Columbia University Libraries Digital Collections: The Real Estate Record

Real estate record and builders' guide: [v. 99, no. 2559: Articles]: March 31, 1917

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REAL ESTATE AND (Copyright, 1917, by The Record and Guide Co.) NEW YORK, MARCH 31, 1917 HOW THE AMERICAN TORRENS SYSTEM OPERATES Relative Merits of Existing Law Compared With Pro- pose(d Changes Provicded in the Burlingame-Fertig Bill By DORR VIELE, Member Real Estate Board Torrens Committee LAW is the most conservative element in our business life, and that branch of it whose subject is real property is the most conservative branch of the law. In this country the early seaboard colo¬ nists originated a system of keeping rec¬ ords to show the ownership of land which after 300 years is continued as it was begun. The machinery of that system has for some time been inadequate. The occasions for using it have enormously increased, land having developed from being one's family section of the earth into a frequent article of commerce. In Suffolk County, Massachusetts (includ¬ ing Boston), more deed-books were filled in the last twenty-five years of the nine¬ teenth century than in all the preceding years from 1875 back to 1627, when the first deed was recorded in that State. The machinery of title-proof may be looked at apart from the legal principles back of it. A general oflice for preserv¬ ing deeds by copy was more secure for a new country than the English way of keeping them in the home, and had been customary among the Dutch. America added the rule that priority of record, as between two deeds from the same apparent owner, secures priority of right. This and the doctrine of "constructive notice"—that recording a deed of unoc¬ cupied land gave the ^me public notice of the owner's claim as possession did— made sure that deeds generally were promptly recorded. This was an as¬ sumption by the body politic, the town or the State, of the duty to afford its land-holders evidence of their titles. This should never have been abandoned, as only the State can fulfill it. The direct public evidence did not long remain complete as the number of re¬ corded deeds increased. Index books were added, but it took a lawyer's ser¬ vices to find the chain of references and look at the records themselves to see what each transaction had included. The number of papers still increased, and faster. Patents, deeds, mortgages, foreclosures and partition-suits ceaseless¬ ly came in for record at the county seats. Before the locality or "block-system" in¬ dex was introduced in New York County by a law of 1887, it was as if, to show the condition of any bank account, the paid checks should be copied at a public office in the order they were presented and not each account by itself, but the checks of all the accounts in chronological order of payment only, and even several banks togetlier before larger counties were sub¬ divided. Improving the index was just creating pigeon-holes for lesser collec¬ tions of checks. The condition of any account is still found by each time going through the copied records from the beginning. To escape this repeated task is the object of the American Torrens System. Making no chan,ge whatever in the legal principles underlyin.g titles to real prop¬ erty, it substitutes for the serial system of recording instruments of transfer, such as deeds, the recording of an evi¬ dence of ownership. The initial certifi- *An address delivered at a meeting to discuss the American Torrens System, called by Anning S, Prall, ot the Staten Island Civic League, and President of the Real Estate Board ot Staten Island, recently held at the Borough Hail, St, (Jeorge. cate of title expresses the cumulative result of the preceding instruments and no later instruments are copied in the records. Subsequent transactions are put into effect by the Register endorsing the certificate or issuing a new one. There are great possibilities of ad¬ vantage to land in this simple change. The burden of delay and expense hitherto inseparable from each necessary proving of title need no longer be attached to land use. Sales will be freed from an¬ noying uncertainty; as security land will take its place as ready collateral for sliort or small loans. Incidentally, dif¬ ficulties of title will be prevented for the future and those from the past can in general be cleared up. This is true in New York State by reason of the thoroughgoing procedure which frames our system of land title registration, in my opinion the best in the country, at least on its legal side. The carrying out of its administrative provisions depends upon the public en¬ lightenment and demands. The proceeding for registering a title was outlined by statute in effect February 1, 1909. It is a natural evolution for us and has attracted surprisingly little gen¬ eral study. It operates through officers and courts already in existence, a special court being precluded by the State Con¬ stitution, which defines the present courts. Therefore, any