Dixon v. Bristol Sav. Bank

• Decision Date: 05 August 1897
• Citation: 31 S.E. 96,102 Ga. 461
• Parties: DIXON v. BRISTOL SAV. BANK et al.
• Court: Georgia Supreme Court

31 S.E. 96

102 Ga. 461

DIXON v. BRISTOL SAV. BANK et al.

Supreme Court of Georgia

August 5, 1897

Syllabus by the Court.

1. An escrow obtained from the depositary by a fraud practiced upon him by the grantee, who had not performed the conditions upon which delivery was to be made, the depositary being innocent of any wrong or bad faith, passes no title either to the grantee or to an innocent purchaser from the latter.

2. If however, the grantor, after such improper delivery, ratified the same, the delivery was effectual to pass title from the grantor. (a) Whether or not in the present case there was ratification, as claimed, was a question which the judge ought to have submitted to the jury, instead of solving himself by granting a nonsuit.

3. "A grantor cannot deliver a deed to a grantee or his attorney as an escrow. Such a delivery would be equivalent to adding a parol condition to the instrument. To make the deed an escrow, it should be delivered to a third person, to be by him delivered to the grantee, upon the performance of any required condition." The agency implied in the above-quoted language is an agency, in behalf of the grantee to obtain possession of the instrument for the latter because, in a broad sense, every depositary of an escrow is the agent of both parties. (a) Whether, in the present case, the depositary was or was not the agent of the grantee named in the escrow, to procure its delivery from the maker, was also a question for the jury.

4. In view of the law laid down in the first head note, the question of possession in this case is immaterial, for the reason that the parties claiming under the grantee named in the escrow cannot be protected unless either the grantor ratified its delivery, or the depositary was the grantee's agent to procure delivery.

Error from superior court, Fulton county; J. H. Lumpkin, Judge.

Action by Annie Dixon against the Bristol Savings Bank and others. From a judgment of nonsuit, plaintiff brings error. Reversed.

Alexander & Lambdin, for plaintiff in error.

Thos. R. R. Cobb and Rosser & Carter, for defendants in error.

FISH J.

