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certificate, it must respond to the in- company to make a search of the title, jured party.
making known his agreement with the This case was followed in Denton plaintiff, and the company agreed to v. Nashville Title Co. (Tenn.) supra,
make and deliver a search and cerwhich held that an abstract company tificate to the property owner, to be making a certificate of title for the by him delivered to the plaintiff and owner of property, and knowing that used for the purpose of obtaining the it was to be used in making a sale, loan. Economy Bldg. & L. Asso. v. was liable for any material defect West Jersey Title Guarantee Co. causing injury to the immediate pur- (1899) 64 N. J. L. 27, 44 Atl. 854. The chaser, to whom the abstract was court stated that the contention of the issued.
defendant that no privity existed beBut Equitable Bldg. & L. Asso. v. tween it and the plaintiff required too Bank of Commerce & T. Co. (1907) narrow a view of the transaction, but 118 Tenn. 678, 12 L.R.A.(N.S.) 449, that, upon the averments of the com102 S. W. 901, 12 Ann. Cas. 407, held plaint, there was disclosed either a that, as an abstracter is liable for his contract between the plaintiff and the errors only where a privity of con- defendant, made through the agency tract exists, he cannot be made to an- of the property owner, for the examswer to one to whom an abstract was ination and certification of the title, presented by the property owner, and or a contract of like employment bewiho loaned money in reliance thereon, tween the property owner and the dewithout any notice to the abstracter fendant, for the benefit of the plainof the intended use of the instru- tiff. ment. The court distinguished the And so a recorder is liable for the Dickle Case and the Denton Case, acts of his clerk in issuing a certifisupra, as holding that under special cate of search, from which he omitted circumstances appearing therein a a mortgage of record at the request privity existed, as in those cases the of the property owner, who assured officers of the abstract company knew him the mortgage was to be paid with for what purpose the abstract was be- money which he was to procure from ing obtained.
a loan then in negotiation, where the Where it was shown that an ar- clerk knew that the plaintiff was rangement existed between a loan as- about to loan money on the faith of sociation and an abstract company, the certificate. Peabody Bldg. & L. by which applicants for loans were Asso. v. Houseman (1879) 89 Pa. 261, required to furnish abstracts to the 33 Am. Rep. 757. loan association, prepared by the ab- And so in Decatur Land, Loan & stract company, which were paid for Abstract Co. v. Rutland (1916) by the applicants, the court in West- Tex. Civ. App. 185 S. W. 1064, it ern Loan & Sav. Co. v. Silver Bow was held that a finding that an abAbstract Co. (1904) 31 Mont. 448, stract company which had prepared 107 Am. St. Rep. 435, 78 Pac. 774, an abstract for the seller of real propheld that not only a privity of con- erty reaffirmed and rectified the abtract was established, but that an stract at the instance of the puractual contract existed between the chaser, and was informed that he conabstract company and the loan as- templated the purchase of the land sociation, as the abstract company and would rely on the title as shown knew that the abstract was for the in the abstract, was sufficient to imexclusive benefit and use of the as- pose a liability in favor of the pursociation, and that it would rely chaser for its negligence in making thereon.
the abstract. And so an action on the contract And the court in Anderson v. Spriemay be maintained by the lender sterbach (1912) 69 Wash. 393, 42 against an abstract company, where L.R.A. (N.S.) 176, 125 Pac. 166, stated in order to procure the loan the prop- that it was inferentially held in Naerty owner had applied to the abstract tional Sav. Bank v. Ward (U. S.) supra, that, had the abstracter had “any considered, it must be concluded that knowledge as to the purposes for the view we take of the pleading bewhich the abstract was obtained,” fore us is sustained by the authorihe would have been liable to one act- ties." ing upon his credit. But see Gordon
3. Effect of statutes. v. Livingston (Mo.) infra, II. c.
In some states statutes have been In Thomas v. Guarantee Title & T.
enacted governing the liability of title Co. (1910) 81 Ohio St. 432, 26 L.R.A.
abstracters for errors in making ab(N.S.) 1210, 91 N. E. 182, 2 N. C. C.
stracts, which in general terms imA. 80, the court, after stating that it could find no exception to the general
pose a liability for damage proximaterule that an action against an ab
ly caused to any person by such er
rors. Such statutes have been held stracter for damages in making or
to impose a liability for damage certifying an abstract of title sound
caused to a third person relying upon in contract, and that he could be lia
an incorrect abstract. ble only to the person employed by
the South Dakota Code provision that him, criticizes Brown v. Sims (1899) 22 Ind. App. 317, 72 Am. St. Rep. 308,
abstracters are liable for any and all
damages that may occur to any party 53 N. E. 779; Denton v. Nashville Title Co. (1903) 112 Tenn. 320, 79 S.
