Lewis v. Shorter

83 So. 2d 79, 225 Miss. 259, 1955 Miss. LEXIS 580

Opinions

Lee, J.

J. W. Shorter, by his bill of complaint, as amended, sought to require Mrs. Mary Catherine Upchurch Lewis and husband, Lester Gr. Lewis, and the Peoples Bank at Mendenhall, Mississippi, to return and deliver up to him a certain warranty deed by the Lewises to him, which conveyed 340 acres of land in Simpson County, as described therein, or execute a duplicate thereof, or, upon failure to do either, that a commissioner be appointed to make and deliver a proper deed to him. After the various pleadings were settled, the sole remaining issue was whether or not the consideration for the deed was paid and the deed delivered prior to the attempt of the grantors to stop delivery. At the conclusion of the trial the court found for the complainant, and entered a decree awarding the relief as prayed for. From that decree, the Lewises appeal.

Mrs. Lewis, in whom the title to this land was vested, through the negotiations of her husband, leased it to Shorter for pasture purposes on March 29, 1948, for one year; and he continued in possession thereafter. Lester Gr. Lewis, her husband, wrote Shorter on July 12, 1953, from Troutlake, Washington, that he had decided to offer the property for sale, and inquired if Shorter wished to make an offer. On July 20 Shorter acknowledged receipt of Lewis ’ letter, thanking him for a chance to buy, and asked for his price. On July 22, Lewis acknowledged receipt of Shorter’s letter and informed him that “Our asking price for 340 acres is $12.50 per acre, taxes prorated, with 1-2 down and balance on terms if desired”. Upon receipt of this letter, Shorter went to the Peoples Bank at Mendenhall and got a commitment from the president of the bank to make him a loan of $4,250 to pay for this land. About this time, W. I. Up-church, father of Mrs. Lewis, went from his home at Morehead, Mississippi, to see Shorter about the sale. Shorter informed him that he was going to accept the Lewises terms and was going to write them to send the deed to the bank and asked Upchurch to let them know also. On August 1, Lewis wrote Shorter that he had received a letter from W. I. Upchurch, advising that Shorter wanted the deed sent to the bank, and asked for information together with directions about the deed. On the same date, August 1, Shorter answered Lewis’ letter of July 22, informed him that he had made arrangements to pay all of the money, $4,250, and directed him to send the deed to the Peoples Bank at Mendenhall for collection, and informed him that the hank would remit the money by return mail. This letter obviously crossed Lewis ’ letter of the same date in the mail. At any rate on August 6 Howard Q. Davis, an attorney, wrote Mrs. Lewis in the State of Washington that, at the request of her father, W. I. Upchurch, he was enclosing a deed for execution by her and her husband to Shorter, and suggested the drawing of a draft on Shorter, together with other suggestions. He sent a carbon copy of this letter to Shorter.

After Shorter had accepted the proposal and had received the copy of the letter from the attorney, he called at the hank several times to ascertain whether the papers had arrived. On August 13, the deed, executed by the Lewises, was forwarded to the Peoples Bank at Mendenhall by the Hood River Branch of the First National Bank of Portland, Oregon, with draft drawn on Shorter in the sum of $4,217.85, which, added to $4.95 and $27.20 for documentary and mineral stamps, respectively, aggregated $4,250, with instructions to deliver the deed to Shorter upon payment of the draft.

The Peoples Bank received these papers on August 17 and notified Shorter, who came in the next day, checked the deed, and found it to he satisfactory. Both Shorter and Sidney D. Davis, President and Cashier of the hank, testified that Shorter accepted the deed and wanted to sign and execute then the necessary papers to consummate the loan hy which he was to realize, under the previous commitment from the bank, the $4,250 with which he was to pay for this land. Davis, the banker, testified that, after Shorter contacted him about the loan, and prior to the receipt of the deed, he checked with the bank’s attorney, who was familiar with the general basic title of this land, and found that it was a good title. Except for the preparation of the note and deed of trust and the mere formality of the attorney in writing a certificate, the loan would have been fully closed that day, thus actually effecting the payment of the draft. Both Davis, for the bank, the lender, and Shorter, the borrower, considered that the money was then available to pay the draft. The balance of the transaction was mere routine; and so far as the deal was concerned, they treated it as if it had been closed. They both testified that Shorter gave the deed back to Davis in order that he might prepare the necessary papers' to be signed by Shorter and his wife.

Shorter’s version can be seen from the following answers : “When I got the price, I came straight down here and Mr. Davis * * * told me specifically that he would let me have the money to buy it.” When Davis “handed the deed to me for inspection * * * I told him that it was O. K. with me and I accepted the deal. I gave him back the deed to finish the papers that he had to finish and left it in his care for that purpose. * * * he was to have all the papers fixed up ready for me and my wife to come and sign.” He was “ready, willing and able to execute the necessary papers * * * And I accepted the deed as it was and gave it back to him * * * to hold for me to finish completing the loan. ’ ’ He did not have $4,250 in the bank, but “I had Mr. Davis’ word that it was good * * * If it had to be put there, Mr. Davis ’ word was good and he had promised to do that.”

