Higgins v. Security Trust & Savings Bank

SEAWELL, J.

The above-entitled action was commenced in the superior court in and for the county of Los Angeles by the assignees of a contract to recover damages from the vendor of the property alleged to have been suffered by said assignees by reason of statements negligently made by said owner to said assignees as to the condition of the title of said real property. The facts are stated below:

The second amended complaint, which the trial court held did not state a cause of action, and accordingly entered a judgment of dismissal of the action, from which judgment this appeal was taken, alleged that appellants’ assignor, Charles S. M. Segelbaum, entered into a contract with respondent, Security Trust

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Savings Bank, for the purchase of a certain described lot or parcel of real property situate in the county of Los Angeles. One George W. Harkens was the agent of said Segelbaum. That on or about January 30, 1925, Segelbaum assigned said contract and his interest therein to appellants, who paid to said Segelbaum as a consideration therefor the sum of $3,000. That prior to the assignment of said contract and prior to the payment of said sum of $3,000 by appellants, appellants and said George W. Harkens called at the office of respondent corporation. That the purpose of Harkens’ visit was to pay respondent the balance due from Segelbaum to respondent on account of said contract of purchase “and for the further purpose of the plaintiffs [appellants] ascertaining from defendant [respondent] that said balance was paid and ascertaining that the title to said lot was free and clear of encumbrances and to arrange with defendant [respondent] for a deed to said property conveying the title thereof to plaintiffs as joint tenants and to secure a certificate of title showing the title thereto vested in plaintiffs free and clear of encumbrances.” That one T. H. Boysen was assistant trust officer of said respondent corporation. That Harkens “talked with said Boysen with regard to the transfer of the interest of said Segelbaum in said lot to plaintiffs . . . the plaintiffs informing said Boysen that they were paying the said Segelbaum cash for his interest in said lot, and that they wanted a deed from defendant to said lot with themselves

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named as grantees . . . and that they desired defendant to furnish a certificate of title showing the title to said lot vested in plaintiffs free and clear of all encumbrances, and that they wanted to know if the title to said lot was clear before they paid the said sum of $3,000 to said Harkens. . . . That when advised of the fact that the plaintiffs were buying said contract for the purchase of said lot . . . and that they wanted to know if the title was clear . . . and that they desired a certificate of title showing the title . . . vested in them free and clear of encumbrances, the said Boysen stated he would ascertain if the title to said lot was clear; that before the payment of said $3,000 . . . the said Boysen undertook to ascertain if the title was clear, knowing that the plaintiffs were relying thereon, stated to the plaintiffs that the title to said lot was clear, ’ ’ and plaintiffs relying on said statement paid the sum of $3,000 to said Harkens, agent of Segelbaum. That at said time Boysen accepted from plaintiffs the sum of $6.75 “to cover the cost of recording the deed from defendant [respondent] to plaintiffs, conveying the title to said lot to them, and the charge for showing in said certificate of title the title thereto vested in the plaintiffs.” The usual allegations in such cases, to the effect that the statements as to the title being clear and free from encumbrances were relied upon by plaintiffs and they would not have entered into the transaction but for their faith in said statements, follow. It was further alleged that subsequent to the payment of said $3,000 by appellants to said Harkens, said Boysen informed appellants that a search of the title of said lot made by respondent disclosed that an action had been filed in the superior court in and for the county of Los Angeles prior to said payment and a