or parties by reason of any error, deW. 99, and Economy Bldg. & L. Asso.
ficiency, or mistake in the abstract
of certificate of title made or issued v. West Jersey Title Guarantee Co.
by the abstracter, an abstracter is (1899) 64 N. J. L. 27, 44 Atl. 854, supra, as being exceptional cases, in
liable to the person injured, without which the court sought to mitigate the
regard to who pays for it or by whom rigor of that rule by straining the
it was ordered, the court stating that doctrine of privity of contract.
the intention of the legislature was
to include within the protection of And so an abstracter, who, at the request of the property owner, makes
this statute any person suffering damand certifies abstracts of the title of
age by reason of the neglect or omisland, which he delivers to the plain
sion of an abstracter. Goldberg v.
Sisseton Loan & Title Co. (1909) 24 tiff, who makes a loan to the owner, is liable to the plaintiff for negligence
S. D. 49, 140 Am. St. Rep. 775, 123
N. W. 266. in making the abstract. Brown v. Sims (1899) 22 Ind. App. 317, 72 Am.
And in Oklahoma, under a statuSt. Rep. 308, 53 N. E. 779. The court
tory provision requiring an abstrac
ter to execute a bond conditioned that states: “We think it cannot properly be said that the appellee did not owe
he will properly demean himself in a duty to the appellant arising under
the business of abstracting, and will the contract, the attending circum
pay all damage that may accrue to
any person by reason of any incomstances indicating that it was the
pleteness, imperfections, or errors in understanding of all the parties that
any abstract furnished by him," and the service was to be rendered for
which further provides that the perthe use and benefit of the appellant,
son executing the bond shall be liable the particular person who was to loan
“to any person or persons for whom his money in reliance upon what the
he or they may compile, make or furabstracter should do and represent in nish abstracts of title to the amount the premises. If such a duty did of damage done to the said person or arise, the appellee was bound to the persons by any incompleteness, imperson to whom he owed the duty, to perfections, or errors" made by the perform it with reasonable care and abstracter, renders the abstracter liaskill. However broad and inclusive ble to persons not in privity with him, the statements of the general doctrine for errors in the certificate of search in the decided cases, we think that upon which they may rely. Washingwhen the facts involved and the ton County Abstract Co. v. Harris reasons stated in the opinions, to (1915) 48 Okla. 577, 149 Pac. 1075; some of which we have referred, are Sackett v. Rose (1916) 55 Okla. 398,
L.R.A.1916D, 820, 154 Pac. 1177; Scott ship in land. Its function is to vouch v. Jordan (1916) 55 Okla. 708, 155 for the title, to define its character, Pac. 498. And see also Gregory v. and afford a reliable basis on which Harper (1915) 51 Okla. 419, 152 Pac. to estimate its marketable worth. 7. And under a similar provision of That being the case, it seems highly the Idaho statutes (Comp. Stat. § probable that, in adopting the act in 2262) an abstracter was held liable question, the legislative design comto a purchaser from the party procur- prehended protection to those who, in ing the abstract, for negligence in dealing with land titles, rely on the preparing it. The court stated that correctness of the abstracter's cerin the absence of statute there could tificate. They stood most in need of have been no recovery, for the reason legislation of this character, and, bethere was no privity between the par- ing fairly within the description of ties. Merrill v. Fremont Abstract Co. persons for whose benefit the law was (1924) Idaho, 227 Pac. 34. enacted, we feel warranted in holding And similar conclusion
that they are within its terms." reached under a subsequent amend- And the Kansas statute (Laws 1903, ment of the Nebraska statute (Rev. chap. 1, Gen. Stat. 1909, | 1690) exStat. 1913, 8 6277) containing, in sub- tends the liability of the abstracter stance, the same provision as in the on his bond to include all damages earlier enactment, in Crook v. Chil- caused to any person or persons by vers (1916) 99 Neb. 685, 157 N. W. reason of the incompleteness, imper617, Ann. Cas. 1918E, 90, 13 N. C. C. fections, or errors made by the abA. 431, holding that a purchaser of stracter, and under that statute a real estate was entitled to maintain subsequent grantee from the person an action against an abstracter em- securing the abstract may recover on ployed by the vendor. See also Mar- the abstracter's bond for error in cell v. Midland Title Guarantee & A. making the search, even though the Co. (1924) - Neb. - 199 N. W. 731. terms of the bond did not cover any
And under the Nebraska statute liability except such as might arise (Sess. Laws 1887, p. 65, chap. 64) in favor of the persons for whom the providing that anyone engaged in the abstract was made, where there is business of compiling abstracts of another provision in the bond that the titles shall execute a bond conditioned abstracter will properly demean himfor the payment of any and all dam- self in the business of abstracting, ages accruing to any party by reason the court stating that that could only of any error, deficiency, or mistake be done by the performance of the in making the abstract, which further duty as the law provides. Arnold v. provides that the abstract shall be Barner (1914) 91 Kan. 768, 139 Pac. prima facie evidence of the existence 404, Ann. Cas. 1915D, 446, 6 N. C. C. of any encumbrance mentioned there- A. 965. in, it was held in Gate City Abstract 6. Notaries public, justices of peace, etc. Co. v. Post (1898) 55 Neb. 742, 76 N.
