Case Name: Monroe Meyerson et al., as Trustees of Central Rigging & Contracting Corp. of Connecticut, Inc., Respondents, v. Lawyers Title Insurance Corporation, Appellant, et al., Defendants
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1972-06-06
Citations: 39 A.D.2d 190
Docket Number: 
Parties: Monroe Meyerson et al., as Trustees of Central Rigging & Contracting Corp. of Connecticut, Inc., Respondents, v. Lawyers Title Insurance Corporation, Appellant, et al., Defendants.
Judges: 
Reporter: Appellate Division Reports
Volume: 39
Pages: 190–197

Head Matter:
Monroe Meyerson et al., as Trustees of Central Rigging & Contracting Corp. of Connecticut, Inc., Respondents, v. Lawyers Title Insurance Corporation, Appellant, et al., Defendants.
First Department,
June 6, 1972.
David Kashman of counsel (Patrick J. Hughes, attorney), for appellant.
Harold Greenberg of counsel (Lorance HocTcert with him on the brief; Glass & Greenberg, attorneys), for respondents.

Opinion:
Capozzoli, J.
The relationship of Rosen, who was represented by the appellant as an " Approved Attorney ", and the appellant, existed for many years, covering a period since 1955. He had been preparing title reports for the appellant and certifying them for the purpose of issuing title policies since that time. Between 1965 and 1966 he had prepared over 75 of such reports and actually closed those titles on behalf of the appellant.
The appellant furnished Rosen with blank forms, on which these reports of the title searches were set forth in detail. At the top of the form there was printed:
"Lawyers title insurance corporation home oeeice — RICHMOND, VIRGINIA REPORT ON TITLE ".
In all fairness, nobody who received this report, unless he were otherwise warned, would have any reason to doubt that he was dealing with the appellant, through a representative. Accordingly, in his efforts to secure the report of the title search, the plaintiffs' attorney, Friedman, testified that he telephoned the appellant and inquired about the report and he was referred to Rosen for same. Surely, if the appellant did not regard Rosen as authorized to act for it, then was not that the time to disclaim knowledge of the transaction and the responsibility for same? It must be remembered that the transaction was given a number by the appellant, earlier in the negotiations, and it was with reference to this numbered transaction that Friedman inquired of the appellant as to the whereabouts of the title report. If there was no relationship between the appellant and Rosen, which would entitle the latter to act as agent for the former, then why would they have referred Friedman to Rosen?
Not only did the appellant give to Rosen its own official blank forms on which to enter the result of the title search, but also furnished him with a "Manual" listing the rates charged by appellant for a title search and insurance. At the closings Rosen was authorized to collect the fees from the clients, as listed in the 1 ' Manual ' ', on behalf of the appellant. Thereafter he accounted to the appellant for the moneys collected and, at the same time, certified the correctness of the title search to the appellant, upon the strength of which the appellant would issue the title policy, out of its office, in the name of the client. At page 195 of the record the title officer of the appellant, James P. Farrell, called as a witness by the appellant, testified as follows:
" Q. Do these people have the right to hold themselves out to the public as Approved Attorneys of Lawyers Title?
A. Yes. They advertise in Martindales and other places."
If the appellant did not regard Rosen as its duly authorized agent to represent it with clients, then it would have been a relatively simple matter for the appellant to print a warning on the title report to the effect that any transaction of business with Rosen did not bind the appellant. But the report is silent as to this and a reasonable person would be warranted in believing that he was dealing with the appellant, and the trial court so found.
The reliance by the defendant on Mandor v. Lawyers Tit. Ins. Corp. (28 N Y 2d 739) is misplaced, as that case is readily distinguishable from the case at bar. The Mandor case was concerned with a complaint based on an alleged title insurance policy issued by the defendant. The court found that no evi dence of a title insurance policy was produced and, in fact, that no title insurance policy had ever been issued. Therefore, the plaintiff had no cause of action. That case does not concern itself in any way with the status of Eosen vis-a-vis the appellant and it cannot be cited as authority for the proposition that Eosen is not an authorized agent in the case before us. This action is based upon the submission of a false title report to the plaintiffs by appellant's agent, resulting in damages to plaintiffs. It is not based upon a title policy, as was Mcmdor. It is also noteworthy that the Court of Appeals, in the Mandor case, noted that Eosen, to whom it referred as defendant's " Approved Attorney", did not testify at all. This is not so in our case. There is extensive testimony by Eosen, in which he gives details of his relations with the appellant and from which one can easily conclude that he was an authorized agent of the appellant.
At pages 64 to 65 of the trial record Eosen testified as follows:
" Q. What is an Approved Attorney?
A. An Approved Attorney is approved by the Lawyers Title Insurance Corporation. The Approved Attorney is authorized to examine titles, to close the titles, and to send the report to the title company and the title company issues the policy as a result of the examination and closing of title.
The Court: In other words, you make the examination?
The Witness: Yes.
The Court: And make out an abstract?.
The Witness: That is right.
The Court: You handle the closing?
The Witness: Yes.
The Court: Do you send a report in?
The Witness: Yes.
The Court: That is, on the closing?
The Witness: Yes.
The Court: And then they issue the policy?
The Witness: The title policy."
Further, at page 66:
" Q. Directing your attention specifically to the period of November-December 1966, how did clients or persons who wished to insure with Lawyers Title reach you?
A. They could reach me at my office."
Later in the record, in referring to the number which appears in the upper right hand corner of the reports involved in this case, the following appears at pages 74 to 75:
" Q. I direct your attention to the upper right-hand corner of this exhibit and ask you what this .number 124,154 represents ?
A. This number represents the number furnished to me by Lawyers Title Insurance Corporation."
Rosen was performing within the scope of his authority when he acted in the fraudulent manner in which he did, to the plaintiffs' damage.
As to the observation in the dissent that the witness, Friedman, testified that he was under the impression that the report was a title insurance policy, it is important to refer to the actual testimony of this witness on this point.
At pages 160 to 161 of the record we find the following:
" Q. You thought this was a title policy?
A. No, I thought it was a certification which was conclusive, based on the number that was issued by the title policy company.
Q. Based upon the title number?
A. Based on the number and the report and the fact that a phone call was made from the closing to the Lawyers Title Insurance Corporation and the fact that all that needed, remained to be done was a clerk typing up the actual policy and mailing it to me. As far as I was concerned, this was the document that I relied upon."
In addition to the above we would also apply to this case the legal maxim that: ' ' where one of two innocent parties must sustain a loss from the fraud of a third, such loss shall fall upon the one whose act has enabled such fraud to be committed." (Moore v. Metropolitan Nat. Bank, 55 N. Y. 41, 47.)
The cause of action in the complaint, which is based upon an alleged conspiracy on the part of all of the defendants to make false and fraudulent representations, should be dismissed. There is no substantive tort of conspiracy as pleaded therein. (Goldstein v. Siegel, 19 A D 2d 489, 493.) Moreover, said cause of action is merely duplicative of the fraud cause of action discussed above.
The judgment appealed from should be modified on the law to the extent of dismissing the cause of action in the complaint which is denominated as the second cause of action against all defendants and otherwise affirmed, with costs to respondents.