Nebo, Inc. v. Transamerica Title Insurance

The defendant Transamerica Title Insurance Company (Transamerica), an insurance underwriter, appeals from a judgment in a court-tried case awarding the insured Nebo, Inc. (Nebo) damages in the amount of $16,240 under a policy of title insurance.

Facts

In May 1964 Sacramento Savings & Loan Association (Sacramento Savings) and Nebo opened a property exchange escrow at Title Insurance and Trust Company under which Nebo was to exchange certain San Diego property for 17 improved lots in the Marysville area claimed to be owned by Sacramento Savings. This lawsuit concerns only four of the lots, Nos. 161, 163, 167 and 419. Sacramento Savings claimed title to the four lots as the purchaser at trustee’s sales held under construction deeds of trust which were recorded in 1960. However, Title Insurance and Trust’s preliminary title report showed title to the four lots vested in individuals named Jones, Williams and Kolb (the Jones group) who had purchased at trustee’s sales held under purchase money trust deeds recorded in 1959.

Sacramento Savings contended the subordination clause contained in the purchase money trust deed gave priority to the construction loan trust deeds.…