Court Opinion

ID: 6255905
Source: CourtListenerOpinion
Date Created: 2022-02-17 21:30:45.881229+00
Date Added: 2024-06-11T08:59:32.852402
License: Public Domain

Opinion by
Mr. Justice Walling,
This is an action of assumpsit against a depositary for the delivery of a certified check for $5,000, held in escrow, in alleged violation of the contract under which it was deposited.
In April, 1919, William Adams, being the owner of a tract of land in Versailles Township, Allegheny County, executed an oil and gas lease for five acres thereof to the Philadelphia Company, by which it was assigned to T. W. McFadden and William Heilman, on January 10, 1920. This land was supposed to be in the McKeesport natural gas belt, about which there was then so much excitement that the assignees of the lease divided the five acres into lots fifty feet wide, for the purpose of subletting. The plaintiffs, J. H. Kreuer and S. G. Anthony, being desirous of securing territory for the purpose of drilling a gas well, arranged with McFadden and Heilman for a sublease of one of the lots for the consideration *204of $6,500, of which $1,000 was paid in hand; but before paying the balance, plaintiffs insisted on their attorney’s approval of the original lease from Adams to the Philadelphia Company. The parties discussed this question at the Union National Bank (defendant), in McKeesport, in the presence of C. I. Erickson, the assistant cashier, where it was agreed plaintiffs’ checks for the $5,500 should be temporarily deposited. On receipt thereof the bank gave plaintiffs a writing as follows: “McKeesport, Pa., Feb. 2, 1920. Received of J. H. Kreuer and S. G. Anthony checks amounting to $5,500, said checks to be surrendered to T. W. McFadden and William Heilman on or before the expiration of ten days from date hereof, provided that title to a certain lease to Philadelphia Company, Deed Book, Vol. 1969, is passed O. K. by attorney for Messrs. Kreuer and Anthony. [Signed] Union National Bank, C. I. Erickson.” Eighteen days thereafter the bank, having received no word from plaintiffs dr their attorney, and without inquiry, delivered to McFadden and Heilman the checks in question. Immediately following the deposit of the checks with defendant, plaintiffs employed W. G. Negley, Esq., of the Pittsburgh Bar to examine the Adams’ lease, but he seemed unable to make report thereon within the ten days, at least did not; but on February 24,1920 (four days after the bank had parted with the checks), he telephoned the defendant, and also notified his clients, of his refusal to approve the title to the lease and, in effect, forbidding the delivery of the checks, while either he or his clients gave defendant a like written notice on the following day. One of the checks in question was a certified check for $5,000, which was cashed by McFadden and Heilman, and this suit was brought to recover that amount from the bank. At the trial, defendant’s assistant cashier, Erickson, testified, inter alia, as follows: “And this [the $5,500] was to constitute the balance of the payment, and it was also understood between all of the parties that the attorney for Messers. Kreuer and Anthony *205would have time to report on the title within ten days, and at the expiration of the ten days we were to turn the money over to Messrs. Heilman and McFadden”; and the trial judge instructed the jury to find for the defendant if they believed that evidence. The verdict, however, was for the plaintiffs for the $5,000, but thereafter the court below entered judgment for defendant non obstante veredicto; from which plaintiffs brought this appeal.
The entry of such judgment was based upon the trial court’s construction of the above-quoted escrow agreement as authorizing a delivery of the checks to McFadden and Heilman, after the ten days, without plaintiffs’ attorney having passed or approved the title to the lease. To this order we cannot assent. The passing of the title to the lease by the attorney was a condition precedent to closing the transaction, which, except by plaintiffs’ consent, could not be done otherwise. The contract does not say the checks are to be turned over at the expiration of the ten days unless the title to the lease is disapproved by plaintiffs’ attorney within that time, but that they are then to be turned over on condition that he had done the affirmative act of approving the title. This not having been done, the delivery of the checks was unauthorized and the defendant liable to plaintiffs for the damages sustained thereby: 21 C. J. p. 879, 884. “As the depositary is bound by the terms of the deposit and charged with the duties voluntarily assumed by him, the rule is that liability attaches to him if he improperly parts with his deposit”: 10 R. C. L., p. 634. To like effect is Wilkins v. Somerville (Vt.), 130 Am. St. R. 906, 949; Citizens Nat. Bank v. Davisson, 229 U. S. 212; Riggs et al. v. Trees, 120 Ind. 402, s. c. 22 N. E. 254; Brown et al. v. Citizens State Bank, Ltd., 17 Idaho 716, s. c. 107 Pac. 405; see also Safron v. McBurney et al., 269 Pa. 392. The depositary is agent or trustee for both parties (21 C. J., p. 878; 11 Am. and Eng. Enc. Law, 2d ed., 345) and is under the implied obligation to in*206demnify the principal from all unauthorized acts committed under color of the agency: Bank of Kentucky v. Schuylkill Bank, 1 Parsons Select Equity Cases 180, 217, 218; and see Etter v. Bailey, 8 Pa. 442. It is also a special agency and, as such, the authority of the agent must be strictly construed and not extended beyond what is given in terms, or what is necessary and proper for carrying the authority so given into full effect: 10 R. C. L., p. 634; and see Varner v. South Penn Oil Co., 64 Pa. Superior Ct. 544, 549.
Without passing upon the question of the competency or sufficiency of Erickson’s testimony to vary the terms of the written escrow agreement, it could not in any event be declared as matter of law to have that effect; for, as oral evidence, its credibility was for the jury, and the charge of the trial judge upon that question gave the defendant every advantage to which it was entitled under any aspect of the case. As this is a motion for judgment for defendant n. o. v., plaintiff must be given the benefit of every fact and inference of fact pertaining to the issues involved, which may reasonably be deduced from the evidence: Mountain v. American W. G. Co., 263 Pa. 181. We need not here pass upon the right of either party to compel the consummation of the transaction after the expiration of the ten days, for the bank could not forestall that question by a premature delivery of the checks.
The expression, “title to the lease,” in the escrow agreement, is not confined to the lessor’s title to the land, but includes the rights and privileges thereby conferred upon the lessee, and, in that sense, the objections made to the lease by plaintiffs’ attorney must be treated as bona fide and not captious. Furthermore, this suit is for defendant’s breach of contract in delivering the checks without the approval of the lease by plaintiffs’ attorney and does not involve the actual validity of his reasons for failure to approve.
*207The judgment is reversed and the record is ordered remitted to the court below that judgment may be entered for the plaintiffs upon the verdict.