Gleason v. Title Guarantee Company
| Decision Date | 30 March 1962 |
| Docket Number | No. 18998.,18998. |
| Parties | William H. GLEASON, Appellant, v. The TITLE GUARANTEE COMPANY, Appellee. |
| Court | U.S. Court of Appeals — Fifth Circuit |
Charles Cook Howell, William M. Howell, Jacksonville, Fla., Erskine W. Landis, DeLand, Fla., Howell, Kirby, Montgomery & Sands, Jacksonville, Fla., Hull, Landis, Graham & French, DeLand, Fla., of counsel, for appellant.
Earl D. Waldin, Jr., David W. Dyer and Louis S. Bonsteel, Miami, Fla., Smathers, Thompson & Dyer, Miami, Fla., of counsel, for appellee.
Before TUTTLE, Chief Judge, and JONES, and WISDOM, Circuit Judges.
The plaintiff, The Title Guarantee Company of Baltimore, Maryland, sued William H. Gleason, a title examining attorney, for damages sustained when various mortgages that it had guaranteed as first mortgages, in reliance on Gleason's certification of clear title, proved to be subordinate to certain other mortgages. Gleason appeals from a summary judgment for the plaintiff. We affirm, subject to a redetermination of damages.
The Title Guarantee Company does business in Florida and has local representatives to handle details of the transactions. The thirteen mortgages involved in this action were handled for the plaintiff by either Sun Coast Home Title Company or Guardian Title Company. These companies selected Gleason from a list of attorneys previously approved by Title Guarantee to make title examinations and verify that the mortgages to be guaranteed were not subordinate to any other mortgages. Gleason introduced substantial testimony showing that during the summer of 1956, when these transactions occurred, there was great activity in real estate in Brevard, Florida, because of the construction of great national facilities at Cape Canaveral. The county recording office was swamped with filings to the point that its indices were several weeks behind. It was therefore virtually impossible to make a complete up-to-the-minute search of a title. Nevertheless, for each mortgage Gleason signed a written certification that he had made "a personal examination of all public records, which contain any or all information pertaining to or affecting the title to the real estate described * * * or of an abstract purporting to contain the contents of all such records. * * *" In his testimony, Gleason acknowledged that he had not in fact examined either the public records or a written abstract but had relied, at least in part, on information given him over the telephone by the abstract company. He acknowledged also the impossibility of his having made the examination that his written certification indicated he had made. He argued, however, that it was customary in Brevard County, Florida, at that time, for lawyers to make certifications of title as he had done, and that he had informed agents of the plaintiff of the basis on which he was making the certifications.
The thirteen mortgages involved here were executed by P. A. Cutri Company and were sold either to J. I. Kislak Mortgage Corporation of Florida or to the First National Bank of Dunedin, Florida. When it was discovered that these mortgages were not valid first mortgages, Title Guarantee stepped in and purchased the superior mortgages at a cost of $83,979. It obtained a summary judgment against Gleason in that amount and tendered to the district court the collateral it acquired in removing the prior liens. The court ordered this collateral delivered to Gleason upon satisfaction of the judgment.
While custom provides an important indication of what constitutes reasonable care and what is negligent, it is not dispositive of the question at issue. The T. J. Hooper, 2 Cir., 1932, 60 F.2d 737. All customs are not good customs, and lawyers have no prescriptive right to make knowingly false statements in the name of custom. "No degree of antiquity can give sanction to a usage bad in itself."1 We can sympathize with the defendant in the fact that he is to be heavily penalized for following the custom while others, perhaps even those who established the custom, may escape adverse consequences. Nevertheless, the custom was improper, and its existence cannot alter Gleason's responsibility to one who has relied on his certification. Gleason should have realized that Title Guarantee in Baltimore would rely on the certification and perhaps would suffer losses because of it.
Gleason's second contention is that Title Guarantee cannot say that it relied on his written representation since he...
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