Annie Dixon was the owner of a lot of land in the city of Atlanta. A deed, signed by her, dated February 24, 1891, and purporting to convey the land to F. C. Hitchens, was recorded March 2, 1891. On March 16, 1891, Hitchens made a conveyance of the same land to the Bristol Savings Bank, as security for a loan of $2,000, and on the same day mortgaged the same property to one Barker, to secure an indebtedness of $100. This latter deed and mortgage were recorded on March 25, 1891. On December 31st of the same year, Annie Dixon brought her petition against Hitchens, Barker, and the bank, alleging that the deed from her to Hitchens was procured by fraud and without consideration; that it was never in fact delivered by her to Hitchens, or to any one for him, but was left as an escrow with a named depositary, from whom Hitchens had, by fraud and without performance of the conditions of delivery, obtained it; that, until two or three weeks before the bringing of the suit, she did not know of the existence of the two liens created on the property by Hitchens; that they were a part of Hitchens' scheme to defraud her of her property; that the property, at the date of the deed to the bank and of the mortgage to Barker, was in possession of certain parties as her tenants. She prayed for a cancellation of the deeds and of the mortgage, and for other appropriate relief. Hitchens denied all allegations of fraud or improper dealing on his part, and insisted that the land had been bought by him from plaintiff, and fully paid for. The bank and Barker answered that they had loaned to Hitchens the money represented by the deed and mortgage in good faith, and without notice or knowledge of any claim of plaintiff upon the property; that their conduct had been blameless and without fraud; that they had no notice or knowledge that plaintiff was in possession of the land by tenants or otherwise, and were informed that she was not so in possession and had no claim to the property. On the trial, the plaintiff introduced evidence tending to prove in substance the following: Plaintiff purchased the property in question in 1877, and subsequently made valuable improvements upon it, she and her tenants being in possession. Hitchens, by false and fraudulent representations of impending litigation, sought to persuade her to put the title to the property temporarily in him. To this end, he prepared a "note of obligation," "the substance of which was that he would restore the property to plaintiff upon the conclusion of the threatened litigation," as well as his promissory note for $2,700, and desired plaintiff to make him a deed to the property. Instead of following exactly this plan, plaintiff and Hitchens went to the office of an attorney, where Hitchens handed plaintiff the promissory note, and she executed a deed conveying the property to Hitchens. This deed she delivered to the attorney, with the express understanding and agreement of all three that he "should hold the deed until Hitchens paid the money." It was also understood between plaintiff and Hitchens that there was never to be any payment upon the note, or any delivery of the deed. Plaintiff had agreed to go with Hitchens to Texas as his housekeeper, and, within a day or two after the delivery of the deed to the attorney, she was sent to New Orleans by Hitchens, he following three days later. Before leaving Atlanta, plaintiff instructed Hitchens to place her property in the hands of a renting agent, which he did. One of her tenants was left in one of the houses upon the place. Between the time of plaintiff's arrival in New Orleans and the time when Hitchens joined her there, she received two letters, signed with the name of a friend of hers in Atlanta, but in fact sent by Hitchens, falsely stating that there was trouble in regard to her property, and that some of her furniture had been attached, and advising her to follow the advice of Hitchens in the matter. When Hitchens reached New Orleans, he took from plaintiff, by force and against her will, the "note of obligation" and the promissory note, and then returned to Atlanta. Plaintiff followed him to Atlanta, and called upon the attorney with whom the deed had been deposited. She asked where she could find Hitchens, and told of the theft of the papers. The attorney said that he was very sorry; that Hitchens had "given him $5 as a fee if anything should come up"; and that he could do nothing for her. She found Hitchens, and he promised to return the stolen papers if she would go to New Orleans; and shortly afterwards, in that city, he executed a paper, and gave it to her, together with her "title papers." She could not read, and did not know the nature of the paper Hitchens signed, but it looked like a deed, and she was told, if she would record it, her property would be all right. Subsequently, in Texas, when she, at the instance of Hitchens, put the papers in her trunk, the trunk was broken open, and the papers stolen. In August, 1891, plaintiff went to Danville, Va., where she remained until December, and then first learned that the property had been mortgaged. She came directly to Atlanta, and employed attorneys to protect her rights. While in Texas, she had received, through Hitchens, some of the rent due on her place, but nothing was ever paid her on the promissory note or as the purchase money of the property. The deeds from her Vendor to herself, from her to Hitchens, to the Bristol Savings Bank, and the mortgage from Hitchens to Barker, were introduced in evidence; also, certain letters and telegrams. At the close of the plaintiff's evidence, the trial judge awarded a nonsuit as to Barker and the bank, and to this ruling plaintiff excepted.

1. "Although it is well settled that an escrow delivered without authority or obtained fraudulently passes no title to the grantee or obligee, there is some conflict of opinion as to the right of an innocent purchaser from a grantee who has obtained possession of the escrow without performing the conditions but the better opinion seems to be that such a purchaser acquires no title." 6 Am. & Eng. Enc. Law (1st Ed.) 869. See cases cited in note 3. "When the instrument has been placed in the hands of the depositary, the grantee is not entitled to it, nor does he acquire any rights under it, until he has performed the condition upon which the depositary is to deliver it to him." Devl. Deeds, § 321. "Until the condition has been performed and the deed delivered over, the title does not pass, but remains in the grantor. *** If the depositary deliver the deed without authority to do so from the grantor, or if the grantee obtain possession of it fraudulently, without performing the condition, the deed is void. The deed thus obtained conveys no title either to the grantee or purchasers under him." Id. § 322, and cases cited in note 4. "To maintain the plea of an innocent purchaser, a person must have acquired the legal title, which he seeks to protect against some latent equity or charge on the land. Hence this plea cannot avail a person who has bought on the faith of the possession of the escrow by the person named therein, where such possession has been obtained wrongfully. The conveyance made by the grantee in the escrow cannot affect the legal...