Seifert v. Lanz

BueKB, J. Plaintiff is a farmer living in Sargent county, North Dakota. In June, 1910, he desired to sell his farm, and talked to a real-estate dealer named Brixsley. After some preliminary negotia — 147 — tions, Brixsley told him that tbe defendant Lanz bad a Wisconsin farm wbicb be desired to trade. Shortly thereafter, plaintiff and Brixsley went to Canton, Wisconsin, and examined a tract of land containing 169 acres. After such examination tbe three went to North Dakota, examined the 161 acres owned by plaintiff, and on the 28th of June went to Newark, South Dakota, where exhibit F, hereinafter referred to, and constituting what is alleged to be an agreement for the trade of the two farms, was executed in duplicate, and where plaintiff and his wife executed a warranty deed to his land, running to the defendant Lanz, and where he then and there deposited the same with one Nelson, cashier of one of the banks. The circumstances surrounding this deposit are in sharp dispute, and will be treated later in this opinion. Lanz repaired to Minneapolis, where he and his wife executed a deed to the Wisconsin land, and forwarded the same to the bank. It is plaintiff’s contention that his deed was delivered to the cashier of the bank, subject to his further orders, and that he had the right to recall the same at any time. On the other hand, defendant insists that the deed was deposited in escrow, and that when Lanz had complied with certain conditions upon his part to be performed, the title to the land passed by operation of law to Lanz. In any event, the plaintiff became dissatisfied with his bargain, and attempted to withdraw the deed from the possession of Nelson, who, however, refused to return the same, but delivered it to Lanz, who later sold it to the defendant Haug, who in turn sold to the defendant Van Schoiack. A trial was had in the court below, which resulted favorably to the defendant. This appeal necessitates a trial de novo in this court. (1) Appellant insists that the deposit of the deed with Nelson did not constitute an escrow, because at the time of the delivery plaintiff expressly reserved dominion over the instrument. Plaintiff and his wife testify that at the time of the deposit plaintiff told Nelson that the deed should not be delivered until plaintiff had personally, or by written order, authorized such delivery. This is in a slight measure corroborated by one Gallagher, who testifies that at a later date, in his presence, plaintiff asked Nelson if he had not so claimed, and Nelson had answered “Yes.” On the other hand, Nelson testifies — 148 — that tbe deed was deposited with him to be delivered when Lanz should have sent or brought a deed from himself and wife covering the Wisconsin land, together with the $100 which was to be paid in addition. Brixsley’s testimony corroborates that of Nelson. The testimony of plaintiff does not appeal to us. For instance, he admits that, two or three days after he had left the deed with the bank, he went and asked Nelson if the Lanz deed had been received. He further admits going back to the bank a few days later, and again inquiring if the deed had come. He also testifies that he might have said to Nelson that he was afraid that Lanz was going to back out, and then a minute later he swears positively that he did not make that admission. He also testifies he expected the deed to be sent to a bank at Cogswell, North Dakota, although he inquired twice for it at Nelson’s bank. He also testifies that he went to Wisconsin to examine the land, in company with Brixsley and Lanz, and walked something like 2 miles over the tract, examined the buildings, and noticed the same were dilapidated, and yet made the claim that he had been defrauded by those two parties in that they misrepresented the value of the land to him. -We will give a short extract from the testimony along this point: At the time you entered into this contract, you knew what the land was, from having seen it, didn’t you? A. I didn’t know what it was. I went by what Brixsley told me. Q. You what ? A. I went by what Brixsley told me. Q. You had seen it yourself? A. How could I see it by running across it ? Q. You went clear from here to Wisconsin to look at this land, and then you say you ran across it so fast that you could not see it? A. Yes, sir. Q. You forgot what you went down there for ? ' A. Almost, I guess. I believe almost. Again, plaintiff testifies that in case the deal made was satisfactory to him he was to give to the agent Brixsley a certain commission, and — 149 — that shortly after tbe signing of exhibit E he satisfied the same by giving to Brixsley a colt. Upon this point he testifies: Q. At the time you came here, you thought the deal was through, and turned over