The Torrens system of registration and transfer of the title to real estate : its principles explained and its methods set forth

Part I. Law Of The State Of Illinois

APPROVED, JUNE 13, 1895.

ESSAY

EXPLANATORY OF THE SYSTEM.

BY HARVEY B. HURD, LL.D.,

Constitutionality of the Law Maintained

BY JURISTS.

PART H.

REGISTRATION AND TRANSFER OF THE TITLE TO REAL ESTATE.

its principles explained and its methods skt forth. Edited by M. M. YBAKLB.

POBLISHED BY THE TORB-ENS PRESS,

No. 79 Fifth Avenue, CHICAGO.

Copyright.

INTRODUCTORY.

In the following pages the reader will find explanation of the modern methods of conveyancing — the registering and transferring of the title to real estate.

For clearness and certainty, for speed and safety, and for economy of time and expense, the new system commends itself to every thoughtful and unprejudiced mind. It is truly a system conceived and carried out in plain common sense.

The present practice of conveyancing scarcely carries the dignity of the name of a system, in view of its liability to errors, lapses from completeness, and its dark pitfalls. Originating in England immediately after the feudal era of possessory titles, that country has pronounced against it by the establishment of the Torrens system; while a large part of the continent of Europe which possessed in practice the root of this system hundreds of years earlier, has, since 1872, adopted the system substantially the same as that recently incorporated into the statutes of Illinois, and, the ablest men of Germany are now engaged in formulating uniform laws for the Empire, in which this system of land registration and transfer is incorporated.

This State, the ftrst taadopt the improved sys-' tern, simply leads the way: since Maryland, Massachusetts, California, Ohio, Iowa, Utah and Rhode Island give indications of following at an early date.

That this system will be universally adopted in the United States is only a question of a very few years of trial.

The Editor.

TO THE READER.

The impression has gained ground that the Torrens System of Registration of Titles is hard to be understood, except by lawyers. This is a mistake. The new system is neither intricate, nor difficult to know; but, is simplicity itself, as compared with the old practice of deed-registration, or recording.

For instance: you are ready for title-registration; then, calling at the county registration office, you inform the Registrar thereof — having with you your deeds, and an abstract, perhaps, being the evidences of your claim to the land — farm, vacant lot, or house and lot. You fill out an application blank, and pay such portion of the fee as is required in advance.

The registrar will inform you, should he need any additional evidence of your ownership; and also when to cair again. If your proof is satisfactory, the registrar will proceed to register your title, and you will receive from him a copy of the register page and folium of your land. This copy is called the duplicate certificate of title.

Should you wish at any time to sell, the intending purchaser can ascertain from the register at a glance how the title stands; then you make a deed to him and surrender your certificate. The registrar wUl file away the deed and make the transfer in the register-book, aud issue a new certificate of title to the purchaser; also close the account with you. The registrar will next open, on a fresh page of the register, registration of the land in the name of the new owner.

Again, the title of land being in you, and you desire to mortgage it, the mortgage is noted upon the register-book, and also upon your duplicate certificate — as a charge against the land.

-The duplicate held by the owner is of special consequence, as without it, you can do nothing. But, should it be lost, a re-issue is obtainable upon affidavit of the fact duly made.

POPULARITY OF THE TORRENS LAW.

The new statute providing for the registration of titles early encountered groundless opposition — just as was the case with every other valuable innovation upon established custom. But the almost unanimous affirmative vote that the law received in the late General Assembly of the State of Illinois, and its prompt approval by the Executive, were the best indications of the popular sentiment. Yet these early expressions of favor are but the prelude to the popular greeting the law is destined to receive at the polls.

The Torrens Law commends itself to every thinking citizen, as expressly suited to supersede the present practice, which is totally unadapted to the common sense methods in" other things at the present day. The thoughtful business and judicial mind had long wished for some gafer and better, simpler and speedier way of transferring the title to real estate; these are all happily found in the law in question.

