State ex rel. Freeman v. Abstracters Board of Examiners

• Decision Date: 09 May 1935
• Docket Number: 7380.
• Parties: STATE ex rel. FREEMAN v. ABSTRACTERS BOARD OF EXAMINERS et al.
• Court: Montana Supreme Court

45 P.2d 668

99 Mont. 564

STATE ex rel. FREEMAN v. ABSTRACTERS BOARD OF EXAMINERS et al.

No. 7380.

Supreme Court of Montana

May 9, 1935

Rehearing Denied June 5, 1935.

Appeal from District Court, Lewis and Clark County; W. H. Poorman Judge.

Application by the State, on the relation of George O. Freeman, for a writ of mandate against the Abstracters Board of Examiners and others to compel the Board to issue to the relator a certificate of authority to conduct an abstract business. From a judgment awarding the writ, defendants appeal.

Reversed and remanded, with directions to dismiss proceeding.

Raymond T. Nagle, Atty. Gen., Enor K. Matson, Asst. Atty. Gen., and Rudolph Nelstead, of Miles City, for appellants.

E. G Toomey and John W. Chapman, both of Helena, for respondent.

MATTHEWS Justice.

Application by the state, on the relation of George O. Freeman, for a writ of mandate against the abstracters board of examiners to compel the board to issue to the relator a certificate of authority to conduct an abstract business in Lewis and Clark county. From a judgment awarding the writ, defendants appeal.

For a period of sixteen years prior to July 1, 1932, the relator was continuously engaged in the business of abstracting titles to real estate in Lewis and Clark county, and during all of that period in which such a certificate was required by law he has held, and still holds, a certificate as a registered abstracter. However, relator was not in business for himself, but managed the business of the Montana Audit Company, which company owned the plant, abstract books, and indices which relator used jointly with other officers of the company. Owing to the shrinkage of business in this line, due to the depression, relator's connection with the company was severed in 1932, and thereupon he made application to the defendant board for a "certificate of authority" to open and conduct an abstracting business of his own.

There can be no question but that the relator is personally well qualified to conduct such a business, but his only showing to the board as to his equipment for conducting such a business is that he "does have 'for use in such business' the original records in the office of the Clerk and Recorder of Lewis and Clark County." The board denied the application and refused the certificate on the ground that the applicant had not complied with the requirements of chapter 105, Laws 1931. Relator thereupon instituted this proceeding in the district court of Lewis and Clark county and therein contended that chapter 105, above, is unconstitutional. Issue being joined and a hearing had, the court entered its judgment declaring that the act is unconstitutional and that the relator requires no certificate of authority from the board to engage in the abstract business. The board thereupon appealed.

Prior to April 1, 1931, the only regulation of the business of abstracting titles to real estate was provided by chapter 43, Laws 1915. This act merely required the filing of a bond with the state treasurer and the issuance by the treasurer of a certificate entitling the principal to engage in business (sections 4139, 4140, Rev. Codes 1921), and the procuring of a seal, an impression of which was to be filed with the state treasurer before the issuance of the certificate. The certificate was valid so long as the bond remained in force, but the bond was to be for one year, and was thereafter renewable annually by a certificate of continuation. Section 4143, Rev. Codes 1921, as amended by chapter 60, Laws 1925.

Chapter 105, Laws 1931, created the board of examiners, and provided for the examination of applicants, the registering of abstracters, and the issuance of a "Certificate of Authority" to those who comply with the requirements of the act, to embark upon the business of abstracting.

Section 1 of the act provides that: "Any person *** desiring to engage in or continue the business of making and compiling abstracts, *** shall have for use in such business a set of abstract books or other system of indices or records showing in a sufficiently comprehensive form all instruments affecting title to real property on file or of record in the office of the County Clerk and Recorder, *** and shall have in charge of such business a registered abstracter, *** and shall first obtain a Certificate of Authority," etc.

