPEDIA OF AMERICAN LAW, 3 RD E DITION DECLARATION OF INDEPENDENCE 389 that no legitimate government may take away, and that the people have the right and duty to overthrow a government that violate s their rights. Jefferson also paralleled Locke in his identification of three major rights—the rights to “Life, Liberty and the pursuit of Happi- ness”—though the last of his three is a change from Locke ’s right to “property.” Jefferson himself minimized the Declara- tion’s contribution to political philosophy. In a letter that he wrote in 1825, 50 years after the Declaration was signed, he described the document as “an appeal to the tribunal of the world.” Its object, he wrote, was [n]ot to find out new principles or new arguments, never before thought of, not merely to say things which had never been said before; but to place before mankind the common sense of the subject, in terms so plain and firm as to command their assent, and to justify ourselves in the independent stand we are compelled to take. Neither aiming at originality of principle or senti- ment, nor yet copied from any particular and previous writing, it was intended to be an expression of the American mind, and to give to that expression the proper tone and spirit called for by the occasion. Although the Declaration of Independence stands with the Constitution as a founding document of the United States of America, its position in U.S. law is much less certain than that of the Constitution. The Declaration has been recognized as the founding act of law establishing the United States as a sovereign and independent nation, and Congress has placed it at the beginning of the U.S. Code, under the heading “The Organic Laws of the United States of America.” The Supreme Court, however, has generally not considered it a part of the ORGANIC LAW of the country. For example, although the Declaration mentions a right to rebellion, this right, particularly with regard to violent rebel- lion, has not been recognized by the Supreme Court and other branches of the federal govern- ment. The most notable failure to uphold this right occurred when the Union put down the rebellion by the Southern CONFEDERACY in the Civil War. Despite its SECONDARY AUTHORITY, many later reform movements have quoted the Declara- tion in support of their cause, including move- ments for universal SUFFRAGE, ABOLITION of SLAVERY, women’s rights, and CIVIL RIGHTS for African Americans. Many have argued that this document influenced the passage and wording of such important developments in U.S. law and government as the Thirteenth and Fourteenth Amendments, which banned slavery and sought to make African Americans equal citizens. In this way, the Declaration of Independence remains the most outstanding example of the spirit, as opposed to the letter, of U.S. law. FURTHER READINGS Cunningham, Noble E., Jr. 2009. In Pursuit of Reason: The Life of Thomas Jefferson. New York: Barnes & Noble. Gerber, Scott Douglas, ed. 2002. The Declaration of Independence: Origins and Impact. Washington, D.C.: CQ Press. Levy, Michael B. 1988. Political Thought in America: An Anthology. 2d ed. Florence, KY: Brooks Cole. Machan, Tibor R., ed. 2001. Individual Rights Reconsidered: Are the Truths of the U.S. Declaration of Independence Lasting? Stanford, Calif.: Hoover Institution. Murray, Charles. 1988. In Pursuit of Happiness and Good Government. New York: Simon & Schuster. CROSS REFERENCES “Declaration of Independence” (Appendix, Primary Docu- ment); Fourteenth Amendment; Thirteenth Amendment. DECLARATION OF TRUST An assertion by a property owner that he or she holds the property or estate for the benefit of another person, or for particular designated objectives. The term also signifies the deed or other instrument that contains the statement—which may be either written or oral, depending upon the applicable state law. DECLARATORY JUDGMENT Statutory remedy for the determination of a justiciable controversy where the plaintiff is in doubt as to his or her legal rights. A binding adjudication of the rights and status of litigants even though no consequential relief is awarded. Individuals may seek a DECLARATORY JUDG- MENT after a legal controversy has arisen but before any damages have occurred or any laws have been violated. A declaratory judgment differs from other judicial rulings in that it does not require that any action be taken. Instead, the judge, after analyzing the controversy, simply issues an opinion declaring the rights of each of the parties involved. A declaratory judgment may only be granted in JUSTICIABLE controversies—that is, in actual, rather than hypothetical, controversies that fall within a court’s jurisdiction. GALE ENCYCLOPEDIA OF AMERICAN LAW, 3RD E DITION 390 DECLARATION OF TRUST A declaratory judgment, sometimes called declaratory relief, is CONCLUSIVE and legally binding as to the present and future rights of the parties involved. The parties involved in a declaratory judgment may not later seek another court resolution of the same legal issue unless they appeal the judgment. Declaratory judgments are often sought in situations involving contracts, deeds, leases, andwills. An insurance company, for example, might seek a declaratory judgment as to whether a policy applies to a