Widess v. Title Insurance & Trust Co.

California Court of Appeal Mar 5, 1931 No. Docket No. 6438.Published

Before: Conrey

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Holding. The court held that money deposited into escrow under specific conditions remains the property of the depositor until those conditions are met, and the vendor has no claim to the funds if the escrow-holder cannot fulfill the specified requirements.

Issues

Whether the plaintiffs were entitled to the return of their $5,000 deposit from escrow when the title company failed to meet the conditions specified in the escrow instructions.
Whether the vendor had a right to the escrowed funds despite the failure of the escrow-holder to provide the required title guarantee.

Disposition. affirmed

Quotations verified verbatim against the opinion

“Pending the procurement of the title guarantee, the escrow-holder held the money in trust for the vendee and the vendor had no claim to it.”

“the money paid into the hands of the escrow-holder could not be deemed to be paid in “for her benefit” until the conditions for payment to her, as set forth in the escrow instructions, were fulfilled.”

CONREY, P. J.

This is an action arising out of a transaction, wherein the following are the principal items: (a) An option, by Jennie B. Doane, owner, to W. Ross

[344]

Campbell Company, to purchase a two-thirds undivided interest in described real property; (b) An assignment of the option, by optionee to plaintiffs; (c) Notice to defendant Doane of exercise of right to purchase under the terms of the option, and that “escrow has been made” with the Title Insurance and Trust Company; (d) Delivery of check for $5,000, by plaintiffs to said title company, as a deposit on said option, but to be used in accordance with written instructions concurrently delivered and which were signed by the plaintiffs; (e) Demand by plaintiffs, for return of the $5,000, and compliance refused by the title company.

Thereafter, plaintiffs having commenced this action against the Title Insurance and Trust Company to recover said sum of $5,000, the money was deposited in court by said defendant (in accordance with section 386 of the Code of Civil Procedure), and Jennie B. Doane was substituted as defendant. Thereafter, by answer, Mrs. Doane pleaded the facts relied upon by her to establish her claim to said money. From judgment entered in favor of plaintiffs, the defendant Doane appeals.

The findings of the court adequately cover the issues raised by the pleadings. The court found as follows:

“I.

“That on the 23rd day of February, 1928, plaintiffs deposited with the Title Insurance and Trust Company, a corporation, the original defendant herein, the sum of $5000.00, with instructions executed concurrently therewith, which provided that said sum of money was to be held and used by said Title Insurance and Trust Company in the manner and in accordance with instructions to be executed and delivered by the plaintiffs to said defendant; that pursuant thereto, and in furtherance thereof, and as a part of said transaction, and for the purpose of controlling the disposition of said sum and the manner in which the same could be used by the Title Insurance and Trust

Company,

or any other person, the plaintiffs made, executed and delivered further written instructions which provided that in the event the said Title Insurance and Trust Company was unable, by the 24th day of March, 1928, to issue and deliver its Guarantee or Policy of Title Insurance showing the title to certain property therein described to be vested in C. M. Widess and David Tierstein as to an undivided two-thirds

Widess v. Title Insurance & Trust Co.

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CONREY, P. J.

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