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(312 IU. 245, 143 N. E. 833.)

there was nothing to show that the report was made with intent to deceive the purchaser.

It has been held that a public weigher, who was ordered by the seller to weigh goods sold and was paid by the seller for his services, owed a duty to the buyer to weigh carefully, though there was no contract between them, where he knew that the purpose of the weighing was to determine the amount the buyer should pay, and where he furnished a copy of his certificate to the buyer for that purpose (Glanzer v. Shepard, 233 N. Y. 236, 23 A.L.R. 1425, 135 N. E. 275), and that where an abstracter knows that the person to whom he delivers an abstract, at the expense of the owner,

who ordered and paid for it, will rely upon it in making a trade or purchase, he is liable in damages to such person for any loss resulting from a material error or omission (Anderson v. Spriestersbach, 69 Wash. 393, 42 L.R.A. (N.S.) 176, 125 Pac. 166), but these decisions do not furnish authority for affirming the judgment in the case at bar. Plaintiffs in error did not deliver a certificate of inspection to defendant in error, nor were they advised by defendant in error that it was going to rely upon their inspection.

The judgments of the Appellate and Superior Courts are reversed. Petition for rehearing denied June 5, 1924.

ANNOTATION.

Liability of one who makes a certificate or report, to third person who acts in

I. In general, 67.

II. Specific instances:

a. Title abstracters:

1. In general, 68.

reliance thereon.

2. Effect of knowledge of use
intended, 71.

3. Effect of statutes, 73.

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United States.-National Sav. Bank v. Ward (1880) 100 U. S. 195, 25 L. ed. 621; Ware v. Brown (1869) 2 Bond, 267, Fed. Cas. No. 17,170; Dundee Mortg. & T. Invest. Co. v. Hughes (1884) 20 Fed. 39.

Arkansas.-Talpey v. Wright (1895) 61 Ark. 275, 54 Am. St. Rep. 206, 32 S. W. 1072.

Illinois.-NATIONAL IRON & STEEL Co. v. HUNT (reported herewith) ante, 63.

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V.
Mallory Ferguson
Kansas.
(1893) 50 Kan. 685, 22 L.R.A. 99, 32
Pac. 410.

Louisiana.-Morano v. Shaw (1871) 23 La. Ann. 379.

Missouri. Gordon v. Livingston (1882) 12 Mo. App. 267; Zweigardt v. Birdseye (1894) 57 Mo. App. 462; Schade v. Gehner (1895) 133 Mo. 252, 34 S. W. 576.

Nebraska.-Gate City Abstract Co.

v. Post (1898) 55 Neb. 742, 76 N. W. 471.

New Jersey.-Kahl v. Love (1874) 37 N. J. L. 5.

New York.-Day v. Reynolds (1885) 23 Hun, 131; Glawatz v. People's Guaranty Search Co. (1900) 49 App. Div. 465, 63 N. Y. Supp. 691; Lockwood v. Title Ins. Co. (1911) 73 Misc. 296, 130 N. Y. Supp. 824, affirmed in (1914) 163 App. Div. 929, 147 N. Y. Supp. 1123, but reversed in (1917) 220 N. Y. 410, 115 N. E. 981, on other grounds.

North Dakota.-Morin V. Divide County Abstract Co. (1921) 48 N. D. 214, 183 N. W. 1006.

Ohio.-Thomas v. Guarantee Title & T. Co. (1910) 81 Ohio St. 432, 26 L.R.A. (N.S.) 1210, 91 N. E. 183, 2 N. C. C. A. 80.

Pennsylvania.-Com. use of Kellogg v. Harmer (1865) 6 Phila. 90; Houseman v. Girard Mut. Bldg. Co. (1876) 81 Pa. 256; Landell v. Lybrand (1916) 264 Pa. 406, 8 A.L.R. 461, 107 Atl. 783.

Tennessee.-Equitable Bldg. & L. Asso. v. Bank of Commerce & T. Co. (1907) 118 Tenn. 678, 12 L.R.A. (N.S.) 449, 102 S. W. 901, 12 Ann. Cas. 407. Texas. Decatur Land, Loan & Abstract Co. v. Rutland (1916) Civ. App., 185 S. W. 1064.

Tex.

Develop

Washington.-Bremerton ment Co. v. Title Trust Co. (1912) 67 Wash. 268, 121 Pac. 69.