certain person or event. Declaratory judgments also commonly involve individuals or parties who seek to determine their rights under specific regulatory or criminal laws. Declaratory judgments are considered a type of preventive justice because, by informing parties of their rights, they help them to avoid violating specific laws or the terms of a contract. In 1934 Congress enacted the Declaratory Judgment Act (28 U.S.C.A. § 2201 et seq.), which allows for declaratory judgments con- cerning issues of federal law. At the state level, the National Conference of Commissioners on Uniform State Laws passed the Uniform Declaratory Judgments Act (12 U.L.A. 109) in 1922. Between 1922 and 1993, this act was adopted in 41 states, the Virgin Islands, and the Commonwealth of Puerto Rico. Most other states have varying laws that provide for declaratory judgments. Most declaratory judg- ment laws grant judges discretion to decide whether or not to issue a declarato ry judgment. FURTHER READINGS Howard, Davis J. 1994. “Declaratory Judgment Coverage Actions.” Ohio Northern Univ. Law Review 13. National Conference of Commissioners on Uniform State Laws. 1922. Uniform Declaratory Judgments Act. Avail- able online at http://www.law.upenn.edu/bll/archives/ ulc/fnact99/1920_69/udja22.pdf; website home page: http://www.law.upenn.edu(accessed September 1, 2009). “Rule 57 Declaratory Judgments.” Federal Rules of Civil Procedure. Legal Information Institute, Cornell Univ. Law School. Available online at http://www.law.cornell. edu/rules/frcp/Rule57.htm; website home page: http:// www.law.cornell.edu (accessed September 1, 2009). DECREE A judgment of a court that announces the legal consequences of the facts found in a case and orders that the court’s decision be carried out. A decree in equity is a sentence or order of the court, pronounced on hearing and understanding all the points in issue, and determining the rights of all the parties to the suit, according to equity and good conscience. It is a declaration of the court announcing the legal consequences of the facts found. With the procedural merger of law and equity in the federal and most state courts under the Rules of Civil Procedure, the term judgment has generally replaced decree. A DIVORCE decree sets out the conclusions of the court relating to the facts asserted as grounds for the divorce, and it subsequently dissolves the marriage. Decree is sometimes used interchangeably with determination and order. DEDICATION In copyright law the first publication of a work that does not comply with the requirements relating to copyright notice and which therefore permits anyone to legally republish it. The gift of land—or an easement, that is, a right of use of the property of another—by the owner to the government for public use, and accepted for such use by or on behalf of the public. The owner of the land does not retain any rights that are inconsiste nt with the complete exercise and enjoyment of the public uses to which the property has been committed. A dedication is express where the gift is formally declared, but it can also be implied by OPERATION OF LAW from the owner’s actions and the facts and circumstances of the case. A dedication may be made under COMMON LAW or pursuant to the requirements of statute. A common-law dedication is not subject to the STATUTE OF FRAU DS,anENGLISH LAW adopted in the United States, which provides that certain agreements must be in writing. Therefore, a common-law dedication does not have to be expressed in writing to be effective; it is based on ESTOPPEL. If the landowner indicates that his or her land is to be used for a public purpose and public use then occurs, the landowner is estopped, or prevented, from refuting the existence of the public right. An express common-law dedication is one in which the intent is explicitly indicated—such as by ordinary deeds or recorded plats, which are maps showing the locations and boundaries of individual land parcels subdivided into lots— but the execution of the dedication has not been in accordance with law or certification of GALE ENCYCLOPEDIA OF AMERICAN LAW, 3RD E DITION DEDICATION 391 it has been defective so as not to constitute a statutory dedication. A statutory dedication is necessarily express, because it is executed pursuant to, and in conformity with, the provisions of a statute regulating the subject. It cannot be implied from the circumstances of the case. A dedication can result from the contrary exclusive use of land by the public pursuant to a claim of right with the knowledge, actual or attributed, and the acceptance of the owner. This method is known as dedication by adverse user. DEDUCTIBLE That which may be taken away or subtracted. In taxation, an item that may be subtracted from gross income or adjusted gross income in determining taxable income (e.g., interest expenses, charitable contributions, certain taxes). The portion of an insured loss to be borne by the insured before he or she is entitled to recovery from the insurer. Automotive insura nce policies frequently in- clude a deductible, such as $250 or $500, which the insured m ust pay before receiving reimbursement under the policy. Usually, the insured motorist chooses a mong several levels of deductible, with the