Case Name: Margaret A. Driscoll, Appellant, v. Title Guarantee and Trust Company, Respondent
Court: New York Supreme Court
Jurisdiction: New York
Decision Date: 1922-12
Citations: 119 Misc. 754
Docket Number: 
Parties: Margaret A. Driscoll, Appellant, v. Title Guarantee and Trust Company, Respondent.
Judges: 
Reporter: New York Miscellaneous Reports
Volume: 119
Pages: 754–760

Head Matter:
Margaret A. Driscoll, Appellant, v. Title Guarantee and Trust Company, Respondent.
Supreme Court, Appellate Term. Second Department,
December, 1922.
Vendor and purchaser — contract for purchase of real estate — title certificate certifying that contemplated vendor “is the owner” of lots — incumbrances — title company not liable under certificate.
Plaintiff entered into a contract to purchase two lots from a land company on the installment plan. After making her initial payment a certificate was issued to her by the defendant, at the request of the land company and was paid for by the land company, certifying that the land company “ is the owner ” of the lots and that when a proper deed is delivered to plaintiff the defendant will issue its guarantee policy, guaranteeing the plaintiff against all loss or damage not exceeding the purchase price, by reason of any defects of title existing at the date of the certificate. At the time the certificate was issued the property was incumbered by a mortgage which was subsequently foreclosed. The plaintiff did not complete her payments under the policy nor has any deed been delivered to her. Plaintiff seeks to recover upon the certificate. Held, that the land company was the owner of the property at the time the certificate was issued and the certificate being silent as to incumbrances did not render the defendant liable for any damages sustained by the plaintiff.
Even a covenant in a deed that the grantor was seized in fee simple and had a good right to convey, would not make him liable thereon, if the property was incumbered. To be liable because of the existence of liens there must be a covenant against incumbrances. Real Prop. Law, §§ 251, 253, 258.
Appeal by plaintiff from a judgment of the Municipal Court of the city of New York, borough of Brooklyn, first district, in favor of the defendant dismissing the complaint after a trial before the court.
Thomas J. Farrell, for appellant.
Arthur P. Hilton, for respondent.

Opinion:
Memorandum:
Judgment affirmed, with twenty-five dollars costs. Plaintiff did not enter into her contract to purchase the lots upon the installment plan, relying upon defendant's certificate. That certificate had not then been issued and plaintiff had no knowledge of it. Plaintiff did not procure it. It was issued at the request of the land company and paid for by the latter. It certified that the land company " is the owner " of the lots and that when a proper deed of them shall be delivered by the land company to the plaintiff the defendant will issue its guarantee policy in customary form guaranteeing the plaintiff against all loss or damage not exceeding the purchase price, by reason of any defects of title, existing at the date of the certificate. Plaintiff's action is not in fraud. She seeks to recover merely upon this certificate — claiming a breach of contract. The defendant's agreement to issue its policy has not been breached. That policy was to be delivered only when plaintiff should receive, her deed, and that she has never gotten, nor has she ever been entitled to it.
It is not necessary to decide whether the certification as to the ownership being in the land company, is a part of defendant's agreement to furnish a title policy, nor whether, if it be not such, it is in the nature of a search or insurance (See Ehmer v. Title Guarantee & Trust Co., 156 N. Y. 10; Trenton Co. v. Title Guarantee Co., 50 App. Div. 490), nor whether it was made to or for the plaintiff. Whatever it might be determined to be, the complete answer to any claim that could be based upon it is that the certification does not misstate the fact. The land company was the owner of the lots at the time the certificate was issued. The defendant certified to nothing else. There was a mortgage upon the property, but the certificate was silent as to incumbrances. No representation was made as to their presence or absence. Ownership has no reference to liens. 2 Cooley Ins. 1356, 1370. Had defendant issued its policy merely certifying that the land company owned the lots and not mentioning incumbrances, it would not be liable though the latter existed. A party taking a title policy and wishing to be protected against the existence of liens must see that the policy so provides. Even a covenant in a deed that the grantor was seized in fee simple and had good right to convey, would not make him liable thereon, if the property was incumbered. To be liable because of the existence of liens there must be a covenant against incumbrances. See Real Prop. Law, § 251, 253, 258. No opinion.
Cropsey and Faber, JJ., concur.