Mumford v. Staton, Whaley & Price

Finan, J., delivered the opinion of the Court. This case involves the question as to when the statute of limitations begins to run in a case arising out of an act of alleged professional malpractice against an attorney for damages resulting from reliance upon a title letter which assumed certain facts concerning the chain of title which subsequently proved to be erroneous. Sobescus Cromleigh by deed dated June 1, 1906, and recorded among the land records of Worcester County, Maryland, in Liber F.H.P. No. 25, folios 162 and 163, acquired from the Fenwick Island Land Company, a body corporate, two parcels of land, designated as lots 5 and 6, block 21, section A, on the Fenwick Island Plat. Subsequently, by deed dated August 13, 1953, and recorded among the land records of Worcester County in Liber E.W.R. No. 61, folio 551, these two lots along with others, were conveyed by Harry Cromleigh and Irma P. Cromleigh, his wife, unto John C. Eckert and Gail Bond Eckert, his wife.

This deed after describing the lots con ⁶⁹⁹ veyed and after referring to the deed first above mentioned, recited: «* * * Hie property hereby conveyed having, upon the death of the said Sobescus Cromleigh more than 12 years prior to the date hereof, descended unto the said Harry Cromleigh, as the son and only heir at law of the said Sobescus Cromleigh, deceased.” Sometime in 1954 the appellant, Margaret Lynch Mumford, became interested in purchasing one of the lots (lot 6, block 24, section A). She consulted John S. Whaley, Esq., a member of the law firm of Staton, Whaley and Price, appellees, with regard to the performance of a title examination of lot 6, block 24, section A. Mr. Whaley undertook the title examination and, on August 6, 1954, he advised the appellant by letter that the title examination had been completed. In the letter he stated: «* * * (jee(j from Harry Cromleigh and wife unto John C. Eckert and wife dated August 13, 1953, recorded in Liber E.W.R. No. 61, folio 551, gives the information that Sobescus Cromleigh died more than twelve years prior to August 13, 1953, and that upon the death of the said Sobescus Cromleigh said property descended unto Harry Cromleigh as the son and only heir at law of the said Sobescus Cromleigh, deceased. We are not familiar with the Cromleigh family, but we see no reason why these statements of Harry Cromleigh and wife, under oath, should not be accepted as true.

Due to the length of time since the said Sobescus Cromleigh died we believe that no difficulty will be caused by failure to take out letters of administration in this state on the estate of Sobescus Cromleigh, deceased. We consequently can see no reason why you should not accept deed from the Eckerts when properly executed, pay the purchase price, and have said deed recorded.” ⁷⁰⁰ Mr. Whaley then prepared,- at appellant’s request, a deed from the Eckerts to appellant for the lot in question. The property was paid for and the deed conveying it, dated August 9,1954, recorded among the land records of Worcester County, on August 11, 1954, in Liber E.W.R. No. 74, folios 116-118. The appellant entered into the possession of the property at that time and continued in possession, without interruption, until sometime in November, 1965, when she tentatively agreed to sell the property to Jarvis Realtors, Ocean City, Maryland.

At that time, it was discovered that appellant’s grantors (Eckerts) had no lawful interest in -Lot No. 6. Contrary to the statement in the deed that Harry Cromleigh was the sole heir of Sobescus Cromleigh, it developed that the latter died on June 5, 1929, testate, a resident of Chester County, Pennsylvania, and that his will was properly recorded and his estate administered there. In the will, he bequeathed the sum of $1.00 to Harry G. Cromleigh and,, after certain other bequests, left the residue of his estate to his wife, Prudee A. Cromleigh. Prudee A. Cromleigh survived Sobescus and it developed that the lot involved here eventually devolved upon her heirs.

On August 25, 1965, a suit was filed by the heirs of Prudee A. Cromleigh in the Circuit Court for Worcester County, Maryland, (Chancery Case No. 8402). As of the date of the filing of this equity suit no ancillary administration had ever been initiated on the estate of Sobescus Cromleigh in Worcester County, Maryland. The suit sought to have the deed from Harry G. Cromleigh and his wife, and the deed from John C. Eckert and his wife declared null and void, and have the lots conveyed thereby declared the property of the heirs of Prudee A. Cromleigh. On March 7, 1966, by decree of the Circuit Court for Worcester County, the deed prepared for the appellant by Mr. Whaley and the appellees was declared to be null and void and the appellant was required to surrender the property. ⁷⁰¹ John S. Whaley, the attorney who performed the title examination for the appellant, died on September 30, 1966, while still a member of the law firm of Staton, Whaley and Price.

