Lawyers Title Ins. Corp. v. Research Loan & Invest. Corp., No. 17996.

CourtUnited States Courts of Appeals. United States Court of Appeals (8th Circuit)
Writing for the CourtVAN OOSTERHOUT and MEHAFFY, Circuit , and MEREDITH
PartiesLAWYERS TITLE INSURANCE CORPORATION, Appellant, v. RESEARCH LOAN & INVESTMENT CORPORATION, Appellee.
Docket NumberNo. 17996.
Decision Date08 July 1966

361 F.2d 764 (1966)

LAWYERS TITLE INSURANCE CORPORATION, Appellant,
v.
RESEARCH LOAN & INVESTMENT CORPORATION, Appellee.

No. 17996.

United States Court of Appeals Eighth Circuit.

June 15, 1966.

Rehearing Denied July 8, 1966.


361 F.2d 765

Bob J. Keeter, of Mann, Walter, Powell, Burkart & Weathers, Springfield, Mo., Jack A. Powell, Springfield, Mo., on the brief, for appellant.

B. H. Clampett, Springfield, Mo., E. Wayne Collinson, Springfield, Mo., on the brief, for appellee.

Before VAN OOSTERHOUT and MEHAFFY, Circuit Judges, and MEREDITH, District Judge.

MEREDITH, District Judge.

Appellant, Lawyers Title Insurance Corporation (hereinafter referred to as Insurance Corporation), appeals from a judgment of the United States District Court for the Western District of Missouri in favor of appellee, Research Loan and Investment Corporation (hereinafter referred to as Research), in the amount of $20,701.66, with interest at six percent from the date of demand amounting to $3,312.16, for a total of $24,013.82, and costs. Jurisdiction is based on diversity of citizenship, Insurance Corporation being a citizen and resident of Virginia, and Research being a citizen and resident of Missouri.

This action was brought to recover on a policy of title insurance issued by appellant to appellee on November 30, 1961. For the sake of clarity, we shall relate the background facts which were stipulated before turing to the disputed issues.

The title insurance policy covered two tracts of land lying in or near Meadowbrook Manor subdivision in Springfield, Missouri, which we label for discussion as Tract 1 and Tract 2. In June 1960, Tract 1 was owned by Jamdo Corporation, the majority stockholders of which were G. E. Barnhouse and his wife and J. Don Helms and his wife. Tract 2 was purchased by the Helms from J. D. and Jacqueline Gillenwaters on June 3, 1960. The Helms gave the Gillenwaters a promissory note in the amount of $50,264.91 and secured the note with a deed of trust on Tract 2. Also on June 3, 1960, Jamdo Corporation and the Helms borrowed $70,000 from the Inglis Mortgage Company, executing a promissory note signed by Jamdo and by the Helms. To secure this note, Inglis was given a second deed of trust on Tract 1 and a third deed of trust on Tract 2. Both tracts were conveyed to Kenneth P. Berg and his wife on November 29, 1960. At this time the Helms remained personally obligated on the $70,000 Inglis note and the $50,264.91 Gillenwaters note. The Bergs, in order to secure improvement loans,1 placed four

361 F.2d 766
deeds of trust on lots in Tract 1 during the time they owned the property. On July 28, 1961, the Bergs conveyed both tracts to Motel and Apartment House Developers, Inc. On September 1, 1961, Mr. Helms received a letter from the Gillenwaters' attorney stating that the promissory note given to the Gillenwaters was delinquent. A default and foreclosure on the Gillenwaters note and deed of trust would have jeopardized the $70,000 note to Inglis on which Helms and his wife were still personally obligated. On September 27, 1961, Motel and Apartment House Developers, Inc., conveyed the property to Jamdo Corporation. There was no monetary consideration for this transfer but the deed recited that
"Grantee accepts property described above subject to mortgages, liens, and indebtedness of all nature, and agrees to make payment on same, without any recourse against Grantors."

At this time Barnhouse was president of Jamdo and J. Don Helms was secretary. On October 23, 1961, Jamdo Corporation conveyed the property to appellee, Research. Again there was no monetary consideration, the deed containing the same clause as that set out above. Both of these deeds were recorded on November 1, 1961. The majority stockholders of Research at this time were J. Don Helms and his wife and Dean Saxton and his wife, and both Helms and Saxton were officers. On November 6, 1961, Don Helms and Dean Saxton went to Jack Hogan, vice-president of the Thieme-Hunt Abstract Co. and Insurance Corporation's agent, and requested a title insurance policy. No written application was made, the request being handled on an informal basis. No inquiry was made by Mr. Hogan as to what knowledge, if any, Mr. Helms and Mr. Saxton had concerning encumbrances.

A policy of title insurance, policy number Y-867-607, for which Research paid $195 was issued on November 30, 1961. Insurance Corporation agreed to pay Research all loss or damage, not exceeding $100,000, which it

"* * * shall sustain by reason of any defects in the title of the Insured to the estate or interest of the Insured covered by this Policy * * * or by reason of liens or encumbrances against the same as of the date of the final examination of the title thereto, to-wit: November 30, 1961 at 8:00 A.M."

