Citizens National Bank of Roswell, New Mexico v. George Davisson

• Decision Date: 26 May 1913
• Docket Number: No. 551,551
• Citation: 57 L.Ed. 1153,229 U.S. 212,33 S.Ct. 625
• Parties: CITIZENS NATIONAL BANK OF ROSWELL, NEW MEXICO, and the United States Fidelity & Guaranty Company of Baltimore, Maryland, Appts., v. GEORGE A. DAVISSON and Fay Etta Owens
• Court: U.S. Supreme Court

229 U.S. 212

33 S.Ct. 625

57 L.Ed. 1153

CITIZENS NATIONAL BANK OF ROSWELL, NEW MEXICO, and the United States Fidelity & Guaranty Company of Baltimore, Maryland, Appts.,

v GEORGE A. DAVISSON and Fay Etta Owens.

No. 551.

Argued December 4, 1912.

Decided May 26, 1913.

Messrs. William C. Reid and James M. Hervey for appellants.

[Argument of Counsel from pages 213-215 intentionally omitted] Messrs. W. A. Dunn, Ed. S. Gibbany, and G. A. Richardson for appellees.

Mr. Justice Pitney delivered the opinion of the court:

This action was brought in the first instance in the district court of Chaves county, in the then territory of New Mexico, by Davisson, as plaintiff, against the Citizens National Bank of Roswell and Mrs. Owens, as defendants. He set up a claim to be paid $5,000 as commissions on a sale of real and personal property made by him as broker in her behalf to one C. C. Berryman, claiming a right to recover against the bank on the ground that Mrs. Owens had given to him a written order directed to the bank for payment of the $5,000 out of money of hers that was in the hands of the bank. Mrs. Owens answered for herself and others as executors of Solon B. Owens, deceased, denying liability to Davisson, on the ground that the sale in question had not been consummated; and, by a cross complaint against the bank, she set up that a contract of sale was made by her in behalf of the executors of Solon B. Owens, deceased, with Berryman, and, upon its execution, the sum of $9,173.32 was, by agreement of the parties, deposited in the bank, together with a copy of the agreement; that after examination of the title by Berryman, he required the executors to procure an order of court, authorizing them to sell and convey the land, whereupon it was agreed that the time for the conveyance of the title should be extended until such date as the executors should be able to obtain the order so required, and that in the meantime Berryman should enter into possession of the land, and he did go into possession thereof; that afterwards Berryman abandoned the possession of the land and removed to his former home in Arkansas, and because of his not being within the jurisdiction of the territory, the executors could not obtain service of process upon him, nor sue him for specific performance of the contract of sale; that under the provisions of the contract the executors had elected to declare said $9,173.32 forfeited by the failure and refusal of Berryman to carry out the contract; wherefore judgment was prayed against the bank as trustee for the executors with respect to the money in question. The bank answered both the complaint and the cross complaint, not denying the making of the contract between Mrs. Owens and Berryman, but denying that it was a party thereto or had any knowledge thereof or concern therewith, and asserting that the $9,173.32 was deposited with the bank by Berryman in escrow, and subject only to the terms of a written memorandum or agreement signed by the bank's cashier; and that because these terms had not been complied with by Mrs. Owens, the responsibility of the bank to her had been terminated, and therefore the bank had paid the whole of the sum of $9,173.32 to Berryman, in compliance with his demand.

Upon the issues thus joined, the parties proceeded to trial before the judge of the district court, without a jury, who rendered judgment in favor of the bank, dismissing both the complaint and the cross complaint.

Davisson and Mrs. Owens appealed to the supreme court of the territory, which court reversed the judgment and remanded the record to the district court with instructions to reinstate the action and proceed in accordance with the views expressed in the opinion. 15 N. M. 680, 113 Pac. 598. The grounds of decision, briefly, were that by the escrow agreement the bank became agent for both parties, that the memorandum did not authorize it to pay over the money to either party, and that in taking sides and making payment to Berryman it acted at its peril, and should be held responsible to Davisson and Mrs. Owens if, upon a retrial, they should sustain their right to the money as against Berryman.

The case was accordingly brought on again to trial before the district court, without a jury, with the result that judgment was rendered against the bank, in favor of Davisson, for $5,000 and interest (the amount of his commissions), and in favor of Mrs. Owens and the other executors of the estate of Solon B. Owens, deceased, for the residue of the $9,173.32. Upon appeal by the bank to the supreme court of the territory this judgment was affirmed (16 N. M. 689, 120 Pac. 304), and the bank appealed to this court.