On March 80, 1967, appellant filed suit in the Circuit Court for Worcester County against William H. Price, as surviving partner of the firm of Staton, Whaley and Price, and against the firm, seeking to recover damages for the loss of the property. On April 17, 1967, the appellees filed their pleas to the suit, one of which was the statute of limitations. Subsequently, on November 28, 1967, upon the motion of the appellant, the case was removed to the Circuit Court for Wicomico County. On May 15, 1968, the appellees filed a motion for summary judgment based on the statute of limitations, which motion was granted.

The lower court held that, while “* * * Nothing in the record in this case indicated that she [appellant] could have reasonably ascertained her status prior to the expiration of a period in excess of eleven years [the interval between August 1954, the date of the title letter and August 25, 1965, the date suit was instituted by the Cromleigh heirs] nonetheless the statute of limitations commenced from the date of the title letter, August 6, 1954. The lower court predicated its decision on the theory that the relationship between the parties, attorney and client, was contractual in nature and that the statute of limitations had begun to run at the time the title examination was made and that the suit was therefore barred. It is from this judgment that the appellant appeals. In the instant case we are not troubled with two situations which frequently arise in limitations cases.

One is the problem created by the difference of the limitations periods applied in some jurisdictions to actions ex delicto as contrasted with actions ex contractu. In Louisiana, for example, the limitations period on tort actions is one year, whereas the limitations period on contract actions is ten years. See Marchand v. Miazza, 151 So. 2d 372 (La. ⁷⁰² 1968) ; Alter v. Michael, 413 P. 2d 153 (Cal. 1966) ; Sellers v. Noah, 95 So. 167 (Ala. 1923). Where different limitations periods do exist, there is accordingly an additional reason for distinguishing actions sounding in tort from those based on contract.

In Maryland the period for both actions in tort and on contract is three years. Code (1968 Repl. Vol.) Article 57, § 1. The other area which need give us no concern in the case at bar is the consideration as to when the damages may have matured, because, even if we were of a mind to consider this contingency as the event which started the running of limitations (the cases in Maryland have not gone beyond the discovery doctrine), in the instant case the discovery of the alleged negligence and the maturation of harm were simultaneous.

Code, Article 57, § 1, provides that “All actions of account, actions of assumpsit, or on the case, * * * shall be commenced, * * * within three years from the time the cause of action accrued; * * (Emphasis supplied.) In the recent case of Mattingly v. Hopkins, 254 Md. 88 , 253 A. 2d 904 (1969) this Court had occasion to consider the question as to when the statute of limitations began to run in a case involving a faulty survey of land. In that case Mattingly, the property owner, had procured a survey from the surveyor, appellee, in December of 1953. In the summer of 1959 while in the process of laying out a tennis court, Mattingly discovered what appeared to be a discrepancy between the plats prepared by the surveyor and the physical markers which the surveyor had placed on the ground. In the summer of 1960 the surveyor appeared on the premises and corrected the error.

However, Mattingly had commenced to sell off lots in 1953, the dimensions of which were predicated on the faulty survey. In December of 1962 and again in 1964, the grantees of the re-subdivided lots brought suit against Mattingly. These suits resulted in a loss of footage to Mattingly, plus the incurring on his part of considerable expense. Mattingly filed suit against the surveyor in Oc ⁷⁰³ tober of 1964 alleging, among other things, a negligent breach of contract.

The surveyor raised the defense of limitations claiming that action should have been brought within three years after the survey was made in 1952, or at the latest, within three years after the discovery of the error in 1959. This Court applying the discovery theory reviewed the applicable law on limitations in Maryland, stating: “Like most general rules of law, those pertaining to ‘limitations’ become less than profound when an attempt is made to apply them to specific cases. Much has been written as to when ‘limitations’ should start to run. Some courts have held the cause of action accrues when the defendant commits his wrong, others when the plaintiff discovers the wrong, and still others have held that it does not accrue until the maturation of harm.

Sometimes the happening of the wrong, the knowledge of it and the maturation of the harm are simultaneous. When this occurs the recognition of the accrual of the cause of action is simple, when these elements happen sequentially it can become complex. Furthermore, there are nuances of difference in the accrual of the cause of action in cases arising out of actions ex contractu, as distinguished from actions ex delicto, and a further hybridization of actions arising out of professional malpractice and otherwise. An exhaustive discourse on the problems which emerge from the various combinations of events which spell out the accrual of the cause of action, is found in 63 Harv.

