Purcell v. Land Title Guarantee Company

• Decision Date: 07 April 1902
• Parties: JOHN PURCELL et al., Respondents, v. LAND TITLE GUARANTEE COMPANY, Appellant
• Court: Kansas Court of Appeals

67 S.W. 726

94 Mo.App. 5

JOHN PURCELL et al., Respondents, v. LAND TITLE GUARANTEE COMPANY, Appellant

Court of Appeals of Missouri, Kansas City

April 7, 1902

Appeal from Jackson Circuit Court.--Hon. W. B. Teasdale, Judge.

AFFIRMED.

Judgment affirmed.

Dobson & McCune and J. P. Gilmer for appellant.

(1) The certificate of title sued on is not a policy of insurance but is merely a certificate of title, the correctness of which is guaranteed. (a) Insurance is a contract whereby one for a consideration undertakes to compensate another if he suffer loss. May on Insurance, p. 1. An insurance in relation to property is a certificate whereby the insurer becomes bound for a definite consideration to indemnify the insured against loss or damage to certain property named in the policy by reason of certain perils to which it may be exposed. Dover Glass Works v. Ins. Co., 29 A. 1039. The certificate in question does not agree to indemnify. (b) If insurance had been intended the certificate would have been in the form of a policy such as was used in the following cases: Ins. & Trust Co. v. Drexel, 70 F. 194; Quigley v. Ins. & Trust Co., 62 N.W. 287, and 69 N.W. 706. (2) The obligation upon the certificate in this case consists of two elements: (a) a certificate of title and (b) a guaranty that this certificate is correct. Warvelle on Abstracts, p. 550; Schade v. Gehner, 133 Mo. 252; Rankin v. Schaeffer, 4 Mo.App. 108; Mortgage & Trust Co. v. Hughes, 20 F. 39; Ehmer v. Title Guarantee & Trust Co., 34 N.Y.S. 1132; s. c., 50 N.E 420; Dickel v. Nashville Abs. Co. (Tenn.), 14 S.W 896; Russell v. Polk Co. Abs. Co., 87 Iowa 233; s c., 54 N.W. 212. (3) This action is barred by the statute of limitation. Section 4273, Revised Statutes 1899, applies. Schade v. Gehner, 133 Mo. 252; Rankin v. Schaeffer, 4 Mo.App. 108; St. Louis Gas Light Co. v. St. Louis, 11 Mo.App. 55; Harper v. Eubank, 32 Mo.App. 258. The statute began to run at the date of the certificate. Rankin v. Gillette, 95 Cal. 317, 30 P. 545; Provident Loan Trust Co. v. Wolcott, 5 Kan.App. 473, 47 P. 8; Russell v. Polk Co. Abs. Co., 87 Iowa 233, 54 N.W. 212. (4) Respondents having failed to give appellant notice of the foreclosure proceedings, there can be no recovery. Dermott v. Jones, 2 Wall. 1; Russell v. Polk Co. Abs. Co., 87 Iowa 233, 54 N.W. 212; Roberts v. Leon Loan & Abstract Co., 63 Iowa 76, 18 N.W. 702; same case on second appeal, 69 Iowa 673, 29 N.W. 776; 1 Am. and Eng. Ency. of Law (2 Ed.), p. 221.

Johnson & Lucas for respondents.

(1) The obligation sued on is a contract of indemnity and insurance, with a continuing guaranty, as clearly appears from its terms. 10 Am. and Eng. Ency. of Law (1 Ed.), 402; Drummond v. Prestman, 25 U.S. 515; Douglass v. Reynolds, 32 U.S. 113; Kernochan v. Murray, 2 L. R. A. 183. (2) The statute of limitations did not begin to run until the "loss or damage" occurred by the eviction of the tenants of respondents in June, 1897. Rowsey v. Lynch, 61 Mo. 560; Kennard Co. v. Dornen, 64 Mo.App. 17. (3) The question whether notice was given to appellant of the existence of and proceedings under the McElroy deed of trust, was determined by the jury in favor of respondents. And when notice was once given, appellant was bound, and it was its duty to look after the deed of trust and all subsequent proceedings thereunder. City of Memphis v. Miller, 78 Mo.App. 67; Garrison v. Baggage Co., 94 Mo. 130; St. Joseph v. Railway, 116 Mo. 636; Railroad v. News Co., 151 Mo. 373.

OPINION

BROADDUS, J.