policy payment being somewhat lower when the insured chooses a higher d eductible. Many types of insurance policies include a deductible amount. DEDUCTION That which is deducted; the part taken away; abatement; as in deductions from gross income in arriving at net income for tax purposes. In civil law, a portion or thing that an heir has a right to take from the mass of the succession before an y partition takes place. A contribution to a charity can be used as a deduction to reduce income for INCOME TAX purposes if the taxpayer meets the requirements imposed by law. DEED A written instrument, which has been signed and delivered, by which one individual, the grantor, conveys title to real property to another individu- al, the grantee; a conveyance of land, tenements, or hereditaments, from one individual to anot her. At COMMON LAW, a de ed was an instrument under seal that contained a covenant or contract delivered by the individual who wa s to be bound by it to the party to whom it was granted. I t is no longer required that such an instrument be sealed. Transfer of Land Land can only be t ransferred from one individual to another in the legally prescribed manner. Historically spea kin g, a written deed is the instru- ment used to convey ownership of real property. A deed is labeled an instrument of convey- ance. Under Spanish law, which was in effect at an early date in areas of the western United States, a written deed was not necessary to convey title to land. A verbal grant was sufficient to complete the transaction, provided that it was accompanied by a transfer of possession. Verbal grants of land in Texas have, therefore, been given recognition in U.S. courts. A deed must describe with reasonable certainty the land that is being conveyed. The conveyance must include operative words of grant; however, technical terms do not need to be us ed. T he GRANTOR must be adequately identified by t he con- veyance, although it is not required that the grantor’s n ame be s pecifically mentioned. S tate laws sometimes require that the deed indicate the resi- dence of the grantor by t own, city, county, and state. In order for title to property to pass, a deed must specify the GRANTEE w i th suff ic ient cer tainty to dis tinguish that individual f rom the rest of the world. Some statutes mandate that the deed lis t the grantee’s residence by town, city, count y, a nd state. Execution In order for a deed to be properly executed, certain acts must be performed to create a valid conveyance. Ordinarily, an essential element of execution is the signature of the grantor in the proper place. Itis not necessary, however, that the grantee sign the deed in order for it to take effect as a conveyance. Generally state statutes require that the deed be signed in the presence of witnesses, attesting to the grantor’s request. Delivery Proper delivery of a deed from the grantor to the grantee is an essential element of its effectiveness. In addition, the grantor must make some statement or perform some act that implies his or her intention to transfer title. It is insufficient for a grantor to have the mere intention to transfer title, in the absence of further conduct that consummates the purpose. GALE ENCYCLOPEDIA OF AMERICAN LAW, 3RD E DITION 392 DEDUCTIBLE GRANT DEED RECORDING REQUESTED BY _________________________________________ AND WHEN RECORDED MAIL THIS DEED AND, UNLESS OTHERWISE SHOWN BELOW, MAIL TAX STATEMENT TO: NAME __________________________________________ STREET ADDRESS _______________________________________ CITY, STATE & ZIP CODE ________________________________________ TITLE ORDER NO. ___________ ESCROW NO. __________ SPACE ABOVE THIS LINE FOR RECORDER’S USE DOCUMENTARY TRANSFER TAX $ ___________________________________ ٗ computed on full value of property conveyed, or ٗ computed on full value less liens and encumbrances remaining at time of sale. _________________________________________________________________ _ Signature of Declarant or Agent Determining Tax Firm Name GRANT DEED FOR VALUABLE CONSIDERATION, receipt of which is acknowledged, I (We), ________________________________________________ _____________________________________________________________________________________________________________ grant to ______________________________________________________________________________________________________ all that real property situated in the City of __________________________________________________ (or in an unincorporated area of) ________________________________________ County, _________________________ described as follows (insert legal description): _____________________________________________________________________________________________________________ _____________________________________________________________________________________________________________ _____________________________________________________________________________________________________________ _____________________________________________________________________________________________________________ _____________________________________________________________________________________________________________ _____________________________________________________________________________________________________________ Accessor’s parcel No. _________________________ Executed on ________________________________ ___________, at ___________________________________________________ _ _________________________________________________ _ STATE OF _________________________________ _________________________________________________ _ COUNTY OF _______________________________ _________________________________________________ _ On ________________ before me, ___________________________________________________________ personally appeared who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/ her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. _______________________________________________ MAIL TAX STATEMENTS TO: _________________________________________________________________________ ________________________________________________________________________________________ CAPACITY CLAIMED BY SIGNER(S) ٗ INDIVIDUAL(S) ٗ CORPORATE ______________ _ OFFICER(S) _______________ _ (TITLES) ٗ PARTNER(S) ٗ LIMITED ٗ GENERAL ٗ ATTORNEY IN FACT ٗ TRUSTEE(S) ٗ GUARDIAN/CONSERVATOR ٗ OTHER __________________ _ ___________________________ _ SIGNER IS REPRESENTING: Name of Person(s) or Executive(s) ___________________________ _ ___________________________ _ RIGHT THUMBPRINT (Optional) (NAME OF GRANTOR(S)) (NAME OF GRANTEE(S)) (NAME OF COUNTY) (STATE) (CITY AND STATE) (NAME/TITLE i.e. “JANE DOE, NOTARY PUBLIC”) (SIGNATURE OF NOTARY) (SEAL) SBR98 A sample grant deed. ILLUSTRATION BY GGS CREATIVE RESOURCES. REPRODUCED BY PERMISSION OF GALE, A PART OF CENGAGE LEARNING. GALE ENCYCLOPEDIA OF AMERICAN LAW, 3 RD E DITION DEED 393 There is no particular prescribed act, method, or ceremony required for delivery, and it is unnecessary that express words be employed or used in a specified manner. The deed need not be physically delivered to the grantee. It is sufficient to mail it to the grantee. Delivery of the deed by the attorney who has written the instrument for the grantor is also adequate. Unless otherwise provided by statute, a deed becomes effective upon its delivery date. The mere fact that the grantee has physical possession of the deed does not constitute delivery unless it was so intended by the grantor. Acceptance A deed must be accepted by the grantee in order for proper transfer of title to land to be accomplished. There are no fixed principles regarding what acts are sufficient to effect acceptance, since the issue is largely dependent upon the party’s intent. Acceptance of a deed need not be made by express words or in writing, absent a contrary statutory provision. A deed is ordinarily accepted when the grantee retains it or obtains a mortgage on the property at issue. Recording Legal policy mandates that a deed to real property be a matter of public record; therefore, subsequent to delivery and acceptance, a deed must be properly recorded. The recordin g process begins w hen the deed is presented to the clerk’s or recorder’s office in the county where the property is located. The entire instrument is duplicated, ordinarily by photocopying. The copy is inserted into the current book of official records, which consists exclusively of copies of documents that are maintained and labeled in numerical order. A properly recorded deed provides con- structive notice of its contents, which means that all parties concerned are considered to have notice of the deed whether or not they actually saw it. A majority of jurisdictions place the burden upon home buyers to investigate any suspicious facts concerning the property of which they have actual or constructive notice. If, for example, there is a reference to the property for sale in the records to other deeds, the purchaser might be required to determine whether such instruments give rights in the property to other individuals. A map referred to in a recorded deed that describes the property conveyed becomes part of the document for identification purposes. The original copy of a deed is returned to the owner once it has been duplicated, recorded, and filed in the office of the recorder. A records or clerk’s office maintains a set of indexes, in addition to official records, in which information about each deed is recorded, so that upon a search for a document such information can be disclosed. A majority of states have a GRANTOR-GRANTEE INDEX, a set of volumes containing a reference to all docu- ments recorded alphabetically according to the grantor’s name. The index lists the name of the grantor first, followed by the name of the grantee, then ordinarily a description of the instrument and sometimes of the property, and ultimately a reference to the volume and page number in the official record where the document has been copied. A grantee-grantor index has the identical information, but it is listed alphabetically according to the grantees’ names. A tract index arranges all of the entries based upon the location of the property. Indexes are frequently classified according to time periods. Therefore separate sets of indexes covering various periods of time may be available. A significant problem can result in the event that a deed cannot be located through the indexes. This situation could result from a mistake in the recording process, such as indexing the deed under