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(312 III. 245, 143 N. E. 833.) there was nothing to show that the who ordered and paid for it, will report was made with intent to de- rely upon it in making a trade or ceive the purchaser.

purchase, he is liable in damages to It has been held that a public such person for any loss resulting weigher, who was ordered by the from a material error or omission seller to weigh goods sold and was (Anderson v. Spriestersbach, 69 paid by the seller for his services, Wash. 393, 42 L.R.A.(N.S.) 176, owed a duty to the buyer to weigh 125 Pac. 166), but these decisions carefully, though there was no con- do not furnish authority for affirmtract between them, where he knew ing the judgment in the case at bar. that the purpose of the weighing Plaintiffs in error did not deliver a was to determine the amount the certificate of inspection to defendbuyer should pay, and where he fur- ant in error, nor were they advised nished a copy of his certificate to by defendant in error that it was the buyer for that purpose (Glanzer going to rely upon their inspection. v. Shepard, 233 N. Y. 236, 23 A.L.R. The judgments of the Appellate 1425, 135 N. E. 275), and that

and Superior Courts are reversed. where an abstracter knows that the person to whom he delivers an ab- Petition for rehearing denied stract, at the expense of the owner, June 5, 1924.

ANNOTATION.

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

reliance thereon.

1. In general, 67.
IL. Specific instances:
a. Title abstracters:

1. In general, 68,
2. Effect of knowledge of use

intended, 71.
3. Effect of statutes, 73.

II.—Continued.

b. Notaries public, justices of peace,

etc., 74.
c. Inspectors, 76.
d. Valuers, surveyors, etc., 77.
e. Miscellaneous, 79.

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 herewiii) ante,

I. In general. It has frequently been declared a rule of law that no cause of action in tort can arise from the breach of a duty existing by virtue of a contract, unless there be between the parties a privity of contract, so that a plaintiff can show no wrong done himself for the breach of any duty arising out of a contractual relation, unless he can establish himself as a party or privy to the contract. 20 R. C. L. 49, § 44.

Following this general principle, the courts generally hold that, because of the absence of privity between the parties, a person making a certificate or record, in the absence of collusion or fraud, incurs no liability toward persons, other than the ones by whom he was employed, who rely thereon, for any negligent errors or omissions therein, causing damage.

63.

v.

Kansas. Mallory Ferguson (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. Thomas v. Guarantee Title & T. Co. 471.

(Ohio) supra. New Jersey.-Kahl v. Love (1874) An exception to this rule seems to 37 N. J. L. 5.

exist, however, where the person makNew York.-Day v. Reynolds (1885) ing the record or certificate follows 23 Hun, 131; Glawatz v. People's a common calling in doing so, and in Guaranty Search Co. (1900) 49 App.

such case he is liable to a person Div. 465, 63 N. Y. Supp. 691; Lock- proximately injured by his negligence, wood v. Title Ins. Co. (1911) 73 Misc. regardless of whether a privity of 296, 130 N. Y. Supp. 824, affirmed in contract can be said to exist or not. (1914) 163 App. Div. 929, 147 N. Y. Tardos v. Bozant (1846) 1 La. Ann. Supp. 1123, but reversed in (1917) 220 199; Nickerson v. Thompson (1851) N. Y. 410, 115 N. E. 981, on other 33 Me. 433; Pearson v. Purkett (1834) grounds.

15 Pick. (Mass.) 264; Glanzer v. ShepNorth Dakota.-Morin Divide ard (1922) 233 N. Y. 236, 23 A.L.R. County Abstract Co. (1921) 48 N. D. 1425, 135 N. E. 275. And see (1915) 214, 183 N. W. 1006.

192 Ill. App. 215, former appeal of the Ohio.-Thomas V. Guarantee Title

reported case (NATIONAL IRON & & T. Co. (1910) 81 Ohio St. 432, 26

STEEL Co. v. HUNT, ante, 63). L.R.A.(N.S.) 1210, 91 N. E. 183, 2 N.

And if the defendant prepares an C. C. A. 80.

abstract or record at the instance of Pennsylvania.Com. use of Kel- the agent of the plaintiff, a sufficient logg v. Harmer (1865) 6 Phila. 90;

privity exists between the plaintiff Houseman v. Girard Mut. Bldg. Co.

and the defendant to enable the plain(1876) 81 Pa. 256; Landell v. Lybrand

tiff to maintain an action for negli(1916) 264 Pa. 406, 8 A.L.R. 461, 107

gence in the preparation thereof. Atl. 783.

