Case Name: FOULKES v. SENGSTACKEN
Court: Oregon Supreme Court
Jurisdiction: Oregon
Decision Date: 1916-07-18
Citations: 83 Or. 118
Docket Number: 
Parties: FOULKES v. SENGSTACKEN.
Judges: Mr. Chief Justice Moore, Mr. Justice Bean and Mr. Justice Harris concur.
Reporter: Oregon Reports
Volume: 83
Pages: 118–136

Head Matter:
Argued June 23,
affirmed July 18, 1916.
Rehearing granted September 19, reargued December 12, 1916. Reversed and remanded February 27, 1917.
FOULKES v. SENGSTACKEN.
(158 Pac. 952; 163 Pac. 311.)
Frauds, Statute of — Deeds—Escrow—Verbal Condition.
1. The deposit of a deed by the grantor with a third party for delivery to the grantee upon payment of the price for the land is in eserow, though the condition of the deposit rests in parol, not being rendered nugatory by the statute of frauds.
[As to deeds delivered in escrow, see note in 53 Am. St. Rep. 555.]
Frauds, Statute of — Operation and Effect — Sale—Option.
2. Where there was a sale of land and a deed delivered in escrow to a third party to await payment, if proof of the escrow agreement were excluded, because oral, by the statute of frauds, the transaction was not changed from a sale to an option ending with the grantor’s life.
Escrows — Death of Grantor — Effect.
3. The death of a grantor eannot affect the subsequent delivery of his deed in eserow by the depositary on the fulfillment of the conditions.
ON REHEARING.
Escrows — Dep ositaries — Agents.
4. Where vendor, pursuant to contract of sale, deposits deed with her attorney for ultimate delivery to vendee upon latter’s compliance with terms of contract, and such attorney holds the deed solely as the representative of the vendor, the transaction does not amount to an eserow.
Escrows — Construction—Intention.
5. In determining whether or not the delivery of a deed to a third person constituted an escrow, the intention of the parties should govern.
Escrows — Construction—Intention.
6. While it is not essential to establish an escrow that the parties use the word “eserow,” yet when they do employ that term, it in dicates more clearly than any other word the actual intention of the parties.
Mortgages — Escrows—Operation and Effect.
7. An agreement, whereby vendor deposited deed with her attorney to be delivered to vendee upon latter’s compliance with terms of sale contract, cannot be treated as a mortgage for unpaid balance of purchase price due from vendee, where the defendant expressly pleaded such agreement as an escrow and the evidence indicated that the parties regarded it as an escrow.
Escrows — Nature and Requisites.
8. ’Where a written instrument importing a legal obligation is deposited by grantor with a third party to be kept by the depositary until the grantee pays a stipulated sum and then to be delivered over to the grantee, an escrow is created.
Escrows — Operation and Effect — Revocation.
9. Where grantor deposits a deed in escrow to be delivered to grantee upon performance of conditions, the deed is beyond the control of the grantor until the expiration of the time allowed for the performance of the condition, and cannot be recalled without the consent of the grantee until the default of the latter.
Escrows — Depositaries.
10. Strictly speaking, the depositary of an escrow is not the agent of either the grantor or grantee, but is rather the trustee of an express trust.
Escrows! — Time of Taking Effect — Relation Back to First Delivery.
11. A deed deposited in escrow does not operate to convey title until performance of the conditions entitling the grantee' to delivery by the depositary; but where the grantor becomes incapacitated after delivery to depositary and before time fixed for performance of condition, a fiction is resorted to by making the instrument the deed of the grantor from the time of delivery to the depositary.
Deeds — Delivery to Third Person — Time of Taking Effect.
12. Where a deed is signed and delivered to a depositary with directions to deliver it to grantee upon death of grantor, the instrument, even in the absence of contract and consideration, will operate to convey title if the grantor at time of delivery parted with control and dominion over the writing, such instrument being regarded as the present act of the grantor.
Deeds — Delivery by Third Person. — Relation Back to First Delivery.
