Getting out of a bad deal

[David Fritch]

This is a long and crazy story so I will just try to stick to the relevant points. Posting in wholesaling forum though it's not an exact fit. 

I had a property under contract yet it didn't belong to the "seller". It was purchased or given (depending who you ask)  from her mom years ago but they never filed a deed. 

We were set up to do a double closing with ownership transferring from mom to daughter to me. 

When I notified the mom that I was not following through with the transaction she had already mailed me the deed (which was intended to be mailed to the escrow company along with my closing documents). She asked that the deed be returned to her as her primary desire is that the daughter not return to the property because apparently at population 250 "this town ain't big enough for the two of 'em". 

So the daughter is demanding the deed. I'm tempted to shred it but I believe the fastest cleanest way out of the deal is to mail it back to mom. All remains as I found it and I'm out. 

Agree or am I overlooking something?