Generally, as to the question of the W. 471, that a subsequent grantee
liability of a notary public on his from the person securing the ab
bonds, see annotation in 18 A.L.R. stract, who relied thereon, was
1302, supplemented in 31 A.L.R. 920. titled to maintain an action on the A notary public, justice of the abstracter's bond for false recitals in
peace, or other like officer is liable the certificate of abstract. The court at common law, or on his official bond, states: “It is matter of common for damage proximately caused to knowledge that titles are generally any person by relying on a certificate transferred and encumbered on the to an acknowledgment of a deed, faith and credit of certificates fur- mortgage, bill of sale, or similar innished by abstracters to the owners strument, in which he falsely cerof the land. An abstract has become tifies that the parties thereto are perthe usual comitant of every instru- sonally known to him, and appeared ment evidencing an interest or owner- and acknowledged the instrument.
California. Hatton Holmes (1913) 39 Okla. 775, 136 Pac. 758; (1893) 97 Cal. 208, 31 Pac. 1131; Clapp v. Miller (1916) 56 Okla. 29, Joost v. Craig (1901) 131 Cal. 504, 156 Pac. 210, 11 N. C. C. A. 581; Clapp 82 Am. St. Rep. 374, 63 Pac. 840; v. Miller (1923) 89 Okla. 38, 213 Pac. Homan v. Wayer (1908) 9 Cal. App. 854. 123, 98 Pac. 80; Kleinpeter v. Castro Tennessee.-Figuers v. Fly (1917) (1909) 11 Cal. App. 83, 103 Pac. 137 Tenn. 358, 193 S. W. 117. 1090; Anderson v. Aronsohn (1919) Texas.-Brittain v. Monsur (1917) 181 Cal. 294, 10 A.L.R. 866, 184 Pac. Tex. Civ. App. —, 195 S. W. 911. 12.
Washington. - Kangley V. Rogers Illinois.-People use of Munson v. (1915) 85 Wash. 250, 147 Pac. 898. Bartels (1891) 138 Ill. 322, 27 N. E.
As stated in State ex rel. Gardner 1091.
v. Webb (1914) 177 Mo. App. 60, 164 Iowa.-Wilson v. Gribben (1911) S. W. 184, “great faith and credit 152 Iowa, 379, 132 N. W. 849.
customarily are reposed in the cerKansas.-Brown v. Graves (1923) tificates of such officers, and a cor114 Kan. 602, 220 Pac. 247.
responding duty is imposed on them Kentucky.-Samuels v. Brand (1904) to exercise care and caution such as 119 Ky. 13, 82 S. W. 977; Com. use a reasonably careful and prudent of Green v. Johnson (1906) 123 Ky. man, burdened with such responsibil437, 124 Am. St. Rep. 368, 96 S. W. ity, would exercise, to guard against 801, 13 Ann. Cas. 716.
being led into making a false cerMichigan.—People ex rel. Curtiss tificate.” v. Colby (1878) 39 Mich. 458.
In Figuers v. Fly (Tenn.) supra, Minnesota. Barnard V. Schuler the court states: “A certificate of (1907) 100 Minn. 289, 110 N. W. 966.
acknowledgment is an act which must, Missouri.—State use of Kleinsorge in the nature of things, be relied on v. Meyer (1876) 2 Mo. App. 413; State with confidence by men of business. v. Plass (1894) 58 Mo. App. 148; State Those buying or taking security by ex rel. Covenant Mut. L. Ins. Co. v.
way of liens on real estate ought not Balmer (1898) 77 Mo. App. 463; State to be required to look with suspicion ex rel. Heitkamp v. Ryland (1901) 163 on such a certificate, or compelled to Mo. 280, 63 S. W. 819; State v. Grun
make proof of its recital as to the don (1901) 90 Mo. App. 266; State ex notary's personal acquaintance with rel. Savings Trust Co. Hallen
the acknowledger.” (1912) 165 Mo. App. 422, 146 S. W. And as a notary public, certifying 1171, later appeal in (1917) Mo.
under seal that all parties to a deed App. —, 196 S. W. 1067; State ex rel.
of assignment of a leasehold appeared Gardner v. Webb (1914) 177 Mo. App. before him and acknowledged the 60, 164 S. W. 184; State ex rel. Savings deed, whereas only three of the four Trust Co. v. Hallen (1917) Mo.