the colt to him ? A. I turned over the colt to him, like a fool. Q. How long was that after your deed had been put in the bank? A. Only a day or so. Q. You were still satisfied at that time ? A. I was partly satisfied. Again he testified relative to the buildings upon the Wisconsin farm. Q. They (the buildings) looked pretty bad? A. They looked pretty tough. Q. You saw that the first time that you were there? A. Yes. Q. Tough looking farm all around ? A. Yes. Q. And the buildings were all run down? A. Yes. Q. And the land was all stony? A. Well, that is what you asked me before; there were lots of stones. I thought there were lots of stones, and they told me there were just a few here and there. Q. When you got there and saw the farm you thought there were lots of stones; where did you get that impression — did you see some stones ? A. Yes, I saw some. Q. And you thought there must be some more where you saw them ? A. Yes, sir. Q. You were hurrying along? A. Yes, you bet. That is what we were. Q. You didn’t get suspicious ? A. I was getting suspicious. Q. When you got suspicious, why didn’t you stop and take more time ? A. That is what I ought to have done. Q. Why didn’t you? A. Because they were helloing for me to come. — 150 — Q. Do you mean to say that when you went from here, three or four hundred miles to Canton, to look at this piece of land, you went out and ran over the land so fast that you couldn’t tell whether it was stony, but thought you did see some rocks on it ? A. Yes. Again he testifies: Q. Do you know a man by the name of Deitz in your neighborhood ? A. Yes. Q. Do you remember of having a talk with him about a week or so after getting back from looking at that land ? A. May be, I talked with him. Q. Do you remember of telling him that it was a fine country down there? That it would be a great deal better for dairying than this was,- — and asked him to go down and look it over, and see if he could get a quarter lying west of the one you got ? A. At that time I did not know that they were lying to me so. Q. You did say that, then, to Deitz ? A. Yes, I did say that. Q. About a week after you got back from your trip ? A. Something like that. Again he testifies: Q. That is all you told Brixsley, — that he was selling the land for too much ? A. Yes, sir. Q. It wasn’t worth that much ? A. No, it wasn’t. Q. That is the only reason that you ever stated to Brixsley why you were not carrying out the deal, isn’t it ? A. I wasn’t satisfied. Q. In other words, you changed your mind about wanting to trade, didn’t you ? A. I guess I did. Q. That is the sum and substance of it, isn’t 'it ? A. When I found out how things were. Q. Made up your mind you didn’t want to give up your land for that land, didn’t you ? A. Yes, sir. — 151 — Neither is tbe testimony of plaintiff’s wife convincing. She did not bear all of tbe conversation, and was unlikely to bave remembered tbe same in detail. Tbe testimony of tbe witness Gallagher is not entirely inconsistent with that of Nelson. Tbe foregoing testimony raises a strong conviction in our minds that, at tbe time of tbe deposit of tbe deed, plaintiff was satisfied with the trade that he bad made, and this in turn indicates an irrevocable deposit of tbe deed. We bave therefore reached tbe conclusion that tbe trial court was correct in its finding that plaintiff deposited tbe deed with Nelson to be delivered to Lanz upon bis paying $100 and furnishing a deed to tbe Wisconsin land. (2) Appellant next insists that, even if tbe deposit were made under tbe circumstances outlined in tbe foregoing paragraph, it would not amount to a deposit in escrow because there was no pre-existing contract of sale of tbe land in controversy. His position as stated in tbe brief is that “without a legal, binding, and enforceable contract to sell and buy tbe property, a conveyance thereof cannot be delivered in escrow,” and in support of bis contention we are cited to Fitch v. Bunch, 30 Cal. 208; Stanton v. Miller, 58 N. Y. 192; Campbell v. Thomas, 42 Wis. 437, 24 Am. Rep. 427, and other cases. This question is extremely complicated. It seems that to constitute an escrow there must be a pre-existing contract of sale antedating tbe escrow agreement itself. Otherwise, tbe deed so deposited could be withdrawn. It is this difference of irrevocability that distinguishes an escrow from an option or offer of sale. It is stated at 16 Cyc. 562, that “in tbe great majority of eases; tbe instrument deposited, together with tbe stipulation as to tbe condition or tbe event upon performance or happening of which tbe instrument is to take effect, constitutes a contract ; indeed, by tbe general rule there must be a valid agreement between the parties, containing all tbe elements of a contract; and, as in other contracts, tbe consideration may be either a benefit to tbe promisor or a detriment to tbe promisee. There is, however, a class of cases where no contract exists, as where an instrument for tbe conveyance of land is deposited with a third person to be delivered to tbe grantee upon tbe death of tbe grantor.” In tbe ease note to Manning v. Foster, 18 L.R.A.