Case ID: so_156/html/0220-01.html
Source: Caselaw Access Project
Author: {"author": "OVERTON, Justice. O’NIELL, Chief Justice", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

180 La. 195
    FISHER v. LEVY, Clerk, et al.
    No. 32557.
    Supreme Court of Louisiana.
    May 21, 1934.
    Rehearing Denied July 2, 1934.
    Barksdale, Bullock, Warren, Clark & Van Hook, of Shreveport, for appellants.
    T. H. McGregor, of Alexandria, and Warren Hunt, of Rayville, for appellee.
    Blanchard, Goldstein, Walker & O’Quin, of Shreveport, amicus curite.
   OVERTON, Justice.

This is a suit against W. M. Levy, clerk of court of the parish of Caddo and ex officio recorder of mortgages thereof and the surety on his bond, the United States Fidelity & Guaranty Company of Baltimore, Md., for damages for the wrongful issuance of a mortgage certificate, thereby causing damage to plaintiff.

The mortgage records of Caddo parish disclosed two mortgages resting on a certain piece of real property belonging to Emma J. Chavis, granted by her. One mortgage was for $1,250, recorded May 23, 1923, and the second was for $1,831, and was recorded November 5, 1924. There was presented to one of Levy’s deputies, on January 7, 1925, a note for $1,250, dated May 21,1923, supposedly the note secured by the 'mortgage for $1,250: the note being marked paid. The person who presented the note is unknown. He requested the deputy to cancel the mortgage.

The deputy, after making some investigation to identify the note presented with the mortgage of record, complied with the request, and canceled it. The note presented is conceded to be a forgery. Therefore, the inscription of the mortgage was canceled by the deputy on a forged note. The genuine note was still out and unpaid. On the same day the person, whoever he was, who presented the forged note, obtained a mortgage certificate from the deputy showing that the second mortgage, mentioned above, that is, the one for $1,831, was the first and only mortgage on the property; the canceled $1,-250 mortgage having been omitted from the certificate.

On the strength of this certificate, Dr. J. D. Woolworth lent some money to the holder of the $1,831 note, and accepted this note as security for the loan. In the fall of 1925 Dr. Woolworth demanded payment of his loan, and the plaintiff herein was induced to furnish the money with which to pay it. The plaintiff did not care to accept tlie $1,831 note as security, as it was past due, but desired a new mortgage. He asked the deputy clerk for a new mortgage certificate, before parting with, bis money. The deputy clerk, in obedience to law, furnished the certificate. The certificate furnished was dated October 20, 1925, and showed the $1,831 mortgage as the first and only one on the property, omitting altogether, as canceled, the $1,250 mortgage.

On the faith of this certificate plaintiff furnished the money to retire the loan, made by Dr. Woolworth, and, instead of taking the $1,831 note as security, took a $1,977.48 note, secured by a new mortgage, and caused the $1,831 mortgage to be canceled from the records, thus leaving the new mortgage apparently the first and only one of record, according to the mortgage certificate.

This situation, however, was not to remain undisturbed. The $1,250 mortgage note, upon which the $1,250 mortgage was canceled, was a forgery. The genuine note had fallen into the hands of J. G. Trimble, who subsequently died, and his widow, Mrs. Martha H. Trimble, administered his succession. She sued by way of executory process on the genuine note, causing the property, securing it, to be sold some time about July, 1925. The property did not bring sufficient to pay the $1,250 mortgage. Efforts were made by plaintiff to prevent the sale under the circumstances, but in vain. The result was that plaintiff lost his security, for the $1,250 mortgage was still extant and was the first mortgage on the property. Its cancellation did not affect the holder of the genuine note, for the cancellation was made without his consent or knowledge, and was not binding upon him.

Plaintiff seeks to hold the clerk and his surety responsible for the fault, and asserted negligence of-the former’s deputy in canceling the mortgage on the authority of the forged note. The defense is that the note was identical with the one described in the mortgage and appeared to be genuine; that the deputy believed it to be the original note, secured by the mortgage; and that the deputy had before him no facts suggesting that the note was forged.

It may be observed, however, that sufficient facts appeared to have had the effect, if heeded, of placing the deputy on his guard and to have caused him to investigate the note more closely before acting on it. The note presented as authority for the cancellation was dated May 21, 1923. The mortgage,

the cancellation of which was requested, was filed for record on May 23, 1923. The mortgage, as inscribed, bore no date, the purported date being meaningless; nor was there anything- in the inscription that indicated the date of the note further than thé statement that the note was of even daté with the mortgage. Since the mortgage, as inscribed, bore no date, and therefore failed to identify the note with it with certainty, ordinary precaution would dictate that the deputy consult the original mortgage, which was on file in the clerk’s office, to identify the note with it. The inscription indicates, without so saying expressly, that the note was signed “Emma J. Chavis,” and not “E. J. Chavis,” and the inscription shows that the original mortgage was signed “Mrs. E. J. Chavis,” and not “E. J. Chavis,” as was the forged note. These circumstances were ample to place the deputy on his guard and to require the one presenting the note to furnish proof that it was the note intended to be secured by the mortgage, or to demand that such person obtain a judgment ordering the clerk to cancel the inscription of the mortgage. The failure of the deputy to have done so was negligence, resulting not only in the erroneous cancellation of a mortgage, but also in plaintiff, an innocent third person, losing his security, by leading him to believe that he would have the first mortgage on the property and by leading him to part with his money on the theory that he would have the first mortgage on it, this being done by the issuance of a mortgage certificate, based upon the erroneous cancellation, it being borne in mind that the erroneous cancellation did not affect the rights of the holder of the genuine note.

