court said: "The elementary idea of an escrow assumes that the obligatory writing has been delivered by the party executing it to a third person, to be held by him until the performance of a specific condition by the obligee, or the happening of a certain contingency, and then to be delivered by the depositary to the obligee. * * * To become an escrow, as well as to become a deed or writing of present obligation, there must be delivery of the instrument." Until the Until the company became an actual depositary it was said: "It has not and cannot have any interest in the negotiations. It has done no service nor contributed anything of value that can support its claim to have an interest in the contract between these parties."

It is not conclusive that the depositary of an escrow may not be vested with some discretion, but it is not a discretion in reference to the management of property, but a discretion merely in determining when a condition precedent to the surrender of an escrow has been performed, especially if the escrow is a paper negotiable in form. It is the general rule, however, that an unauthorized surrender by a depositary of an escrow does not bind the obligor. For the creation of a depositary of an escrow it is essential that there exist a binding contract between parties, otherwise valid conditions as to its retention or surrender cannot occur." But while an escrow is itself an instrument in writing, the contract back of it need not itself be in writing.10

7. Provident Life & Trust Co. v. Mercer County (1898), 170 U. S. 593, 42 L. Ed. 1156.

8. Mays v. Shields (1903), 117 Ga. 814, 45 S. E. 68; Powers v. Rude (1904), 14 Okl. 381, 79 Pac. 89; Schmidt v. Musson (1906), 20 S. D. 389, 107 N. W. 367.

9. Clark v. Campbell (1901), 23 Utah 569, 65 Pac. 496, 54 L. R. A. 508, 90 Am. St. Rep. 716.

10. Thoraldsen v. Hatch (1902), 87 Minn. 168, 91 N. W. 467.

§ 102. Summary. It is true that in agreements in which depositaries for escrows are selected, the business of trust companies and their facilities for safekeeping of instruments of writing make such companies come to the minds of parties very readily, but I wish to distinguish in this work these deposits from those in which the relation is rather that of trustee than depositary. These latter deposits are greatly more important and as a general thing might extend over a vastly greater period of time. Escrows generally contemplate a brief period of time, especially when surrender is dependent upon the performance by obligee of a condition precedent. Escrow is an arrangement to arrest or keep in suspension the fulfillment of a contract until a condition is performed or an event happens. The contract may be and often is very simple and, being upon a present consideration, its fruition is not apt to be delayed a great while. In this way the deposit of an instrument in escrow, is but a detail in negotiation.

CHAPTER XVI

Trust Companies as Conveyancers, Abstractors and Title Insurers

§ 103. In General. Trust companies in many states have the charter or statutory power to examine, certify and guarantee titles to real estate. As stated by the attorney-general of Indiana in an opinion rendered on December 9, 1910, trust companies have no such powers, in the absence of express authority. In its guarantee features, it is essentially an insurance business, and therefore attracts insurance supervision, as distinguished from the banking supervision generally applicable to trust companies.

§ 104. Searching, Abstract Business and Title Insurance Defined and Contrasted. In a Tennessee case,' the court said:

"To furnish abstracts of titles is a business. Parties undertaking it assume the responsibility of discharging its duties in a skillful and careful manner. Patience in the investigation of records is the main capacity required. There is no professional opinion. The agent has only to furnish the facts from the register's office, without concern for their legal effects. Upon the facts fur

1. Dickel v. Nashville Abstract Co. (1890), 89 Tenn. 431, 14 S. W. 896, 24 Am. St. Rep. 616.

nished, the purchaser must determine for himself on their sufficiency."

Title insurance has been defined thus: "A policy of title insurance means the opinion of the company which issues it, as to the validity of the title, backed by an agreement to make that opinion good, in case it should prove to be mistaken, and loss should result in consequence to the insured."

In a case wherein recovery upon a policy was defeated by reforming it so as to give it effect upon the date intended, it was said that:

"The risks of title insurance end when the risks of other kinds begin. Title insurance, instead of protecting the insured against matters that may arise during a stated period after the issuance of the policy, is designed to save him harmless from any loss through defects, liens or incumbrances that may affect or burden his title when he takes it. It must follow, as a general rule, therefore, that when the insured gets a good title, the covenant of the insurer has been fulfilled and there is no liability. It is apparent from the very nature of the contract that it usually bears the same date as the deed of the title which it purports to insure, and that if, in a given case, there is a discrepancy between these dates, it must be due to some exceptional circumstance which should be noted in the contract. In the contract before us the absence of any special note as to the date negatives any intention to take this case out of the general rule."

In the same case the distinction between the two

2. Foehrenbach v. German-American Title & Trust Co. (1907), 217 Penn. 331, 66 Atl. 561, 12 L. R. A. (N. S.) 465.

3. Trenton Potteries Co. v. Title Guarantee & Trust Co. (1903), 176 N. Y. 65.

activities of searching and insuring is brought out. The court said:

"The contract of insurance is distinct and separate from the contract of searching. This action is brought upon the contract of insurance. Under the contract for searching titles the defendant may be liable for any damages which its negligence may have imposed upon the plaintiff. Under the contract of insurance no question of negligence in searching can arise.'

§ 105. Relation assumed by Trust Company in Examining Titles and Acting as Conveyancer. Where a trust company was retained to draw up a contract of sale, search title, and secure a deed, and it was sued for improperly describing the property conveyed, it was held by the New York Court of Appeals that:

"The defendant is a domestic corporation organized for the purpose, among other things, of examining and guaranteeing titles to real estate for hire and profit. In all matters relating to conveyancing and searching titles it holds itself out to the public and assumes to discharge the same duties as an individual conveyancer or attorney, and, hence, in such transactions its duties and responsibilities are the same. * * The obligations and duties that the parties assumed towards each other were, therefore, similar in all respects to those growing out of the relation of attorney and client in transactions of the same character, and hence the case must be determined upon the same principles."

§ 106. Duty as Conveyancer to Advise Client of Encroachments. Holding that plaintiff was entitled

4. Elmer v. Title Guarantee & Trust Co. (1898, 156 N. Y. 10. See also Glyn v. Title Guarantee & Trust Co. (1909), 132 N. Y. App. Div. 859, 117 N. Y. Supp. 2424.