Stone v. Lawyers Title Ins. Corp.
| Decision Date | 13 July 1977 |
| Docket Number | No. B-6109,B-6109 |
| Parties | Charles C. STONE, Jr., Petitioner, v. LAWYERS TITLE INSURANCE CORPORATION et al., Respondents. |
| Court | Texas Supreme Court |
Prichard, Peeler & Cartwright, C. Edwin Prichard, Jr., Corpus Christi, for petitioner.
Wood, Burney, Nesbitt & Ryan, James P. Ryan, Kleberg, Mobley, Lockett & Weil, Ernest F. Bogart, Jr., John A. Waller, Corpus Christi, for respondents.
Charles C. Stone, Jr., the purchaser of a tract of land in Nueces County, filed this suit for damages resulting from the existence of a pipeline easement inside the boundaries of the tract of land purchased. Stone sued Lo-Vaca Gathering Company in trespass to try title to determine the validity of the easement; Isabel B. Weil Goodstein, the seller of the land, for breach of warranty; Lawyers Title Insurance Corporation on an owner's title policy covering the tract of land for damages sustained due to the failure of the policy to show the pipeline easements as exceptions; Lawyers Title Agency of Corpus Christi, Inc. and Eli Lipner, its President, who countersigned the title policy for fraud and negligence in failing to show the pipeline easements as an exception to the policy and in a mortgagee's title binder; and Joe B. Weil, Jr., the real estate agent who negotiated the sale, for fraud.
The trial court granted an interlocutory take-nothing judgment in favor of Lo-Vaca, which became final when the final judgment was rendered. No appeal was taken from this portion of the judgment. Stone took a non-suit as to Isabel Goodstein during the trial. At the conclusion of the plaintiff's evidence, the trial court granted instructed verdicts for Lawyers Title Agency of Corpus Christi, Eli Lipner and Joe B. Weil, Jr., and rendered judgment for the plaintiff for $2,789 as damages under the terms of the title policy against Lawyers Title Insurance Corporation. The court of civil appeals, by a majority opinion, affirmed the portion of the trial court's judgment in favor of Lawyers Title Agency of Corpus Christi, Lipner and Lawyers Title Insurance Corporation, and reversed and remanded that portion of the judgment in favor of Weil. 537 S.W.2d 55. We reverse and remand as to petitioner's alleged cause of action against Lawyers Title Agency and Lipner.
Stone, desiring to construct a mobile home park, contacted Weil concerning the purchase of a tract of land out of a certain 70 acre tract in Nueces County owned by Mrs. Goodstein. Stone was interested in a particular 18.639 acre tract in the Southeast corner of the 70 acre tract. A twenty-five foot strip of land adjacent to the south Stone obtained a commitment from the Federal Housing Administration to insure a loan of $397,000.00. The commitment was based upon the construction of a mobile home park containing 147 spaces. In June 1971, when the Park was approximately 80% complete, it was discovered that a high pressure gas pipeline lay some four feet inside the southern boundary line of the tract purchased by Stone. Subsequently, several other pipelines were discovered inside the southern boundary line of the tract. It was determined that these pipelines were in easements in a strip of land approximately 25 feet in width just north of the south line of the 18.639 acre tract. In order to comply with regulations of the FHA concerning the proximity of residential structures to live pipelines, Stone was required to redesign the park following the discovery of live pipelines within the boundaries of the tract that he had purchased. The redesigned park contained only 129 spaces, which caused the FHA to reduce its commitment to Stone to $318,500.00.
boundary line of the 18.639 acre tract was excluded from the tract Stone proposed to purchase because of several oil and gas pipelines that were known to be located in that strip. On February 19, 1971, Stone entered into a contract with Mrs. Goodstein to purchase the tract, and it was conveyed to him by warranty deed dated March 11, 1971 for a cash consideration of $55,917.00. No exceptions or reservations appear in the deed. On March 12, 1971 Lipner, acting as President of the Title Agency and as agent for Title Insurance Corp., issued an owner's title policy to Stone which insured the title to the land in the amount of the purchase price. In addition, a Mortgagee's Title Policy Binder on Interim Construction Loan in the amount of $370,000.00 was issued to the Corpus Christi Savings and Loan Association for the benefit of Stone. Neither the owner's title policy nor the binder made mention of the pipeline's easements of record.
Stone contends that the court of civil appeals incorrectly affirmed the trial court's action in instructing a verdict against Stone in favor of Lipner and Lawyers Title Agency on Stone's cause of action for fraud. The court of civil appeals correctly stated the general rule regarding the elements of actionable fraud: (1) that a material representation was made; (2) that it was false; (3) that when the speaker made it he knew it was false or made it recklessly without any knowledge of the truth and as a positive assertion; (4) that he made it with the intention that it should be acted upon by the party; (5) that the party acted in reliance upon it; (6) that he thereby suffered injury. Oilwell Division, United States Steel Corporation v. Fryer, 493 S.W.2d 487 (Tex.1973); Wilson v. Jones, 45 S.W.2d 572 (Tex.Com.App.1932, approved).
