Mechanics Building Association v. Whitacre

• Decision Date: 16 November 1882
• Docket Number: 9013
• Citation: 92 Ind. 547
• Parties: The Mechanics Building Association v. Whitacre
• Court: Indiana Supreme Court

92 Ind. 547

The Mechanics Building Association v. Whitacre

No. 9013

Supreme Court of Indiana

November 16, 1882

Rehearing: January 11, 1884.

Petition for a Rehearing Overruled, Reported at: 92 Ind. 547 at 554.

From the Wayne Circuit Court.

The judgment is reversed, at the costs of the appellee.

C. H Burchenal and B. F. Harris, for appellant.

W. D Foulke and J. L. Rupe, for appellee.

OPINION

Morris, C.

This action was brought by the appellant against the appellee, to recover damages alleged to have been sustained through the negligence of the latter.

The complaint contains two paragraphs. The first states, in substance, that one Isaac Lammert executed a mortgage on certain real estate situate in Wayne county, Indiana, to one Hettle to secure a debt of $ 500 and interest, which mortgage had been duly recorded in the recorder's office of said county, and duly indexed in the general index of mortgages in said office, and was, and appeared of record to be, a valid lien on said real estate; that on the 19th day of August, 1871, the defendant, being then the recorder of said county, and, as such, having the custody of the mortgage records and index of said county, entered and recorded, upon the margin of the page upon which said mortgage had been recorded, an instrument of satisfaction, purporting to have been made and acknowledged by said mortgagee as follows:

"Received payment for the within mortgage this 19th day of July, 1871.

S. L. Hettle.

"State of Indiana, Wayne County: Before me, the undersigned, a notary public in said county, personally came Squire L. Hettle, and acknowledged the execution of the above release, this 19th day of July, 1871.

"Abel L. Study, Notary Public. [SEAL.]"

And that the defendant, according to the uniform custom of recorders of mortgages in said office, entered in the general index of mortgages that said mortgage had been satisfied July 19th, 1871; that said mortgage appeared satisfied and discharged, whereas no such satisfaction had in fact been made; that said instrument, so entered and recorded by said appellee, had been executed by said Hettle upon the back of another mortgage upon other land, and not being designed to apply to the one in question, and being so recorded by the appellee through negligence on his part; that while the said Hettle mortgage so appeared to be satisfied, said Lammert applied to the appellant to obtain a loan of money upon the security of a mortgage upon the same real estate, and produced to the appellant a certificate, made and signed by the appellee as such recorder, attested by his official seal, dated September 20th, 1871, certifying that there were then no unsatisfied mortgages on said real estate; that the plaintiff, having caused an examination to be made of said records and said certificate, and the same appearing to be correct, and no encumbrance appearing against said real estate unsatisfied, said plaintiff, on the faith of said release of said Hettle mortgage, so made and appearing of record as aforesaid, and of the said certificate, and having no notice or knowledge that any part of said Hettle mortgage remained unsatisfied, made to said Lammert a loan of $ 990, and took from him a mortgage on said real estate to secure the same, together with interest, dues and fines according to the laws and usages of said appellee, which mortgage was duly recorded; that said Lammert was then solvent, and so continued, and continued to pay his interest, dues, etc., up to February, 1876, when he ceased to pay, and then became and has since continued to be insolvent; that the Hettle mortgage became due and was unpaid, and suit was brought to foreclose the same, which resulted in a decree of foreclosure, under which said real estate was sold by the sheriff February 24th, 1877, for $ 698.48; and at the expiration of one year thereafter a deed therefor was executed to the purchaser; that appellee had no notice, until the commencement of the foreclosure suit, that said Hettle mortgage remained unsatisfied; that said real estate was then worth no more than the sum for which it had been so sold; that the appellant is without remedy to recover any part of his mortgage debt, of which a large sum remains due and unpaid; that by the wrongful acts of the appellee the appellant has been damaged, etc. Wherefore, etc.

The second paragraph states that Lammert, being the apparent owner of said real estate, applied to the appellant for a loan, to be secured by a mortgage on the same; that the appellant applied to the appellee as such recorder, to search the records of said county, and make out a certified statement of the title of Lammert to said real estate and the encumbrance thereon, under his hand and official seal; that the appellee made out and delivered such statement to the appellant, certifying that there was no encumbrance on said real estate. A copy of the certificate is filed with the complaint. It is alleged that the certificate was false; that the Hettle mortgage remained unsatisfied and binding upon said real estate; that the appellant had no actual notice or knowledge of said Hettle mortgage. The foreclosure of the Hettle mortgage, the sale and conveyance of the real estate, its value, etc., are there stated as in the first paragraph. The insolvency of Lammert and the loss of the appellant are alleged as in the first paragraph.

The appellee demurred separately to each paragraph of the complaint. The court sustained the demurrer to the first and overruled it to the second. The appellee filed an answer in nine paragraphs. Demurrers were sustained to the 2d, 3d, 6th, 7th and 9th, and the appellant replied to the 4th, 5th and 8th.

The cause was submitted to a jury for trial, who returned a verdict for the appellee.

The appellant moved the court for a new trial. The motion was overruled, and final judgment was rendered for the appellee. The evidence is in the record by bill of exceptions.

The sustaining of the demurrer to the first paragraph of the complaint, the overruling of the appellant's demurrer to the fourth and fifth paragraphs of the appellee's answer, and the overruling of the motion for a new trial, are assigned as errors.

The appellee insists that the first paragraph of the complaint is bad, for the reasons, that the satisfaction of the Hettle mortgage, not being made according to law, could not be relied upon as a record of satisfaction by the appellant; that the alleged entry upon the general index of mortgages is not required to be made by any law; that it was a mere private memorandum upon which no one had a right to rely; that the alleged certificate to said abstract, as set forth in the complaint, was not required by law to be made by the recorder; that he could be made liable for an error in such abstract only as other persons might be made liable upon contract; that it is not alleged in the first paragraph that the appellee was employed by the appellant to make the certificate, and, therefore, he could not be held liable for errors therein.

Upon the last proposition we think the appellee is right. We know of no law, nor has the counsel for the appellant referred us to any, that makes it the duty of the recorder to search the records and certify to the conditions of titles. If, for a consideration, he undertook to search the records and certify to titles, and whether certain real estate was encumbered or not, he would be liable upon such undertaking just as would any other person; he would be liable to the party who employed him, but not to such as might simply see and rely upon such certificate. Savings Bank v. Ward, 100 U.S. 195.

Cooley, in his work on Torts, p. 389, says: "The recorder knows that his records are to be seen, and titles to be made in reliance upon them; he is not bound to know that his certificate is for the use or reliance of any one but the person who receives it, nor can it be assumed that he gives it for any other use. He contracts with the person who requests it and pays for it to give a certificate which shall state the facts, but he enters into no relation of contract or otherwise in respect to it with any other person, and if another relies upon it to his injury, he can not have redress upon the recorder, because the recorder assumed no duty for his protection." Houseman v. Girard, etc., Ass'n, 81 Pa. 256.

There is no statute requiring the recorder to enter upon or in the general index of mortgages the date of the satisfaction of the mortgage or the satisfaction itself; such an entry, if made, could be regarded only as the private memorandum of the recorder, and...