England. Derry v. Peek (1889) L. R. 14 App. Cas. 337, 58 L. J. Ch. N. S. 864, 61 L. T. N. S. 265, 38 Week. Rep. 33, 1 Megone, 292, 54 J. P. 148, 12 Eng. Rul. Cas. 250; Le Lievre v. Gould [1893] 1 Q. B. 491, 62 L. J. Q. B. N. S. 353, 68 L. T. N. S. 626, 4 Reports, 274, 41 Week. Rep. 468, 57 J. P. 484-C. A.; Love v. Mack (1905) 93 L. T. N. S. 352-C. A. But see Cann v. Willson (1888) L. R. 39 Ch. Div. 39, 57 L. J. Ch. N. S. 1034, 59 L. T. N. S. 723, 37 Week. Rep. 23, overruled in Le Livre v. Gould, supra.

A custom cannot change the rule. National Sav. Bank v. Ward (U. S.) supra; NATIONAL IRON & STEEL Co. v. HUNT (reported herewith) ante, 63; Gordon v. Livingston (Mo.) and

Thomas v. Guarantee Title & T. Co. (Ohio) supra.

An exception to this rule seems to exist, however, where the person making the record or certificate follows a common calling in doing so, and in such case he is liable to a person proximately injured by his negligence, regardless of whether a privity of contract can be said to exist or not. Tardos v. Bozant (1846) 1 La. Ann. 199; Nickerson v. Thompson (1851) 33 Me. 433; Pearson v. Purkett (1834) 15 Pick. (Mass.) 264; Glanzer v. Shepard (1922) 233 N. Y. 236, 23 A.L.R. 1425, 135 N. E. 275. And see (1915) 192 Ill. App. 215, former appeal of the reported case (NATIONAL IRON & STEEL Co. v. HUNT, ante, 63).

And if the defendant prepares an abstract or record at the instance of the agent of the plaintiff, a sufficient privity exists between the plaintiff and the defendant to enable the plaintiff to maintain an action for negligence in the preparation thereof. Young v. Lohr (1902) 118 Iowa, 624, 92 N. W. 684; Allen v. Hopkins (1900) 62 Kan. 175, 61 Pac. 750; Siewers v. Com. (1878) 87 Pa. 15; Bremerton Development Co. V. Title Trust Co.

(1912) 67 Wash. 268, 121 Pac. 69; Murphy v. Fidelity Abstract & Title Co. (1921) 114 Wash. 77, 194 Pac. 591. And see infra, II. a, 2, for discussion as to effect of knowledge of the use thereof.

II. Specific instances.

a. Title abstracters.

1. In general.

It is not the purpose of this subdivision to treat the general question of the liability of title abstracters, but, assuming that the abstracter has committed a breach of duty in the preparation of the abstract for which he would be liable for damages caused thereby to the person employing him, whether such liability extends to third persons relying on his abstract.

The general rule, above stated, that third persons, relying on certificates or records prepared at the instance and for the use of others, cannot re

cover for negligence in the preparation of the certificate or record, is generally held applicable in cases of abstracts of title prepared by title abstracters; at least, where there is no evidence of an agency between the person procuring the abstract and the one relying thereon, or of knowledge on the part of the abstracter that third persons will rely thereon.

United States.-National Sav. Bank v. Ward (1880) 100 U. S. 195, 25 L. ed. 621; Dundee Mortg. & T. Invest. Co. v. Hughes (1884) 20 Fed. 39.

Arkansas.-Talpey v. Wright (1895) 61 Ark. 275, 54 Am. St. Rep. 206, 32 S. W. 1072.

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Mallory

Kansas. V. Ferguson (1893) 50 Kan. 685, 22 L.R.A. 99, 32 Pac. 410.

Missouri.-Zweigardt v. Birdseye (1894) 57 Mo. App. 462. And see Schade v. Gehner (1896) 133 Mo. 252, 34 S. W. 576.

Nebraska.-Gate City Abstract Co. v. Post (1898) 55 Neb. 742, 76 N. W. 471.

New York.-Glawatz v. People's Guaranty Search Co. (1900) 49 App. Div. 465, 63 N. Y. Supp. 691.

North Dakota.-Morin V. Divide County Abstract Co. (1921) 48 N. D. 214, 183 N. W. 1006.

Ohio. Thomas v. Guarantee Title & T. Co. (1910) 81 Ohio St. 432, 26 L.R.A. (N.S.) 1210, 91 N. E. 183, 2 N. C. C. A. 80.

Pennsylvania.-Com. use of Kellogg v. Harmer (1865) 6 Phila. 90.

