Brown v. Sims
| Decision Date | 10 May 1899 |
| Docket Number | 2,815 |
| Citation | 53 N.E. 779,22 Ind.App. 317 |
| Parties | BROWN v. SIMS |
| Court | Indiana Appellate Court |
From the Clinton Circuit Court.
Reversed.
Claybaugh & Claybaugh, for appellant.
Guenther & Clark and H. C. Sheridan, for appellee.
OPINION
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 Henry H. Hackerd, 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 Hackered 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 represent 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 Hackerd; 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 Hackerd, 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 Hackerd on the 11th day of June, 1895, and accepted a mortgage on said real estate, executed by said Henry H. Hackerd and Martha E. Hackerd, his wife, to secure said loan, and delivered to said Henry H. Hackerd said sum of $ 400.
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 pendens 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 H. Hackerd and Martha E. Hackerd, 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 Henry H. 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 lis pendens 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 lis 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 best bidders, they purchased said real estate for the amount of their judgment, interest, and costs and attorney's fee, being the full value of said real estate.
It is further shown that said mortgage became subject to be foreclosed by failure of said Henry H. 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 H. Hackerd, who filed his schedule claiming his exemption; that said Henry H. 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.
One who holds himself out as an examiner of titles to real estate, and maker of abstracts thereof impliedly undertakes that he possesses the requisite knowledge and skill for such employment, and if he contract to render such service, he is bound to exercise ordinary skill and care in making the examination and the abstract. Chase v. Heaney, 70 Ill. 268; Lattin v. Gillette, 95 Cal. 317, 30 P. 545. Actionable negligence exists only when the party whose negligence occasions the loss owes a duty, arising from contract or otherwise, to the person sustaining the loss. Kahl v. Love, 37 N.J.L. 5. In Zweigardt v. Birdseye, 57 Mo.App. 462, it was held that where the abstract and certificate were made for the owner of the land, and not for one to whom he conveyed it, nor for such owner as agent of such grantee, the grantee, relying thereon, and suffering loss because of encumbrances not shown by the abstract, could not recover from the abstracter. It was said that the rule applies even where the abstracter has knowledge that the certificate as to title is to be used in a sale or loan to advise the purchaser or lender. In Savings Bank v. Ward, 100 U.S. 195, 25 L.Ed. 621, the attorney never came in contact with the lender or his agents, but made his report at the sole request of the claimant of the land, the borrower; there being no fraud or collusion. It was held that the lender...
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