Kenny

Appellants appeal from a judgment rendered January 23, 1980, dismissing appellants’ first amended complaint for negligence pursuant to an order sustaining respondents’ demurrer without leave to amend.

Appellants sold certain real property to buyers Robert G. Parsons and Jeanne K. Parsons. Appellants agreed to convey property free of all encumbrances except 1978-1979 taxes and instructed escrow holder to pay all “liens of record” other than 1978-1979 taxes. Respondents issued a policy of title insurance on May 10, 1978, to the buyers insuring their title to be free from any liens and encumbrances with some exceptions. On March 14, 1978, a federal tax lien for $32,132.49 for 1976 taxes had been imposed upon appellants and their property. The lien was recorded March 15, 1978.

Respondents failed to note said lien and on May 10, 1978, respondents issued the policy of title insurance to the buyers failing to show said lien as an exclusion under their policy. The buyers, respondents’ insured, became aware of the federal tax lien on their property, made demand for payment to clear their title and respondents extinguished the tax lien for the benefit of the insured buyers by…