Certain answers of Sidney D. Davis, called as a witness by the defendants, were as follows: He made the commitment to Shorter for the loan about three weeks or a month previously. Q. “Had you in the meanwhile, prior to this date when the deed was delivered to Mr. Shorter and subsequent to his original contact with the bank, checked with your attorney, Mr. Sikes, as to whether or not he was familiar with the general basic title and you found it was a good title? A. Yes, sir.” While, on August 18, when Shorter accepted the deed, he did not actually give the bank $4,250, “I confirmed to him a prior agreement we made with Mr. Shorter before he bought the land * * * Mr. Shorter wanted to prepare his papers the day he came to see the deed. He was ready to execute the instrument to us at that time.” He did not have sufficient money in the bank in his own name to take care of it, “but he had my commitment * * * Q. I believe you stated a while ago in response to the question of counsel that as president and cashier of the bank that you considered that with the commital of the bank to Mr. Shorter that payment had been made to the bank of $4,250.00 with the deed being held as security so that the formalities might be completed. Is that correct? You considered that actually $4,250.00 was available in the bank? A. Yes, sir. * * * Q. Other than the ministerial duty of executing the mortgage, which he had already agreed to execute and which you had agreed to accept, you considered it as a final transaction? A. Yes, sir”; and he so advised Attorney Davis and Mr. Lewis when they called over the telephone to stop the deal. His words to Davis over the telephone were, “I told you over the phone — that the transaction had gone too far and that Mr. Shorter was ready and able to pay and that I had obligated the bank to make the loan and that for all practical purposes it was a closed deal.” It is true that several other answers of this witness, if isolated or taken out of context, in themselves alone, could be deemed conflicting ; and, if believed, would warrant a different conclusion.

Here was the bug under the chip: Sometime in the afternoon of August 18, W. E. Bridges offered Shorter $7,500 for the timber. His offer not being accepted, Bridges called the Lewises over the telephone the next day and offered them $7,500 for the timber. On the 20th, Howard Q. Davis, the attorney, called Davis, the banker, over the telephone and ordered him to return the draft and deed. This telephone call was confirmed by letter. A wire was also received from Lewis. As has been seen, Banker Davis advised attorney Davis, in the telephone conversation just mentioned, that the transaction had gone too far; that Shorter was ready and able to pay; that he, Davis, had obligated the bank to make the loan; and that for all practical purposes it was a closed deal.

Shorter and wife executed the deed of trust on August 22, and tendered the money to the bank; and upon its failure to deliver up the deed to him, he filed his suit in the chancery court against both the bank and the Lewises and again tendered the amount of $4,250 into court.

Now it is true that “"Where a bank receives commercial paper for collection merely, the relationship which arises between the depositor and the bank is that of principal and agent. The agency thus created continues in the absence of a revocation * * 9 C.J.S., Banks and Banking, Section 218, pp. 466-7. And “Ordinarily a bank is the agent of its depositor with respect to collection of paper, but becomes his debtor after collection.” 9 O.J.S., Banks and Banking, Section 280, p. 583. It is also true that “Unless the bank has a lien for past or present advances, the owner of paper which has been sent to the bank for collection has the right, at any time prior to collection, to revoke the bank’s authority to collect, and to demand the return of the paper, and a refusal to comply with such a demand operates as a conversion.” 9 C.J.S., Banks and Banking, Sec tion 217, p. 466. Obviously no delivery of tbe deed occurred unless or until tbe fulfillment of the condition, that is, until the deed was accepted and the money paid. See 26 C. J. S., Deeds, Section 43d, p. 244; Mississippi State Highway Commission v. Anderson, 183 Miss. 458, 184 So. 450.

The case turns on the narrow question as to whether or not, under the evidence, there was in fact a payment of the money to the bank and a delivery of the deed to Shorter before notice to stop delivery.

After the efforts of her husband and father had resulted in finding a potential buyer of the land, and after her attorney had prepared and sent to her a deed to consummate this sale and purchase, in exact conformity to the negotiations and representations of her husband, Mrs. Lewis, together with her husband, executed and acknowledged the deed to Shorter. She then entrusted it to her husband to deliver upon payment of the consideration, and he in turn attached it to a draft, drawn by him on Shorter and payable at the Peoples Bank, and deposited it with the bank in Oregon. That bank in turn forwarded the deed and draft through regular channels to the Peoples Bank, advising that “You are authorized to deliver to Mr. Shorter this warranty deed upon payment of the draft above mentioned.” Obviously Mrs. Lewis and her forwarders had no right to stop delivery of the deed after payment of the draft. The bank, under its commitment to Shorter, considered that it had the money in hand to pay the draft. It refused to return the draft. Its president testified that he considered the deal to be closed on August 18, two days before the notices to stop delivery of the deed were received. Thus when the notices were received, the relation between the bank and Mrs. Lewis and her forwarders was that of debtor and creditor, because, under the agreement between Shorter and the bank, the bank had stepped into Shorter’s shoes, and by its acts and conduct, had in effect received the money from Shorter with which to pay the draft, and had made itself liable to Mrs. Lewis and her forwarders for the proceeds thereof.

It was the peculiar province of the chancellor, as the trier of the facts, to reconcile possible conflicts in the various statements of the witnesses and resolve and determine the facts. He found, from all of the evidence, that payment of the draft, the amount of the con-' sideration for the deed, had been assured by the Peoples Bank and that there was a delivery of the deed on August 18, which was two days before the attempt to stop payment and delivery. The effect of this finding was that the bank, in lieu of requiring Shorter to deliver to it manually $4,250, substituted its commitment to bim for the money and thereby paid the draft before notice to stop delivery was given. There was substantial evidence to sustain the finding, and we cannot say that the chancellor was manifestly wrong.

Wherefore it follows that the decree of the lower court should be, and is, affirmed.

Affirmed.

Roberds, P. J., and Hall, Holmes and Arrington, JJ., Concur.