## Facts

- Ida Caspar owned an unrestored Capitol Hill row house in Washington, D.C.
- On October 13, 1972, Caspar was personally served with a District of Columbia housing inspector’s notice listing numerous (126) Housing Code violations and requiring correction within 60 days.
- On November 18, 1972, Caspar contracted in writing to sell the property to Harry and Jean Ferguson for $23,000, with the price to be paid in cash at settlement at Lawyers Title Insurance Corporation on or before February 1, 1973.
- The contract included a provision that the premises would be conveyed “free of all notices of municipal violations existing at the date of the contract,” and stated that this obligation would survive delivery of the deed.
- Before settlement, the Fergusons learned of the violation notice and obtained an estimate of repair costs (about $6,125) without Caspar’s knowledge; they did not raise the violations with Caspar before closing.
- On February 1, 1973, the parties met at Lawyers Title to settle:
  - Caspar executed and delivered the deed and related papers to the settlement officer to hold pending completion of settlement requirements.
  - The Fergusons delivered a check for the full $23,000 purchase price to the settlement officer.
- As the meeting was ending, the Fergusons presented separate written instructions directing the settlement officer to withhold a substantial portion of the purchase funds (roughly equal to the repair estimate) and to release that money only after Caspar made the repairs.
- The settlement officer refused to complete the closing or deliver/record the deed on the basis of the Fergusons’ unilateral holdback instructions.
- Caspar later sold the property to the McAteers for $25,000, and that conveyance was completed and recorded.
- The Fergusons sued Caspar and the McAteers seeking (1) a declaration that title had passed to them at the February 1 settlement and (2) specific performance compelling conveyance to them.
- After a bench trial, the Superior Court entered judgment for the defendants, concluding the Fergusons had not made the unconditional cash tender required by the contract.
- The Fergusons appealed to the District of Columbia Court of Appeals.

## Issues

1. Did legal title pass to the Fergusons when Caspar deposited the executed deed with the settlement officer and the Fergusons delivered a check, even though the Fergusons simultaneously imposed unilateral escrow holdback instructions?
2. Were the Fergusons entitled to specific performance when their tender of the purchase price was conditioned on an escrow holdback not provided for in the contract?

## Decision

- The District of Columbia Court of Appeals affirmed the judgment for Caspar and the McAteers.
- Legal title did not pass to the Fergusons at the February 1 settlement because the closing was not completed in accordance with the contract; the deed was not delivered out of escrow or recorded, and the settlement officer properly refused to proceed under conflicting instructions.
- The Fergusons were not entitled to specific performance because they did not unconditionally perform (or stand ready to unconditionally perform) their own obligation to pay the full purchase price in cash at settlement; their last-minute holdback instructions made their tender conditional.
- The contract’s municipal-violation provision did not authorize the Fergusons to change the agreed payment terms by directing the settlement officer to retain part of the purchase funds as security for repairs.

## Legal Principles

- In a real-estate settlement using a title company as settlement officer/escrow holder, a deed held by the settlement officer does not transfer legal title unless the agreed settlement conditions are satisfied and the transaction is completed as contemplated.
- Where a contract requires payment of the full purchase price in cash at settlement, the purchaser must make an unconditional tender consistent with the contract; a tender conditioned on additional terms is not performance.
- Specific performance is an equitable remedy available only to a party who has performed, or is unconditionally ready, willing, and able to perform, that party’s own contractual duties.
- A seller’s promise to convey property free of existing municipal violation notices (even if stated to survive delivery of the deed) does not, without more, give the buyer a right to impose a unilateral escrow holdback at closing.

## Conclusion

Ferguson v. Caspar holds that no title passed and specific performance was properly denied when the purchasers, despite delivering a check for the full price, conditioned settlement by instructing the settlement officer to withhold a substantial portion of the funds for housing-code repairs—an arrangement not authorized by the parties’ contract requiring full cash payment at settlement.


Ferguson v. Caspar, 359 A.2d 17 (1976)