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RUSSELL v. Polk COUNTY ABSTRACT COMPANY.

[87 Iowa, 233.) TORT, BREACH OF CONTRACT WHEN MAY AMOUNT TO.- If one person

owes another a duty the breach of which is a tort, the fact that the former has expressly contracted with the latter for the performance of such duty does not render its breach any the less a tort, but, if the duty is imposed or created by the contract and otherwise did not exist, its

breach is not a tort. TORT, ACTION FOR, WHAT IS NOT. —The fact that a person negligently per

formed a duty which he imposed upon himself by contract cannot entitle another contracting party to sustain an action of tort for such negligence, and thereiore any action commenced to recover damages for the failure to perform such duty is an action upon a contract, and the statute of limitations applicable thereto is not that designating the time within which actions may be brought for torts, but is that declar

ing the time within which actions may be prosecuted upon contracts. STATUTE OF LIMITATIONS. -CAUSE OF ACTION FOR MISTAKE IN AN AB.

STRACT WHEN ARISES. - If a searcher of records employed to make a correct abstract of public records affecting the title to real property, through his negligence or mistake omits an instrument from such abstract, a cause of action against him is at once created, and the state ute of limitations commences to run in his favor, and cannot be made to commence at a later day by proving that the mistake was not dis. covered until such later day. That the party for whom it was made, subsequently acting in reliance on its correctness, paid out money which he would not have paid had it been correct, does not constitute any new cause of action. Action to recover damages resulting to plaintiff from an error or mistake in making and certifying to an abstract of title in the month of December, 1884. This abstract showed a certain mortgage to be a first lien on the land described therein. Relying on the abstract the plaintiff purchased the mortgage and subsequently foreclosed it, buying in the property at the sale. A judgment lien had been omitted from the abstract, and therefrom plaintiff suffered damages. The complaint was demurred to on the ground that plaintiff's cause of action was barred by the statute of limitations, and, the demurrer having been sustained, the plaintiff appealed.

Cole, McVey & Cheshire, for the appellant.
W. G. Harvison, for the appellee.

237 GRANGER, J. 1, The statute of limitations commences to run from the time a cause of action accrues: Code, sec. 2529. By section 2530 it is provided that in actions for relief on the ground of fraud or mistake the cause shall not be deemed to have accrued until the fraud or mistake has

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been discovered. The petition is without allegations to bring the case within the provisions of the latter section, and hence we are to inquire when the cause of action accrued without reference to its being grounded on fraud or mistake. The pith of the contention by counsel is whether the action is one ex contractu, so that the cause of action accrues with the actual breach of the contract, or ex delicto, so that the action accrues whenever consequential damages result because of the tort. We are directed especially to the averments of the petition wherein recovery is sought because of negligence in preparing the abstract, and for the money expended in the purchase of the mortgage because of such negligence; and it is said that “no legal damage was sustained on the part of the plaintiff until the purchase of the Kellogg mortgage." We may not correctly apprehend what is meant by the term "legal damage.” If it means special damage, such as that alleged, the proposition is correct. If it means general damage, such as the law infers because of the breach, without its being specified, it is not correct. Of course, a cause of action does not accrue in such a case until damages are recoverable, and hence 238 the statute does not commence to run until there is damage to constitute a basis for an action. The further discussion of the case will indicate our view as to when such damage first arose.

The appellant, in support of its theory, that the action is ex delicto, cites the following from Angell on Limitations, section 71: "The action of assumpsit lies to recover damages for consequential wrongs or torts, which, though they are ex delicto, are quasi ex contractu; and they arise from malfeasance, or doing what the defendant ought not to do; non feasance, or not doing what he ought to do; and misfeasance, or doing what he ought to do improperly.” It also cites the following from Addison on Torts, page 13: “A tort may be dependent upon, or independent of, contract. If a contract imposed a legal duty upon a person the neglect of that duty is a tort founded on contract, so that an action et contractu for the breach of contract, or an action ex delicto for the breach of duty, may be brought at the option of the plaintiff.” It is then urged that this is "an action for misfeasance," and hence based upon tort. A few considerations will lead to a correct conclusion on this particular proposition, and aid much toward a solution of the entire case. We get the spirit of the rule to be deduced from the above citations,

80 far as it pertains to this case, by understanding the last statement in the citation from Addison on Torts: “If a contract imposes a legal duty upon a person, the neglect of that duty is a tort founded on contract," and in such a case the injured party may elect to sue for the tort or breach of the legal duty, or sue for the breach of contract. Now, what is the true siguificance of the rule stated ? We think it is this: When the law imposes a duty from one person to another, independent of contract, the duty thus imposed is a legal one, one enjoined by the law. Its neglect is a tort. Now, if the parties by 239 contract, further impose that duty, which may be, and is often, done then the obligation is twofoldenjoined by both law and the contract—and the author has said no more than that "the neglect of such a duty is a tort founded on contract.” It cannot be said that the legal duty referred to means duties arising solely upon contract, for, if it does, then all duties in pursuance of contract are, within the meaning of the rule, legal duties, and hence a neglect to discharge them is a tort. This, followed to its legal conclusion, would make every breach of contract a tort. The duties arising upon contracts are, of course, legal duties, within the most comprehensive meaning of the term, but the sanction of the law making them so is invcked by the contract, and hence in an important and practical sense, we regard and express the obligations and duties thus arising between parties as contractual, and in that way distinguish them from other legal duties or obligations. The learned author was evidently preserving this distinction.

