Feinberg v. Intrastate Escrow Corp.

BURKE, P. J.

Defendant has appealed from the judgment rendered against it in this action which was brought on the theory that defendant, acting as an escrow agent for one Patricia Kennedy, had cooperated with her in fraudulently representing to the plaintiff that he would receive over $4,000 out of the escrow. The trial court did not find the allegations of fraud to be true, but based its judgment on the closely analogous theory of estoppel and also on the theory that there was a breach of an obligation founded upon an instrument in writing. We have concluded that while the evidence fails to support the last theory it does support the judgment based upon estoppel.

Viewed most favorably to the prevailing party, the evidence showed that in June of 1956 one Patricia Kennedy owed plaintiff $2,800. Mrs. Kennedy owned a piece of property upon which she wished to borrow some money and opened an escrow with defendant to accomplish her purpose. Becoming aware, in some way, that plaintiff purposed to bring an action against her and attach her property, she and defendant came to an understanding with him. Plaintiff agreed to refrain from levying an attachment on the property against which Mrs. Kennedy was seeking to negotiate a loan, and she in turn agreed to instruct defendant to pay plaintiff from the proceeds of the expected loan, and defendant agreed to accept such instruction and to act upon it.

The trial court found that three such instructions were "prepared and accepted by defendant, with knowledge of the very valuable consideration moving from plaintiff and of his reliance on the agreement.” Patricia Kennedy signed these instructions, the first one dated June 19, authorizing defendant to pay plaintiff $2,800, the second, three days later, increasing the amount to $3,800, and the third, July 24, increasing the total to $4,175 "to be paid upon close of escrow.” The first two instructions appear in the first escrow and the third instruction in an escrow established to replace the first one. The reason for the several instructions appears from this

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finding: “Plaintiff relied on the agreement and the escrow instructions hereinabove found, and in such reliance not only refrained from levying attachment on Mrs. Kennedy’s said property, but even lent sums of money to Mrs. Kennedy additional to those that had been lent to her before such agreement was entered into and said instructions were given.”