statement of the system to the public from any county office can be given only by the officer taking time from other duties, until local authorities (in New York, the Board of Estimate and Apportionment) shall provide for a man for this work or perhaps make even a temporary appropriation for its proper presentation through the power of ap¬ pointment vested in the several Registers and County Clerks by one of last year's amendments. The ofiicial utterances so far are confined to the court reports, be¬ sides the rules of the Court of Appeals, the Appellate Divisions and the State Board of Law Examiners, which have been gathered into a leaflet by the Asso¬ ciated Official Examiners of Title, and can be had from them upon request. To understand and appreciate how at this moment it is open to you to secure a State-issued certicate of your land titles you must bear in mind the limitations of what has been available hitherto. Until thirty years ago there was nothing save the lawyer's opinion. As this w^s ob¬ tained by private contract only the client was entitled to rely on it and a new opin¬ ion must be obtained for every transac¬ tion. The opinion would be based on personal examination of the documents on record, which would be found amon,g the mass of records by means of an ab¬ stract of title or "search." The same stages follow in the various parts of the country. When lawyers stop making their own searches they are made by individual searchers or by abstract companies. This is generally the first gateway to corpora¬ tions into this field. It has the advantage of financial responsibility not alwavs common to the individual abstracter. The money guarantee is susceptible of ex¬ pansion in various forms, from the sim¬ ple one covering that all indexed papers are included in the search, to the com¬ prehensive title policy insuring that one will not be ejected from certain premises for other than certain specified reasons. Today, when an owner first thinks of wanting a title to be registered, precisely the same work must be covered as in obtaining a lawyer's opinion. The rec¬ ords affecting the land must be com¬ piled and examined, the plot surveyed, and the facts of possession inquired into. How can this be done so that it will not have to be repeated later? A worker can be chosen to compile the data, so competent as to be accurate, but some consideration must flow from everyone who is to be bound by the result. The proceeding is entrusted to a justice and if anyone in the world would differ from the owner's claims he is given his "day in court" in which to be heard with his evidence. Perhaps as good a way as any to bring out the merits of the New York Law now in force will be to compare with it in detail the proposed amendments that have been introduced before the Legis¬ lature this year in the measure known as the Burlingame-Fertig bill. The form of notice to those interested in the action is taken as the first point on which, a change is proposed. The method of present procedure to get one's title registered is for the owner to notify his attorney of his wish. Be¬ fore drawing the action papers the attor¬ ney will look up an official examiner of title (qualified under rules of the Court of Appeals) and the latter will prepare a report of the full data on the land, in¬ cluding the chain of title as formerly supplied to a lawyer for an opinion. With this and a survey the attorney draws up a summons and complaint as the owner's application to the Court for bringing an action which shall determine who is vested with title. This is the point to be settled as be¬ tween all persons who could claim an in¬ terest from any state of facts appearing bv the records, or from other source. Therefore, the statute makes strict and careful provision for giving to all of them due. notice. It requires the names of all whose names can be learned. If there is a class who can only be described by a phrase such as "the widow, heirs-at- law, devisees, grantees and persons in¬ terested under a will or grant of John Doe," the best description possible is to be used, as indicated by the code for other actions. Of course any govern¬ mental division, like the town or county that has a claim, is added, and the State, and lastly for these registration actions alone any still missing are brought in under this: "All other persons, if any, having any interest in or lien upon the premises or any part thereof." Jurisdiction over all these possible in¬ terests is obtained in the usual way of actions, by personal service where pos¬ sible, and. where not, by the regular forms of substituted service, except that for the final class "all other persons, etc.," the special publication is maintained of once a week for four weeks, the service to be complete at the end of twenty-eight days from the first publication. This assures the owner of even a title clouded by defects of record that jurisdiction can be had over all the interests constituting the whole title. Whether registration will b? dfer?e4 will depend upon the