Under the act of April 7, 1874, chap. 80, § 2 (18 Stat. at L. 27, 28), our review is confined to determining the question whether the facts found by the court below sustain the judgment. And these facts are to be certified to us by the territorial supreme court, either by adopting the findings of the trial court, or by making separate findings of its own. Stringfellow v. Cain, 99 U. S. 610, 613, 614, 25 L. ed. 421, 422; O'Reilly v. Campbell, 116 U. S. 418, 421, 29 L. ed. 669, 670, 6 Sup. Ct. Rep. 421; Haws v. Victoria Copper Min. Co. 160 U. S. 303, 312, 40 L. ed. 436, 439, 16 Sup. Ct. Rep. 282; Gildersleeve v. New Mexico Min. Co. 161 U. S. 573, 577, 40 L. ed. 812, 813, 16 Sup. Ct. Rep. 663; Apache County v. Barth, 177 U. S. 538, 542, 547, 44 L. ed. 878, 879, 881, 20 Sup. Ct. Rep. 718; Crowe v. Trickey, 204 U. S. 228, 235, 51 L. ed. 454, 458, 27 Sup. Ct. Rep. 275; Eagle Min. & Improv. Co. v. Hamilton, 218 U. S. 513, 54 L. ed. 1131, 31 Sup. Ct. Rep. 27; Zeckendorf v. Steinfeld, 225 U. S. 445, 448, 56 L. ed. 1156, 1160, 32 Sup. Ct. Rep. 728; Rosaly v. Graham y Frazer, 227 U. S. 584, 590, 57 L. ed. ——, 33 Sup. Ct. Rep. 333.

The supreme court of the territory, in affirming the judgment of the district court, resulting from the second trial, adopted the findings of that court, and supplemented them with certain findings of its own. From these findings, and from the admissions of the pleadings, the essential facts of the case may be summarized as follows:

On August 21, 1908, Mrs. Owens, residing at Roswell Chaves county, New Mexico, acting for herself and in behalf of others who were her coexecutors of the estate of her deceased husband, Solon B. Owens, made an agreement in writing with C. C. Berryman of Arkadelphia, Arkansas, for the sale to him of certain lands, belonging to the estate situate in Chaves county, containing 360 acres, with the live stock and other personal property thereon. Davisson negotiated the sale as broker, and was entitled to a commission of $5,000 for his services if the sale should be finally consummated.

The price agreed to be paid by the purchaser was $80,000, payable $10,000 in cash upon the making of the agreement (receipt whereof was acknowledged), $12,000 by assuming payment of a note for that amount held by an insurance company in Ohio, and not yet due, and the balance to be secured by five notes of $11,600 each, falling due September 10, 1909, and in the four successive years thereafter. The property was to be clear of all encumbrance excepting the $12,000 mortgage. By the terms of the agreement the party of the first part, within ten days from its date (that is, on or before August 31), was to furnish the party of the second part, at Roswell, a complete abstract of title showing a good merchantable title in the party of the first part; the purchaser was to have until September 10th to examine the abstract, and if it showed a good title, the transaction was to be closed at Roswell on or before September 10th, by the delivery of a warranty deed to the purchaser, he paying the consideration according to the terms of the agreement. There were the following additional clauses, which should be quoted in full:

'6th. If, upon examination of the said abstract of title, it is found that the title is not a good merchantable title, then any objections made to said title shall be pointed out by the party of the second part, and then the party of the first part shall have ten days in which to cure said objections. Should it prove, upon examina- tion of said abstract, that the said title is not good, and same cannot be made good within such reasonable time, then it shall be the duty of the party of the first part to perfect said title at their expense, promptly, in accordance with the requirements of the party of the second part, within the time stated, and if the party of the first part fails, neglects, or refuses to perfect said title in accordance with the requirements of the party of the second part, then the party of the second part shall have the right to perfect said title at the expense of the party of the first part, who shall repay at Roswell, New Mexico, such sum of money as is expended by the party of the second part in perfecting said title, and if, upon examination of said title, it shall be shown that the title to the said property is not good and cannot be made good, then in such event this sale shall be annulled, and the said $10,000 paid as purchase money hereinbefore provided for shall be returned by the party of the first part to the party of the second part.

'7th. Now, if the party of the first part complies with this contract and furnishes the...