It is almost surprising that the favoring flood-tide, that will surelyisweep over the country, has been kept back so long; but the explanation lies in the fact of the almost entire want of information upon the new system. It has been predicted, that the latent intelligence of the people would find out sooner or later what they were missing, and when found, it would be hailed with general acclamation; that it was as certain to receive the public favor as that common sense freely abounded, and that the average citizen, when he has once reached the point of asserting his intelligence upon the worth of the Torrens System, could but wonder that he had never himself invented registration of titles.

At such time he will find, that the registering of deeds, including their appendency of "abstracts," often invite and carry both danger and damage to the title which they propose to illustrate and verify.

THE PUBLIC ATTENTION CONCENTRATED UPON THE

TORRENS SYSTEM.

The Torrens land law of Illinois, while constructed upon the strict lines of the system of its astute English author, is modified and made to suit American institutions and constitutional law, and every feature of the Act is in harmony therewith.

There is so much improvement in the new system over the old, that admiration yields only to thankfulness at the result of the work of the Illinois commission. Now, the holding of land need no longer be sub- ■ ject to onerous burdens, and harassing law suits: since rest and security are found in a registered title — running swiftly onward to indefeasibility.

Accordingly, a more rapid appreciation of salable and holding values will follow upon- title registration. Titles held under deed registration do not possess as favorable conditions to invite an equal measure of active appreciation.

The new law invites the home-seeker and capitalist toward land investments, and improvements thereon; for, under it, there can not be any uncertainty of title. Under deeds of record, all questions affecting the title to* real estate remain open, and are rarely if ever conclusively settled. While at every transfer, a fresh examination and extension of abstract are called for by the transferee — no matter how short the period between transfers. This onerous usage — in daily practice — is not in keeping with the wisdom and advanced general intelligence of our day. But, now that the choice of a better way is before the people, shall they not choose it?

THE SPECIAL ADVANTAGES OF

TITLE REGISTRATION.

The new statute providing for registration of titles in the State o'f Illinois, cannot fail to influence the adoption of a similar law in other States. But wherever and whenever it goes into practice, it will exercise a direct influence in opposition to all forms of deception in land dealings, but will encourage fairness therein: the system being so straightforward, and its methods so transparently honest, that reciprocity must have a place in men's minds.

The status of title can be so readily and completely ascertained that dealings will be begun and carried out to completion within a few hours, instead of weeks or months — as under the old practice of lengthy searches for validity of title.

Some of the advantages of the new system — unknown to the old — may be mentioned:

1. A Short, but an Absolute and Indisputable Title.

2. A Registered Certificate of Title carrying its own

proofs.

3. Available for Transfer within an hour.

4. Saves Time and Money misspent.

5. Makes Land a Quick Asset.

6. Increases the number of Transfers.

7. Swells Income from Investments.

8. Adds Flexibility and Strength to Holdings. q. Increases Individual and General Wealth.

The system being rigidly simple, it takes fast hold of common sense; it allows no lapses in registered proof of ownership, which, if once allowed, develops into snares and pitfalls.

The wisdom in legislation in providing this better law makes it one of the most valuable of all the later law reforms of the last one hundred years. Its beneficence in practice will grow and broaden the more it is used, but it cannot be received at its full worth until it is studied and generally introduced throughout the whole country.

Contents

PAGE.

The Simple Process of Title Registration, . . A

The Popularity of the Torrens Law B

I. The Constitutional Question

The inquiry as to the propriety and practicability of an improvement in these respects resolves itself into three heads: —

1. Can there be a constitutional mode of procedure, by which a given title can, as against all the world, and up to a given point, be conclusively adjudicated to be in a given person, subject to given limitations in favor of other given persons?

