History
Prior to the invention of title insurance, buyers in real estate transactions bore sole responsibility for ensuring the validity of the land title held by the seller. If the title were later deemed invalid or found to be fraudulent, the buyer lost his investment.
In 1868, the case of Watson v. Muirhead was heard by the Pennsylvania Supreme Court. Plaintiff Watson had lost his investment in a real estate transaction as the result of a prior lien on the property. Defendant Muirhead, the conveyancer, had discovered the lien prior to the sale but told Watson the title was clear after his lawyer had (erroneously) determined that the lien was not valid.
The courts ruled that Muirhead (and others in similar situations) was not liable for mistakes based on professional opinions. As a result, in 1874, the Pennsylvania legislature passed an act allowing for the incorporation of title insurance companies.
Joshua Morris, a conveyancer in Philadelphia, and several colleagues met on 28 March 1876 to incorporate the first title insurance company. The new firm, Real Estate Title Insurance Company of Philadelphia, would "insure the purchasers of real estate and mortgages against losses from defective titles, liens and encumbrances," and that "through these facilities, transfer of real estate and real estate securities can be made more speedily and with greater security than heretofore."
Morris' aunt purchased the first policy, valued at $1,500, to cover a home on North 43rd Street in Philadelphia.
Read more about this topic: Title Insurance
Famous quotes containing the word history:
“The history of a soldier’s wound beguiles the pain of it.”
—Laurence Sterne (1713–1768)
“Three million of such stones would be needed before the work was done. Three million stones of an average weight of 5,000 pounds, every stone cut precisely to fit into its destined place in the great pyramid. From the quarries they pulled the stones across the desert to the banks of the Nile. Never in the history of the world had so great a task been performed. Their faith gave them strength, and their joy gave them song.”
—William Faulkner (1897–1962)
“The only history is a mere question of one’s struggle inside oneself. But that is the joy of it. One need neither discover Americas nor conquer nations, and yet one has as great a work as Columbus or Alexander, to do.”
—D.H. (David Herbert)