Van Dyke v. Lauer

The sole issue on this appeal is whether the loss of the $3,000 embezzled by Davidson, the escrow holder, should fall upon the plaintiff purchasers or upon the defendant vendors.

The determining factor is not that Davidson was originally the agent of the vendors at the time the escrow arrangement was entered into, but rather who had title to the $3,000 at the time the escrow holder absconded with it. The controlling principle of law is well stated in the annotation entitled, “Who must bear loss resulting from defaults or peculations of escrow holder,” 15 A. L. R. (2d) 870, 871, as follows:

“Spea…