The plaintiffs, Robert E. Butcher and Gladys K. Butcher, appeal from an order issued by Wayne County Circuit Judge Charles Kaufman granting defendant Burton Abstract and Title Company’s motion for summary judgment. The facts precipitating this appeal are not disputed.
The plaintiffs purchased property in Grosse lie. Township on June 16, 1966. Defendant issued its owner’s title insurance policy covering the property dated July 21, 1966. The terms of the policy contract insured the plaintiffs "against all loss or damage * * * which the insured shall sustain by reason of the failure or unmarketability of the title * * * excepting only such liens, incumbrances and other matters as set forth * * * and subject to the conditions and stipulations * * * hereto annexed”. The first annexed condition reads:
"The Burton Abstract and Title Company will, at its own cost, defend the insured in all actions or proceedings founded on a claim of title or incumbrance prior in date to this policy, except as to items specifically excluded.”
Plaintiffs claim that various charges not excepted by the policy instituted by the township of Grosse He, and attorney’s fees expended in previous litigation contesting aspects of those charges, give rise to damages under the policy contract.
The charges in question placed against the property by the township of Grosse He include the following:
*100 "(1) annual ad valorem taxes assessed against the township of Grosse He by the Grosse lie sanitary interceptor drain and treatment plant drainage district, pursuant to chapter 20 of the drain code of 1956, to pay the costs of the sewage plant (the first payment was due December 1, 1965 and had been paid by the previous owner; 29 additional assessments would be required to retire the 30-year sewer bonds);
"(2) annual ad valorem taxes assessed against Grosse Ile Township to retire Grosse Ile Board of Education school bonds approved in 1955, 1958, and 1963 by the electorate, which taxes are due each December 1st;
"(3) a special assessment exceeding $2,000 subjected by a township ordinance (effective June 27, 1966), passed to help pay for a sewer installed in front of plaintiffs’ property in 1965, and various sewer connection charges pursuant to this ordinance.”
After being informed by the township of the sewer charges on September 27, 1967, 14 months after the title insurance policy was issued, the plaintiffs began a suit prior to the instant litigation which contested the charges imposed by the township ordinance mentioned above and the validity of the ordinance itself as well as the validity of MCLA 123.192; MSA 5.2767(102) which required plaintiffs’ to connect to the public sewer and made the property subject to charges pursuant to such connection. For the history of this prior litigation, see
Butcher v Grosse Ile Twp,
The critical question presented by these facts is whether the charges placed against plaintiffs’ property by the township of Grosse He constitute encumbrances within the meaning of that term as used in the title insurance policy contract.
Judge Charles Kaufman decided the question adversely to the plaintiffs in a thorough, scholarly, 17-page opinion. We agree with his decision to grant the motion for summary judgment.
The charges claimed to be encumbrances on the plaintiffs’ title can be classified as either special assessments (the connection charges and possibly the ad valorem sewer taxes) or prospective general ad valorem taxes (the school taxes and the ad valorem sewer taxes). The plaintiffs concede that none of the charges were due at the time the title insurance policy was issued and plaintiffs even admit in their brief that none of the charges constituted liens on the property.
Granting that the broadest definition of the word "encumbrance” might include prospective charges, the general rule is that a special assessment does not become an encumbrance until it has achieved lien status.
Municipal Investors Ass’n v City of Birmingham,
"Title insurance operates to protect a purchaser or a mortgagee against defects in or incumbrances on a title existing at the date of such insurance. It is not prospective in its operation and has no relation to liens or requirements arising thereafter.
"It follows, we think, that Lawyers Title & Guaranty Company no more agreed with plaintiff to protect him against liability for the unpaid assessment in question than it undertook to indemnify him for taxes to be levied against the premises after delivery of its certificate of title insurance.”268 NY 323 , 324;197 NE 296 , 297-298.
Since none of the charges the plaintiffs claim as encumbrances were either due or liens at the date of the issuance of the title insurance policy, they do not constitute liens or encumbrances within the meaning of the policy terms. The motion for summary judgment was properly granted.
Affirmed. Costs to defendants.