ROSS v. NEW AMSTERDAM CASUALTY CO

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Docket Number

Civ. No. 3973.

Attorney(S)

Reisner Honey for Appellant. Lilienthal, McKinstry, Raymond, Haber Firebaugh for Respondents.

Judges

RICHARDS, J. —

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Smart Summary

Factual and Procedural Background

This case arises from an action brought by the plaintiff, M. F. Ross, to recover damages in the amount of $650 resulting from an alleged official misconduct and negligence by defendant Mark Lane in his capacity as a notary public, and against the defendant New Amsterdam Casualty Company as surety on Lane's official bond. The dispute centers on a transaction dated November 6, 1919, in which the plaintiff paid $650 to Gladys Steele as the purchase price for an automobile. Steele represented that she owned the automobile and had purchased it from John Reed. To induce the plaintiff, Steele presented a bill of sale purportedly from Reed, bearing a certificate of acknowledgment executed by Lane as notary public. The plaintiff alleged that John Reed was fictitious and never appeared before Lane, rendering the acknowledgment false and fraudulent. The automobile was subsequently reclaimed by its true owner, Rodgers, through police intervention, causing the plaintiff's loss. The plaintiff sought recovery from Lane and his surety for damages sustained due to the false acknowledgment. Procedurally, the Superior Court of San Francisco sustained a demurrer to the plaintiff’s second amended complaint without leave to amend, resulting in a judgment for defendants, from which the plaintiff appealed.

Legal Issues Presented

Whether the plaintiff’s complaint stated a valid cause of action against the notary public, Mark Lane, and his surety for damages resulting from a false certificate of acknowledgment attached to a bill of sale.
Whether the damages alleged by the plaintiff were legally attributable to the notary’s alleged official misconduct.
Whether the plaintiff stated a cause of action against Mark Lane in his personal capacity based on an alleged conspiracy to defraud.

Arguments of the Parties

Appellant's Arguments

The appellant contended that the complaint stated a cause of action against Mark Lane personally, separate from his official capacity, predicated on an alleged conspiracy between Lane and Gladys Steele to defraud the plaintiff.

Respondents' Arguments

This information was not available in the provided opinion.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Homan v. Wayer, 9 Cal.App. 123 [98 P. 80]	The purpose of a notary's certificate of acknowledgment is to establish the identity of the grantor and genuineness of the signature, not to certify ownership of property.	The court applied this principle to conclude that the notary’s false acknowledgment did not cause the plaintiff’s damages because the bill of sale was ineffective to transfer title regardless of the acknowledgment’s truth.
Overacre v. Blake, 82 Cal. 77 [22 P. 979]	Reinforces that a notary public does not certify ownership in the person executing an instrument.	Supported the court’s reasoning that the plaintiff could not have obtained title through the instrument regardless of the notary’s certificate.
Heidt v. Minor, 89 Cal. 115 [26 P. 627]	A notary and surety are liable only for damages caused by false certificates of acknowledgment to valid instruments; if the instrument is valueless, no recovery is allowed.	The court relied on this precedent to hold that since the bill of sale was valueless due to non-ownership, the plaintiff could not recover damages for the false acknowledgment.
McAllister v. Clement, 75 Cal. 182 [16 P. 775]	False acknowledgment to a valueless mortgage cannot support recovery against a notary and his surety.	Used to reinforce that the plaintiff’s claim was untenable because the underlying instrument conveyed no valid interest.

Court's Reasoning and Analysis

The court began by assuming the truth of the plaintiff’s allegations for purposes of the appeal but found that the complaint failed to state a cause of action. It reasoned that a notary public’s certificate of acknowledgment does not certify ownership of the property described in an instrument but only the identity of the person executing it and the genuineness of the signature. Even if the notary falsely identified a fictitious person as the grantor, the plaintiff’s damages must be causally connected to that falsehood. Here, the automobile was stolen property belonging to a third party, and the bill of sale from the fictitious John Reed to Gladys Steele was valueless to transfer title. Therefore, the plaintiff could not have obtained title regardless of the notary’s false certificate. The court cited precedents holding that official misconduct in certifying acknowledgment does not create liability if the instrument itself is valueless.