Tennessee.-Equitable Bldg. & L. Asso. v. Bank of Commerce & T. Co. (1907) 118 Tenn. 678, 12 L.R.A. (N.S.) 449, 102 S. W. 901, 12 Ann. Cas. 407. Texas. Decatur Land, Loan & Abstract Co. v. Rutland (1916) Tex. Civ. App. 185 S. W. 1064. Washington. Bremerton Development Co. v. Title Trust Co. (1912) 67 Wash. 268, 121 Pac. 69.

This rule has been changed in many states, by statute. See infra, II. a, 3. In Com. use of Kellogg v. Harmer (Pa.) supra, in holding that a re

corder of deeds was not liable on a false certificate of search to a subsequent grantee from the person taking the certificate, the court, observing that the duty of the recorder of deeds was to make searches for mortgages, deeds, and other recordable instruments, at the instance of those applying therefor and paying him the fee allowed by law for this duty, states: "The duty is specific, to make it for him who asks for it, and pays for it, and, therefore, has a right to the responsibility of the officer, and to rely upon it. It is he who is deceived by the officer's false search, because he alone stands in privity with him, by demanding performance of the duty and making compensation for it. The emoluments of office constitute the consideration of the undertaking of the responsibility. .

If a new liability arises, it is because of a new duty, which cannot take place without a renewed privity and a renewed compensation. It encounters a further objection. The new duty, at each successive purchase, gives rise to a new cause of action, which runs only from its breach, and cannot occur until the new purchase is made. This may be twenty years after the date of the certificate. this is repugnant to the Statute of Limitations, which bars action against sureties in official bonds after seven years from the injury, and that must arise during the official term."

But

And where a property owner employed the defendant to make an abstract of title which he desired to use in securing a loan upon a mortgage of the property, and an investment company, through a broker employed by a property owner relying upon the certificate of search, advanced the money, taking as security notes and mortgage, which it thereafter assigned to the plaintiff, who also relied upon the certificate of search, the court in Talpey v. Wright (Ark.) supra, held that while the broker or the investment company had a right of action against the defendant, it was clear that the assignee had no such right of action, as the defendant did not contract to furnish the ab

stract to the plaintiff, or to anyone for his use and benefit.

And it has been held that no privity of contract exists between the widow as sole devisee of one employing another to make an abstract of title of certain property, and the abstracter, such as will entitle her to maintain an action against the abstracter for negligence in the performance of his work. Schade v. Gehner (Mo.) supra. The decision of this question, however, does not seem to have been necessary, as the court decided that in any event her action was barred by the Statute of Limitations.

In Dundee Mortg. & T. Invest. Co. v. Hughes (Fed.) supra, it was held that an attorney, who, at the instance of the lender, made a title search of the property on which the money was to be loaned, was not liable to an assignee of the note and mortgage on account of any error or mistake in the certificate, there being no privity of contract or any relation whatever between the attorney and the assignee. The court stated that such certificate, made at the instance of the owner, might be used to influence the third person to make a loan, but that when the certificate was made for the information of the lender, it was presumably made for his use alone, and when the loan was made and security accepted, it had performed. its office.

In National Sav. Bank v. Ward (1880) 100 U. S. 195, 25 L. ed. 621, in an action against an attorney employed by a pretended owner of land to make a title search instituted by one lending money on faith of the search records, the court, in holding the defendant not liable, stated that where there was neither fraud, collusion nor privity of contract, the person whose act had caused damage would not be liable therefor unless the act was one imminently dangerous to the lives of others, or to be performed in pursuance of some legal duty. In that case it was held that evidence of a local usage that attorneys examining title of an applicant for a loan should be considered as also acting for the lender of money

was not admissible, as it would tend to contradict what was clear and unambiguous, or to restrict or enlarge what required no explanation. Waite, Ch. J., dissented, stating that, in his opinion, the case presented the situation of one employed to examine and certify to the recorded title of real property, giving his client a certificate which he knew, or ought to have known, would be used in a business transaction as evidence of the fact certified to.

And it has been held that, because of no privity of contract, an abstracter, who, in his search certifies, guarantees and warrants to the property owner, "his heirs, devisees, or grantees," that everything affecting the title to the premises is set forth therein, is not liable to a mesne grantee of the person for whom the certificate was made. Glawatz v. People's Guaranty Search Co. (1900) 49 App. Div. 465, 63 N. Y. Supp. 691, the court stating that the case was not within the doctrine of Lawrence v. Fox (1859) 20 N. Y. 269.

