#### LAFAYETTE BUILDING ASSOCIATION, Plaintiff-Appellant, v. FORUM INSURANCE COMPANY, Great Plains Insurance Company, Inc. and Ogdan C. Guilliot (O.C. Dan Guilliot), Defendants-Appellees.

No. 87-366.

Court of Appeal of Louisiana, Third Circuit.

May 11, 1988.

Dissenting Opinion May 24, 1988.

Rehearing Denied June 21, 1988.

William H. Mouton, Lafayette, for plaintiff-appellant.

Franklin, Moore & Walsh, William L. Schuette, Jr., Ray C. Dawson, Baton Rouge, Charles T. Keller, Preis, Kraft, La-borde & Daigle, P.L.C., Gregory J. La-borde, Lafayette, for defendants-appellees.

Before FORET, STOKER and DOUCET, JJ.

STOKER, Judge.

This is a suit by a mortgagee against a clerk of court for damages for failure of the clerk to note in a mortgage certificate three judgments bearing on certain mortgaged property. The certificate was requested after the mortgagee, Lafayette Building Association (LBA), had disbursed its loan funds on behalf of the buyer. One of the disbursements was in the form of a check sent by LBA to pay off an existing mortgage on the property granted by the seller. LBA claims that it should recover from the clerk of court on the basis of the following argument: Had the after-the-fact mortgage certificate listed the three obligations bearing on the property, LBA could have issued a stop order on its payoff check sent to the seller’s mortgage holder and thus could have avoided its loss resulting from having to pay off the three judgment obligations totaling $31,670.28.

After suing the Clerk of Court of Lafayette Parish, Ogdan C. Guilliot, and certain alleged insurers, answers and various cross claims were filed. Plaintiff-appellant filed a motion for summary judgment. The trial court denied the motion for summary judgment and dismissed plaintiff’s suit with prejudice. Plaintiff appealed. We affirm.

FACTS

In order that the issue can be more clearly viewed, we will set forth the specific facts of this case.

LBA agreed to loan money to Harold Chastant to purchase property located in Lafayette belonging to Thomas Farrell De-*1155sormeaux. Mr. Desormeaux’s property was mortgaged to Alliance Mortgage Corporation. In exchange for the loan to be made to him Mr. Chastant agreed to execute a mortgage on the property in favor of LBA.

LBA requested from the clerk of court, in December of 1983, a mortgage certificate reflecting any liens, mortgages or other encumbrances against the Desormeaux property. The certificate was issued on December 5, 1983 and showed only the mortgage in favor of Alliance Mortgage Corporation. The sale from Desormeaux to Chastant was passed on January 12, 1984. The mortgage in favor of LBA was executed the same day and a check drawn on LBA’s account at First National Bank of Lafayette was sent to Alliance Mortgage Corporation’s Florida office. The acts of sale and mortgage were thereafter recorded on January 13, 1984 and at that time LBA requested that the mortgage certificate of December 5, 1983 be updated.

The updated certificate was issued by the clerk’s office on January 16, 1984 and reflected the Alliance mortgage and LBA’s hewly recorded mortgage. The check to Alliance Mortgage Corporation cleared LBA’s account at First National Bank on January 19, 1984.

Several weeks later, it came to LBA’s attention that three judgments totaling $31,670.28 had been filed against Mr. De-sormeaux. These judgments were recorded on December 12, 1983, January 4, 1984 and January 5,1984. The mortgage certificate issued by the clerk on January 16, 1984 failed to disclose the existence of these judgments. In order to prevent the seizure and sale of the property subject to its mortgage, LBA paid the judgments against Desormeaux which encumbered the property. This suit for damages against Guilliot, Forum Insurance Company and Great Plains Insurance Company ensued.

PLAINTIFF-APPELLANT’S POSITION

LBA alleged in its petition that had it received an accurate mortgage certificate on January 16, it would have issued a stop payment order on the check sent to Alliance Mortgage Corporation and would have held the funds for future disposition. It is LBA’s contention that it was damaged as a result of the clerk’s omission on the mortgage certificate.

TRIAL COURT’S RULING

The trial court found that the facts of the case were not in dispute. It found that LBA did not rely on the January 16, 1984 mortgage certificate because at the time the certificate was issued the sale had already taken place. In this connection the trial court cited in its written reasons the case of *Tranchina v. Williams,*10 La.App. 666, 120 So. 882 (La.App. Orleans 1929). The trial court rejected LBA’s argument that *Tranchina*was distinguishable for the reason that the check payable to Alliance Mortgage Corporation had not been presented and timely notice of the rec-ordation of the judgments against the property would have permitted LBA to stop payment on the check.

The rejection of LBA’s motion for summary judgment disposed of the case and the trial judge signed a judgment dismissing the suit with prejudice in favor of Guil-liot, the Clerk of Court, Forum Insurance Company and Great Plains Insurance Company. The cross claims, some of which fell with the rejection of plaintiff’s claim, are not on appeal except as the claimants make protective arguments in case of the reversal of the judgment against LBA.

RULING ON APPEAL

The trial court’s ruling is correct and should be affirmed. No exceptional discussion or citation of authority is necessary to demonstrate the correctness of the trial court’s ruling. The appellant’s argument simply misses the point. Analysis of the facts shows the error of appellant’s position. It is clear that LBA did not rely on the January 16, 1984 mortgage certificate at the time of the loan closing and sale. The only colorable argument is LBA’s second argument.