13. Where a deed is delivered to a depositary, with directions to deliver it to grantee upon death of grantor and subsequent performance of some condition by grantee, the instrument is the present deed of the grantor at the time of delivery to depositary, and title thereupon passes to grantee, defeasible, however, if grantee fails to perform condition imposed upon him.
Escrows — Nature and Requisites.
14. A pure escrow presupposes the existence of a valid contract With sufficient parties, a proper subject matter, and a consideration. Escrows — Nature and Requisites.
15. To constitute the deposit of a deed an escrow, there must be an actual valid contract of sale, in the absence of which the instrument, though in form a deed, is neither a deed nor an escrow.
Escrows — Frauds, Statute of — Deeds—Validity.
16. An oral agreement for the sale of real estate, pursuant to which the vendor deposits a deed with a third person to be delivered to grantee upon performance by him of the conditions of the agreement, is void under statute of frauds, Section 808, L. O. L., and the deposit of such deed does not constitute an escrow.
Frauds, Statute of — Contracts of Sale — Escrow Agreements.
17. A deed deposited with a third person to be delivered to vendee upon compliance with conditions of oral contract of sale, which does not contain all the terms of such oral contract, does not satisfy the provisions of Section 808, L. O. L., making void agreements for sale of- real property not in writing.
Frauds, Statute of — Part Performance — Payment of Purchase Price.
18. The bar of statute of frauds, Section 808, L. O. L., making void oral agreements for sale of lands, is not removed by part payment of purchase price or payment of taxes; such acts not constituting part performance.
Frauds, Statute of — Escrows.
19. An escrow agreement for the deposit of a deed with a third person to be delivered to the vendee- upon performance of conditions is not a contract of sale of real property, and is not required to be in writing under statute of frauds, Section 808, L. O. L.
Evidence — Parol Evidence to Prove Escrows.
20. The delivery of a deed in escrow and the conditions of the deposit may be shown by parol evidence.
Escrows — Authority of Depositary to Deliver.
21. Where vendor, pursuant to oral contract of sale, delivered deed to depositary to .be delivered to vendee upon performance of conditions of contract, and thereafter there was no sufficient part performance by vendee to avoid statute of frauds, Section 808 L. O. L., making void oral agreements for sale of real property, the delivery of the deed to depositary was merely a continuing offer, which terminated upon death of vendee, so that thereafter the depositary had no authority to deliver deed, to vendee upon subsequent performance of conditions by him.
Vendor and Purchaser — Lien of Purchaser for Amounts Paid Under Void Contract.
22. In action to quiet title, where defendant claimed under deed delivered to him by depositary of an alleged escrow agreement, which was held void because the contract of sale under which deposit was made was oral and void under statute of frauds, Section 808, L. O. L., the defendant in absence of fraud, is entitled in equity to repayment of purchase price, taxes and interest, and is entitled to a lien for such amounts on the land.
From Coos: John S. Coke, Judge.
Department 2. Statement by Mr. Justice Benson.
This is a suit by John M. Foulkes against Henry Sengstacken, Agnes R. Sengstacken, his wife, M. C. Horton, Daniel Ritzman, Henry Sengstacken Company, a corporation, John F. Hall, executor de bonis non of the last will and testament of Elizabeth "Williams, deceased, John F. Hall and John F. Hall, executor of the last will and testament of James T. Hall, deceased. The facts are as follows:
On July 1,1906, Elizabeth Williams, a widow, signed and acknowledged a bargain and sale deed conveying certain lands in Coos County" to the defendant Henry Sengstacken. The agreed consideration to be paid therefor was $1,500. At the time of the making of the deed, Sengstacken paid her $500, and it was agreed that John F. Hall should hold the deed in escrow until the balance of the purchase price was paid, which was to be in two payments of $500 each, one and two years later, respectively. ' At the maturity of the first installment, Sengstacken paid only $250, and Hall called the attention of Mrs. Williams to the fact that he was in default, and she replied: o
“Well, he is all right. Let the deed lay there, and when he pays it you can turn it over to him. ’ ’
Mrs. Williams died on May 3, 1909, leaving a will wherein she devised to the plaintiff all real estate which she should possess at the time of her death. About two years later Sengstacken paid the balance due upon the land, including interest, and Hall delivered the deed to him. Thereafter there were two other deeds executed by the executor of her estate for the correction of errors in the description.
