Opinion
For Opinion on Hearing, see 83 Cal.Rptr. 394, 463 P.2d 746.
Haizlip, Ring, O'Donnell & Moore, San Francisco, for appellant.
Tobin & Tobin, San Francisco, for respondent.
AGEE, Associate Justice.
Plaintiff appeals from a judgment in favor of defendant title company following a nonjury trial.
On December 12, 1963, one Oscar Holmberg executed a promissory note for $35,000 payable to plaintiff herein, secured by a deed of trust executed by him as trustor and naming plaintiff as beneficiary, on two parcels of real property located in Contra Costa County and Marin County, respectively. The deed of trust was recorded in both counties on December 19, 1963.
On this latter date, the City Title Insurance Company issued two separate title insurance In each policy, the title company agreed, inter alia, to defend plaintiff, at its own expense, in any action against plaintiff founded upon a claim that its title to the above deed of trust was defective.
Defendant Transamerica Title Insurance Company is the successor in interest to City Title Insurance Company and both are referred to hereafter interchangeably as 'the title company.'
On April 9 and 10, 1964, respectively, one Lawrence J. Giubbini commenced quiet title actions in Contra Costa County and Marin County, naming plaintiff as one of the defendants in each action.
The substance of Giubbini's claim was that he was the owner of the two parcels involved; that Holmberg and one Willer had induced him to execute and deliver to them a deed to each of said parcels with the name of the grantee left blank in each deed; that Holmberg and Willer had fraudulently represented to him that said deeds would be held in trust and that the blank space would not be filled in without his knowledge and consent; that thereafter, without his knowledge or consent, Holmberg and Willer caused Holmberg's name to be inserted in the Contra Costa deed as grantee and recorded the same on December 19, 1963; that they likewise caused one Steagall's name to be inserted in the Marin deed as grantee and recorded the same on December 13, 1963; that Steagall then deeded this parcel to Holmberg and the latter caused the deed to be recorded on December 19, 1963; that by reason of the foregoing facts, the deed of trust executed by Holmberg to plaintiff was void.
The title company accepted the defense of these two actions on behalf of plaintiff at its own expense and in accordance with its obligations under its title insurance policies.
During the pendency of this litigation, on July 14, 1964, Giubbini paid plaintiff $36,391.80 in full payment of said $35,000 note and deed of trust and obtained a reconveyance of the later, which reconveyance was promptly recorded. Giubbini in turn dismissed his two quiet title actions and sold the Contra Costa parcel. It is not claimed that the title company in any way participated in this loan settlement, although it knew about it because it was the trustee under the deed of trust.
On September 22, 1964 Giubbini filed an action in Contra Costa County against Holmberg, Willer, and plaintiff to recover the $36,391.80 paid to plaintiff on July 14, 1964.
The basic theory was the same, i.e., that the deed of trust was void for the reasons claimed in the prior quiet title actions. In addition, Giubbini alleged that, in order to sell the Contra Costa County property, he was 'forced' to pay off plaintiff's deed of trust. He prayed for the recovery of the amount of such payment.
The title company refused to defend plaintiff in this action. Plaintiff successfully defended itself and on February 9, 1967 filed the instant action against the title company to recover its costs incurred in such defense.
Each of the two title policies contains the following provision: 'Payment in full by any person or voluntary satisfaction or release by the Insured of a mortgage covered by this policy shall terminate all liability of the [title] Company to the insured owner of the indebtedness secured by such mortgage, * * *' (emphasis added).
Only the emphasized portion of the above provision is applicable, since there is no voluntary satisfaction or release involved herein. Upon being paid the full amount due under its note, plaintiff authorized the reconveyance of the deed of trust and this was done. As before stated, Giubbini in turn dismissed his two quiet title actions, which defendant title company had undertaken to defend.
The above emphasized provision is clear and unambiguous and makes good sense. Title to real property given as security (whether such title is defective or not) becomes totally irrelevant to a lender who, like plaintiff, has been paid in full. Once such a lender has been paid off, no later attack on the title to the property which The following is appropriate to this case: 'An insurance contract should not be construed against the insurer unless the language used reasonably demands such construction. Merely because contracts of insurance are to be construed against the insurer or merely because the contract itself is one of insurance does not warrant the creation of doubt through construction of plain and unambiguous provisions of a contract.' (1 Couch on Insurance 2d, § 15.85.)
As stated in 27 Cal.Jur.2d 771-772, 'Although in case of doubt the provisions of an insurance contract or policy will be construed most strongly against the insurer, where the terms of the policy are plain and explicit the courts will indulge in no forced or strained or unnatural construction so as to cast a liability on an insurance company which it has not assumed or make a new contract for the parties.' (See also Johnson v. Aetna Life Insurance Co. (1963) 221 Cal.App.2d 247, 258, 34 Cal.Rptr. 484; O'Doan v. Insurance Co. of North America (1966) 243 Cal.App.2d 71, 77, 52 Cal.Rptr. 184.)
Here, the instant action for money damages was commenced by Giubbini after the title policies had terminated, in accordance with the provision quoted above.
We have concluded that defendant had no obligation under its policies or otherwise to defend plaintiff in said subsequent action. It is therefore unnecessary for us to discuss other issues raised by both parties.
Judgment affirmed.
SHOEMAKER, P. J., and TAYLOR, J., concur.