22 Ind. App. 317 | Ind. Ct. App. | 1899
— By the- complaint of the appellant against the appellee, a demurrer to which for want of sufficient facts was sustained, it was shown that one ITenry II. Ilackerd, claimed to be the owner of real estate described, including a certain town lot described, in the town of Mulberry, Clinton county, Indiana, and desiring to borrow of the appellant $400, offered to mortgage said real estate to the appellant to secure the loan of said sum; that the appellant refused to make said loan until he was furnished with an abstract of title to said real estate; that said Ilackerd applied to the appellee, who held himself out to be competent to make and certify abstracts of the title of lands in said county, and the appellee, for a valuable consideration] did make and deliver to the appellant, for the use of the appellant,- an abstract of said real estate, and certified it to be a correct and true abstract of the title of said land, and did rejiresent to the appellant, before he made said loan, that said title to said land was free and unencumbered, and that there were no liens of any kind whatever on said real estate; that, the appellant informed the appellee that he would rely entirely upon said abstract and representations which he had' made that said land was free from all judgments, mortgages, liens of every kind and description, before he would loan said money to said Ilackerd; that the appellee informed the appellant, before he made said loan, that he could rely on said representations and said abstract, that said land was free from all liens of every kind and character, that the title to said land was in Ilackerd, and was perfectly good, and it was all right, and nothing against the land; that the appellant, relying upon said representations made by the appellee, and upon said abstract made by the appellee, and having-no other knowledge or information whatever, and relying upon no other or different information, made said loan of $400 to said Hack
It was further alleged that the statement made in said abstract as to its being correct and true and the representations made by the appellee that said real estate was free and unencumbered, and that no liens whatever existed upon it, •on which the appellant relied and parted with his money, were not true; that the appellee failed and neglected to set out in said abstract and to inform the appellant that there then existed a lien against a part of said real estate, in the nature of a lis penclens notice, which notice is set out, showing that certain persons named had filed their complaint in the court below against certain other persons named, including Henry IT. Hackerd and Martha E. ITackerd, to set 'aside the conveyance of said town lot; said notice being signed by the plaintiffs in said suit by their attorney, and filed and recorded in the office of the clerk of said Clinton county on the 22nd day of May, 1894, and signed by said clerk. It was further alleged that the ITenry II. Hackerd so referred to was the same person of that name who borrowed said sum from the appellant, and that the lot mentioned in said lis pendens notice was part of the real estate embraced in said abstract, and the security which the said Hackerd offered and the appellant accepted for said loan; that said Us pen-dens notice was filed and recorded in the clerk’s office of said county long prior to the making of said abstract by the appellee. It was further shown that the persons named as plaintiffs in said Us pendens notice obtained a judgment against the persons named as defendants therein in the cause referred to in said notice “in the sum of-dollars, which judgment was a lien on said real estate;” that an execution was issued by the judgment plaintiffs against the judgment defendants, and said real estate was sold to satisfy said judgment; that the judgment plaintiffs being the highest and
•It is further shown that said mortgage became subject to be foreclosed by failure of said Henry IT. Hackerd to pay an interest note which became due on the 11th of June, 1896; that the appellant thereafter filed his complaint against said Hackerd and others to foreclose said mortgage; that the appellant therein obtained judgment for $531.72, and a foreclosure of said mortgage; that it was therein further decreed that the appellant’s judgment of foreclosure on said town lot was a lien junior to that of said plaintiffs named in said lis pendens notice; that on the 27th of February, 1897, all the real estate described in said mortgage was sold by the sheriff of said county, and the appellant, being the highest and best bidder, purchased the same for $100, and paid costs amounting to $45.52; that after said property was so sold to the appellant, he caused an execution to issue against Henry IT. Hackerd, who filed his schedule claiming his exemption; that said Henry IT. Hackerd is notoriously insolvent, and nothing whatever can be collected from him; that at the time said abstract and representations were made by the appellee, and said money was loaned by the appellant, said town lot was of the value of $700, and was ample security for said loan, had not said lien of said lis pendens existed against it; that the real estate described in said mortgage other than said town lot was not of the value of more than $50 at the time of making said loan or since; “that by reason of the foregoing facts, and relying upon the abstract and representations so made by the defendant, as above set forth, and none other, and said representations not being true,” the appellant “has lost all of said money so loaned, to wit, the sum of four hundred dollars and interest, and has been compelled to pay out for costs and expenses in said foreclosure proceedings the sum of one hundred dollars; wherefore,” etc.
In Dickle v. Abstract Co., 89 Tenn. 431, 14 S. W. 896, 24 Am. St. 616, the plaintiff purchased land from Bowman, but declined to do so until furnished with an abstract. Bowman applied to the defendant to make an abstract, and paid for it. The defendant furnished the abstract to Bowman and guaranteed it to be a true and perfect abstract of title. The plaintiff purchased on the faith of it. The deed from Bowman to the plaintiff was prepared by the defendant. Certain conveyances of a part of the land were not shown by the abstract. The defendant was held responsible to the plaintiff. The case is subjected to some criticism in the note thereto in 24 Am. St. 617, because, so far as appears from the opinion, the person in whose favor the action was brought did not apply to the searcher of records for the abstract of title, nor was he in any respect brought in any contract relation with him. An attorney who examined the title to real estate for the party by whom a loan was made secured by mortgage was held not responsible to an assignee of the mortgage. Dundee, etc., Co. v. Hughes, 20 Fed. 39.