On January 27, 1914, plaintiff began this suit to cancel such deeds upon the ground that they were fraudulent and void and to quiet the title of property in him. From a decree in favor of defendants, plaintiff appeals.
Affirmed..
For appellant there was a brief over the name of Messrs. Stoll & Hodge, with an oral argument by Mr. Dwight E. Hodge.
For respondents there was a brief over the name of Messrs. Peck S Peck, with an oral argument by Mr. Cassius B. Peck.
As to effect of deed delivered in escrow as satisfying the statute of frauds, see note in 43 L. R. A. (N. S.) 390.
On proof of escrow agreement by parol, see notes in 18 L. R. A. (N. S.) 227; 31 L. R. A. (N. S.) 606.
On necessity of strict compliance with condition of instrument placed in eserow, see note in L. R. A. 1916A, 502.
On effect of deed delivered in eserow to further security for a mortgage, see notes in 2 L. R. A. (N. S.) 627; L. R. A. 1915B, 492. Reporter.

Opinion:
Mr. Justice Benson
delivered the opinion of the court.
With reference to the assignments of error based upon the findings of fact, it may be said at the outset that, while the evidence is conflicting, there is ample testimony in the record to justify the results reached by the trial court, and we are not inclined, therefore, to disturb them.
The principal contention of appellant upon the legal questions involved is that the deposit of the deed with J. F. ,Hall could not be an escrow, because the conditions of such deposit rest in parol, and therefore are rendered nugatory by the statute of frauds; and that, since this is so, the transaction was simply a continuing offer of sale which ended with the life of the grantor. This contention is untenable as to both propositions. In the first place, it has been definitely settled by this court that the terms of an escrow need not be in writing. In Gaston v. City of Portland, 16 Or. 255 (19 Pac. 127) Mr. Chief Justice Lord says:
"The intent of the grantor must govern, and this is to be derived from all the facts, circumstances, and proof. Nor is it necessary that the condition upon which the deed is delivered in escrow be expressed in writing; it may rest in parol, or be partly in writing and in part oral. The rule that a contract in writing inter partes must be deemed to contain the entire agreement or understanding has no application in such case" — citing Stanton v. Miller, 58 N. Y. 193.
To the same effect is 1 Devlin on Deeds (3 ed.), Section 312a, which says:
"It is well settled that the condition upon which the deed is delivered in escrow may be proved by parol evidence. The statute of frauds has no application to such an agreement, ordinarily, nor is it affected by the rule of evidence which prohibits a written contract from being contradicted or varied by parol evidence. ' '
In Cannon v. Handley, 72 Cal. 133 (13 Pac. 315), the court uses this language:
"But it is said there was nothing in writing authorizing Cox to hold or deliver the deed. There is nothing in the statute which requires this to be in writing. The statute only requires a note or memorandum in writing as evidence of the contract. Nothing in it has reference to any arrangement for the delivery of the deed in escrow, or its subsequent delivery by the party so- holding it to the grantee."
If it were otherwise, and proof of the escrow agreement were excluded by the statute of frauds, that condition would not change the nature of a transaction from a sale to an option. The cases cited by appellant are not inconsistent with the views here expressed, since in each of them the vital point was an effort to enforce specifically the terms of an executory parol contract, while the case at bar presents an executed contract wherein the escrow had been terminated by delivery prior to the commencement of this suit.
The conclusions we have reached practically dispose of the appeal, since the authorities are unanimously to the effect that the death of the grantor cannot affect the subsequent delivery of a deed in escrow by the depositary upon the fulfillment of the conditions: Jackson v. Jackson, 67 Or. 44 (135 Pac. 201, Ann. Cas. 1915C, 373); Devlin on Deeds (3 ed.), § 333a.
There are other assignments of error; but, since they are involved in the discussion already had, it is not regarded as necessary to discuss them.
The decree is affirmed. Affirmed.
Mr. Chief Justice Moore, Mr. Justice Bean and Mr. Justice Harris concur.