Cradock v. Cooper, 1703

• Decision Date: 21 September 1960
• Docket Number: No. 1703,1703
• Citation: 123 So.2d 256
• Parties: Eric CRADOCK, Appellant, v. W. R. COOPER and Betty U. Cooper, his wife, Appellees.
• Court: Florida District Court of Appeals

Page 256

123 So.2d 256

Eric CRADOCK, Appellant, v. W. R. COOPER and Betty U. Cooper, his wife, Appellees.

No. 1703.

District Court of Appeal of Florida, Second District.

Sept. 21, 1960.

Elwyn L. Middleton of Burns, Middleton, Rogers & Farrell, Palm Beach, for appellant.

Paschal C. Reese and Gibson & Gibson, West Palm Beach, for appellees.

CARLTON, VASSAR B., Associate Judge.

The main facts in this case are not disputed. Defendant Cradock, appellant here, bought certain lands from plaintiffs, Coopers, appellees here. This suit was originated by Coopers, sellers, to establish an equitable lien against those lands for a portion of the purchase price, which was never received. The missing money had been placed in an escrow account and was misappropriated by the escrow holder. From a final decree ordering the loss to be shared equally by both parties, the Defendant-purchaser has appealed.

The selling price for the realty was $80,000, and the transaction was closed in June, 1956. The Internal Revenue Service had a claim which the defendant's attorney, one Charles E. Boland, contended was a lien against the land, and he objected to the title. The sellers' offer to provide title insurance was not accepted; and later both parties agreed to allow Boland, the defendant's attorney, to hold $15,000 of the purchase money under a written escrow agreement. By the terms of this agreement the money would go to the sellers, if the claim were settled; and, if not, it would go first toward settlement of the claim and any remainder to the sellers. The agreement was signed by Charles E. Boland, Attorney at Law, Escrow Agent, Carl Voyles, Agent for Eric Cradock, Betty U. Cooper, W. R. Cooper and W. T. Gibson, Gibson & Gibson, Attorneys for Sellers; and the money was paid to Boland 'to be held for and on behalf of W. R. Cooper and Betty U. Cooper, his wife, subject to the following terms and conditions * * *.' The terms and conditions briefly were as set out above, that the money would go to the sellers, if the claim was settled; and, if not, it would go first toward the settlement of the claim, and any remainder to the sellers.

The Internal Revenue claim was finally settled, after several extensions-of time at the request of plaintiff's attorney; but Charles E. Boland was not able to close out the escrow account because he had misappropriated the balance of the funds, some $10,900. (Boland, for other reasons, now resides at Raiford.) The plaintiffs brought suit against defendant to attach a lien for this amount.

In the final decree the Chancellor states: 'There is a question as to whether the escrow agreement creates a true escrow or a depositary. However, construing the same as an escrow, it would appear that such agreement, standing alone, would be controlling; and since it was signed by the plaintiffs and their attorney, they thereby made Boland their agent, and the loss should fall on plaintiffs. However, considering all the facts and circumstances surrounding the closing of the deal, the drafting, modifying, and signing of the agreement, with all the parties being represented by counsel, and with Boland coming to the closing as attorney for the defendant and with an instrument naming himself as escrow agent, and thereafter the instrument being amended and signed by the plaintiffs and their attorneys in order that the closing could be effected, the Court finds that Boland was the agent of both the plaintiffs and the defendant; that both are equally responsible for allowing Boland to hold the funds, and that both should equally bear the loss of the $10,900.00,' and allowed a lien for $5,450. Appellant seeks to have the lien extinguished.

It should be observed before proceeding to the consideration of the law applicable to this situation that reprehensible as was the conduct of Charles E. Boland, if can hardly be assumed that his wrongdoing in either a moral or legal sense can be imputed to the defendant in this case. Each and every member of the Florida Bar is assumed to be a man of integrity, ethical to the highest degree, by laymen of the State.

According to the law as set forth in 30 C.J.S. Escrows § 7 d, p. 1202; and in 19 Am.Jur., Escrow, Section 15, p. 432, the attorney of the grantor of the subject matter of the escrow agreement may act as escrow agent so long as his duties do not involve a conflict of interest with,...