The appellant’s argument that Lane was personally liable due to a conspiracy to defraud was rejected because the complaint did not sufficiently allege conspiracy with the required particularity. Moreover, the presence of the surety as a defendant indicated the plaintiff’s intent to sue Lane only in his official capacity. The court concluded that the complaint was properly treated as an action based on official misconduct, which was deficient as a matter of law.

Holding and Implications

The court affirmed the judgment of the Superior Court sustaining the demurrer to the plaintiff’s second amended complaint without leave to amend. The ruling means that the plaintiff’s complaint failed to state a cause of action either against the notary public or his surety because the alleged damages were not legally attributable to the notary’s false certificate of acknowledgment on a valueless bill of sale. The court did not find sufficient allegations of personal liability or conspiracy. No new legal precedent was established; the decision applied existing principles limiting notary liability to damages caused by false certification of valid instruments.

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M. F. ROSS, Appellant, v. NEW AMSTERDAM CASUALTY COMPANY et al., Respondents.

RICHARDS, J. —

This is an appeal from a judgment in favor of the defendants entered upon an order sustaining a demurrer to the plaintiff's second amended complaint without leave to amend. The action is one in form to recover damages against the defendant Mark Lane as a notary public and against the defendant New Amsterdam Casualty Company, a corporation, as the surety upon his official bond, in the sum of $650 alleged to have been sustained through the official misconduct and negligence of said defendant Mark Lane as a notary public in the course of the following transaction as set forth in the plaintiff's second amended complaint substantially as follows: On or about November 6, 1919, the plaintiff paid to one Gladys Steele the sum of $650 as the purchase price of an automobile represented by said Gladys Steele to belong to her and to have been purchased by her from one John Reed; and the said Gladys Steele, as an inducement to the plaintiff to buy said automobile, presented to plaintiff a bill of sale which she represented she had received from said John Reed, which bill of sale was in the usual form of such documents, but which had attached to it a certificate of acknowledgment in the statutory form of such certificates executed by said Mark Lane as a notary public and certifying that John Reed, known to him to be the person described in and whose name was subscribed to the annexed instrument, had appeared before him as such notary public and acknowledged that he executed the said instrument. The plaintiff alleges that he relied upon said bill of sale and particularly upon said acknowledgment and paid over to said Gladys Steele said sum as the purchase price of said automobile, whereas in truth and fact said John Reed was a fictitious person who never had appeared before said notary public nor acknowledged the execution of said instrument and that the said certificate of acknowledgment and of said notary public attached to said bill of sale was false, fraudulent, and untrue, and was made and executed by the defendant Mark Lane so that said Gladys Steele could represent that she was the owner of said automobile and had purchased same from said John Reed; that said automobile was in fact stolen property and belonged to one Rodgers, who subsequently reclaimed it through the police department from the said plaintiff, to his damage and loss in the sum of $650, which he now seeks to recover from Mark Lane or said surety upon his official bond.

