HOCKING v. TITLE INS. & TRUST CO. et al.
Action on policy of title insurance.
Plaintiff appeals from a judgment on the pleadings rendered against her in an action for damages for alleged breach of the terms of a title insurance policy. The sole issue here is whether a cause of action is stated in the complaint.
It is alleged that plaintiff purchased, and obtained a grant deed for, two unimproved lots in a subdivision described as ‘Vista del Cielo No. 3’ in the city of Palm Springs; that the defendant, Title Insurance and Trust Company, through its affiliate, defendant Riverside Title Company, executed and delivered to plaintiff a policy of title insurance, insuring plaintiff against loss or damage which she might sustain by reason of the title to said lots not being bested in plaintiff in fee simple; by reason of the unmarketability of plaintiff's title subject to certain exceptions; and by reason of any defect in, or lien or encumbrance on said title not shown in the policy. Plaintiff further alleges that she did not receive a marketable title to said lots in that the Palm Springs city council, in violation of a city ordinance, approved and accepted a subdivision map of the property involved without first obtaining from the owners, agreements and bonds providing for the grading and paving of the streets in said subdivision as required by the ordinance; that the county recorder of the county of Riverside, in violation of the terms of the Subdivision Map Act and of the provisions of section 11626 of the Business and Professions Code, purportedly accepted, recorded and filed the subdivision map of record; that the city refused to issue building permits on any of the lots in said subdivision for the reason that the city council approved the subdivision map in violation of a city ordinance and that plaintiff has not had a marketable title to said lots by reason thereof.
It is plaintiff's contention that the policy of title insurance was breached by the non-existence of a bond supported agreement for street improvements as required by the Palm Springs ordinance; that on the date of the issuance of the policy she was not vested with fee simple estate in the lots and that the title thereto was defective because of the refusal of the city to issue building permits.
The policy of title insurance insured plaintiff against loss or damage by reason of the title to said lots being vested otherwise than in plaintiff's name. The two lots were sold and deeded to plaintiff by Evelyn R. Bank and Elliott M. Bank, and a grant deed therefor was executed and delivered to plaintiff by said grantors. There is no allegation that the grantors did not have a fee simple title to convey nor that the grantors' title was unmarketable or defective. The grant deed conveyed, and plaintiff succeeded to the title and interest of the grantors, and, in the absence of a contrary allegation, we must assume that a good fee simple title was so conveyed. A fee simple title is presumed to be intended to pass by a grant of real property, unless it appears from the grant that a lessor estate was intended. Civil Code, section 1105. There is no allegation that the deed included the right to have the streets paved and graded and there is no language in the title insurance policy which insured that the streets were to be so improved. The conveyance of the title to the property is in no wise dependent upon the condition of the streets, or the claimed irregularities in the subdivision proceedings.
Title to land has been defined as the means wereby the owner has the just possession of his property. 25 Cal.Jur. 626, sec. 125. The word ‘title’ commonly means complete ownership, in the sense of all the rights, privileges, powers and immunities an owner may have with respect to land, Smith v. Bank of America, etc., Ass'n, 14 Cal.App.2d 78, 85, 57 P.2d 1363, and, as used in the insurance contract before us, does not include a guaranty that the city of Palm Springs would issue building permits or would permit the grading and paving of streets. Moreover, the title insurance policy (Schedule B) provides that the company does not, by the policy, insure against loss by reason of:
‘1. Easements or liens which are not shown by the public records (a) of the District Court of the Federal District, (b) of the county, or (c) of the city, in which the land or any part thereof is situated;
‘2. Rights or claims of persons in possession of said land which are not shown by those public records which impart constructive notice;
‘3. Any facts, rights, interest or claims which are not shown by those public records which impart constructive notice, but which could be ascertained by an inspection of said land, or by making inquiry of persons in possession thereof, or by a correct survey;
‘4. Mining claims, reservations in patents, water rights, claims or title to water;
‘5. Any governmental acts or regulations restricting, regulating, or prohibiting the occupancy or use of said land or any building or structure thereon.’
Plaintiff's argument that she did not receive a ‘marketable’ title is without merit. A marketable title has been defined generally as one free from reasonable doubt, and as was said in Mertens v. Berendsen, 213 Cal. 111, 113, 1 P.2d 440, 441: ‘Such a title must be free from reasonable doubt, and such that a reasonable prudent person, with full knowledge of the facts and their legal bearings, willing and anxious to perform his contract, would, in the exercise of that prudence which business men ordinarily bring to bear upon such transactions, be willing to accept and ought to accept. It must be so far free from defects as to enable the holder, not only to retain the land, but possess it in peace, and, if he wishes to sell it, to be reasonably sure that no flaw or doubt will arise to disturb its market value.’
A title to be good and marketable must be free from encumbrances. 25 Cal.Jur., p. 634, sec. 132. Plaintiff claims that she has not had a marketable title to the lots involved because of the failure of the city council to obtain from the subdividers a bond supported agreement for street improvements. However, the title insurance policy, with respect to the marketability of the property, is qualified, and insures against loss ‘by reason of unmarketability of the title of any vestee to said land, at the date hereof, unless such unmarketability exists because of defects, liens, encumbrances, or other matters shown in Schedule ‘B’ of the policy.'
The Subdivision map was recorded and plaintiff's deed referring to the recorded map contained a sufficient description of the property conveyed.
BARNARD, P. J., and GRIFFIN, J., concur.