Balfour v. Hopkins
Decision Date | 13 February 1899 |
Citation | 93 F. 564 |
Parties | BALFOUR et al. v. HOPKINS et al. |
Court | U.S. Court of Appeals — Ninth Circuit |
In October, 1892, Charles Hopkins owned lot 7 in block D of A A. Denny's addition to Seattle. The government meander line ran nearly north and south through the block. Lot 7 was upland, abutting on the shore. Lot 8, and the lots to the westward thereof, which were not platted, but which were called lots 9 and 10, were on submerged or tide lands outside of the meander lines. The owner of lot 7 had, through an act of the legislature of the state of Washington passed in March, 1890, the preference right to purchase from the state the lots outside of the meander line, as soon as the tide lands should be platted and the harbor lines established. On October 20, 1892, Hopkins entered into a contract with J. Parkinson to exchange his said property for lots 5 and 8 in A. A. Denny's Broadway addition to Seattle, which then belonged to Parkinson. By the agreement the Parkinson property was valued at about $60,000. There was a mortgage outstanding upon it for about $34,000. Later the net value of the Parkinson property was ascertained to be $28,497.85. The Hopkins property was valued at $90,000. Parkinson was to pay Hopkins a balance of $61,502.15. The agreement was delivered to Hopkins, and was withheld from record. By its terms, Parkinson purchased from Hopkins the property aforesaid, describing the same as lots 7 and 8 in block D of A. A. Denny's addition to Seattle, Wash 'together with all the riparian and littoral rights belonging or appertaining thereto, and consisting of lots 9 and 10, adjoining, and extending westward along the north side of Seneca street, across both West street and Railroad avenue, to deep water or ship's channel,' for $90,000, to be paid by the conveyance by Parkinson to Hopkins of the Parkinson property at a net value as above stated. For the balance of the $90,000, Parkinson was to make Hopkins deferred payments,-- two payments of $12,500 each to be secured by mortgage 'on all the lots denominated herein 9 and 10, and all superstructures, consisting of houses wharves, and warehouses thereon,' and the remainder to be secured by a mortgage on the same property, and also by a second mortgage on lots 7 and 8, conveyed by C. Hopkins to Parkinson, 'and which are not to be mortgaged by said Parkinson, as a first mortgage, for a greater sum than sixth thousand dollars, which said sum, pursuant to said first mortgage, is to be placed into a brick structure on said lot 7, within one year from and after said 24th day of October, 1892, to cost not less than said sum of sixty thousand dollars when finished. ' On October 24, 1892, Parkinson and wife conveyed the Parkinson property to Hopkins; and on the following day Hopkins placed the deed on record, and at once took possession of the property, and has since held and owned the same. On November 2, 1892, a deed was executed from Hopkins and wife to Parkinson, conveying to the latter the Hopkins property. Four promissory notes from Parkinson and wife to Hopkins for the deferred payments were signed by Parkinson and wife. A mortgage from Parkinson and wife to Hopkins, as called for in the agreement, was signed, sealed, and acknowledged by Parkinson and wife. A bond running to Hopkins was signed by Parkinson and wife as principals, and by R. R. Spencer and M. D. Ballard, officers of the National Bank of Commerce of Seattle, as sureties, conditioned upon the expenditure of the whole of said sum of $60,000 in the erection of the brick building. An escrow card was signed by Hopkins and wife and Parkinson and wife. The deed, the notes, the mortgage, the bond, and the escrow card were thereupon deposited in the National Bank of Commerce of Seattle, in escrow; and said Spencer, the cashier, wrote upon the escrow card a receipt, which reads as follows: 'Received of Roger S. Greene, acting in behalf of the parties signing the escrow card of which the within is a copy, this 3d day of November, A.D. 1892, the instruments specified in said escrow card, to be held by the National Bank of Commerce of Seattle, Washington, as in said escrow card directed, and to be delivered, when and as in said escrow card directed, to the respective parties entitled thereto, as intended in said escrow card. ' The escrow card reads as follows:
The escrow papers were delivered in an unsealed package. The property which the deed from Hopkins and wife to Parkinson described was as follows: 'Lots numbered seven (7) and eight (8) of block D in A.A. Denny's addition to the city of Seattle (being the same premises otherwise known as lots 7 and 8 of block D of that part of the town, now city, of Seattle laid off by A.A. Denny), and all littoral and riparian rights thereunto belonging and appertaining, and all houses, wharves, warehouses, and structures situated and being to the westward of lots seven (7) and eight (8), and extending across West street and Railroad avenue, in said city, to deep water,-- subject, however, to all rights of the United States or of the state of Washington west of the government meander line, where the same crosses said premises. ' The mortgage from Parkinson and wife to Hopkins, which was deposited with the deed in escrow, bore the same date with the deed, and described the property exactly as the same was described in the deed. It reserved permission to the mortgagors to make a prior incumbrance upon a portion of the property, as follows: 'And whereas, in and by a certain memorandum of agreement, dated the 20th day of October, 1892, made by and between the said Charles Hopkins and John Parkinson, it was agreed, among other things, in effect, that said John Parkinson might mortgage said lots seven (7) and eight (8), by first mortgage, for a sum not greater than $60,000, which sum, pursuant to said first mortgage, is to be placed into a brick structure placed on said lot 7 within one year from and after this 24th day of October, 1892, to cost not less than said sum of $60,000 when finished: Now, therefore, these presents are intended to be, and the said first parties, their heirs, executors, administrators, and assigns, hereby covenant that these presents shall be, a first mortgage upon the property and premises hereby intended to be mortgaged, except only as against such first mortgage for sixty thousand ($60,000.00) dollars, as is mentioned and intended in said memorandum of agreement; but said first parties shall be at liberty, pursuant to said memorandum of agreement, to place upon said lots seven (7) and eight (8) a first mortgage to secure said sum of sixty thousand ($60,000.00) dollars, and such mortgage shall be a first mortgage, as against these presents.'
Shortly after the papers were left in escrow, Parkinson applied to the agents of Balfour, Guthrie & Co., the appellants, for a loan of $60,000. The appellants understood that the security offered them was all of the property which...
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