the wrong name. In a number of states, the courts will hold that such a deed was never record ed inasmuch as it was not indexed in such a manner as to provide notice to someone properly conducting a check on the title. In these jurisdictions, all grantees have the duty to retu rn to the recorder’s office after filing to protect themselves by checking on the indexing of their deeds. A purchaser who lives in a state with such laws should protect himself or herself either by consulting an attorney or returning to the recorder’s office to ascertain that the deed is properly recorded and indexed. Other state statutes provide that a document is considered recorded when it is deposited in the proper office even if it is improperly recorded such that it cannot be located. In these states, there are no practical GALE ENCYCLOPEDIA OF AMERICAN LAW, 3RD E DITION 394 DEED steps for subsequent buyers to take to circum- vent this problem. Types of Deeds Three basic types of deeds commonly used are the grant deed, the QUITCLAIM DEED, and the WARRANTY DEED. Grant Deed By use of a grant deed, the conveyor says, “I grant (convey, bargain, or sell) the property to you.” In a number of jurisdictions a representation that the conveyor actually owns the property he or she is transferring is implied from s uch language. Quitclaim Deed A quitclaim deed is intended to pass any title, interest, or claim that the grantor has in the property but makes no representation that such title is valid. In effect, this type of deed states that if the grantor actually owns the premises described or any interest therein, it is to be conveyed to the grantee. For this type of deed, some state statutes require a warranty by the grantor, stating that neither the grantor nor anyone associated with him or her has encumbered the property, and that the grantor will defend the title against any defects that arise under and through him or her, but as to no others. Warranty Deed In a warranty deed the grantor inserts covenants for title, promising that such title is good and clear. The customary covenants of title include warranty of seisin, QUIET ENJOYMENT, the right to convey, freedom from encumbrances, and a defense of the title as to all claims. Validity If a deed is to have any validity, it must be made voluntarily. The test of the capacity of an individual to execute a valid deed is based upon that person’s ability to comprehend the con- sequences of his or her act. If a deed is not made through the conscious act of the grantor, it can be set aside in court. Relevant factors for the determination of whether a particular individu- al is capable of executing a valid deed are his or her age, and mental and physical condition. Extreme physical weakness resulting from old age or disease is a proper element for consider- ation in establishing capacity. Mental capacity, however, is the most important factor. If an individual is deemed to be mentally capable of disposing of his or her own property, the deed is ordinarily valid and would withstand objec- tions made to it. If fraud is committed by either the grantor or grantee, a deed can be declared invalid. For example, a deed that is a FORGERY is completely ineffective. The exercise of UNDUE INFLUENCE also ordi- narily serves to invalidate a deed. The test of whether such influence has been exerted turns upon the issue of whether the grantor executed the deed voluntarily. Undue influence is wrong- ful and serves to confuse the judgment and to control the will of the grantor. Ordinary influence is insufficient to invalidate a deed. Deeds between parties who share a confidential relationship are frequently examined by the courts for undue influence. For example, the courts might place a deed under close scrutiny if the grantor’sattorney or physician is named grantee. In addition, if the grantor is a drunkard or uses DRUGS AND NARCOTICS to excess, such would be circumstances for consideration when a court determines whether undue influence was exercised upon the grantor. Defects In a number of jurisdictions, an individual selling a house is required to disclose any material defect known to him or her but not to the purchaser. A failure to disclose gives the buyer the right to cancel the deed, sue for damages, and in some instances, recover for personal injuries incurred as a result of such defect. FURTHER READINGS Jacobus, Charles J. 2009. Real Estate Principles. Florence, Ky.: South-Western. Ring, Alfred A., and Jerome Dasso. 1989. Real Estate Principles and Practices. 11th ed. Upper Saddle River, N.J.: Prentice-Hall. Unger, Maurice A., and George Karvel. 