(N.S.) 337, it is stated: “It seems to be well settled that that rule of evidence which prohibits a written contract to be contradicted — 152 — or varied by parol evidence has no application to a delivery of a deed in escrow, — that is, a delivery to a third person to take effect upon the happening of some condition, — as all the authorities are agreed that the condition upon which a deed is thus delivered may rest in and be proved by parol.” Willard’s Eq. Jur. page 267, says: “The only exception to the rule with respect to mutuality is when an agreement under the statute of frauds has only been executed by the party sought to be charged. In this class of cases, although the plaintiff has not signed, the agreement, . . . yet he can enforce it against the other party,, by whom it has been executed.” See also Worrall v. Munn, 5 N. Y. 229, 55 Am. Dec. 330; Gira v. Harris, 14 S. D. 537, 86 N. W. 624. The holding of those cases seems to be that, to constitute an escrow and render the deposit irrevocable, there must be a contract between the proposed purchaser and proposed seller, which in turn, to satisfy the statute of frauds, must be evidenced by a memorandum in writing-signed by the party sought to be bound thereby. However, the contract, in so far as it affects the second party, who has made no deposit in escrow, need have no memoranda to satisfy the statute of frauds because-he has not deposited evidence of title to land, although, forsooth, he-may bring to the bank a deed as a measure of payment. In other-words, Seifert is the party who has made a deposit in escrow. This, deposit must be preceded by a binding contract between himself and. Lanz. Otherwise, it would be a mere offer to sell, or option, and would be revocable. To be irrevocable and an escrow, it must be preceded by a contract enforceable against Seifert; otherwise, it would run contrary to the statute of frauds. But Lanz had made no deposit of a. deed, and the contract, so far as he is concerned, need have no memo-randa in writing, although part of the purchase price which he was to-pay to Seifert was a deed to Wisconsin lands. (3) Accepting the law as outlined in preceding paragraphs, we apply it to the facts at hand. As stated before, the agreement was made in writing between Lanz and Seifert; is designated in the record as exhibit. F, and reads as follows: Newark, S. Dak., June 27, 1910. ^Received of Fred Seifert on account of purchase made by bi-m this day to the undersigned, Otto W. Lanz, of the following described real — 153 — estate situated in Sargent county, state of North Dakota (describing North Dakota land), for the sum of $6,700 upon the following terms: The sum of $10 at or before the execution of this contract. $100 on July 11, 1910. The balance to be a quarter of land (161 acres) located near Canton, Wisconsin, purchased of Joseph Floor, same being the land shown by Lanz to Seifert and Brixsley as being the land to be delivered, both tracts of land being executed subject to the encumbrance now against them, namely $2,500 against the land now owned by Seifert, and $1,800 against the land now owned by Lanz, said lands being the same lands above described. Each party to this contract is to deliver his land with all interest and taxes paid to date. A reasonable time, not exceeding ten days, after delivery of abstract, is to be allowed for examination of title, and the form of conveyance, is to be warranty deed in each case, title to each contract of land to be marketable, and in ease the title shall be ascertained to be unmarketable to such an extent as to warrant the purchaser in refusing the same, and he shall so refuse the same upon that ground, or the owner refuses to' accept sale, the vendor shall not be liable for any damages, and the said sum of $10 paid by the purchaser shall be returned to him, and if the title is found to be marketable, and this trade — the deed or contract being tendered — is not closed within the time as herein named, said earnest money is forfeited as a consideration paid for this agreement, and said vendor shall be considered to have fully performed his-part of this agreement, and may declare this contract terminated, and in case of any encumbrance on this land the purchaser agrees to assume the same and take it from the purchase price. Time is made the essence, of this agreement. Said purchasers hereby accept the conditions of the foregoing