Warington Lumber Co. v. Fullerton Mortgage & Escrow Co.

Defendant-appellant, Fullerton Mortgage & Escrow Company, appeals from a judgment in favor of plaintiff-respondent, Warington Lumber Company, for $26,756.27 in a breach of contract action brought by plaintiff-respondent, a building materials dealer who sold lumber and other building materials to Hintz Development Corporation. Hintz became delinquent in its account with plaintiff, owing about $120,000. Funds were being furnished to Hintz under a construction loan from a savings and loan company. Defendant had obtained this loan for Hintz and received a fee for this service. Upon learning that the payments or “draws” were being paid by the savings and loan company by means of cheeks payable to Hintz and J. W. Hartman, president and general manager of defendant escrow company, plaintiff informed defendant of its claim and said it would file a “withholding” notice with the savings and loan company unless defendant company would agree that plaintiff’s claim would be taken care of out of the checks received from the savings and loan company. Defendant agreed to take care of plaintiff and sent the following letter, dated September 19,1959, to it:

It is apparent that in reliance on this…