Pruett v. Mississippi Valley Title Ins. Co.
| Decision Date | 02 January 1973 |
| Docket Number | No. 46937,46937 |
| Citation | 271 So.2d 920 |
| Parties | J. H. PRUETT v. MISSISSIPPI VALLEY TITLE INSURANCE COMPANY. |
| Court | Mississippi Supreme Court |
Sullivan, Smith & Hunt, Walter W. Thompson, Clarksdale, for appellant.
Semmes Luckett, William O. Luckett, Clarksdale, Vardaman S. Dunn, Jackson, for appellee.
J. H. Pruett (Policyholder) sued Mississippi Valley Title Insurance Company (Insurer) in the Circuit Court of Coahoma County alleging a loss under the terms of a title insurance policy. Insurer pleaded that the loss (1) was expressly excepted, and (2) was barred by the six-year statute of limitations. The court sustained Insurer's motion for a directed verdict on the ground that the loss was expressly excepted from the coverage of the policy. Although the trial judge indicated he was not ruling on whether the statute of limitations applied, he said, 'If I had to make a decision on it, I would say the statute of limitations also applied.' Judgment was thereupon entered for Insurer and Policyholder appealed.
On April 19, 1963, Policyholder purchased 360 acres of land for $60,000. On May 20, 1963, Insurer issued to Policyholder a policy of title insurance whereby it agreed to pay Policyholder all loss or damage not exceeding $60,000 (W)hich the insured shall sustain by reason of any defect in the title of the insured to the estate or interest of the insured in the real estate described under Schedule A herein, or by reason of liens or incumbrances against the same as of the date hereof, excepting the defects, estates, interests, objections, liens or incumbrances mentioned in Schedule B herein, or excepted by the conditions of this policy hereto annexed and incorporated herein as a part of this contract.
Schedule B provides in part as follows:
There is excepted from this policy all rights of parties in possession, deficiency in quantity of land, boundary line disputes, roadways, unrecorded servitudes or easements, or any matters not of record which would be disclosed by an accurate survey and competent inspection of the property.
Under Paragraph 6 of the 'Conditions of This Policy,' it is provided that nothing contained in the policy shall be construed as insuring
(7) against loss or damage by reason of the rights, titles or occupancies of parties in actual possession of any part of the premises herein described at the date hereof, other than the insured. . . .
At the time Policyholder purchased the land and when the Insurer issued its title policy there was of record an instrument granting Hobson Bayou Drainage District No. 2 (Drainage District) a perpetual easement 200 feet wide measured 100 feet on each side of and at right angles to the center line of a drainage ditch traversing the lands in question from north to south. The instrument granted Drainage District the right to maintain and improve the drainage ditch and spread the excavated dirt from the ditch on land adjacent to the ditch within the easement right-of-way. Policyholder owned the land to the north of the subject lands when the latter was acquired and he knew that a drainage ditch 25 to 40 feet wide traversed his lands north of the land covered by the title policy and continued on across the latter. He knew that Drainage District owned the ditch traversing his lands to the north and assumed it had a 'ditch easement' but did not know Drainage District had a 200 foot easement, and he did not make any inquiry prior to the issuance of the title policy.
The policy issued by Insurer did not except the recorded instrument granting Drainage District the 200 foot easement across the lands in question.
In 1969, more than six years from the date on the title policy, Drainage District entered the land described in the title policy and cleaned out the drainage ditch traversing sand land and spread the dirt on Policyholder's crops. Policyholder then learned of the recorded easement and made demands on Insurer under the title policy for damages sustained as a result of the Drainage District's easement.
The principal question is whether the loss in question is excepted from the coverage of the policy under Paragraph 6(7) of 'Conditions of This Policy.' It is the contention of Insurer that because the drainage ditch traversed the property described in the policy, Drainage District was in 'actual possession' of a part of the premises and therefore any damage flowing from the existence of the easement owned by it was excluded under the terms of the policy. Insurer relies on Shaver v. National Title & Abstract Co., 361 S.W.2d 867, 98 A.L.R.2d 531 (Tex.1962), and Guarantee Abstract & Title Insurance Co. v. St. Paul Fire & Marine Insurance Co., 216 So.2d 255 (Fla.App.1968). Both of these cases involved pipelines buried beneath the surface of the land with no surface indications that a pipeline was buried in the soil. Insurer contends that the two cited cases are authority for its position because both opinions indicate that the decision would have been otherwise if there had been surface indication of the existence of the underground pipelines which was sufficient to put a purchaser on inquiry as to the rights of the possessor. We do not think these cases are authority on the question before us. The parts of the opinions relied upon by...
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