The facts present two sets of contracting parties. Chastant agreed to buy and De-*1156sormeaux agreed to sell the property in question. LBA agreed to lend Chastant the funds with which to make the purchase in exchange for the payment of interest and the giving of a mortgage. It was LBA’s responsibility to satisfy itself that the property title was clear and free of encumbrances. Although it disbursed the loan funds, as is usual in loan closing transactions, once the funds were disbursed it had completed its contract. LBA was never a party to the contract of sale. LBA was powerless to call back part of the purchase price from the seller. Clearly the payoff made to Alliance Mortgage Corporation was part of that purchase price.

Nevertheless, LBA’s position is that, in essence, it could have called back part of the purchase price by stopping payment on the check sent as a mortgage payoff to Alliance Mortgage Corporation. The drawee bank no doubt would have honored the stop payment. However, this would not have improved LBA’s legal position because, in fact, it would have breached its loan contract with the purchaser. LBA apparently confuses its position with that of the purchaser who might have called the seller on his warranty of sale. LBA was not a party to the contract of sale.

Had LBA learned of the three judgments in time to stop payment on the payoff check, we feel that Chastant could, nevertheless, have required LBA to make good on the loan contract and readvance the funds necessary to make the mortgage payoff. Stopping payment on the payoff check would accomplish nothing.

For the foregoing reasons the judgment of the trial court insofar as it dismisses the suit of Lafayette Building Association is affirmed. We are not required to pass on the counterclaims briefly mentioned in this opinion.

AFFIRMED.

FORET, J., dissents and assigns reasons.

FORET, Judge,

dissenting.

I respectfully dissent from the majority’s affirmation of the trial court judgment, which dismissed plaintiff’s suit. I disagree with the majority for several reasons. Firstly, I disagree that we should follow the *Tranchina*case relied on by the defendants. The court in *Tranchina*(Orl. App.1929) even went so far as to make a completely outlandish implication that to hold the recorder of mortgages responsible for the error of some deputy clerk would be “to extend the responsibility of the recorder of mortgages beyond all reasonable limits.” Nothing could be further from the truth, and from the law. It is axiomatic that if a deputy clerk negligently makes an error to the detriment of a third party, the clerk of court, that deputy clerk’s employer, is certainly liable in solido with his deputy for the damages sustained by the third party as a result thereof.

Now, let’s consider the "result thereof” as applied to this case. I believe that the majority is wrong when it says that for the plaintiff to stop payment on its check to pay off the pre-existing mortgage would be a breach of contract with its customer. It was to the best interest of *all*parties (except to the judgment creditor, who suddenly stepped into a windfall) to know of the judgments prior to completion of the transaction. Further, I have serious doubts about the observation indulged in by the majority that plaintiff had the burden of making sure that there were no judgments burdening the property involved. It seems to me that the borrower had a parallel duty to satisfy himself that there were no judgments affecting the property.

It is apparent that the lender made an effort to determine if there were judgments, and none being shown of record from a preliminary record check and presumably a record check prior to completion of the loan still revealing no other encumbrances, it becomes somewhat apparent to me that these judgments were not indexed until sometime after the final certificate of the clerk’s office. Therefore, the plaintiff could have checked all it wanted to prior to the loan closure and would never have found the judgments indexed in the mortgage records. This was an unfortunate error by the employees of the clerk of *1157court’s office which caused the plaintiff damages, and the clerk and/or his insurer should be held liable therefor.

At the very least, the issues presented, in my opinion, involve issues of material fact which are best resolved at trial on the merits. For example, would the plaintiff ever have made this loan had it known of the judgments? No doubt the reply here would be in the negative. Further, were the judgments indexed in the mortgage records prior to the date of the final certificate of mortgage, and if not, why not?

There is too much reliance placed by the majority and the defendant in the fact that Lafayette Building Ass’n. issued its check prior to the issuance of the final certificate of mortgage. The certificate of mortgage itself is an indicia by the recorder of mortgages that no mortgage exists in its records other than, let’s say, the judgment in favor of the interested mortgage holder, in the name of the property owner so indicated. The certificate of mortgage itself is hearsay. The real evidence of the existence of mortgages are the mortgage records themselves, including the all-important indices to these records. If the judgments which are filed in the office of the recorder of mortgages are indexed daily into the mortgage records, and a particular deputy clerk is designated from whom interested lenders and/or their attorneys can check to see if a judgment has come in within the last hours or minutes and not yet indexed, then there is really no need for a certificate of mortgage as far as the relationships of the parties are affected. The negligence arises not necessarily in a mistake in the certificate of mortgage itself, but in the failure to properly and timely, in other words, at least daily, index judgments or other mortgages in the mortgage indices. So, in my view, the negligence of the clerk’s office, in this case, occurred prior to, and continued through the issuance of the certificate of mortgage. Whether or not that negligence arose from a failure to properly and timely index the judgments and other mortgages is a serious question of fact in this case which can properly be resolved only by trial on the merits.

I fully realize that the office of the Clerk of Court in Lafayette Parish has many employees, and it is inevitable that errors can occur. It is a tribute to the clerks of court and recorders of mortgages of this State that the Tranchina case relied on by the majority was rendered in 1929. It is obvious that the clerks of court of this State do an admirable job. However, we can all make mistakes, and if our mistake is negligently made, then we are responsible for the damages sustained by third parties who are relying upon us in the performance of our official duties. This is particularly true in the offices of the recorders of mortgages and conveyances. It is absolutely essential that these records be 100% accurate. The public records doctrine demands no less. The wheels of commerce in this country would quickly come to a grinding halt if we were unable to place our total faith on the accuracy of the public records insofar as the recordation of mortgages, judgments, and conveyances are concerned.

For the foregoing reasons, I respectfully dissent.