persons named therein were present, App. —, 196 S. W. 1067; State ex rel. and the signature of the fourth, Dominick v. Farmer (1918) Mo.
known to the notary, was forged, is App. 201 S. W. 955; State ex rel. not liable to the purchaser from the Haitz v. American Surety Co. (1920) assignee, who supposed he got good 203 Mo. App. 71, 217 S. W. 317.
title, for expense he was compelled to Montana.-Ellis v. Hale (1920) 58 undergo on account of the notary's Mont. 181, 194 Pac. 155.
false act. Ware v. Brown (1869) 2 Nebraska. – Harrington v. Vogle Bond. 267, Fed. Cas. No. 17,170. The (1919) 103 Neb. 677, 173 N. W. 699. court stated there was no privity of
New York. Lesser v. Wunder contract between the plaintiff and the (1879) 9 N. Y. Week. Dig. 56; Rhodes parties implicated in the fraud, and V. Franz (1916) 173 App. Div. 744, there could have been no intention 160 N. Y. Supp. 66.
to defraud or injure him, and that, North Dakota.-Peterson v. Mahon as it was the duty of the plaintiff to (1914) 27 N. D. 92, 145 N. W. 596. inquire as to the validity of his Oklahoma. State Nat. Bank v. Mee grantor's title, he could see no reason
why the doctrine of caveat emptor curred to persons not in privity, as should not apply.
being a case where a person underBut in Smith v. Maginnis (1905) 75 took to discharge a duty by which the Ark. 472, 89 S. W. 91, a notary public conduet of another might be reguwas held not liable, for falsely cer- lated and governed, and which he was tifying to an acknowledgment to an bound to perform in such a manner affidavit that certain persons were en- that one rightfully led to a course of titled to homestead entries, to pur- conduct on the faith of that act should chasers relying upon the affidavit and not suffer loss or injury by reason of certificate, where the essential pur- his negligence. pose of the affidavit was to establish So, a grain inspector appointed by the right to the satisfaction of the the board of directors of the Mergovernment, since the proximate cause chants' Exchange, who give certifof the injury was the wrongful act of icates of quality of grain purchased the vendor in selling what he did not and sold, which, by the general cusown, and not the negligent act of the tom of trade, are regarded by the notary in certifying to the affidavit. grain merchants as evidence that the And to the same effect is Coffin v. grain inspected is of the quality cerBruton (1906) 78 Ark. 162, 95 S. W. tified to, is not liable to a purchaser 462.
from a dealer at whose instance an A notary public who falsely cer- inspection is made, for giving a false tifies to a forged affidavit concerning certificate of inspection that the grain title to real property, purporting to was of a certain quality, which the have been made by the owners there- purchaser accepted without further of, will be liable for the loss occa- inspection, on the faith of the cersioned to a person relying on the tificate. Gordon v. Livingston (1882) genuineness of the affidavit, who 12 Mo. App. 267. makes a loan on the property on a But in the following cases the docmortgage forged by the same person
trine of Glanzer v. Shepard (N. Y.) who forged the affidavit. State ex rel. infra, II. e, that one following a comGardner v. Webb (1913) 177 Mo. App. mon calling may come under a duty 60, 164 S. W. 184.
to another than the one whom he c. Inspectors.
serves, though a third party may give
the order, is apparently the basis of The reported case (NATIONAL IRON
the decision in the following cases, & STEEL Co. v. HUNT, ante, 63) holds
dealing with the liability of food inthat one purchasing rails from an
spectors for damages caused by false other has no right of action against
or erroneous certificates of inspection: one who inspected them for the latter,
Tardos v. Bozant (1846) i La. for a false report, although he acted
Ann. 199, where an official inspector upon the report so made. The court
of pork was held liable to a purchaser observes that the facts that the in
for negligence in the inspection of the spectors held themselves out as ex
pork and for issuing a false certificate perts, and that business men relied
of inspection. The court stated that upon their reports in purchasing ma
the only mode of securing the objects terials, did not operate to change the rule requiring that there be privity
of inspection, that is, the giving of between the parties; the defendants
security to commerce and the increase only assumed the duties and obliga
in confidence of purchasers in the tions of experts when they were em
soundness of the article sold, was to ployed to render expert services, and hold the inspector responsible for all their obligations in that regard ex- ordinary diligence in the discharge of tended only to persons who bought his duties; and paid for those services. On an - Nickerson v. Thompson (1851) earlier appeal, the lower court, in 33 Me. 433, where a fish inspector was (1915) 192 Ill. App. 215, held that this held liable to a purchaser buying on case presented an exception to the the face of the inspection blank, for general rule that no liability was in- negligence in the inspection;