Land Title Co. of Alabama v. State ex rel. Porter

• Decision Date: 08 August 1974
• Parties: LAND TITLE COMPANY OF ALABAMA, an Alabama corporation v. STATE of Alabama ex rel. Irvine C. PORTER et al. SC 566.
• Court: Alabama Supreme Court

Page 289

299 So.2d 289

292 Ala. 691

LAND TITLE COMPANY OF ALABAMA, an Alabama corporation v. STATE of Alabama ex rel. Irvine C. PORTER et al.

SC 566.

Supreme Court of Alabama.

Aug. 8, 1974.

Rehearing Denied Sept. 12, 1974.

Spain, Gillon, Riley, Tate & Ansley and S. R. Starnes and Ollie L. Blan, Jr., Birmingham, for appellant.

William H. Morrow, Jr., Montgomery, for appellee.

William M. Acker, Jr., Birmingham, for Lawyers Title Ins. Corp., Douglas P. Corretti, Birmingham, for American Title Ins. Co., James M. Tingle, Birmingham, for Louisville Title Ins. Co. and Alabama Title Company, Inc., Shuford B. Smyer, Birmingham, for Miss. Valley Title Ins. Co. and Jefferson Land Title Services, Inc., and Minnesota Title Insurance Co., amici curiae.

HARWOOD, Justice.

On 8 June 1971, the State of Alabama on the relation of Irvine C. Porter, as Chairman of the Unauthorized Practice of Law Committee of the Alabama State Bar, and Irvine C. Porter, individually, filed a petition for a Writ of Quo Warranto and Bond for Costs in the Circuit Court of Blount County, Alabama.

The petition asserted that in five instances the defendant, Land Title Company of Alabama, an Alabama Corporation, had intruded into the practice of law in that for a consideration it advised others as to secular law. The petition further asserts that in the five mentioned instances the defendant made an examination of the public records of Blount County affecting the title to certain real property located therein. (Descriptions of the five parcels of land are separately set forth.)

The petition asserts that based upon such examination, and acting through lay personnel, who were not licensed to practice law in Alabama, the defendant rendered an opinion of title as to the respectively described real properties. In each form the 'Commitment for Title Insurance' designated as the proposed insured State National Bank of Oneonta, Alabama. The petition asserts that the 'Commitment for Title Insurance' in each instance contained among other things the following language:

'The estate or interest in the land described or referred to in this Commitment and covered herein is a fee simple, and title thereto is at the effective date hereof vested in: * * *' (Here the owners are named.)

The petition then continues:

'The 'Commitment for Title Insurance' delineated certain exceptions and incumbrances affecting the 'fee simple' title to real property. A copy of the 'Commitment for Title Insurance' is attached hereto and made a part hereof as Exhibit 'A.'

'The defendant thus rendered an opinion of title as to the real property described therein to the proposed lender, State National Bank, Oneonta, Alabama, and, on, to-wit: (date specified), and in reliance upon this opinion of title, the lender made a loan to (certain named party or parties) in the sum of (amount specified) secured by a mortgage on the real property as to which the defendant had rendered the above described opinion of title. The defendant made a charge for examining in public records of Blount County, Alabama, and rendering an opinion of title which charge was in excess of and in addition to the premium for issuance of a policy of title insurance.'

The petition prayed that the defendant, Land Title Company of Alabama, be excluded from the practice of law by order of the court, and be enjoined from further engaging in any acts which constitute the practice of law.

The defendant filed a Plea in Abatement based upon vanue and jurisdiction, and the plaintiff's demurrer to this plea was sustained. The defendant then filed a demurrer to the petition, which was overruled. Pleas and answers were then filed by the defendant asserting that the acts charged to the defendant were permitted by Section 42, Title 46, Code of Alabama, Recompiled 1958, and did not constitute an unauthorized practice of law.

A motion for judgment on the pleading was then filed by the plaintiffs and was later amended. The defendant filed an answer to this motion attaching as exhibits affidavits of two of its officers, William F. Miller and John C. Miller, President and Executive Vice President respectively of the defendant company.

