Court Opinion

ID: 9668341
Source: CourtListenerOpinion
Date Created: 2023-08-24 02:09:58.343947+00
Date Added: 2024-06-11T18:15:44.748824
License: Public Domain

HENDERSON, Justice
(concurring in result in part and concurring in part).
Essentially, this case pertains to time— time when an instrument becomes operative. In this case, it is a warranty deed placed in escrow by appellees, vendors, with an escrow agent, a bank, naming Vernon Garrett Ranch, Inc., as vendee. A third party to this transaction, Hartman and Pahl, total strangers to the contract for deed, sue for both specific performance and damages. These appellants are requesting of the appellees, a second deed, which, in essence, would boil down to the appellees warranting title to the property, free and clear, of all encumbrances. What happens to intervening purchases, contracts, assignments, easements, liens, and rights-of-way placed of record upon the property in question, is an impactual question and vitally influences the rationale of this writer. I should mention that the action for general damages is for supposed wrongful refusal to convey legal title. This theory, pleaded by appellants, appears in the complaint even though appellees have executed a warranty deed, placed it in escrow, and the warranty deed is there simply for the asking by the appellants from the escrow agent. It is noted by this writer that there are twenty-four entries, since the execution of the contract for deed and warranty deed, and the placement thereof in an escrow file. Needless to say, the subject of the sale of this property, after its sale, has an influx of subsequently recorded documents in the chain of title. It is understandable why appellees are not interested in now negotiating a new warranty deed and to strangers — strangers in the sense that the appellants were not privy to the original contract for deed.
This all brings us to a rule, or let us call it an exception, known as “relation back to the first delivery.” Simply put, it means: That upon final delivery of an escrow instrument by the escrow agent or upon the performance of the conditions of the escrow agreement, the escrow instrument (here a warranty deed) will be treated as relating back to the time of its original deposit in escrow; it will take effect at the time of its original deposit in escrow. Fundamentally, we are dealing with a fiction to prevent injustice and to effectuate the intention of the parties. Cowden v. Broderick & Calvert, 131 Tex. 434, 114 S.W.2d 1166, 117 A.L.R. 61 (1938). Regarding this fictional “relation back theory,” it is an attempt to legally engineer an avoidance of injury to the effect of the deed, as pertaining to entries on the title between a first and a second delivery. Historically, this *859rule devolved from Butler & Baker’s Case, 3 Coke 25a, 75 Eng. Reprint 684 (1591), wherein Lord Coke expressed:
[T]he second delivery hath all its force by the first delivery, and the second is but an execution and consummation of the first; and therefore in case of necessity, et ut res magis valeat quam pereat, it shall have relation by fiction to be his deed ab initio, by force of the first delivery. (Emphasis added.)
Bottomed in equity, said fiction is devised to avoid injustice. It is upon the performance of the conditions whereupon the instrument is to take effect from the date of delivery in escrow. Broderick, supra, 114 S.W.2d 1166, 117 A.L.R. 72, 90. However, this rule of “relation back” should not be applied if it does not effectuate the intention of the parties or it does not avoid hardship. Vierneisel v. Rhode Island Ins. Co., 77 Cal.App.2d 229, 175 P.2d 63 (1946). It is difficult for me to understand why these vendors should have to “stand good” for numerous entries on this title which were not of their own doing. Appellees bargained for delivering a warranty deed upon the fulfillment of certain conditions. Those conditions were met. Thereupon, the fictional passage of title took place.
I concur in the result of this opinion; however, I write to express that the title, in my opinion, did not pass until the escrow agent delivered the warranty deed and all of the financial conditions placed upon the deed’s delivery had been met. Where one accepts the conceptual basis that the escrow deed relates back to its original deposit (here, grantee having made a conveyance of the land to a third person), still the performance of the conditions (contingencies) must be met. I accept the proposition that the escrow deed vested title to the property in Vernon Garrett Ranch, Inc., at the time the deed was placed in escrow, providing the conditions for delivery of the escrow deed were met. Newport Bay Dredging Co. v. Helm, 120 Cal.App. 127, 7 P.2d 1039 (1932). Furthermore, I agree with the majority opinion which holds, under Kallstrom, that there was nothing left for Woods to specifically perform. Since reading these briefs, I have been overwhelmed with the thought that vendors performed their contract. They fulfilled their bargain. All of the subsequent transactions, regarding this property sold under the contract for deed, were the actions of vendee and its successors in interest. Fictional passing of title must be based upon the fulfillment of the conditions. Wampler v. Wampler, 239 La. 315, 118 So.2d 423 (1960).
I fully concur with the dissertation on Issues 2 and 3.