[1] Viewing this action as one to recover damages from the defendant Mark Lane as a notary public and from the New Amsterdam Casualty Company as surety upon his official bond, it would seem clear that the complaint fails to state a cause of action. Conceding, as we must, for the purposes of this appeal that the averments of the plaintiff's complaint are true, the damages which he is alleged therein to have sustained are not referable to the alleged falsity of the certificate of acknowledgment attached by said notary public to the alleged bill of sale of said Reed. [2] A notary public in affixing his certificate of acknowledgment to an instrument purporting to convey title to property does not certify to the ownership in the person executing such instrument of the property described therein. ( Homan v. Wayer, 9 Cal.App. 123 [ 98 P. 80]; Overacre v. Blake, 82 Cal. 77 [ 22 P. 979].) In the case of Homan v. Wayer, supra, it is stated that "the purpose of the certificate is to establish the identity of the grantor and genuineness of the signature to the deed." Assuming the fact to be as averred in the plaintiff's complaint, and conceding that the said defendant Mark Lane committed a breach of his duty as a notary public in falsely identifying by his said certificate of acknowledgment John Reed as an actual person and also as the person executing said bill of sale, for which breach of duty he and his surety would be liable to any person injured thereby, the question still remains as to what injury the plaintiff suffered by the wrongful act of said notary. This question may be answered by the inquiry as to what advantage it would have been to the plaintiff had the notary's certificate been in all respects true. Neither John Reed nor Gladys Steele was, nor had either ever been, the owner of said property, and hence a bill of sale from both or either could not have been effectual to transfer any title to or interest in the same to the plaintiff. Therefore the plaintiff could have received no title to the automobile had John Reed been an actual person and had the bill of sale from himself to Gladys Steele been actually made and properly executed and certified. How can he be said to have sustained any damage from the alleged fact that John Reed was a fictitious person and that his purported bill of sale was falsely acknowledged and certified to by the notary public? The case of Heidt v. Minor, 89 Cal. 115 [ 26 P. 627], seems to cover this precise situation. In that case the official misconduct for which the defendants, the notary, and his official bondsman were sought to be made liable consisted in the making and attaching to counterfeit mortgages false certificates of their due acknowledgment. The court says: "The plaintiff is not entitled to recover any more than his loss by reason of said certificates being false instead of true. . . . The official misconduct consisted in certifying falsely to the acknowledgments of the mortgages. The defendants are liable only for what would be the value of those mortgages if valid. The court has not found that they would be of any value if valid. Therefore the proper basis for determining the liability of the defendants is wanting." The same principle is recognized in the case of McAllister v. Clement, 75 Cal. 182 [ 16 P. 775], wherein the court held that a false acknowledgment to a mortgage which was valueless could not be made the basis of a recovery against a notary public and his sureties upon his official bond. In the case at bar the plaintiff's complaint affirmatively shows that the bill of sale from Reed to Steele was valueless, for the reason that the title to the property described therein was in another. This being so, there is no escape from the application of the foregoing cases to the case at bar.

[3] The appellant, however, contends that his complaint states a cause of action against the defendant Mark Lane in his personal capacity and apart from his liability for official misconduct. This contention could only be predicated upon the existence of a conspiracy to defraud the plaintiff, entered into between Gladys Steele and the defendant Lane. As to such a cause of action the defendant New Amsterdam Casualty Company would not be a proper party, since it requires no argument to show that it is not liable under the terms of its undertaking for conspiracy or other forms of wrongdoing engaged in by its principal in his personal capacity and beyond the line of his official duty. As to the defendant Lane, however, the only averment in defendant's complaint which squints in the direction of such a conspiracy is the following: "That said acknowledgment of said bill of sale was false, fraudulent, and untrue and was made and executed by the defendant Mark Lane so that the said Gladys Steele could represent that she was the owner of said automobile and had purchased the same from said John Reed." This averment falls far short of alleging a conspiracy to defraud the plaintiff entered into between the defendant Lane and Gladys Steele and entirely fails to measure up to that degree of particularity requisite in actions for damages for fraud and deceit. Taking the plaintiff's complaint as a whole, it is apparent that the pleader was attempting to state no such cause of action, since had he so intended he would not have sued the defendant's Surety Company, but, on the contrary, would have made Gladys Steele a party to the action. This action viewed from the four corners of the plaintiff's second amended complaint is an action against Mark Lane in his official capacity as a notary public and against the surety upon his official bond for a violation of his official duty. As such, said complaint fails to state a cause of action against the defendants and hence the demurrer to said complaint was properly sustained.

Judgment affirmed.

Kerrigan, J., and Tyler, P. J., concurred.