But where it appears that a firm applying to an abstracter to procure an extension of an abstract is acting as agent for the plaintiff, recovery may be had from the abstracter for his negligence in making the extension. Young v. Lohr (1902) 118 Iowa, 624, 92 N. W. 684. And the court further stated that it was sufficient if the agency in fact existed, whether the defendant knew the plaintiff as principal or not.

And in Allen v. Hopkins (1900) 62 Kan. 175, 61 Pac. 750, it was held that the finding of the jury that a real estate company acted as agent for both parties to an exchange of land, and as such agent for these parties ordered from the defendant an abstract of the title of one of the tracts of land, was sufficient to sustain a finding of privity of contract between the owner of the other tracts and the abstracter, which would enable him to recover for damages caused through error in making the abstract.

And so a privity exists rendering a prothonotary liable for his negligence in making a search, where,

although the original search was made at the request of and paid for by the borrower, the vendor's agent took the certificate to the officer and requested a new search, which was made by the officer, who returned the certificate to the agent, stating that it was correct. Siewers v. Com. (1878) 87 Pa. 16.

An abstract company retained by one party to extend a search which it has previously made for other parties, which by reference and adoption makes those former certificates part and parcel of the later one, is liable to the party for whom the search is made, for any material omission in the abstract, although the omission occurs in the previous certificate, the liability being considered contractual and recovery allowed upon a finding of strict privity of contract. Bremerton Development Co. v. Title Trust Co. (1912) 67 Wash. 268, 121 Pac. 69. And so, where an attorney employs an abstracter to furnish a certificate of title intended for a client of the attorney, a sufficient privity of contract exists between the client and the abstracter to enable the client to recover for any omission in the certificate, although the abstracter was not advised of the fact that the attorney was procuring the continuation for any other than himself. Murphy v. Fidelity Abstract & Title Co. (1921) 114 Wash. 77, 194 Pac. 591.

2. Effect of knowledge of use intended. And some courts, to mitigate the rigor of the above rule, have held, in cases dealing with the liability of an abstracter for negligence in making an abstract of the title of real property, that a privity of contract exists, enabling one purchasing or taking a mortgage of property to maintain an action for negligence in the preparation of the abstract, although the abstract was made at the instance of the vendor, if it can be shown that the abstracter knew the purpose for which it was intended.

Indiana.-Brown v. Sims (1899) 22 Ind. App. 317, 72 Am. St. Rep. 308, 53 N. E. 779. Montana.-Western

Loan & Sav.

Co. v. Silver Bow Abstract Co. (1904) 31 Mont. 448, 107 Am. St. Rep. 435, 78 Pac. 774.

New Jersey.-Economy Bldg. & L. Asso. v. West Jersey Title Guarantee Co. (1899) 64 N. J. L. 27, 44 Atl. 854. Pennsylvania.-Peabody Bldg. & L. Asso. v. Houseman (1879) 89 Pa. 261, 33 Am. Rep. 757.

Tennessee. Dickle v. Nashville Abstract Co. (1890) 89 Tenn. 431, 24 Am. St. Rep. 616, 14 S. W. 896; Denton v. Nashville Title Co. (1903) 112 Tenn. 320, 79 S. W. 99.

Texas. Decatur Land, Loan & Abstract Co. v. Rutland (1916) Tex. Civ. App. 185 S. W. 1064.

Washington.-Anderson v. Spriestersbach (1912) 69 Wash. 393, 42 L.R.A. (N.S.) 176, 125 Pac. 166.

And see also dissenting opinion of Waite, Ch. J., in National Sav. Bank v. Ward (1880) 100 U. S. 195, 25 L. ed. 621, supra.

But Zweigardt v. Birdseye (1894) 57 Mo. App. 462, holds that, because no privity of contract exists between one examining title to real property for the owner and a purchaser from the owner, the examiner is not liable to the purchaser for the negligent omission to include a judgment against the owner, even though he had knowledge that the abstract was to be used in a sale or loan by the owner to advise the purchaser or lender of encumbrances against the property.

In Dickle v. Nashville Abstract Co. (Tenn.) supra, where the plaintiff refused to purchase property unless furnished with an abstract of title, and the defendants, at the request of the owner, made and delivered to the plaintiff an abstract of title which they guaranteed to be true and perfect, and on the faith of which the plaintiff purchased the property, the court, on demurrer, for the reasons that the bill did not allege fraud and that there was no privity of contract, held that a privity of contract was established between the abstracter and the purchaser, and remanded the case before the proceeding, stating that if an abstract company makes a mistake or oversight in preparing its

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