Section 11 of the act also provides that: "Every person, firm or corporation, who shall furnish satisfactory proof to said board that applicant has for use in such business a set of abstract books or other system of indices and shall have in charge of such business a registered abstracter, *** furnish the bond *** and pay the application fee *** shall be entitled, upon compliance with the other provisions of this law, to receive from said Board a Certificate of Authority. Certificates of Authority shall be valid for one year. ***"

The act contains three exceptions to the above requirements. Section 12 of the act declares (1) that: "Any person, firm or corporation not having the abstract books or indices as required, *** who, upon the 1st day of March, 1931, is the holder of a valid and subsisting Certificate of Authority issued *** pursuant to Section 4140 of the Revised Codes of *** 1921, and who shall make application to said Board prior to the expiration of such Certificate, *** and who shall comply with the other requirements hereof *** shall, upon the payment of Five Dollars [the regular fee], as is herein provided be issued a Certificate of Authority under the provisions of this Act." (2) "Any person, firm or corporation, desiring to engage in the business *** who is not at the time of making application *** provided with the abstract books or indices, *** and who can comply with the other requirements, *** shall, upon submitting satisfactory proof to said Board that he has been engaged in good faith in the preparation of such abstract books or indices and that upon the date of such application that such abstract books or indices are at least fifty per cent completed and that he intends to complete the same, *** be issued a Temporary Certificate of Authority good for a period of one year, and, upon good cause being shown, *** such Certificate may be renewed *** for an additional term of one year only." (3) "The provisions of this Act shall not apply to County Clerks and Recorders or persons employed by counties in the preparation of abstracts of title." Section 18 of the act.

In support of the judgment, it is first contended that relator's showing that he has access to the records of the county is a sufficient compliance with the requirements of the act; that there could be no more "comprehensive" index than that of the county, which is "all-inclusive." This contention cannot be maintained; it would render the requirements of sections 1 and 11, above, meaningless, and set at naught the manifest intention of the Legislature to require an abstracter to have a plant or set of "abstract books" from which he can compile abstracts accurately. The undisputed evidence received on the trial is to the effect that an abstracter cannot safely rely upon the records and indices in the clerk's office for use in his business, for the reason that, under the statutes, the county clerk merely indexes instruments under the names of the parties. Section 4799, Rev. Codes 1921. A break in the chain of title, by name indices, would mislead the investigator into believing that he had reached the end of the chain. Numerous instances in illustration could be given; a few will suffice:

An abstracter is requested to make an abstract of title to a tract of land of which A is the owner of record. A had theretofore transferred to B, who had not recorded his deed but had mortgaged the land to C. Jane Doe is the record owner of a tract of land; she married Richard Roe; and thereafter joins with him in a deed to the property without reference to her maiden name. A is a corporation owning real estate; it changes its name to B, and thereafter transfers the property under the new name. Many such examples of instruments of record affecting title, but which the indices in the clerk's office would not disclose to the abstracter, might be given; change of title by the law of descent, with mortgage of an heir's interest before an estate is closed; the recording of a quitclaim deed by the holder of an unrecorded contract for a deed. Such pitfalls are avoided by the experienced abstracter through the compilation and use of an "abstract book or tract index," which describes every piece of real estate in the county and to which is "charged" every instrument of record in the county in any manner affecting the title to the "tract regardless of who gave the instrument or who is named in the instrument." The indices differ somewhat with different individuals, but the system is universal among abstracters, and it is such records, varying according to the individual ideas on the subject, that are known to the men in the business as "abstract books or other system of indices or records showing in a sufficiently comprehensive form all instruments" affecting the title to each tract of land in a county. This is manifestly the meaning of the terms used by the Legislature.

"The meaning of a given term employed in a statute must be measured and controlled by the connection in which it is employed, the evident purpose of the statute, and the subject to which it relates" (Northern Pacific Ry. Co. v. Sanders County, 66 Mont. 608, 609, 214 P. 596), and, if a term has a well-defined meaning in the law, its use, without specific definition, will not render the act inoperative for uncertainty (State ex rel. Lyman v. Stewart, 58 Mont. 1, 190 P. 129).

The verb "abstract"...