Young v. Lohr (1902) 118 Iowa, 624,

92 N. W. 684; Allen v. Hopkins (1900) Tennessee.-Equitable Bldg. & L.

62 Kan. 175, 61 Pac. 750; Siewers v. Asso. v. Bank of Commerce & T. Co.

Com. (1878) 87 Pa. 15; Bremerton De(1907) 118 Tenn. 678, 12 L.R.A.(N.S.)

velopment Co. Title Trust Co. 449, 102 S. W. 901, 12 Ann. Cas. 407.

(1912) 67 Wash. 268, 121 Pac. 69; Texas.—Decatur Land, Loan & Ab

Murphy v. Fidelity Abstract & Title stract Co. v. Rutland (1916) Tex.

.

Co. (1921) 114 Wash. 77, 194 Pac. 591. Civ. App. 185 S. W. 1064.

And see infra, II. a, 2, for discussion Washington.-Bremerton Develop

as to effect of knowledge of the use ment Co. v. Title Trust Co. (1912) 67

thereof. Wash. 268, 121 Pac. 69. England.—Derry v. Peek (1889) L.

II. Specific instances. R. 14 App. Cas. 337, 58 L. J. Ch. N. S.

a. Title abstracters. 864, 61 L. T. N. S. 265, 38 Week. Rep. 33, 1 Megone, 292, 54 J. P. 148, 12

1. In general. Eng. Rul. Cas. 250; Le Lievre v. Gould It is not the purpose of this sub(1893] 1 Q. B. 491, 62 L. J. Q. B. N. S. division to treat the general question 353, 68 L. T. N. S. 626, 4 Reports, 274,

of the liability of title abstracters, 41 Week. Rep. 468, 57 J. P. 484-C.

but, assuming that the abstracter has A.; Love v. Mack (1905) 93 L. T. N. S. committed a breach of duty in the 352—C. A. But see Cann v. Willson preparation of the abstract for which (1888) L. R. 39 Ch. Div. 39, 57 L. J.

he would be liable for damages Ch. N. S. 1034, 59 L. T. N. S. 723, 37 caused thereby to the person employWeek. Rep. 23, overruled in Le Lievre ing him, whether such liability exv. Gould, supra.

tends to third persons relying on his A custom cannot change the rule. abstract. National Sav. Bank v. Ward (U. S.) The general rule, above stated, that supra; NATIONAL IRON & STEEL Co. v.

third persons, relying on certificates HUNT (reported herewith) ante, 63; or records prepared at the instance Gordon V. Livingston (Mo.) and and for the use of others, cannot re

V.

V.

cover for negligence in the prepara- corder of deeds was not liable on a tion of the certificate or record, is false certificate of search to a subsegenerally held applicable in cases of quent grantee from the person takabstracts of title prepared by title ing the certificate, the court, observabstracters; at least, where there is ing that the duty of the recorder of no evidence of an agency between the deeds was to make searches for mortperson procuring the abstract and the gages, deeds, and other recordable one relying thereon, or of knowledge instruments, at the instance of those on the part of the abstracter that applying therefor and paying him the third persons will rely thereon. fee allowed by law for this duty,

United States.-National Sav. Bank states: “The duty is specific, to make v. Ward (1880) 100 U. S. 195, 25 L. it for him who asks for it, and pays ed. 621; Dundee Mortg. & T. Invest. for it, and, therefore, has a right to Co. v. Hughes (1884) 20 Fed. 39. the responsibility of the officer, and

Arkansas.-Talpey v. Wright (1895) to rely upon it. It is he who is de61 Ark. 275, 54 Am. St. Rep. 206, 32 ceived by the officer's false search, S. W. 1072.

because he alone stands in privity Idaho.—Merrill v. Fremont Ab

with him, by demanding performance stract Co. (1924) Idaho, 227

of the duty and making compensation Pac. 34 (dictum).

for it. The emoluments of office conKansas. Mallory V. Ferguson

stitute the consideration of the under(1893) 50 Kan. 685, 22 L.R.A. 99, 32

taking of the responsibility. Pac. 410.

If a new liability arises, it is because Missouri.--Zweigardt Birdseye

of a new duty, which cannot take (1894) 57 Mo. App. 462.

