California Pacific Title & Trust Co. v. MacArthur

California Court of Appeal Oct 10, 1934 No. Civ. 9132Published

Before: Sturtevant

AI Brief

AI-generated · verify before citing

Holding. The court held that a notary's false certificate of acknowledgment on forged deeds of trust was the proximate cause of the bank's loss, and that the title insurer, having paid the bank under its policy, was entitled to recover from the notary's surety.

Issues

Whether a notary's false certificate of acknowledgment is the proximate cause of loss when the bank relies on the certificate to issue loan proceeds.
Whether a title insurer has the right to sue a notary's surety for losses paid to an insured bank under a title policy.
Whether the bank's loss was covered under the terms of the title insurance policy.

Disposition. affirmed

Quotations verified verbatim against the opinion

“The original wrongful cause which the forger had started continued and was not broken by any intervening cause of any kind or nature.”

“The bank, therefore, had the right to pay said checks. Having been defrauded it had the right to sue. As it had the right to sue, no reason appears on the face of the record why this plaintiff, the bank’s insurer, did not have the right to sue.”

[324]

STURTEVANT, J.

The appeal is by the defendant Columbia Casualty Company, a corporation, from a judgment for $2,687.34 in an action upon the official bond of a notary public.

The complaint contained two causes of action involving separate transactions and was directed against J. J. Mae-Arthur, a notary public in and for the county of Marin, and the Columbia Casualty Company, the surety on his official bond.

In the first cause of action it was alleged that the Bank of America (formerly the Bank of Italy) loaned the sum of $2,000 upon a promissory note secured by a deed of trust purporting to be executed by one Margaret Ashton Kerrell and that the plaintiff, at the request of the bank, issued its title policy insuring the validity of this deed of trust. It was further alleged that the note and deed of trust were forgeries; that as a result thereof the bank lost the sum of $1837.17; and that upon demand the title company, pursuant to its title policy, paid the bank the said sum of $1837.17. Plaintiff sought damages in the said sum and alleged that the same was caused by the official misconduct or neglect of the notary in making a false certificate of acknowledgment to the said deed of trust.

In the second cause of action a similar transaction was alleged with reference to a promissory note in the sum of $1,000 secured by a deed of trust purporting to be executed by Adolph N. Schopke and C. Burke. It was similarly alleged "that these documents were forgeries, that the deed of trust bore a similarly false certificate of acknowledgment by the notary, and that the validity of the deed of trust was similarly insured by the plaintiff title company. Damage in the sum of $850.17 was claimed in this transaction.

Copies of the respective notes and deeds of trust were attached to the complaint by way of exhibits, and by amendment to the complaint copies of the respective title policies were attached as exhibits.

The defendant MacArthur was not served with summons and did not appear in the action, which proceeded to trial solely against the defendant surety. In its answer that defendant put in issue the allegations of the complaint respecting misconduct or neglect of the notary, proximate

California Pacific Title & Trust Co. v. MacArthur

AI Brief

STURTEVANT, J.

More from California Court of Appeal

Related research

AI Brief