60 Ga. App. 114 | Ga. Ct. App. | 1939
The Allied Mortgage Company sued the Atlanta Title and Trust Company for $1479.03 on a policy of title insurance issued by the defendant to the Security Mortgage Company, and duly transferred by that company to the plaintiff. It was alleged in the petition as amended, that on November 17, 1933, the defendant issued to the Security Mortgage Company its policy of title -insurance for the face amount of $14,000, by the terms of which it covenanted that it would indemnify, keep harmless, and guarantee the assured and all to whom this policy may be transferred against all loss or damage, not exceeding $14,000, which the party guaranteed shall sustain by reason of defect of title affecting the premises described in the policy, or by reason of liens or encumbrances charging the same at the date of this policy, subject to the conditions and stipulations in the policy; that it developed that the title to the premises covered by tire policy was defective in that, before and at the time of the issuance of the policy, the premises were subject to two paving-assessment liens in favor of the City of Florence, Alabama, in the approximate sum of $1479.03; that these paving assessments were made on December 14, 1923, and were duly recorded; that said assessments were made by the city council of the City of Florence, Alabama, pursuant to its powers and authority under certain sections of the Code of Alabama which were in force at the time said assessments were made, said Code sections being specified and made a part of plaintiff’s petition by reference, the assessments being for-public improvements pursuant to said Code sections; that it was provided by that Code, § 1381, that after notice and advertisement as required in said sections the owners of any real estate affected by the proposed assessment would have the right to file objections and
The defendant demurred to the petition as amended, and the exception is to the overruling of the demurrer. The grounds of the demurrer are stated and dealt with in the following opinion.
1. It is contended by the defendant that it does not appear from the petition that the defendant was notified in writing that any action or proceeding had ever been instituted which was founded upon a claim of title, encumbrance or defect that existed or is claimed to have existed prior to the date of the policy, or that the plaintiff gave to the defendant any notice before it paid off the paving assessment; that this was a failure to comply with the terms of the policy, and consequently the plaintiff is not entitled to prosecute this suit. It is true that the policy provides: “ 1. The Atlanta Title & Trust Company shall at its own cost and charges defend the party guaranteed in all actions of ejectment or other action or proceeding founded upon a claim of title, encumbrance, or defect which existed or is claimed to have existed prior to date
The case of Atlanta Title & Trust Co. v. Ful-Kalb Inc., 56 Ga. App. 742 (193 S. E. 796), is distinguishable on its facts from the present case. There the Ful-Kalb Inc. refused to permit the title company to defend the action or to furnish counsel, for the reason that it was contrary to law and against public policy; and that was held to be a breach of the contract that would prevent the plaintiff from recovering against the title company. No legal liability there, when that was done, had become fixed against the property guaranteed, as it had in the case at bar when the plaintiff paid off the assessments in question. Neither is American Surety Co. v. Ballman, 115 Fed. 292 (2), in point. There a judgment of the trial court, which had been appealed, was paid by the surety company without the consent of the indemnitor before the case was heard by the appellate court; and it was held that such payment discharged the indemnitor, as it had the right under the terms of the policy to prosecute the case to a final judgment in the appellate court.
2. The defendant further demurred on the ground that it was not alleged that the plaintiff had suffered any loss by reason of the existence of such lien because of plaintiff’s inability to collect the amount of said lien from the person primarily liable for the payment of the lien. The principal amount of the mortgage made by the Long Realty Company to the Security Mortgage Company, and transferred by the latter company to the plaintiff, was $14,000. It is alleged in the petition as amended that the plaintiff paid the Security Mortgage Company the full amount of this mortgage, in consideration of its transfer, by delivering to it the equivalent amount of bonds of said Security Mortgage Company then held by the plaintiff; that the realty covered by the mortgage was sold the next year for $10,000, and the actual value of the mortgage was $10,000; that the assessment lien of $1479.03 was paid by the plaintiff, and was a loss to it in said sum, for which it had not been reimbursed and against which it was indemnified by the defend
3. The demurrer on the ground that the plaintiff paid off the lien against the property without taking a transfer thereof, which it is claimed destroyed the defendant’s right of subrogation under the terms of the title policy, is without merit. It was alleged in the petition that the assessment lien was in rem and operated solely against the property, and no right of subrogation existed at any time by virtue of the street assessment; and besides, it was alleged that the property had been sold for less than the amount of the mortgage, and that the original mortgagor was insolvent. So it does not appear that the defendant’s rights were harmed by the action of the plaintiff in this respect.
4. The contention of the defendant that the payment of the lien was a voluntary payment of taxes and could not-be recovered by the plaintiff is without merit. Under the terms of the title policy, the plaintiff was indemnified' against any loss or damage on account of defective title or liens against the property guaranteed. The. court properly overruled the defendant’s demurrer to the petition as amended.
Judgment affirmed.