The court of civil appeals has held that there is no evidence, supported by proper pleadings, to support a judgment against either Lipner or Lawyers Title Agency for fraud. In Stone's Fifth Amended Petition, upon which he went to trial, he alleged that, in the preparation for the closing of the real estate transaction called for in the contract of sale, an employee of the Lawyers Title Agency made an examination of the title to the property, and wrote a title opinion which listed the pipeline's easements, in question, as an encumbrance upon the property. It was further alleged that this title opinion was delivered to Lipner shortly after it was written. Stone made the following allegations concerning the representations made by Lipner to Stone:
COUNT I
. . . On March 12, 1971, or within a few days just prior thereto, the Defendant ELI LIPNER called the Plaintiff by telephone and stated that JOE WEIL was in his office and that there was some confusion over pipeline easements, and asked the Plaintiff if he knew of any pipeline or easement on the property. The Plaintiff replied that he did not know of any, but that Mr. LIPNER was the one who was supposed to be able to search the records out. Mr. LIPNER then hung up without divulging the details of the confusion. Later that same day or the next day or two thereafter, JOE WEIL came to see the Plaintiff and told him that everything was straightened out and that Mr. LIPNER was mistaken as to where the pipeline easement was. To verify that the matter was straightened out, the Plaintiff telephoned Mr. LIPNER either on or just prior to March 12, 1971, and asked if everything was squared away. Mr. LIPNER replied that it was, and that there would be no exceptions in the Title Policy.
. . . Also, the statement made by Mr. LIPNER either on or just prior to March 12, 1971, when he told Mr. STONE that everything was squared away concerning the pipe-lines coupled with the fact that Mr. LIPNER then caused to be issued through LAWYERS TITLE AGENCY OF CORPUS CHRISTI, INC., an Owner's Policy of Title Insurance (attached as "Exhibit A") and a Mortgagee's Title Policy Binder on Interim Construction Loan, neither of which contained any mention of pipeline easements, plus the further fact that Mr. LIPNER approved for transfer of title the Warranty Deed from ISABEL B. WEIL (GOODSTEIN) which also did not mention any pipeline easements, constituted common law fraud on the part of ELI LIPNER and LAWYERS TITLE AGENCY OF CORPUS CHRISTI, INC., constituted representations on their part that the title to the land Plaintiff was buying was not burdened with pipelines or pipeline easements. These representations were made with the intention that they be acted upon by the Plaintiff in the manner reasonably contemplated, (i. e., he would close the transaction, take title to said property and construct an FHA...
To continue reading
Request your trial
-
Eagle Properties, Ltd. v. Scharbauer
...and (6) the party thereby suffered injury. Trenholm v. Ratcliff, 646 S.W.2d 927, 930 (Tex.1983); Stone v. Lawyers Title Ins. Corp., 554 S.W.2d 183, 185 (Tex.1977). Eagle bases its actions for common law and statutory fraud 7 on the grounds that the Directors made false representations or ma......
-
In re Gas Reclamation, Inc. Securities Litigation
...v. Aluminum Limited Sales, Inc., 4 N.Y.2d 403, 407, 176 N.Y.S.2d 259, 262, 151 N.E.2d 833, 835 (1958) with Stone v. Lawyers Title Insurance Corp., 554 S.W.2d 183, 185 (Tex.1977) (elements of common law fraud essentially Both New York and Texas courts have recognized an action for aiding and......
-
Ho v. University of Texas at Arlington
...parties, Stone v. Lawyers Title Ins. Corp., 537 S.W.2d 55, 67 (Tex.Civ.App.--Corpus Christi 1976), aff'd in part and rev'd in part, 554 S.W.2d 183 (Tex.1977), or when a party makes a material representation relied upon by the other party that he later finds out to be untrue and fails to rev......
-
Edinburg Hosp. Authority v. Trevino
...court. Trevino therefore waived these arguments, and we need not pass on their merits. See TEX.R.CIV.P. 45(b); Stone v. Lawyers Title Ins. Corp., 554 S.W.2d 183, 186-88 (Tex.1977).1 See TENN.CODE ANN. § 20-5-106 (1994); Wade v. United States, 745 F.Supp. 1573, 1579 (D.Haw.1990); Espadero v.......
-
Table of Cases
...248-49 (Tex. App.—Houston [14th Dist.] 1989), rev’d . 822 S.W.2d 1, 10 (Tex. 1991), §§1.02.15, 9.20.4 Stone v. Lawyers Title Ins. Corp., 554 S.W.2d 183 (Tex. 1977), §5.01 Sun Oil Co. v. Whitaker, 424 S.W.2d 216 (Tex. 1968), §5.27 Swafford v. View-Caps Water Supply Corp., 617 S.W.2d 674 (Tex......
-
Plaintiff's Pleadings
...the jury questions that ultimately are submitted are supported by the pleadings. See generally, Stone v. Lawyers Title Ins. Corp., 554 S.W.2d 183 (Tex. 1977). §5.01.1 Expedited Actions In 2011, the Legislature amended section 22,004 of the Texas Government Code authorizing the Texas Supreme......