In Talpey v. Wright, 61 Ark. 275, 32 S. W. 1072, it was held that an abstracter employed by a landowner to prepare an abstract of title for the purpose of procuring a loan upon mortgage, was not liable to an assignee of the notes secured by the mortgage, who took the notes in reliance upon the abstract, for loss occasioned by negligent omission of certain defects in the title from the abstract. In discussing the opinion of Mr. Justice Clifford in Savings Bank v. Ward, 100 U. S. 195, and the decision in Dickle v. Abstract Co., supra, it is said that in the former case “the defendant did not know that the abstract was intended for the use and benefit of the plaintiff, nor the purpose for which it was to be used; he
In Day v. Reynolds, 23 Hun 131, where it was held there was no liability, it was remarked that there was no reason, without proof of the fact, why the defendant, who made the search, should know that the mortgagor,' or his agent who procured the making of the search, was to use it in a transaction with the plaintiff, the mortgagee, or with any one else..
In Mechanics Building Assn. v. Whitacre, 92 Ind. 547, it was said that it is not by law made the duty of a county recorder to search the records and certify to the conditions of titles, but if a county recorder, for a consideration, undertook to search the records and certify to the title of real estate, and as to whether or not it was encumbered, “he would be liable upon such undertaking just as would any other person; he would be liable to the party who employed him, but not to such as might simply see and rely upon such certificate.” Citing Savings Bank v. Ward, 100 U. S. 195.
In Schade v. Gehner, 133 Mo. 252, 34 S. W. 576, it was held that the right of action for negligence in the examination of the title to land does-not exist in favor of others than the parties to the contract or their privies, although damages may have resulted to such other persons by reason of the negligence. In that case, the examination having been made for a purchaser, and under employment by him, it was held that a right of action for such negligence did not exist in favor of the purchaser’s widow and sole devisee and legatee.
In Buckley v. Gray, 110 Cal. 339, 42 Pac. 900, 31 L. R. A. 862, — an action against an attorney to recover for his negligence in drafting and executing the will of the plaintiff’s mother, whereby the plaintiff was deprived of benefits intended by the testatrix, — it was held that there could be-no recovery.- The court stated, as a general doctrine, that an •attorney is liable for negligence in the conduct of his pro- - fessional duties, arising only from ignorance or want of care, to his client alone, — -that is, to the one between whom andX the attorney the contract of employment and service existed, and not to third parties; that where there has been no fraud or collusion or malicious or tortious act, the rule is universal that for injury arising from mere negligence, however gross, there must exist between the party inflicting the injury and the one injured some privity by contract or otherwise, by reason of which the,former owes some legal duty to' the latter.
Lawall v. Groman, 180 Pa. St. 532, 31 Atl. 98, was an action to recover damages for alleged loss occasioned by the negligence of an attorney at law. It was said by the court that if the defendant, the attorney, knowing that the plaintiff, the lender, was relying upon him in his professional capacity to see that her mortgage was the first lien, although Roberts, the borrower, was to pay the fees, undertook to perform that duty, he was bound to do it with ordinary and reasonable skill and care in his profession, and would be liable for negligence in that respect.
In Siewers v. Commonwealth, 87 Pa. St. 15, it was said that for the accuracy and truthfulness of his search and certificate a prothonotarv was responsible to the persons who employed him to render the service, and not to others; yet where
It is very well known that the owner of real estate seldom incurs the expense of procuring an abstract of the title from an abstracter, except for the purpose of thereby furnishing information to some third person or persons who are to be influenced by the information thus provided. If the abstracter in all eases be responsible only to the person under whose employment he performs the service, it is manifest that the loss occasioned thereby must in many cases, if not in most cases, be remediless. "Where the abstracter has no knowledge that some person other than his employer will rely in a pecuniary transaction upon the correctness of the abstract, the general rule that his duty extends only to his employer must be maintained. How far exceptions ought to be countenanced, we will not now undertake to say, but, confining ourselves to the case before us, we are .of the opinion that the facts stated in the complaint are sufficient to put the defendant to his answer. Here there was actual communication between the abstracter and the person for whose information the abstract was prepared. The appellant had refused to make the loan until he should be furnished with an abstract, and the abstracter was informed that his abstract was to be used for the particular purpose of inducing the plaintiff to make a loan secured by mortgage on this real «state. He delivered the abstract to the appellant for his use, and certified it to be a correct and true abstract of title;
The judgment is reversed, and the cause remanded, with instructions to overrule the demurrer to the complaint.
Henley, J., dissents.