2. Are there precedents for such an improved procedure, recognizing the principles upon which it would proceed?

3. What is the simplest way of reaching the desired result? First: The constitutionality of such procedure has been settled beyond question. It has been repeatedly determined within recent years by the courts of last resort of several of the States, and by the Supreme Court of the United States, that a State statute is constitutional which enables one in possession of land, claiming title, to file a petition for quieting and establishing his title against all the world, — against persons outside the State as well as persons within the State. The only essentials to the validity of such procedure are that a fair notice^ either ;by general advertisement or otherwise, and an opportunity to be heard be given; second, that the statute provide either that the decree shall . operate directly upon the land, and itself cut off any possible outstanding adverse titles, or that it shall empower some person to give a deed in the name of all possible adverse claimants, releasing their rights. It is only statutes which have failed in these latter respects that have been declared unconstitutional. It is not requisite under such statutes that adverse claimants shall be named or known or identified. They may be described in general terms as the heirs of a given person named, or even as "unknown persons." A large proportion of the States have statutes of this character covering more or less of the whole field of title. In some States the statutes cover practically the whole field. These statutes are frequently resorted to.

Second: There is abundant and' ■ familiar precedent in all the States for such procedure.

CONSTITUTIONALITY. 77

The only difficulty with existing procedure is, not that it falls short in principle, but that it lacks completeness. Dquity has always recognized proceedings to remove clouds from titles; but in equity procedure there are limitations which rendered the procedure inapplicable in many cases where it was needed. This head of equity jurisdiction has been gradually broadened in many States, and the Supreme Court of the United States holds that extensions of it are cognizable by the equity courts of the United States.

II. Constitutional Difficulties Are Not Insuperable

But it may be urged that while the omnipotence of the English Parliament might be equal to the task of imposing this system upon , land owners in that country, that there are constitutional restrictions in the United States which would render such a system here impracticable.

On examination it will be found that these constitutional difficulties are not insuperable, but simply require some modifications of the system to adapt them to our wants. What is needed is a conclusive starting point for the title; this can be obtained either by a ishort statute of limitations or by judicial proceedings to establish the title. If the first method is adopted the certificate when first issued would not give an indefeasible title, but the title would become such by lapse of time, as the statute of limitations would cutoff all interests which had not, within the period fixed by the statute, by caveat or action in court, established their rights to the property. In other words, possessory title would be admitted to the registry, and the certificate would confer upon the applicant no greater title than he actually possessed, but the plan, from the time of the issue of the certificate, would be transferred according to the Torrens System, thereby avoiding further complication of the title, and reaching a safe starting point. This method would not at once reach the result attained by the Torrens System, an absolute and indefeasible title, but in the end, if the title was good, the same result would be reached. Certain advantages also would result from the change. An assurance fund would be unnecessary, as sufficient time would be allowed for all adverse rights to intervene and protect themselves. Under either method no exhaustive examination of titles would be necessary, and the expense of the first entry, therefore, would be comparatively small; the system thus

CONSTITUTIONALITY. 79

modified would adjust itself readily to existing conditions, as it would be merelj': an extension of methods of dealing with land which are now recognized. For the constitutionality of statutes to quiet title to real estate has been sustained both by the Supreme Court of the United States, and by numerous State courts of last resort. .Under these statutes a person in possession of land, claiming title, may bring an action to establish his title again'st all the world, and personal notice is not essential to the validity of a decree which is made to operate on the land itself and is in effect a judgment in rem. Such decrees are sustained against persons who are not named in the petition, and are represented as "persons unknown." Legislation of this character has been passed in many of the States, and the advantage, nay almost the necessity, of such statutes is becoming more and" more recognized.

"THE ILLINOIS BILL BLAZES THE WAY."*

The report of the Land Transfer Commission, appointed under the authority of a joint resolution of the General Assembly of the State of Illinois, made to the Governor of that State in 1893, well illustrates, the manner in which the Torrens System can be adapted to our peculiar institutions, and at the same time work out results nearly as advantageous as those which the Torrens System secures. The bill reported by this commission is the first complete measure which has been submitted to any State legislature in this country, '

•Note.— The " Bill" became an "Act" June 13, 1895.

and for that reason invites careful consideration. The report accompanying the bill points out its salient features.