Atlanta Title & Trust Co. v. Ful-Kalb Inc.

Felton, J. Ful-Kalb Incorporated sued the Atlanta Title & Trust Company on a title policy insuring the plaintiff against all loss or damage not exceeding $350 which it might sustain by reason of defects in the title to premises therein described. The original suit was only for attorney’s fees and court costs. The petition alleged that plaintiff furnished defendant with a copy of the suit against it, attacking the title insured, but refused to permit the defendant to defend the action or to furnish counsel for the defense thereof, for the reason that it was contrary to law and against public policy. The policy sued on provides that defendant shall at its own cost and charges defend the party guaranteed in all actions of ejectment, etc.; that it shall be the duty of the [743] party guaranteed to notify the defendant, in writing, of any such suit filed, and to secure to it, when practicable, the right to defend the same, and to give all reasonable assistance; and that if such notice shall not be given within thirty days after the first service in such proceedings, all liability of defendant in regard thereto ceased. The general demurrer to the petition was overruled, and the defendant excepted. The record discloses that an amendment to the petition, seeking a recovery for the face amount of the policy, was filed after the bill of exceptions had been signed by the judge. The Code, § 9-403, authorizes the title company to insure titles, and to employ attorneys to defend suits to which it is or may be a party. It was an interested party, and had such an interest in the suit as would entitle it to defend the case by counsel. This is true whether or not the contract amounts to an agreement by the defendant to vouch the title company into court. Eeasonably construed, the contract means that the title company shall be permitted to defend, by employing attorneys at law, suits brought against titles it insures; and that if not permitted to do so, it shall not be liable on the contract. The only purpose of a notice, of such a suit to the title company would be for an opportunity to prepare a defense and defend. We think that where the assured breaches the contract by refusing the company this right, it is precluded from a recovery on the contract, which was an entire contract. The general demurrer to the petition should have been sustained. It is unnecessary to rule on the question whether an amendment filed after the bill of exceptions was filed will be considered, as the general demurrer would lie against the petition as amended. It was error to overrule the general demurrer. Judgment reversed. Stephens, P. J., and Sutton, J., concur.