When there are two escrows in a real estate transaction, does the general rule that a party must be charged with notice of an event where the other party was not a participant?

California, United States of America


The following excerpt is from Oldenburg v. Brody, 139 Cal.App.2d 543, 293 P.2d 844 (Cal. App. 1956):

'While that is the general rule, there are exceptions to it', and that 'the general rule would not be applied where there were two escrows, 'to documents deposited in the escrow to which the party sought to be charged with notice was not a participant.'' It then quotes from Thompson v. Stoakes, 46 Cal.App.2d 285, 292, 115 P.2d 830, as follows: "As a matter of substantive law, where a positive fraud has been perpetrated by one agent, appellants herein, such fraud does not become non-actionable because of the knowledge of another agent, the escrow holder, of facts not communicated to the common principal. As between two innocent parties, notice to the agent of one is notice to the principal, but, as between the principal and the fraudulent agent, notice of another agent should not be imputed to the principal."

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