Conway v. Title Ins. Co.
| Decision Date | 10 May 1973 |
| Citation | 291 Ala. 76,277 So.2d 890 |
| Parties | Maudine D. Neese CONWAY v. TITLE INSURANCE COMPANY, a corporation. SC 78. |
| Court | Alabama Supreme Court |
Samuel L. Stockman, Mobile, for appellant.
Charles B. Bailey, Jr., Mobile, for appellee.
This is an appeal from a decree of the Circuit Court of Mobile County, Alabama, adjudging and decreeing in substance that any damage suffered by the appellant here was not within the coverage of a title insurance policy issued by Title Insurance Company to the appellant, Mrs. Maudine D. Neese Conway.
The evidence introduced below amply tends to show that on 7 May 1965, this appellant purportedly foreclosed a mortgage given by Gulf Development Company to secure a loan made to Gulf by the appellant. The land covered by the mortgage included a large number of lots in two subdivisions being developed by Gulf, including Lot 8 of the First Unit of Gulf Hills subdivision. Lot 8, with the house thereon, had been sold by Gulf to Francis Andrews in 1957 for $29,500.00. Andrews had made improvements on the house and lot amounting to $5,500.00.
As Gulf would sell the lots in its subdivision they would routinely be released from the mortgage upon the payment of $1,200.00 to Mrs. Conway, the mortgagee. Every lot sold by Gulf in the subdivisions had been so released except Lot 8 sold to Andrews. The appellant Conway was fully aware of this releasing procedure. Unfortunately for Andrews he neglected to obtain a release of Lot 8 from the mortgage upon purchasing it.
Mrs. Conway's husband, who is an attorney and was her agent, admitted that no attempt was made to give Andrews actual notice of the foreclosure sale because of fear that Andrews would seek to obtain a belated release of his lot from the mortgage by the payment of $1,200.00. The evidence also showed that Mrs. Conway became aware of the sale of Lot 8 to Andrews and that his lot had not been released from her mortgage sometime prior to 8 August 1964, and that she became personally aware that Andrews was occupying the home on Lot 8 when in August 1964 she moved into a house in Gulf Hills subdivision located about a block from Andrews' house on Lot 8.
Gulf being in default on the mortgage, Mrs. Conway, on 7 May 1965, purportedly foreclosed the Gulf mortgage and obtained a foreclosure deed, having bid $50,000.00 at the mortgage sale. The next day she procured from Title Insurance Company the policy of title insurance here sued on.
The purported foreclosure sale was set aside by the Circuit Court of Mobile County because of the misconduct of appellant or her agents in attempting to conceal from Andrews the fact that he could clear his title by paying $1,200.00 for a release of his property from the mortgage. This decree was affirmed by this court on 28 May 1970, on the basis that the appellant engaged in conduct deliberately calculated to conceal from Andrews the existence of a mortgage lien upon his home, i.e., Lot 8, and also that Mrs. Conway had attempted to pervert the power of sale contained in the mortgage from its legitimate purpose and to use it for the purpose of oppressing and debtor and thereby obtain the property for herself. See Conway v. Andrews, 286 Ala. 28, 236 So.2d 687.
This same title defect was present and known to the appellant or her agents at the time she procured the policy of title insurance from the appellee.
This appellant, still seeking to obtain benefits from her conduct already adjudged wrongful in Conway v. Andrews, supra, brought an action at law from damages against Title Insurance claiming she had suffered damages resulting from a defect in the title to the property which had been insured by Title Insurance.
On Motion of Title Insurance this suit was transferred to equity. Thereafter Title Insurance filed its bill in equity praying that the court declare that the defect against the property insured, insofar as Lot 8 was concerned, was created by Mrs. Conway, and there was no liability on the part of Title Insurance Company under the policy, and also that Mrs. Conway should not recover under the policy here involved because the defect in the title was known to Mrs. Conway and was not of public record, and had never been made known to the insurer in writing, and further that such defect resulted from the fact that Andrews was in possession of the property at the...
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