Section 68 of article 7 of the Constitution of 1921 reads:

“Each clerk of court shall give bond and security for the faithful performance of his duties in such amount as may be fixed by the Legislature.”

This article shows that the- clerk of court is responsible to others whom he maj injure in performing the duties of his office unfaithfully. One of the duties of clerks is to record the acts that are presented to them for registry and to furnish to those, demanding them, certificates of mortgages. Civil Code, art. 3393. Deputy clerks are granted these powers by law. Section 10, Act No. 204 of 1924. Clerks of court and ex officio recorders are responsible for the faithful performance of the ministerial duties of their deputies, transacted in the ordinary course of the business of their offices. 53 C. J., Verbo “Register of Deeds,” § 44; R. C. L., Verbo “Public Officers,” § 303.

Our conclusion is that the clerk of court and ex officio recorder, one of the defendants herein, is liable for the loss sustained 'by plaintiff because of his deputy’s fault, and that the surety on the clerk’s official bond is also liable. It would be intolerable if one deprived of his security by the. fault of a deputy clerk could not obtain redress from h'im by whose fault it happened or from his principal.

Defendant, however, urges that plaintiff’s action is one in tort, and is prescribed in one year. While plaintiff’s action involves a tort, it also involves a bond, and the action is upon the bond. An action on a bond does not prescribe for ten years. Therefore the action is not prescribed.

The trial court rendered judgment in favor of plaintiff and against defendants, the clerk of court and his surety, the United States Fidelity & Guaranty Company, of Baltimore, Md., in solido, in the sum of $1,977.48, with 8 per cent, per annum interest thereon from October 25, 1925, and in 'the further sum of $377.75, costs of court, expended by plaintiff in three suits, seeking to prevent the loss of his mortgage rights, with 5 per cent, yearly interest thereon from October 11, 1930. The trial court also impliedly rejected plaintiff’s demand for 10 per cent, attorney’s fees. These attorney’s fees are stipulated in the mortgage note that was lost, due to the fault of the deputy clerk. While the note itself stipulates the payment of attorney’s fees in the event it is placed in the hands of an attorney for collection or suit, yet this suit is not on the note, but for damages for its loss to plaintiff. The attorney’s fee clause is not applicable in this, the suit for damages. Therefore, plaintiff’s demand, contained in his answer to the appeal that the judgment be amended by allowing the attorney’s fees rejected below, cannot be sustained.

We find no error in the judgment.

The judgment is therefore affirmed.

ROGERS, J., concurs in the decree.

O’NIELL, Chief Justice

(concurring in the decree, except as to the amount of the judgment).

The liability of the recorder in a case like this is imposed by article 3394 of the Civil Code, which, in very plain terms, declares that a recorder of mortgages is answerable for any loss resulting, first, from omitting to record any act that is directed to be recorded in his office; or, second, from omitting to mention in a certificate of mortgages a recorded mortgage or lien on the property. The article declares that the only excuse that can be urged successfully by a recorder who has omitted from a certificate of mortgages a recorded mortgage or lien on the property is that the error was caused by “-a wánt of exactness in the description” of the property, which could not be imputed to the recorder.

The liability of the recorder, and of the surety on his official bond, for such an error or omission as is referred to in article 3394 of the Civil Code, is not dependent upon the recorder’s committing a tort, or being at fault, or being guilty of negligence, as is the liability imposed upon everybody by the declaration in article 2315, that every act whatever of man that causes damage to another obliges him by whose fault it happened to repair it. The controlling word in that article is the word “fault,” because no one is obliged by that article to repair a damage caused by his act unless he is at fault. But the liability imposed by article 3394 of the Code, upon the recorders of mortgages, is not dependent upon any actual fault or wrongdoing or negligence on the part of the recorder, beyond his official mistake.

The actions which are subject to the prescription of one year are enumerated in article 3536 of the Civil Code, and among them is mentioned “that for damages * * * resulting from offenses or quasi offenses.” But the liability of a public official, individually, for a loss occasioned by an error or omission in the performance of an official duty, is not dependent upon his being guilty of an offense or quasi offense, in the broad sense of the term, or in the sense in which it is used in article 3536 of the Code. The right of action for damages referred to in that article is the right of action granted by article 2315, and depends upon some actual fault or negligence, other than a mere error or omission in the performance of an official duty imposed by law.

