Hastings v. Bank of America National Trust & Savings Ass'n

MOORE, J.

On June 22, 1944, respondents were owners of lots 12 and 13 of the Hallowell tract in Los Angeles County. On that day appellants agreed to deposit in an escrow with defendant bank the sum of $3,500 to be paid to respondents whenever the bank should have filed for recordation a sufficient conveyance such as would entitle the bank to procure an owner’s policy of title insurance issued by the Title Insurance and Trust Company or National Title Insurance Company showing title of the two lots vested in appellants

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subject to certain specified exceptions. At the same time appellants deposited $500 of the purchase price and directed the bank that if it should be “unable to comply with these instructions on or prior to July 22, 1944, you will comply as soon thereafter as possible unless a written demand for return of money or instruments by a party to this escrow is received by you subsequent to such date.” On or about the same day respondents approved by writing of appellants’ instructions and agreed to deposit such instruments in the escrow as would enable the bank to comply with the instructions. Also, they authorized the bank to use such instruments when it should hold for the account of respondents the sum of $3,500.

The legal effect of the instructions was an obligation upon appellants to pay into the escrow the balance of the purchase price on or prior to July 22, 1944, but that if they should be unable to comply by that date they should “comply as soon thereafter as possible unless a written demand for return of money or instruments by party to this escrow is received by you subsequent to such date and prior to the recording of any instrument provided for herein.” No demand was thereafter made upon appellants to comply with the escrow by depositing the balance of the money, but without notice to' appellants and without their knowledge on August 21, 1944, respondents conveyed the property to a stranger to the escrow and eleven days later demanded payment of the deposit to themselves. Respondents filed this action to quiet their title to the $500, less the $20 service charge alleging that appellants’ claims thereto are without right.

In their cross-complaint appellants alleged in addition to the facts above recited that “said deed was never recorded and said owner’s policy of title insurance was never obtained; that said . . . bank . . . could not obtain said owner’s policy of title insurance because of the fact that said plaintiffs . . . did . . . convey said real property to a third party which deed was recorded on August 31, 1944, in the office of the county recorder.” In response to such pleading respondents alleged that the bank was instructed by appellants to record the deed and obtain the policy of title insurance “on or before July 22, 1944,” but that on the latter date appellants declared their inability to consummate the purchase and refused to deposit the balance of the purchase price. The bank having deposited the $480 with the clerk of the court was dismissed from further liability.