Lechner v. Halling

216 P.2d 179 (1950)

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Nature of the Case

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Facts

P contracted with the Donahue Realty Company to sell a tavern. Mrs. C. A. Donahue and her salesman, Mr. Sant, found D as a buyer. The price agreed on was thirteen thousand dollars. P agreed to accept a certain house trailer, in which Ds were then living, in lieu of two thousand dollars of this sum, and the rest was to be paid in cash. An earnest money receipt was executed by the parties, and, pursuant to its terms, P made out a check for two thousand dollars to the Donahue Realty Company, which she gave to Mr. Sant. It was agreed that Donahue would be the escrow agent for the transaction. The certificate of title and the registration certificate for the trailer were delivered to Donahue. Ds paid the remaining nine thousand dollars to Mr. Sant. Donahue issues a receipt for the titles and money. The receipt stated in part: Said money to be held in escrow until title insurance, license, warranty deed, together with bill of sale of all equipment. No written instructions were given by Ds to Donahue. Ds took possession of the tavern. The liquor licenses were transferred. P went to The Citizens State Bank and directed it to inform Donahue of the fact that the sum of $ 2,901.74 was due the bank on certain mortgages held by it upon the property. The bank so advised Donahue, and on the following day, Mrs. Donahue paid this sum from the funds in the Halling-Lechner account. The satisfactions of the mortgages were thereupon sent to her. P executed a warranty deed to the property and a bill of sale for the equipment and inventory, and deposited them, as he testified, 'in escrow,' with Donahue. No written escrow instructions were given by P to Donahue. D obtained the warranty deed and bill of sale for the personal property, and a policy of title insurance for the sale of the real property. D signed a letter drafted by Sant allowing Donahue to close the sale and pay the next proceeds over to P. Mrs. Donahue paid the taxes and sent the satisfactions of the mortgages which had been outstanding against the property, together with the title insurance policy, to the Snohomish County Abstract Company in order that the mortgage satisfactions might be recorded and the title policy corrected. The title insurance policy and mortgage satisfactions were received by Mrs. Donahue. Mrs. Donahue made an assignment of her business to her stepson, and her licenses as a realtor were picked up by the state on February 9th. A receivership followed shortly thereafter. Mrs. Donahue was convicted of embezzlement, and this particular matter was one of the items for which she was convicted. D delivered the trailer to P. The title insurance policy, the bill of sale for the personal property, and the warranty deed are still unrecorded, were found in the possession of Mrs. Donahue by the receiver, as was the bill of sale for the trailer. P sued D seeking a return of the title. Ds claimed they fully performed.