James v. Vanderheyden

1 Paige Ch. 386

Opinion

The Chahcellor :—The writings left in the hands of Livingston, although called by him and the parties escrows, were not so in fact. It is essential to an escrow that it be delivered to a third person, to be delivered by him to ^ obligee or grantee, upon the happening of some event or the "“'performance of some condition, from which time it becomes an absolute deed.

Footnotes

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[1] But whether we are confined to the written agreement signed by the parties and deposited with the papers, specifying the conditions on which they were left with Livingston, or are permitted to resort to the paroi conversations and declarations of the parties previous to the execution of that paper, there is no evidence that they ever intended to authorize him to deliver up the papers to either party without some further directions from both. He swears that he proposed they should leave the papers with him as “ escrows,” and that they should leave with him written instructions relative to the manner in which he was to dispose of them; and that they should be kept by him subject to such order of the parties as should arise out of any subsequent agreement between them. He drew several memorandums specifying the terms, but Vanderheyden rejected the whole, and finally drew for himself the one now before the court. This was probably signed by the parties at the time they signed the other papers. Livingston was not present, and never saw the parties together afterwards. It would, therefore, be a dangerous species of evidence to substitute his belief of what the parties intended, derived from their previous conversations, for this written and formal declaration of their intent. It is probable that Vanderheyden supposed there were no other incumbrances on the farm than those in the hands of Thompson; but that was not sufficient to authorize the witness to infer an agreement that he would take the title subject to all others which might be discovered before the agreement was actually completed, and look to the personal responsibility of Blake for his indemnity. The written memorandum shows that the papers were left with Livingston as a mere depository, and that it was not intended they should become absolute deeds without the farther consent of both parties authorizing a delivery as such. Livingston swears that Yanderheyden came to him alone, and brought the papers and written agreement in their present situation, and that he also directed him to hgve them recorded. In this he is partially supported by the imperfect recollection of his wife. On the other hand, Dr. Douglass and D. Buel, junior, *testify that Livingston told them he put the papers on record of his own accord. It is not material to decide which is right in this particular. After the lapse of three or four years, he may very honestly have substituted the declarations of the parties when they were together at the drawing of the papers, for a supposed direction given to him by Yanderheyden at the time they were left in his hands. In either case, he would be likely to leave them to be recorded, unless there was some express prohibition; but in neither ease would it alter the nature of the transaction as between the parties. Livingston himself swears that he supposed the recording the papers would not alter the rights of the parties, and therefore he made no suggestion that it would be improper. The other parties undoubtedly acted on the same supposition, and Vanderheyden particularly, as, notwithstanding any directions he might have given as to the recording, he was so as to indorse the word “ escrow ” on the back of each instrument. This clearly shows he never intended the papers to operate as absolute deeds without some further agreement or understanding between him and Blake. Admitting, for a moment, that the recording of those papers would at law give them a different effect from what was intended by the parties, surely a party who comes into a court of equity for relief cannot be permitted to gain any advantage from that mistake.

This is not the case of a Iona fide purchaser of the legal estate, without notice of a latent equity which is attempted to be set up to defeat his title. James in this case is in no better situation than Blake. He is the assignee of a chose in action, with sufficient notice to put him on inquiry. He has not been injured by any mistakes of the other parties, as he took the assignment to indemnify himself against a pre-existing responsibility. Hnder the assignment from Blake he has all the legal title to the farm which Blake had; and it would be inequitable to compel the representatives of Vanderheyden to take an incumbered farm or a defective title, and look to the responsibility of Blake, who has left the state, and is probably insolvent.

*The complainants dare not even pay off the incumbrances which have been assigned to them, because they see that the lien of Knickerbacker’s judgment would then attach upon the whole farm, as it does now upon the surplus value over and above those incumbrances. Those incumbrances are about three-fourths of the value of the farm, and it will be necessary to foreclose the mortgage and sell on the judgments, or buy off Kniclcerbaoker’s lien, before a good title can be had. This is an expense which at all events ought to be sustained by Blake, and not by the defendants.

But there is also a failure of title as to forty acres of the farm. More than twenty-five years ago, Or. Seymour purchased this forty acres of Andrews, who was in possession claiming title, and paid $1,000 for the purchase-money. Seymour went on to the same and died there, leaving his widow in possession with her infant daughter. The widow married Lee, who came on to the farm with her, and after-wards, without any right, sold the forty acres to St. John or Tull, from whom Davis purchased. Ring purchased of Davis, and Blake of Ring. This testimony would be sufficient to enable the daughter of Seymour to recover in ejectment against any one deriving title under Blake. It is not material to inquire whether there is sufficient evidence of the loss of the deed to Seymour. He paid the consideration money, and was entitled to a deed, and under the circumstances it may probably be presumed. But even if the legal title still remains in Andrews, it is out of the complainants, and renders their title to the forty acres equally defective. I am therefore satisfied it would be inequitable and unjust to enforce these bonds and the mortgage against the defendants before a perfect title can be made to the farm, and free from all incumbrances.

If the complainants can satisfy these outstanding claims and clear the premises, they may perhaps even now be entitled to a specific performance of the original agreement of January, 1828; but on this question I have not formed any definite opinion. This bill is not properly framed for such relief in this suit, because no such agreement is set out, but one entirely different. If the complainants intend to avail themselves of that agreement hereafter, they are at liberty to have this bill ‘^dismissed with costs, but without prejudice to their right to file a new bill for that purpose.

But there is one kind of relief which the complainants are entitled to, if they prefer to abandon the contract of January, 1823. The deed and mortgage remaining on the records of the county arc a cloud upon the title: they are therefore entitled to a decree declaring the deed and mortgage void and inoperative; and if they abandon the contract of sale, they will be entitled to an account of the rents and profits of the farm while it has been in the possession of Yanderheyden or his tenant, after deducting therefrom the defendant’s costs in this suit to be taxed.

Mersted v. Avery, 4 Paige, 9; Johnson v. Gatlin, 2 John. Oh. 248; Oilman v. Ghwrch, 15 Wen. 656 ; Johnson v. Baker, 4 Bam. & Aid. 440; 4 Kent. 454. Such delivery must be to a stranger, and not to one of the parties. 10 Smeed. & M. 9. The presence nor express assent of the grantee is not necessary. Merrils v. Swift, 18 Conn. 251; see also Tompkins v. Wheeler, 16 Peters, 106; Wesson v. Stephens, 2 Ired. Eq. 551. Such assent will be presumed, from the beneficial interest of the grantee in the deed, unless a dissent is proved. Lady Superior, dec. v. McNamara, 3 Barb. Oh. 315.

“ An escrow," says Chancellor Kent, “is only a conditional delivery to a stranger, who is to keep the deed until certain conditions are performed, when he is to deliver it to the grantee. Until the conditions are satisfied the estate does not pass, but remains in the grantor. It becomes absolute from the time of the second delivery: but this general rule does not apply when justice requires a resort to fiction. The relation back to the first delivery, so as to give the deed effect from that time, is allowed in cases of necessity, to avoid injury to the operation of the deed from events happening between the first and second delivery. Thus, if the grantor was a feme sole when she executed the deed, and she married before it ceases to be an escrow by the second delivery." 4 Kent. 454.