L. Rev. 1177 (1950) and in 28 Md. L. Rev. 47 (1968). Both articles cite numerous cases and the trend of decisions. In 28 Md. L. Rev. 47 , beginning at 61 there is a concise summary of ‘The Situation in Maryland.’ See also Prosser, The Law of Torts (1964) § 30. ⁷⁰⁴ “However, we think the most viable articulation of the law, in so far as affording a solution to the case at bar is concerned, is found in Waldman v. Rohrbaugh, 241 Md. 137 , 215 A. 2d 825 (1966). * * * In reading Waldman , it is quite apparent that in Maryland we have adopted the ‘discovery rule’ in medical malpractice cases, originally laid down in Hahn v. Claybrook, 130 Md. 179 , 100 A. 83 (1917), but which rule had not been as clearly defined in Hahn as it subsequently was in Waldman . In Waldman the Court stated that the statute of limitations commences to run ‘* * * from the moment of discovery, the moment he knows or should know he has a cause of action, within which to sue.’ (Id. at 145) .” Id. at 92-94 In the case at bar we are dealing with the question of limitations with reference to the alleged negligent action of an attorney in the performance of a title search to real property for his client.

We are fully aware that the majority view is that followed by the lower court and as expressed in 18 A.L.R.3d 978 , wherein it is stated: “The courts have held that the statute of limitations commences to run against an action arising out of the negligence of an attorney in the examination of title from the time the attorney makes an erroneous report to his client as to the status of the title to the property or delivers an abstract of title which is incomplete or contains errors.” Id. at 1012. See also 5 A.L.R. 1389 , 1395. 1 Am. Jur. 2d “Abstracts of Title,” § 24; 7 Am. Jur. 2d “Attorney at Law,” § 186.

The same general rule is applied by most jurisdictions with regard to the negligent or intentional misconduct of an attorney generally in his professional capacity: “It is said in 17 R.C.L. Limitation of Actions, p. 766, § 132, quoted in Sullivan v. Stout (N. J.) ⁷⁰⁵ (reported herewith) [overruled by New Market Poultry Farms, Inc. v. Fellows, 241 A. 2d 633 (N. J. 1967) discussed later in this opinion] ante, 211, that ‘An action by a client for the misfeasance or non-feasance of his attorney is based on the latter’s breach of duty, and not on the consequential damages subsequently resulting. In such cases the general rule is that in the absence of fraudulent concealment by the attorney, the statute begins to run at the time of the neglect or misconduct and not from the time when the wrong is discovered or the consequential damages are felt.’ ” 118 A.L.R. 215 . The duties of an attorney in performing a title search, and the nature of the cause of action which may be brought against him for the negligent breach of his duty in this regard, were dealt with by this Court in Reamer v. Kessler, 233 Md. 311 , 196 A. 2d 896 (1964), wherein Chief Judge Bruñe writing for the Court stated: “In this State it has been held that the obligation of an attorney or abstracter examining and certifying title is contractual in nature, though it has been recognized in two cases that it has ordinarily been enforced by an action on the case alleging negligence in the discharge of the professional duty of an attorney. See Watson v. Calvert Building and Loan Ass’n., 91 Md. 25, at 33 , 45 A. 879 ; Wlodarek v. Thrift, 178 Md. 453, at 468 , 13 A. 2d 774 ; and Corcoran v. Abstract & Title Co. of Md., Inc., 217 Md. 633, at 637 , 143 A. 2d 808 (involving an abstract company, not an attorney, but quoting from Watson).

See also Kendall v. Rogers, 181 Md. 606 , 31 A. 2d 312 , * * (Emphasis supplied.) Id. at 315-316. It should be noted that although the opinion in Reamer classifies an action for professional malpractice against ⁷⁰⁶ an attorney as one in contract, it also recognizes that the gravamen is the negligent breach of the contractual duty. Also, in the early case of Watson v. Calvert Bldg. Assn., 91 Md. 25 , 45 A. 879 (1900), this Court after reciting the duties incumbent upon an attorney in making a title search, stated: “* * * This responsibility of the attorney, although ordinarily enforced by an action of case for negligence in the discharge of his professional duties, in reality rests upon his employment by the client and is contractual in its nature.

Before the attorney can be made liable, it must appear that the loss for which he is sought to be held arose from his failure or neglect to discharge some duty which was fairly within the purview of his employment.” (Emphasis supplied.) Id. at 33 . It should be noted that this Court in Watson , although characterizing the attorney-client relationship as contractual, nevertheless, recognized that the breach of the contractual duty smacked of negligence. We think this is important because in the case at bar, as in Watson , although recognizing the relationship between attorney and client to be in essence contractual, none the less, we think the fact that liability is grounded on the negligent breach of duty permits the application of legal principles usually reserved to the field of torts, such as the discovery rule with regard to limitations. Cf.

Benson v. Mays, 245 Md. 632 , 227 A. 2d 220 (1967), a medical