Mr. William F. Miller's affidavit was to the effect that he was familiar with the Commitments named in the petition, and the circumstances surrounding their issuance; that the defendant was requested by the owners of the property described in each Commitment to issue title insurance in connection with the sale of the property; that all information was received from said owners; that based on a review of the records of Blount County, decision was made to issue the respective Commitments to insure the various properties, provided certain conditions and requirements were complied with; the Commitments with invoices therefor were sent to the different owners, and at no time were any Commitments sent to the State National Bank nor were any charges made to the Bank; the Commitments were issued as preliminaries to the issuance of policies of title insurance, and were not intended to be used as opinions of title, and were not, to Mr. Miller's knowledge, relied on by State National Bank as such. The Commitments were on standard forms approved by the American Land Title Association and were used by most, if not all, title insurance companies in Alabama.

The affidavit of Mr. John C. Miller as Executive Vice President of the defendant company, is largely to the same effect as that of William F. Miller.

On 21 August 1973, the plaintiffs filed an affidavit of H. G. NeSmith, Vice President of State National Bank. This affidavit set forth the loans made to the respective owners, and concluded that the Bank relied upon the statement that the proposed borrowers were vested with a fee simple title, and but for this representation by Land Title Company, State National Bank would not have made the loan and accepted as security therefor a mortgage on the real property described in the 'Commitment for Title Insurance.'

The case came on for a pre-trial hearing before Hon. L. P. Waid, Judge of the Circuit Court of Blount County, on 23 August 1973. At that time the defendant moved for a continuance to obtain other affidavits or depositions to oppose the affidavit of NeSmith, filed by the plaintiffs. The court refused this motion and stated it was going to grant judgment in favor of the plaintiffs. Thereupon the defendant filed a motion for reconsideration, a motion to set a new pre-trial conference date, and a motion to strike NeSmith's affidavit. Each motion was supported by affidavits of defendant's attorney. These motions were denied by the court on 23 August 1973.

On 19 September 1973, the court entered summary judgment finding that the defendant had unlawfully intruded into the practice of law, and ordered the defendant to cease and desist from performing all of the acts set forth and charged in the Petition for Quo Warranto.

The defendant has perfected its appeal from this decree.

There was no oral hearing involved in this cause, it being considered by the court on the pleadings, and the affidavits submitted.

A number of points are argued in brief of appellant as constituting error in the court's decree, among these being the court's finding that language of the 'Commitment for Title Insurance' constituted an opinion of title; that the court abused its discretion in denying appellant's motions to reconsider, to continue the matter, to set a new pre-trial hearing, and to strike NeSmith's affidavit, and in considering the same as evidence. As to the consideration of NeSmith's affidavit as evidence, it is vigorously argued that this affidavit is faulty in that it is merely a conclusory statement not made on personal knowledge and does not comply with Rule 56(e) of the Alabama Rules of Civil Procedure, thus furnishing no basis for summary judgment. In support of this argument, appellant cites Doza v. American National Ins. Co., (8th Cir.), 314 F.2d 230, and Union Insurance Soc. of Canton, LTD v. William Gluckin & Co., (2nd Cir.), 353 F.2d 946.

The threshold and primary issue presented is, however, whether the issuance of a 'Commitment for Title Insurance' preliminary to the issuance of a policy of title insurance, containing language such as was contained in the Commitment here being considered, constitutes the practice of law.

Originally title insurance companies were regulated by various Acts which for convenience may be found as Article 10, Sections 169--177, entitled 'Corporations Issuing Guaranties of Title to Land,' Title 10, 1958 Recompiled Code of Alabama. It is interesting to note that under the provisions of Section 169 of said Article 10, it was provided that if from the examination by the Superintendent of Insurance, required to be made every two years, it was found that a title insurance company was engaged in preparing or drawing deeds, conveyances, mortgages, or any document affecting secular rights, unless such company owned a proprietary interest in the property, or if such examination revealed that a company was violating any of the provisions of Section 42, Title 46, Code of Alabama 1940, the Superintendent must certify such finding to the Attorney General who must then bring an action to enjoin such acts by the title insurance company.

It appears that all of Article 10, above mentioned, was repealed by Act No. 407, 1971 Acts of Alabama, p. 1067, effective 1 January 1972.

By Act No. 407, 1971 Acts of Alabama, p. 709, (Alabama Insurance Code) to be found as Title 28A, Sections 1--810, 1973 Cumulative Supplement to 1958 Recompiled Code of Alabama, effective 1 January 1972, all insurance companies including title insurance companies, are brought within the provisions of the Alabama Insurance Code. The only specific references in said Insurance Code to title insurance companies are Sections 94 and 494 of Title 28A.

Section 94 merely defines title insurance in the following terms:

'Title...