1991. Real Estate: Principles and Practices. Florence, Ky.: South-Western. CROSS REFERENCES Quitclaim Deed; Records; Recording of Land Titles. DEED OF TRUST A document that embodies the agreement between a lender and a borrower to transfer an interest in the borrower’s land to a neutral third party, a trustee, to secure the payment of a debt by the borrower. A deed of trust, also called a TRUST DEED or a Potomac Mortgage, is used in some states in place of a mortgage, a transfer of interest in land GALE ENCYCLOPEDIA OF AMERICAN LAW, 3RD E DITION DEED OF TRUST 395 A sample deed of trust. GENERAL FORM Deed of trust made on ____________________________________(date), between _______________________________________, of ___________________________________________________________________________________ (address), referred to as trustor, __________________________________________________________________________________________________________, of _____________________________________________________________________________________________________ (address), referred to as trustee, and _____________________________________________________________________________________, of ________________________________________________________________________________ (address), referred to as beneficiary. Trustor, in consideration of the indebtedness recited below, irrevocably grants, bargains, sells, assigns, and conveys to trustee in trust, with power of sale, the property in _________________________________________________________________________________ (location and address) described as ________________________________________________________________________________ _________________________________________________________________________________________ (description of property), together with all the tenements, hereditaments, and appurtenances now or hereafter belonging or in any wise appertaining. To have and to hold the same, with the appurtenances, unto trustee. For the purpose of securing performance of each agreement of trustor and of securing payment of the sum of ______________ (amount) ($________) with interest thereon according to the terms of a _________________ (Note or Bond), dated _____________ (month & day), _____ (year) payable to beneficiary or order and made or executed by trustor, the final payment of principal and interest, if not paid sooner, to be due and payable on _______________ (month & day),________ (year) at the office of _________________________________, at ___________________________ (address), or at such other place as beneficiary may designate in writing delivered or mailed to trustor. The terms of the _________________ (Note or Bond) are incorporated by reference. Trustor covenants and agrees as follows: 1. PAYMENT OF INDEBTEDNESS 1.1 Trustor shall pay the indebtedness, as provided above. Trustor reserves the right and privilege to prepay at any time, without premium or fee, the entire indebtedness or any part of it not less than the amount of one installment, or ___________________________ (amount) ($_________), whichever is less. Any prepayment made on other than an installment due date will not be credited until the next following installment due date. 2. OWNERSHIP OF PROPERTY 2.1 Trustor is lawfully seized (in possession) of _______________________________________________________________________ ___________________________________________________________________________________________ (description of estate) and, except as otherwise stated, the premises are free from any encumbrances. Trustor hereby warrants the usual covenants to the same extent as a statutory _________________________________ (warranty) deed under the laws of _________________________ (state), and all covenants herein made, and trustor will defend against any breach of any such covenant. 3. CONTINUED EFFECTIVENESS 3.1 The provisions of this instrument shall remain in full force and effect during any postponement or extension of the time of payment of the indebtedness or any part of it. 4. TAXES AND ASSESSMENTS 4.1 Trustor shall pay all taxes, assessments, water rates, and other governmental or municipal charges, fines, or impositions; and, in default thereof, beneficiary may pay the same. 5. WASTE; REPAIR OR REMOVAL OF STRUCTURES 5.1 Trustor shall not commit waste or authorize the repair or the removal of any structures on the premises, and shall not do or permit any act that may lawfully result in the creation of a lien or claim on the land or the improvements of equal or prior rank to the claim of this trust deed without prior written consent of beneficiary; but shall maintain the property in as good condition as at present, reasonable wear and tear excepted. On any failure to so maintain, beneficiary, at its option, may cause reasonable maintenance work to be performed at trustor's cost. 6. INSURANCE 6.1 Trustor shall maintain continuously hazard insurance of such type or types and amounts as beneficiary may from time to time require on the improvements now or hereafter on the premises, and shall pay promptly when due any premiums for such insurance. All insurance DEED OF TRUST [continued] GALE ENCYCLOPEDIA OF AMERICAN LAW, 3RD E DITION 396 DEED OF TRUST shall be carried with companies approved by beneficiary, and the policies and renewals shall be held by beneficiary and provide that loss be payable solely and in form acceptable to beneficiary. In event of loss, trustor shall give immediate notice by mail to beneficiary, who may make proof of loss if not made promptly by trustor, and each insurance company concerned is hereby authorized and directed to make payment of the loss directly to beneficiary, rather than to trustor and beneficiary jointly. The insurance proceeds, or any part of them, may be applied by beneficiary, at its option, either to the reduction of the indebtedness hereby secured or to the restoration or repair of the property damaged. In the event of a conveyance to beneficiary, or other transfer of title to the premises in extinguishment of the indebtedness secured hereby, all right, title, and interest of trustor in and to any insurance policies then in force shall pass to the purchaser or grantee. 