This section contains the nature of the case and procedural background.

P obtained title insurance policies that insured against defects in incumbrances upon or liens or charges against the title of the mortgagors or grantors to premises described in the mortgage or trust deed existing at or prior to the date of the policy and not excepted under Schedule B. A dispute developed when it became known that assessments were made against the property with P claiming that they were not excepted under the policy and D claiming that they were. The assessments came into being because of local improvements such as sewers, pavements, and sidewalks that were paid for by assessments against the individual properties benefited. It was clear that there was no lien at the time of issuance of the policies. D's motion to dismiss was granted, and P appealed.

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