Court Opinion

ID: 9715893
Source: CourtListenerOpinion
Date Created: 2023-08-26 06:19:10.28047+00
Date Added: 2024-06-11T18:23:39.642459
License: Public Domain

Supplemental Opinion Filed on Reconsideration After Allowance of Petition for Rehearing  In its petition for rehearing, defendant County of Cook renewed its argument that the contributory negligence of the mortgagee Avondale Savings and Loan Association (Avondale) bars it from recovering its loss out of the indemnity fund. Defendant cited a case not previously cited, Miller v. Davy, 7 NZ Law Rep 515. That case does so hold. It was decided in 1889. The question is whether we should follow that decision and adopt a doctrine in the instant case similar to that of contributory negligence used in negligence cases. While the Commonwealth nations were pioneers in that field and their decisions therefore are persuasive, we do not consider an 1889 New Zealand decision conclusive. The opinion in that case is not convincing. In our country the doctrine of contributory negligence has been confined to personal injury cases and even there it has been under severe criticism. To apply the doctrine in the instant case would be illogical and not in the interests of justice. As we pointed out in our opinion, the indemnity fund is. in the nature of insurance against mistakes of the registrar and the premium is paid by the applicant for Torrens title. We regard this in the nature of a contractual liability. A purchaser does not contribute to the fund upon registration of an interest taken by purchase, but he is essentially a third party beneficiary to the insurance contract. To import into this type of transaction the doctrine of contributory negligence, whereby gross errors of a registrar might be completely cancelled out by some slight mistake on the part of an insured, could discredit the whole system and destroy it as an effective means of assuring titles in this county. The registrar has made the mistake and has a fund to pay for it.  Defendant County of Cook also contends that Avondale should not be allowed indemnification because it was not barred by the provisions of the act from bringing an action for recovery of its interest in the land, but rather, as we interpret its argument, that Avondale was barred by general principles of law. It should be borne in mind that Avondale in its counterclaim sought to foreclose the mortgage and alternatively, if foreclosure was denied, it sought recovery out of the indemnity fund. Foreclosure was denied as to one-half the property and Avondale seeks to recover out of the indemnity fund the damages thereby sustained. Defendant County bases its argument on Section 101 of the Torrens Act, Ill Rev Stats, ch 30, § 138 (1961). This provides in part as follows: “(1) Any person sustaining loss or damage through any omission, mistake or misfeasance of the registrar ... (2) and any person wrongfully deprived of any land or any interest therein, through the bringing of the same under the provisions of this act, or by the registration of any other person as owner of such land, or . . . [other enumerated reasons] and who by the provisions of this act is barred or in any way precluded from bringing an action for the recovery of such land or interest therein, or claim upon the same, shall have a right of action for the damages thus sustained. . . .” (Parentheses, numerals and emphasis ours.)  As can be seen, this section creates two classes of persons for whom indemnification is provided. Class (1) makes no reference to any interest in land, but applies to one whose interest may have been previously defeated or to one who had never achieved ownership, but whose loss was suffered because of the registrar’s omission, mistake or misfeasance. The second class, on the other hand, does cover persons wrongfully deprived of any interest in land and lists numerous conditions, some of which do not have the absolute requirement of mistake, omission or misfeasance on the part of the registrar. The condition stating that the person shall be one who is barred or precluded from bringing an action for the recovery of such land or interest therein is thus definitely related to the second class of persons and not to the first. If we were to apply the language of the condition literally, it would mean that the indemnity clause would apply only to those who by reason of some disqualification were not entitled to bring suit. This, of course, would be an absurd construction. There are circumstances under which a mistake is made but, as in the instant case, no successful action can be brought to recover the interest in the land. This is such a case and it comes within the provisions of class (1). The decree is affirmed insofar as it relates to Avon-dale’s claim for lien on Marlene Schroeder’s interest, and it is reversed insofar as it relates to the liability of the County of Cook to indemnify Avondale. The cause is remanded with directions to amend the decree so as to direct the County of Cook to pay Avondale for the loss it has sustained, as provided by the Torrens Act, and for such other and further proceedings as are not inconsistent with the views herein expressed. Decree affirmed in part and reversed in part and cause remanded with directions. DEMPSEY, P. J. and McCORMICK, J., concur.