The allegations of the petition are that the defendant corporation was, at the date of the transaction hereinafter mentioned, and still is engaged in the business of examining, certifying and guaranteeing titles in Jackson county, Missouri, and that on the twenty-fifth day of November, 1890, the defendant, in consideration of the sum of forty dollars paid to it by the plaintiffs, issued to said plaintiffs, in writing, the following certificate or guaranty of title to the lands therein described, omitting description of the property, viz.: "Land Title Guarantee Company, a corporation under the laws of Missouri, pursuant to application No. 1158, dated the twenty-fourth day of November, 1890, referred to and made a part of this contract, hereby certifies that it has examined the title to the following described lands in Jackson county, Missouri, to-wit: . . . and hereby certifies that John Purcell (owning an undivided two-thirds interest therein), and Pierce Beresford (owning an undivided one-third interest therein) have a good and perfect title in fee simple to the above described premises, free from liens and incumbrances on this twenty-fifth day of November, 1890, at four o'clock and fifty-five minutes p. m., except a deed of trust executed by John Purcell and Pierce Beresford, dated November 2, 1889, and recorded in book B 381, at page 154, in the recorder's office of Jackson county, Missouri, securing to William J. Scott six notes amounting in the aggregate to twenty-eight hundred dollars and interest thereon.

"And the said Land Title Guarantee Company, for the consideration of forty dollars, makes this certificate to John Purcell and Pierce Beresford, their heirs and assigns, and guarantees the same to be correct.

"Said guarantor shall not be liable for damages beyond five thousand dollars, and shall, at its own cost, defend said guarantees, and heirs and assigns, in every suit or proceeding on any claim against or right to said land, or any part thereof, adverse to the title hereby guaranteed and not herein excepted, provided the party or parties entitled to such defense shall, within a reasonable time after the commencement of such suit, or proceeding, and in ample time for defense therein, give said guarantor written notice of the pendency of the suit or proceeding, and authority to defend, said guarantor not to be liable for loss or damage from a suit or proceeding without such notice and authority, and said guarantor shall not be liable until each adverse claim or right shall have been held valid by a court of last resort, and, if such adverse claim or right so established shall be for less than the whole of the land, then the liability of the guarantor shall be only such part of the whole liability limited above as shall bear the same ratio to the whole liability that the adverse claim or right established may bear to the whole lands.

"If the guarantor shall at any time pay any claim under this certificate and guaranty, it shall be entitled to all rights and remedies which the party guaranteed would have against any other party or property, on account of loss from the establishment of such adverse claim or right, had this certificate and guaranty not been made, and shall be entitled to an assignment of such rights, if an assignment can legally be made, or to the proper remedy or remedies in the name of any other party or parties for its use, when it can not according to law obtain an assignment of such rights and enforce the remedy in its own name, and said guarantor shall be subrogated to all rights of action and remedies to accomplish the result above specified.

"In testimony whereof, the Land Title Guarantee Company has caused this certificate to be signed by its president and its seal to be attested by its secretary, this twenty-fifth day of November, A. D. 1890.

(Seal) "SAMUEL M. JARVIS, President.

"Attest: A. W. CHILDS, Secretary."

Plaintiff alleges that at the time defendant issued said certificate there was a valid deed of trust creating a lien upon said property, which was afterwards foreclosed by sale; and that the plaintiffs were evicted by legal process from the possession of said property by the purchasers at said sale. Plaintiffs sue for a breach of the contract. Defendant's answer makes several special defenses, some of which are not relied on in this appeal. We will only consider such as are. The statute of limitations is pleaded and failure of plaintiffs to give defendant written notice of the proceedings to foreclose said deed of trust, as provided by the certificate, in addition to the general denial of the right of the plaintiffs to recover on the cause of action set out in their petition. The plaintiffs admit the failure to give the written notice, as alleged, but charge that the defendant waived it.

There was a trial before a jury and verdict and judgment for plaintiffs for $ 2,600, from which defendant appealed.

The principal contention upon the part of the defendant is that the writing in suit is not a guaranty of title, only a guaranty of the correctness of the certificate. This contention is based upon the following recitation in the certificate, viz.: "And the said Land Title Guarantee Company for the consideration of forty dollars makes this certificate to John Purcell and Pierce Beresford, their heirs and assigns, and guarantees the same to be correct."

Standing alone, there could be no construction put upon it other than that it was merely a guaranty of the correctness of the certificate, for that is its plain meaning; it would not be a debatable point. But such a construction would in effect render nugatory other provisions in the certificate to be found in the two following clauses, which would be doing violence to the rule that, "the whole agreement is to be considered and a liberal interpretation given." Johnson county v. Wood, 84 Mo. 489. This is said to be a rule of general application. In truth, we do not see how any other...