And see

place without a renewed privity and Schade v. Gehner (1896) 133 Mo. 252,

a renewed compensation. It encoun34 S. W. 576.

ters a further objection. The new Nebraska.—Gate City Abstract Co.

duty, at each successive purchase, v. Post (1898) 55 Neb. 742, 76 N. W.

gives rise to a new cause of action, 471.

which runs only from its breach, and New York.-Glawatz v. People's

cannot occur until the new purchase

is made. This may be twenty years Guaranty Search Co. (1900) 49 App.

after the date of the certificate. But Div. 465, 63 N. Y. Supp. 691.

this is repugnant to the Statute of North Dakota.-Morin Divide

Limitations, which bars action against County Abstract Co. (1921) 48 N. D.

sureties in official bonds after seven 214, 183 N. W. 1006.

years from the injury, and that must Ohio.—Thomas v. Guarantee Title

arise during the official term." & T. Co. (1910) 81 Ohio St. 432, 26

And where a property owner emL.R.A. (N.S.) 1210, 91 N. E. 183, 2

ployed the defendant to make an abN. C. C. A. 80.

stract of title which he desired to use Pennsylvania.Com. use of Kel

in securing a loan upon a mortgage of logg v. Harmer (1865) 6 Phila. 90.

the property, and an investment comTennessee.-Equitable Bldg. & L.

pany, through a broker employed by Asso. v. Bank of Commerce & T. Co.

a property owner relying upon the (1907) 118 Tenn. 678, 12 L.R.A.(N.S.)

certificate of search, advanced the 449, 102 S. W. 901, 12 Ann. Cas. 407.

money, taking as security notes and Texas.-Decatur Land, Loan & Ab

mortgage, which it thereafter stract Co. v. Rutland (1916) Tex.

signed to the plaintiff, who also reCiv. App. 185 S. W. 1064.

lied upon the certificate of search, the Washington. — Bremerton Develop- court in Talpey v. Wright (Ark.) ment Co. v. Title Trust Co. (1912) 67 supra, held that while the broker or Wash. 268, 121 Pac. 69.

the investment company had a right This rule has been changed in many of action against the defendant, it states, by statute. See infra, II. a, 3. was clear that the assignee had no

In Com. use of Kellogg v. Harmer such right of action, as the defendant (Pa.) supra, in holding that a re- did not contract to furnish the ab

V.

asa

v.

stract to the plaintiff, or to anyone was not admissible, as it would tend for his use and benefit.

to contradict what was clear and unAnd it has been held that no privity ambiguous, or to restrict or enlarge of contract exists between the widow what required no explanation. Waite, as sole devisee of one employing an- Ch. J., dissented, stating that, in his other to make an abstract of title of opinion, the case presented the situacertain property, and the abstracter, tion of one employed to examine and such as will entitle her to maintain certify to the recorded title of real an action against the abstracter for property, giving his client a certificate negligence in the performance of his which he knew, or ought to have work. Schade v. Gehner (Mo.) supra. known, would be used in a business The decision of this question, how- transaction as evidence of the fact ever, does not seem to have been certified to. necessary, as the court decided that And it has been held that, because in any event her action was barred by of no privity of contract, an abstracthe Statute of Limitations.

ter, who, in his search certifies, In Dundee Mortg. & T. Invest. Co. guarantees and warrants to the propV. Hughes (Fed.) supra, it was held erty owner, "his heirs, devisees, or that an attorney, who, at the instance grantees," that everything affecting of the lender, made a title search of the title to the premises is set forth the property on which the money was therein, is not liable to mesne to be loaned, was not liable to an as- grantee of the person for whom the signee of the note and mortgage on certificate was made. Glawatz account of any error or mistake in People's Guaranty Search Co. (1900) the certificate, there being no privity 49 App. Div. 465, 63 N. Y. Supp. 691, of contract or any relation whatever the court stating that the case was between the attorney and the as- not within the doctrine of Lawrence signee. The court stated that such v. Fox (1859) 20 N. Y. 269. certificate, made at the instance of But where it appears that a firm the owner, might be used to influence applying to an abstracter to procure the third person to make a loan, but an extension of an abstract is acting that when the certificate was made for as agent for the plaintiff, recovery the information of the lender, it was may be had from the abstracter for presumably made for his use alone, his negligence in making the extenand when the loan was made and sion. Young v. Lohr (1902) 118 Iowa, security accepted, it had performed 624, 92 N. W. 684. And the court its office.