Schedule B of the policy sets out a description of the two tracts of land involved. Schedule C lists certain encumbrances, liens, etc., which are excepted from the coverage of the policy. The deed of trust to the Gillenwaters and certain easements and rights not here pertinent are listed in Schedule C. The $70,000 Inglis deed of trust and the four small encumbrances placed on the property by the Bergs are not listed in Schedule C. The policy contained the following conditions and stipulations:

"3. Nothing contained in this Policy shall be construed as insuring against loss or damage by reason of fraud on the part of the Insured; or by reason of claims arising under any act, thing, or trust relationship done, created, suffered or permitted by the Insured; or by reason of the fact that the Insured was not a bona fide purchaser for value without notice, or that the acquisition of the estate or interest hereby insured contravened the laws of the United States establishing a uniform system of bankruptcy; or against the rights of dower, courtesy, or homestead, if any, of the spouse of the Insured; nor will the Company be liable in any event for any loss or damage arising from the refusal of any party to carry out any contract to purchase, lease or loan money on the estate or interest insured.
"9. Defects and encumbrances arising after the effective date of this Policy, or created, suffered, assumed or agreed to by the Insured, and taxes and assessments which have not become liens up to the effective date of this Policy, or which, although they have become liens, are not payable until
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25 practice notes
  • Stewart Title Guar. Co. v. West, No. 1077
    • United States
    • Court of Special Appeals of Maryland
    • September 1, 1995
    ...Service Co. v. Baebler, 484 S.W.2d 1, 18 (Mo.1972)[676 A.2d 961] ; Lawyers Title Insurance Corp. v. Research Loan & Investment Corp., 361 F.2d 764, 767 (8th Cir.1966); Luboff v. Security Title & Guaranty Co., 46 Misc.2d 599, 260 N.Y.S.2d 279, 283 When an insured notifies an insurer of a tit......
  • Falmouth Nat. Bank v. Ticor Title Ins. Co., No. 90-1335
    • United States
    • United States Courts of Appeals. United States Court of Appeals (1st Circuit)
    • September 7, 1990
    ...policies. Brown v. St. Paul Title Ins. Corp., 634 F.2d 1103, 1107 (8th Cir.1980); Lawyers Title Ins. Corp. v. Research Loan & Inv. Corp., 361 F.2d 764, 768 (8th Cir.1966); Sandler v. New Jersey Realty Title Ins. Co., 36 N.J. 471, 479, 178 A.2d 1, 5 (1962); 9 Appleman, Insurance Law and Prac......
  • L. Smirlock Realty Corp. v. Title Guarantee Co.
    • United States
    • New York Court of Appeals
    • February 19, 1981
    ...with such a duty to speak intentionally failed to disclose the information." (Lawyers Tit. Ins. Corp. v. Research Loan & Inv. Corp., 361 F.2d 764, 768.) In a like manner, other jurisdictions which have addressed similar clauses have required a showing that the insured had actual knowledge o......
  • Nationwide Life Ins. Co. v. Commonwealth Land Title Ins. Co., CIVIL ACTION NO. 05-281
    • United States
    • United States District Courts. 3th Circuit. United States District Court (Eastern District of Pennsylvania)
    • February 17, 2011
    ...that Commonwealth cites support its argument that Exclusion 3(a) applies. See Lawyers Title Ins. Corp. v. Research Loan & Inv. Corp., 361 F.2d 764, 767-69 (8th Cir. 1966) (noting that although there was no evidence of plaintiff's actual knowledge of defect, court found that plaintiff had as......
  • Request a trial to view additional results
25 cases
  • Stewart Title Guar. Co. v. West, No. 1077
    • United States
    • Court of Special Appeals of Maryland
    • September 1, 1995
    ...Service Co. v. Baebler, 484 S.W.2d 1, 18 (Mo.1972)[676 A.2d 961] ; Lawyers Title Insurance Corp. v. Research Loan & Investment Corp., 361 F.2d 764, 767 (8th Cir.1966); Luboff v. Security Title & Guaranty Co., 46 Misc.2d 599, 260 N.Y.S.2d 279, 283 When an insured notifies an insurer of a tit......
  • Falmouth Nat. Bank v. Ticor Title Ins. Co., No. 90-1335
    • United States
    • United States Courts of Appeals. United States Court of Appeals (1st Circuit)
    • September 7, 1990
    ...policies. Brown v. St. Paul Title Ins. Corp., 634 F.2d 1103, 1107 (8th Cir.1980); Lawyers Title Ins. Corp. v. Research Loan & Inv. Corp., 361 F.2d 764, 768 (8th Cir.1966); Sandler v. New Jersey Realty Title Ins. Co., 36 N.J. 471, 479, 178 A.2d 1, 5 (1962); 9 Appleman, Insurance Law and Prac......
  • L. Smirlock Realty Corp. v. Title Guarantee Co.
    • United States
    • New York Court of Appeals
    • February 19, 1981
    ...with such a duty to speak intentionally failed to disclose the information." (Lawyers Tit. Ins. Corp. v. Research Loan & Inv. Corp., 361 F.2d 764, 768.) In a like manner, other jurisdictions which have addressed similar clauses have required a showing that the insured had actual knowledge o......
  • Nationwide Life Ins. Co. v. Commonwealth Land Title Ins. Co., CIVIL ACTION NO. 05-281
    • United States
    • United States District Courts. 3th Circuit. United States District Court (Eastern District of Pennsylvania)
    • February 17, 2011
    ...that Commonwealth cites support its argument that Exclusion 3(a) applies. See Lawyers Title Ins. Corp. v. Research Loan & Inv. Corp., 361 F.2d 764, 767-69 (8th Cir. 1966) (noting that although there was no evidence of plaintiff's actual knowledge of defect, court found that plaintiff had as......
  • Request a trial to view additional results

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