Court Opinion

ID: 3948056
Source: CourtListenerOpinion
Date Created: 2016-07-06 10:10:32.258705+00
Date Added: 2024-06-11T14:17:08.508693
License: Public Domain

I concur in the action of this court in overruling the motion for rehearing in this case upon the following grounds:
The petition in this case shows that the defendants in error were employed as agents to sell the land of plaintiffs, and as such reported a sale or a prospect of a sale. The deed was executed and delivered to them to be delivered to the purchaser upon the completion of the transaction. There was no agreement between the proposed vendee and the vendors that a deed should be deposited with any person for future delivery. Therefore the deed was not in escrow; it had none of the elements or characteristics of such an instrument.
There must be an agreement between the parties upon the depositary and the terms upon which the delivery shall be made. It can not be deposited with one of the parties, nor with his agent. 16 Cyc., pp. 571, 573; Miller v. Sears, 91 Cal. 282, 25 Am. St. Rep., 176, 27 P. 589.
In fact, it is immaterial whether the deed was in escrow or whether it was a deed delivered to the agent without any concurrent agreement on the part of the vendee, and to be by the agent delivered at its own discretion upon the completion of the transaction between him and the proposed vendee.
If it was a deed which the owner of the land executed and delivered to his agent to be delivered to the vendee upon the performance of the agreement between them, and the agent delivered it fraudulently, as alleged in the petition, still, when the land had been sold to an innocent purchaser, as it was in this case, and as alleged in the petition, the purchase was for valuable consideration without notice, title would pass notwithstanding the fraud. If the deed had been strictly in escrow, deposited with the parties by agreement, and the depositary had delivered it by a fraudulent agreement between himself and the vendees in the deed, the innocent purchaser for value and without notice of any such conditions would take the title free from the claim of the vendor. 16 Cyc., 582, note 34.
I have not thought it necessary to enter into a discussion of what constitutes an escrow, or the difference between that and a deed. The case as here presented and the ground upon which the demurrer was sustained is the real point to be decided; that is, the deed, whether escrow or not, being placed in the hands of the agents, and having been fraudulently delivered to the vendee, who sold the same to innocent parties for valuable consideration and without notice, the title passed, and the plaintiffs in error could not have recovered the land from the innocent parties, if the petition alleges the truth of the transaction.
If the agent to deliver a deed or a depositary who has been entrusted with an escrow, in fraud of the right of the maker of the deed, delivers the same to the vendee who conveys the land to an innocent purchaser, *Page 562 
such agent or depositary is responsible to his principal for the damages thus occasioned. It would be monstrous to say that one entrusted with property may fraudulently dispose of it and acquit himself of liability by casting upon the principal the burden of recovering the property from the fraudulent vendee.
It follows, therefore, that I conclude that the allegations of the petition show a right of action against the defendants in error in this case.
The motion is overruled.
Mr. Justice Phillips not sitting.
Delivered February 3, 1915.