Brief Fact Summary. Clevenger (Plaintiff) owned a building in Bartlesville, Oklahoma, which she considered trading to Simmons for an apartment building. Peay, acting as an intermediate, took a deed to Simmons, which Peay was to hold pending Plaintiff’s investigation of Simmons’ Tulsa property.
Synopsis of Rule of Law. No title will pass by a deed, which is not delivered by the grantor or someone duly authorized by him.
Issue. Two issues were stated by the court:
When a deed is placed in escrow and the same is delivered to the grantee without performance of the conditions for delivery, is such a deed absolutely void?
What are the rights of one claiming to be an innocent purchaser for value of the property from such grantee, when such grantee is in possession of the property without the knowledge or consent of the grantor?
Held. The deed is void, and the rights of an innocent purchaser for value are discussed below. Reversed and remanded.
No title will pass by a deed, which is not delivered by the grantor or someone duly authorized by him.
An escrow deed is utterly invalid to transfer any right, in the absence of performance of the condition, so that wrongful yielding of possession of the deed to the grantee by the person with whom it is deposited transfers no title, even though the claimant be an innocent purchaser for value.
In cases when the instrument is obtained from the escrow in violation of the escrow terms, and without the knowledge and consent of the grantor, it is the equivalent to taking the instrument from the grantor by theft. Therefore, an innocent purchaser for value will not be protected.
The fraudulent procurement of a deed, deposited as an escrow, from the depositary, by the grantee named in the deed, would not operate to pass the title; a bona fide purchaser for value from such grantee fraudulently obtaining such deed, could derive no title from him, and would not be protected.
Discussion. The fraudulent procurement of the deed can be inferred from the facts of the case. The Plaintiff clearly delivered the deed to Peay to hold in escrow, conditioned on her investigation of Simmons’ Tulsa property. In considering Peay’s liability to Plaintiff, it would seem that a confidential or fiduciary relationship has been breached.