further stated that it was sufficient In National Sav. Bank v. Ward if the agency in fact existed, whether (1880) 100 U. S. 195, 25 L. ed. 621, the defendant knew the plaintiff as in an action against an attorney em

principal or not. ployed by a pretended owner of land And in Allen v. Hopkins (1900) 62 to make a title search instituted by Kan. 175, 61 Pac. 750, it was held that one lending money on faith of the the finding of the jury that a real search records, the court, in holding estate company acted as agent for the defendant not liable, stated that both parties to an exchange of land, where there was neither fraud, col- and as such agent for these parties lusion nor privity of contract, the per

ordered from the defendant an abson whose act had caused damage stract of the title of one of the tracts would not be liable therefor unless of land, was sufficient to sustain a the act was one imminently dangerous finding of privity of contract between to the lives of others, or to be per- the owner of the other tracts and the formed in pursuance of some legal abstracter, which would enable him duty. In that case it was held that to recover for damages caused through evidence of a local usage that attor- error in making the abstract. neys examining title of an applicant And so a privity exists rendering for a loan should be considered as a prothonotary liable for his negalso acting for the lender of money ligence in making a search, where,

although the original search was made Co. v. Silver Bow Abstract Co. (1904) at the request of and paid for by the 31 Mont. 448, 107 Am. St. Rep. 435, borrower, the vendor's agent took the 78 Pac. 774. certificate to the officer and requested New Jersey.-Economy Bldg. & L. a new search, which was made by the Asso. v. West Jersey Title Guarantee officer, who returned the certificate Co. (1899) 64 N. J. L. 27, 44 Atl. 854. to the agent, stating that it was cor- Pennsylvania.- Peabody Bldg. & L. rect. Siewers v. Com. (1878) 87 Pa. Asso. v. Houseman (1879) 89 Pa. 261, 16.

33 Am. Rep. 757. An abstract company retained by Tennessee. Dickle v. Nashville one party to extend a search which Abstract Co. (1890) 89 Tenn. 431, 24 it has previously made for other par- Am. St. Rep. 616, 14 S. W. 896; Denties, which by reference and adoption ton y. Nashville Title Co. (1903) 112 makes those former certificates part Tenn. 320, 79 S. W. 99. and parcel of the later one, is liable Texas.-Decatur Land, Loan & Abto the party for whom the search is stract Co. v. Rutland (1916) Tex.

. made, for any material omission in Civ. App. —, 185 S. W. 1064. the abstract, although the omission Washington.-Anderson v. Spriesoccurs in the previous certificate, the tersbach (1912) 69 Wash. 393, 42 liability being considered contractual L.R.A.(N.S.) 176, 125 Pac. 166. and recovery allowed upon a finding And see also dissenting opinion of of strict privity of contract. Bremer- Waite, Ch. J., in National Sav. Bank ton Development Co. v. Title Trust v. Ward (1880) 100 U. S. 195, 25 L. Co. (1912) 67 Wash. 268, 121 Pac. 69. ed. 621, supra.

And so, where an attorney employs But Zweigardt v. Birdseye (1894) an abstracter to furnish a certificate 57 Mo. App. 462, holds that, because of title intended for a client of the no privity of contract exists between attorney, a sufficient privity of con- one examining title to real property tract exists between the client and for the owner and a purchaser from the abstracter to enable the client to the owner, the examiner is not liable recover for any omission in the cer- to the purchaser for the negligent tificate, although the abstracter was omission to include judgment not advised of the fact that the attor- against the owner, even though he ney was procuring the continuation had knowledge that the abstract was for any other than himself. Murphy to be used in a sale or loan by the v. Fidelity Abstract & Title Co. (1921) owner to advise the purchaser or 114 Wash. 77, 194 Pac. 591.

lender of encumbrances against the

property. 2. Effect of knowledge of use intended.

In Dickle v. Nashville Abstract Co. And some courts, to mitigate the (Tenn.) supra, where the plaintiff rerigor of the above rule, have held, fused to purchase property unless in cases dealing with the liability of furnished with an abstract of title, an abstracter for negligence in mak- and the defendants, at the request of ing an abstract of the title of real the owner, made and delivered to the property, that a privity of contract plaintiff an abstract of title which exists, enabling one purchasing or they guaranteed to be true and pertaking a mortgage of property to fect, and on the faith of which the maintain an action for negligence in plaintiff purchased the property, the the preparation of the abstract, al- court, on demurrer, for the reasons though the abstract was made at the that the bill did not allege fraud and instance of the vendor, if it can be that there was no privity of contract, shown that the abstracter knew the held that a privity of contract was purpose for which it was intended. established between the abstracter

Indiana.—Brown v. Sims (1899) 22 and the purchaser, and remanded the Ind. App. 317, 72 Am. St. Rep. 308, case before the proceeding, stating 53 N. E. 779.

that if an abstract company makes a Montana.-Western Loan & Sav. mistake or oversight in preparing its

a

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