Cunningham v. Security Title Insurance Co.

CONLEY, P. J.

C. B. Cunningham and his wife sued the Security Title Insurance Company and its employee, Charles W. Streeper, for alleged negligence in the execution and completion of an escrow involving the sale by the Cunninghams of their mountain chicken ranch to George and Donna Gillespie. The case was tried by the court without a jury and resulted in a judgment that plaintiffs take nothing by reason of their action.

The Cunninghams desired- to sell their 350-aere ranch, together with the buildings on that portion of the property which was fenced, and a comprehensive list of equipment, including chicken brooders, pumps, and other property designed principally for raising chickens. The Gillespies became attracted to the proposed sale, and a conference was held between the plaintiffs and the proposed purchasers at which Lloyd Griffin, a real estate agent representing the plaintiffs, was the activating element.

At that time, Mr. Griffin made out a deposit receipt approved by all the parties. Thereafter, the buyers and sellers and Mr. Griffin, as agent of the plaintiffs, went to the Security Title Insurance Company’s office in Visalia where Mr. Streeper, an experienced title man, drew up escrow instructions, and then a deed, a trust deed, and a bill of sale in strict accordance, as found by the trial court, with the escrow instructions. The sellers executed a deed to the purchasers; the Gillespies, in turn, signed a note and trust deed for the balance due, and the Cunninghams also executed the bill of sale which constituted a part of the escrow and consideration for which was included in the total purchase price.

There is evidence that the Cunninghams also executed and delivered to the Gillespies a second bill of sale for certain specified articles of personal property, entirely outside of the escrow.

The total purchase price of the ranch and the personal property in the escrowed bill of sale was $60,550, payable $500 on

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May 23, 1959, $17,000 at or before the close of escrow, and $43,050 in the note secured by the deed of trust.

The case turns on the questions whether all items in the escrowed bill of sale were correctly included and whether the bill of sale took timely effect according to the contract between the parties. Plaintiffs claim that they did not intend to pass title by the bill of sale to all of the property described in the document as personalty, and also that' the bill of sale was not to take effect until the full purchase price of $60,550 had been pai'd. On the contrary, the defendants say that they followed explicitly the directions of plaintiffs and that it was the intention of the Cunninghams, as shown by the specific terms of the escrow instructions, that the bill of sale was to be delivered and, therefore operative, at the close of escrow; the Gillespies contended that they gained title to all of the property specified in the bill of sale immediately upon the close of the escrow, and that they consequently had the right to remove it from the ranch and to sell it to whomsoever they wished. The Gillespies failed to carry out their agreements with the Cunninghams contained in the note secured by the deed of trust; and they removed all or at least a preponderant part of the personal property described in the bill of sale, selling some of it and retaining other items to the damage of the chicken ranch as an operative property. The Cunninghams thereafter foreclosed the deed of trust and repurchased the real property.