7. BENEFICIARY PAYMENT IN EVENT OF DEFAULT 7.1 If trustor defaults in any of the covenants or agreements contained in this trust deed, or in the ____________________ (Note or Bond) secured by it, then beneficiary, at its option, may perform the same. All expenditures made by beneficiary in so doing shall draw interest at the rate provided for in the principal indebtedness, and shall be repayable by trustor to beneficiary, and, together with interest and costs accruing thereon, shall be secured by this trust deed. 8. SUPPLEMENTAL NOTES 8.1 On beneficiary's request, trustor shall execute and deliver a supplemental note or notes for the sum or sums advanced by beneficiary for the alteration, modernization, improvement, maintenance, or repair of such premises, for taxes or assessments against the same, and for any other purpose authorized under this trust deed. The note or notes shall be secured by this trust deed with equal priority and as fully as if the advance evidenced thereby were included in the ______________ (Note or Bond) first described above. The supplemental note or notes shall bear interest at the rate provided for in the principal indebtedness and shall be payable in approximately equal __________________ (monthly) payments for such period as may be agreed on by trustor and beneficiary. On the failure to agree on the maturity, the whole of the sum or sums so advanced shall be due and payable ___________ days after beneficiary's demand. In no event, shall the maturity extend beyond the ultimate maturity of the __________________ (Note or Bond) first described above. 9. RIGHT OF BENEFICIARY TO APPEAR 9.1 Beneficiary may appear in and defend any action or proceeding purporting to affect the security of this trust deed, and trustor shall pay all costs and expenses, including the costs of evidence of title and reasonable attorney fees, in any such action or proceeding in which beneficiary may appear. 10. WAIVER OF NOTICE 10.1 Trustor waives notice of the exercise of any option granted to beneficiary in this trust deed or in such _____________ (Note or Bond). 11. CONDEMNATION 11.1 Any award of compensation or damages in connection with any condemnation for public use of or injury to the premises or any part of them is hereby assigned and shall be paid to beneficiary, who may apply or release such moneys received in the same manner and with the same effect as provided above for the disposition of fire or other insurance proceeds. 12. NONWAIVER OF RIGHTS 12.1 Beneficiary's accepting payment of any sum secured by this trust deed after its due date shall not constitute a waiver of its right either to require prompt payment when due of all other sums so secured or to declare default for failure so to pay. 13. RIGHTS OF TRUSTEE 13.1 At any time or from time to time, without liability therefor and without notice, on beneficiary's written request and presentation of this trust deed and such ___________ (Note or Bond) for Endorsement, and without affecting the personal liability of any person for payment of the indebtedness secured by this trust deed, trustee may: reconvey all or any part of the premises; consent to the making of any map or plat thereof; join in granting any easement thereon; or join in any extension agreement or any agreement subordinating this trust deed to subsequent liens or charges. 14. RECONVEYANCE 14.1 On beneficiary's written request stating that all sums secured by this trust deed have been paid, and on surrender of this trust deed and such ________________________ (Note or Bond) to trustee for cancellation and retention, and on payment of trustee's fees, trustee shall reconvey, without warranty, the property then held under this trust deed. The recitals in any reconveyance accepted under this trust deed of any matters or facts shall be conclusive proof of their truthfulness. The grantee in such reconveyance may be described as "the person or persons legally entitled thereto." 15. RENTS, ISSUES, AND PROFITS 15.1 As additional security, trustor hereby gives to and confers on beneficiary the right, power, and authority during the continuance of the interests created by this trust deed to collect the rents, issues, and profits of the premises, reserving to trustor the right, prior to any DEED OF TRUST [continued] A sample deed of trust (continued). GALE ENCYCLOPEDIA OF AMERICAN LAW, 3RD E DITION DEED OF TRUST 397 . and profits of the premises, reserving to trustor the right, prior to any DEED OF TRUST [continued] A sample deed of trust (continued). GALE ENCYCLOPEDIA OF AMERICAN LAW, 3RD E DITION DEED OF TRUST. boundaries of individual land parcels subdivided into lots— but the execution of the dedication has not been in accordance with law or certification of GALE ENCYCLOPEDIA OF AMERICAN LAW, 3RD E DITION DEDICATION. and Thomas Jefferson, along with the seals of the 13 original states. LIBRARY OF CONGRESS GALE ENCYCLOPEDIA OF AMERICAN LAW, 3 RD E DITION DECLARATION OF INDEPENDENCE 38 9 that no legitimate government