contract. In testimony whereof said parties have hereunto respectively set their hands and seals, the day and year above mentioned. (Signed) Otto W. Lanz, Fred Seifert. Appellant insists that this agreement does not constitute an enforceable contract as outlined in paragraph two of this opinion, because: (a) The land in controversy was a homestead, and plaintiff’s wife did not contract to convey; (b) Defendant Lanz was a married man, and his wife did not join in the contract; (c) that it appears from exhibit — 154 — F itself that it was terminable at will by either party; and (d) said contract did not describe the Wisconsin lands. After long and careful consideration we have reached the conclusion that none of these objections are valid. As to the first, it is sufficient to say that when the wife joined in the deed which was deposited with exhibit F in escrow, she bound herself as effectually as though she had signed exhibit F also, and that the plaintiff herein is likewise estopped to assert this objection. See Ryan v. United States, 136 U. S. 68, 34 L. ed. 447, 10 Sup. Ct. Rep. 913; Bayne v. Wiggins, 139 U. S. 210, 35 L. ed. 144, 11 Sup. Ct. Rep. 521; Knopf v. Hansen, 37 Minn. 215, 33 N. W. 781; Hughes v. Thistlewood, 40 Kan. 232, 19 Pac. 629; Manning v. Foster, 49 Wash. 541, 18 L.R.A.(N.S.) 337, 126 Am. St. Rep. 876, 96 Pac. 233; Johnston v. Jones, 85 Ala. 286, 4 So. 748; Epperly v. Ferguson, 118 Iowa, 47, 91 N. W. 816; Kettering v. Eastlack, 130 Iowa, 498, 107 N. W. 177, 8 Ann. Cas. 357; 13 Cyc. 614. Thus exhibit F, reinforced by the signature of the wife upon the deed, is valid as against this attack. We do not believe there is anything in Arnegaard v. Arnegaard, 7 N. D. 478, 41 L.R.A. 258, 75 N. W. 797, nor Silander v. Gronna, 15 N. D. 552, 125 Am. St. Rep. 616, 108 N. W. 544, inconsistent with this holding. Appellant makes an ingenious argument which is hard to answer upon this very proposition, but we believe the equities of the case, as well as the great weight of the decisions, are against his position, and we so hold. As to the second proposition, that Mrs. Lanz had not signed exhibit F, it need only be said that the deed to the Wisconsin land was not deposited in escrow, and comes under an entirely different rule; besides, Mrs. Lanz actually signed the deed to the Wisconsin land before it was offered. As to the third proposition, that exhibit F shows upon its face that it is terminable at will by either party, the instrument speaks for itself, and we do not believe it bears the interpretation claimed by appellant. And, fourth, the description of the Wisconsin land while not sufficient for a deed, is sufficient to cover the initial contract. There is no contention that the deed offered by Lanz did not cover the identical tract shown to Seifert and described in exhibit F. It is our conclusion that exhibit F was a sufficient contract to support the escrow agreement, and that as against this attack the deed deposited by plaintiff was deposited as an irrevocable escrow. — 155 — (4) Appellant next says that, “even assuming exhibit B to have been deposited by plaintiff with Nelson in escrow, the escrow terminated when plaintiff, because of the fraud of the defendant Lanz, timely rescinded the transaction.” Without setting forth more of the evidence, we state that in our opinion no fraud has been shown upon which to base a rescission, thus rendering unnecessary a discussion of the law upon that subject. (5) Appellant next says that, “even assuming exhibit B to have been deposited by plaintiff with Nelson in escrow, the escrow terminated upon Lanz’s failure to comply with the conditions of the escrow agreement within the time thereby limited.” The evidence upon this is also lengthy and of no public concern. We will content ourselves with saying that an examination of the same convinces us that the deposit was in fact made within ten days. (6) Lastly, it is contended that the description of the Wisconsin lands was filled in, in part, at least, after it had been signed by Mrs. Lanz. By delivering the deed to her husband with part of the description in blank, she authorized him to supply the deficiency. This presents an altogether different question than one wherein there is an entire absence of description. Minor details- of a description of a particular piece of land may be supplied, where the intention of the grantor has been already fully expressed. The foregoing disposes of all of the objections of the appellant. Our conclusion is that the deed, exhibit B, was deposited in escrow; that all the terms of the same have been fully met by the defendants; that the delivery of the deed by Nelson to Lanz was proper and the title duly passed thereunder. Judgment of the District Court is in all things affirmed.