Block v. Citizens Trust Etc. Bank , 57 Cal. App. 518 ( 1922 )

I dissent. As is stated in the opinion of the majority of the court the appellant, the vendor in the contract, covenanted to do two things. First, to execute "a good and sufficient deed of grant conveying said land"; second, to "deliver a good and sufficient certificate of title . . . showing title to said property vested in the party of the first part free from all encumbrances, made, done or suffered by said first party." The dispute between the parties upon this appeal centers upon the construction of the provisions above quoted. The appellant concedes that if he had simply agreed to deliver a good and sufficient deed without mentioning the character of the title to be conveyed, a stipulation would exist by implication that the deed must carry with it a good and sufficient title. Haynes v. White, 55 Cal. 38; 39 Cyc. 1446, is authority for this proposition. But it is argued that the provision, "and to deliver a good and sufficient certificate of title showing title to said property vested in the party of the first part free from all encumbrances made, done or suffered by said first party," is a qualification of the phrase just preceding it, to wit, "agrees to execute and deliver to the party of the second part, a good and sufficient deed of grant conveying said land." However, the plain meaning of the entire provision under consideration, governed by rules of grammatical construction, is that the vendor was to do two distinct and independent acts. The purpose of the provision for a certificate of title is not merely to describe the kind of title required. Such a stipulation was unnecessary. It had been definitely defined by the agreement to execute "a good and sufficient deed of grant conveying said land." The intention of the parties concerning a requirement for a certificate of title is rather to be ascertained by a consideration of the following well-recognized legal principles.

The rule in the purchase of land is caveat emptor. In the absence of an agreement by the vendor to furnish an abstract or certificate of title it is incumbent upon the purchaser to provide the same and to satisfy himself as to the condition of the title. (Easton v. Montgomery, 90 Cal. 307 [25 Am. St. Rep. 123, 27 P. 280].) The object of an abstract is to benefit the purchaser and to enable him or his counsel to pass more readily upon the sufficiency of the title. (Kane v. Rippy etal., 22 Or. 296 [23 P. 180]; Taylor v. Williams, 2 Colo. App. 559 [31 P. 504].) In the case last cited it was further held that a provision for the delivery by the vendor "of warranty deed conveying clear title with abstract" was not complied with by proof that the title was in fact complete and perfect. The court held that the contract was to furnish a certain abstract and not merely good title. Smith v. Taylor, 82 Cal. 538 [23 P. 217], is another case of the same character. The contract called for an abstract of title which would show good title. The vendor furnished an abstract of title which showed defects. Upon the trial he claimed the right to show that the claims of persons appearing in the abstract which constituted the apparent defects were groundless. The court held that under the contract there in question proof of the actual condition of the title was inadmissible to show compliance with the stipulation that the abstract should show good title. In Kane v. Rippy, supra, the contract provided that the vendor should convey "in fee simple, clear of all encumbrances, by a good and sufficient warranty deed and abstract of title." The court held that by this stipulation the vendor agreed to convey a good title free from all encumbrances whatsoever and to furnish an abstract of such title and that the abstract which was furnished was admissible in evidence not, however, for the purpose of proving title, but to show the condition of the abstract itself. From these cases it is apparent that the covenants for good title and for abstract of title are not interdependent.

As to whether or not any abstract of title shall be required is purely a matter of contract between the parties. Where the vendor agrees to the purchase "with abstract showing good title" this refers to record title only. However, the contract sued upon in Moot v. Business Men's Assn., 157 N.Y. 201 [45 L. R. A. 666, 52 N.E. 1]), provided for a search as to the actual title and not as to the record title of the property in question. It is obvious that the nature and scope of the certificate of title is purely a matter of agreement. In the instant case the parties expressly stipulated that the vendor should not only execute and deliver to the vendee "a good and sufficient deed of grant conveying said land," but also deliver to the vendee "a good and sufficient certificate of title issued by the Title Insurance Trust Company showing title to said property vested in the party of the first part free from all encumbrances made, done or suffered by said first party." The purpose of the latter requirement for a certificate of title was to relieve the vendee from the necessity of investigating the public records of the county concerning the existence of any encumbrances "made, done or suffered by the vendor." As to all other encumbrances, however, the vendee impliedly agreed to make his own investigation and the rule caveat emptor applies. In our endeavor to discover the intention of the parties another fact worthy of consideration and one which can hardly be in doubt is that the vendee would not have signed a contract to purchase this lot, being an ordinary residence lot 50 by 130 feet, with the expectation and understanding that the vendor might only convey to him a lot 50 by 70 feet. If this is true, unless the language of the contract necessarily requires such a construction, a court of equity should not interpret it in such a manner as to force the vendee to accept a piece of property which he obviously had no intention of buying. I conclude that the provision of the contract concerning the furnishing of a certificate of title does not relieve the vendor from the obligation to supply "a good and sufficient deed of grant conveying said land," which means that the vendor must have good and sufficient title, one complete and perfect for alienation; that although the provision concerning the certificate of title may have been complied with by the vendor, the stipulation to execute and deliver a good and sufficient deed of grant conveying the land required the vendor to possess and tender a good and sufficient title. (Easton v. Montgomery,90 Cal. 307 [25 Am. St. Rep. 123, 27 P. 280], and Whittier v.Gormley, 3 Cal.App. 489 [86 P. 726].) The pendency of the condemnation proceeding, the lis pendens, and the order of the court giving the flood control district possession of the strip being condemned is clearly such a defect of title as to violate the agreement in that respect. If authority is needed for this proposition, Prentice v. Erskine, 164 Cal. 446 [129 P. 585] and Koshland v. Spring, 116 Cal. 689 [48 P. 58], supply it. Appellant attempts to distinguish these cases from the one at bar upon the ground that the defects in the title existed at the time of the execution of each of the contracts. The vendor having contracted to deliver a good title, no reason is suggested, nor do we perceive any to exist relieving the vendor from a violation of his covenant because of the fact that such violation is due to an occurrence taking place subsequent to the time that the contract was executed.

A petition for a rehearing of this cause was denied by the district court of appeal on May, 24, 1922, and a petition to have the cause heard in the supreme court, after judgment in the district court of appeal, was denied by the supreme court on June 26, 1922.

All the Justices concurred.

Shurtleff, J., was absent and Richards, J., pro tem., was acting.