The reason why an. action to enforce the liability imposed by article 3394 upon a recorder of mortgages 'is barred by the prescription of ten years, and not by the prescription of one year, is that this right of action is not listed among those “enumerated” in article 3536, or in any other article of the Code, and hence belongs in the omnibus article, 3544, viz.: “In general, all personal actions, except those before enumerated, are prescribed by ten years.”

It has been said, in the decisions maintaining that an action of this character is not barred by the prescription of one year bnt by the prescription of ten years, that the reason is that the damages result ex contractu, and not ex delicto, viz.: Brigham v. Bussey, 26 La. Ann. 676; Fox v. Thibault, 33 La. Ann. 32; Weintz v. Kramer, 44 La. Ann. 35, 10 So. 416; Baker v. Lee & Parks, 49 La. Ann. 874, 21 So. 588; Gordon v. Stanley, 108 La. 182, 32 So. 531. It was said or suggested in those cases that the giving of the official bond was what made' the action one for damages ex contractu, even with regard to the principal on the bond. But, if we maintain that the giving of the bond, instead of the character of the action, is what makes the action against the principal on the bond subject to the prescription of ten years, instead of one year, it will be impossible to reconcile these decisions with the ruling in Stephenson v. New Orleans Railway & Light Co., 165 La. 132, 115 So. 412. In that case a bond, was exacted by a municipal ordinance, and was given by the street railway company, to protect any person suffering damages to his person or property through any fault of the carrier ; and it was contended by the plaintiffs, suing the carrier and the surety on its 'bond for damages for the death of the plaintiffs’ sister, alleged to have been caused by the fault of the carrier, that the action was on the bond, and was therefore subject to the prescription of ten years, and not to the prescription of one year. But we held that the action was barred because of the failure of the plaintiffs to sue the railway 'company within one year; and that, as the action was barred as to the principal on the bond, it was barred also as to the surety. In so deciding, we referred with approval to the ease of Distefano v. Michiels, 158 La. 885, 104 So. 914, where it was held that a suit which was brought against the carrier within the year, and which had resulted in a judgment against the carrier, had interrupted the prescription of one year, and had therefore preserved the right of the plaintiff to sue the surety on the carrier’s bond, at any time within ten years from the date of the injury, to compel payment of the amount of the judgment. It was said in that case, and was affirmed in Stephenson’s Case, that, although the right of action against the principal on the bond was for damages for a quasi offense, and was therefore subject to the prescription of one year, nevertheless the right of action against the surety on the bond was founded upon the bond, or contract of guaranty, and was therefore subject to the prescription of ten years. I believe yet that the doctrine of the Distefano Case and of the Stephenson Case is sound. It is simply this: If the bond is given as a guaranty for the payment of damages resulting from an offense or a quasi offense, the right of action against the principal on the bond is barred by prescription if the action is not brought against him within the year from the date of the offense or quasi offense; and if the action against the principal is thus barred by prescription, the action against the surety on his bond is also barred. The right of action against the principal on the bond does not become a right of action ex contractu by reason of his giving a bond. It is not necessary for the principal to sign the bond. His liability is not created by his giving a 'bond, nor is it limited to the amount of the bond. He is liable even though he fails or neglects to give a bond. But the surety is not liable except by virtue of the bond, or beyond the amount of the bond. The liability of the surety, therefore,, arises ex contractu, from the contract of guaranty; and the liability of the surety is dependent, of course, upon the principal’s being also liable.

I respectfully submit, therefore, that we will do violence to the doctrine of the Diste-fano Case and of the Stephenson Case, and particularly the Stephenson Case, if we say that the liability of a public official, for damages resulting from an error or omission on his part, in the performance of an official duty, becomes a liability ex contractu by his giving a bond to guarantee that he will well and faithfully perform his official duties. The only reason why the action against the public official is not barred by the prescription of one year is that the right of action is not founded upon an offense or a quasi offense, in the broad sense of the term “offense,” or in the sense in which it is used in article 3536 of the Civil Code. If that were not so, this action against the recorder would be barred by the prescription of one year, because, under the doctrine of the Stephenson Case, the right of action against the recorder would not have been prolonged beyond a year by his having given a bond, if the right of action was otherwise subject to the prescription of one year.

I respectfully submit, however, that the liability of the recorder in this case, or of the surety on his official 'bond, is not $1,977.48, merely because the plaintiff holds a mortgage note for $1,977.48. The liability of the recorder and oí the surety on his bond cannot exceed the amount of the security which the plaintiff lost by the mistake of the recorder in canceling the mortgage for $1,250; and that loss cannot exceed either the amount of the canceled mortgage or the value of the property that was subject to the mortgage. In Gordon v. Stanley, 108 La. 182, 32 So. 531, it was held that the liability of the recorder of conveyances for an omission in the issuing of a conveyance certificate was not only limited to the value of the property alienated, on which the plaintiff took a mortgage, but was limited also to' the net loss to be sustained by the plaintiff after a discussion of the property of the mortgagor; and the plaintiff’s suit was dismissed, as in case of nonsuit, for insufficient proof of his loss. The amount of the mortgage note held by the plaintiff in this case, therefore, is not the measure of his loss.