In the case at bar the defendant, independent of the contract, owed no duty to the plaintiff. The neglected duty was one alone enjoined by contract. The failure to perform by the defendant was a failure to discharge its agreement, which is solely a breach of contract. No refinement of reasoning can or should avoid the conclusion. The fact that the act is alleged as negligently done does not change the situation. It is an allegation only as to the manner of making the breach. The liability of the defendant company in no way depends on the fact of negligence. The allegations of the petition show an absolute undertaking "to furnish a full, complete, and correct abstract to the plaintiff, correctly showing the liens of mortgages, judgments, and otherwise." The demur. rer admits such an undertaking, and the allegation of negligence cannot have the effect to change the action from one

on contract to 2-40

one for tort. If A should engage to deliver to B a quantity of wheat at a certain time and place, and he failed to do so, he would be liable upon his undertakirg, and, in an action for damage, because of the failure, a mere allegation that he negligently failed to perform would not affect the character of the action. The liability in either case attaches without the negligence. We reach the conclusion that the action is upon contract, and that the statute of limitations is to be applied accordingly.

We may now notice the claims as to when the statute commences to run. With our conclusion as to the character of the action, it is probable the appellant might not claim that the authorities cited are applicable. We refer, however, to a few as indicating the character of all. Reference is made to 2 Greenleaf on Evidence, sections 433 and 434. These sections have reference to cases of tort, and actions on the case sounding in tort, and it is there stated as the rule that in such cases, where the injury is consequential, and the right of action is founded in special damages, the statute commences to run from the time the special damages accrued. Also, where a statute commences to run from the time of the “act done,” and the act was lawful as to the plaintiff, the act is regarded as “done" when the damages result. But this case is not within either rule. Section 435 is the one applicable to this case, and it states: "In cases of contract, the general principle is that the statute attaches as soon as the contract is broken, because the plaintiff may then commence his action.” As especially applicable to this case, it is further said in the same connection: “And though special damage has resulted, yet the limitation is computed from the time of the breach, and not from the time when the special damage arose.'

The appellant cites, as “one of the best-considered cases on this subject,” Bank of Hartford County v. Waterman, 241 26 Conn. 324. The action is founded on the neglect of an officer to make a valid attachment of real estate, and a false return that he had made such an attachment. That was purely an action ex delicto, and neither the neglect to serve the attachment, nor the false return, nor both, under the holding in the case, “would be enough to constitute a cause of action.” That case holds to a rule that a failure to serve mesne process, or a false return of such process, is not actionable in itself, but becomes so whenever real injury fol

lows from it. Such a holding is not in conflict with our views. The case, however, contains some language strongly in their support. It is there said, speaking of the breach of duties to individuals as those created by contract, whereby each party enters into and defines for himself an immediate obligation to the other, that "the breach of such an obligation is a direct and immediate wrong to the other, so that whether any evil consequences follow, or whatever consequences follow, the cause of action dates from the wrong which would be treated as the cause of action, whether the plaintiff sues in tort or contract." The other cases cited by the appellant are, in their legal effect, the same, being actions based upon tort, and not for a breach of contract, with some exceptions, as where money is paid for the benefit of another to discharge his primary obligation, wherein it is held that the cause of action accrues in behalf of the plaintiff when he makes the payment: See Foster v. Marsh, 25 Iowa, 300. In Steel v. Bryant, 49 Iowa, 116, it is held in an action for nego ligence by a clerk in accepting an insufficient etay bond, that the cause of action did not accrue until the stay expired. It is there said that the action is " for the negligent performance of a duty imposed.” It is then said in the same connection that “the authorities cited in actions based on contract, or acts of negligence in failing to properly perform obligations resulting from contracts, 242 are not strictly applicable." The words we have italicized are highly significant in this case, for the negligent act complained of here is one resulting from contract.

Wilcox v. Plummer, 4 Pet. 172, is a very conclusive case upon the question. The action was to recover damage because of a “blunder” or mistake of an attorney in his professional capacity in the institution and prosecution of a suit on a promissory note. The action (Wilcox v. Plummer, 4 Pet. 172) was in form assumpsit. The damages sought to be recovered were those resulting from the mistake, the result of the mistake being that the note became barred by the statute of limitations because of a nonsuit occasioned thereby. The question in the case was whether the statute commenced to run “from the happening of the damage,” or at the time the mistake was made. The language of the opinion reaches several phases of this case. It is there said: “The ground of the action here is a contract to act diligently and skillfully, and both the contract and breach of it admit of a definite assignment of date.

Ax. Sr. REP., VOL. XLIII - 25

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