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khen - ~ r o p e r t y has been registered under the Land T i t l e Law a l l subsequent dealincs v i t h t h a t land a r e subject t o the provisions of t h Land

~ T i t l e Lar;,(l) unless the property i s properly hithdraxn from t h e system. The bringing of t h e t runs with the land. Formerly, no land un5er t h e a c t implies an a g r e e ~ e n which ~cithdrawalof ~ r o p e r t y from t h e Torrens System w a s permitted. I n t h e l a s t elect i o n , however, a measure was passed by t h e people p e r n i t t i n e okners t o withdraw it from the Torrens Syster?. The procedure f o r vithdrawal u i l l be discussed below. S n t i l withdrawal, the property remains subject t o the provisions of the Land T i t l e Law. The Dresent chagter w i l l be devoted t o a discussion of the procedure f o l lowed in dealin:: with Reqistered land a f t e r it has Seen brought uneer t h e Lmd T i t l e Law. This involves conveyacec, creation of various types of voluntary cetera; creation of various encumbrances such a s a .nlort;l.age, t r u s t deed, t p e s of involuntaq? encumbra?ces such as j u d p e n t l i e n s , attachment l i e n s , e t cetera.

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Tie procedure described i n t h i s section applies t o the conveyaxe of the e n t i r e e s t a t e in registered land; the conveyance of a p a r t of t h e land; t h e conveyance of an undivided i n t e r e s t in the lend; l e a s e of registered land f o r t h e l e s s e e ' s l i f e . Any t r a n s f e r of a l e s s e r i n t e r e s t such as a l e a s e f o r years and t h e c r e a t i o n of any encumbrances on registered land w i l l be discussed in t h e next section. The first s t e p involved in t h e conveymce of registered land i s the execilticn of an instru;.ent of conveyance, which i s required t o be of durable mamay be the s m e a s M O U ~ C . be used i f t e r i a l . ( 2 ) The f o m of t h i s i n s t r ~ u e n t non-registered land were involved. (3) For exmule, 0 , t h e or.mer of E l a c k c r e , desires t o convey h i s i n t e r e s t t o P. O executes any type of deed authorized by lax, suck a s a gat deed o r quit ckirr? deed made out t o P, the e r a t e e . 0 m u s t mzke a notation on the instrunent t h a t the l a d i s registered land, t h e name of t h e registered owner (0 in t h i s case) and the number of the " c e r t i f i c a t e of t h e l a s t r e g i s t r a t i o n of t h i s property. If t h i s notation i s omitted t h e i n s t n m c n t w i l l be refused by the fiegistrar.(k) The p a n t e e ' s f u l l name m d adc!ress must also appear on the deed. ( 5 ) If the property convered i s r e g i s t e r e d property and c o n s i s t s of community property, the spouse i r : whose name it i s registered may convey it in h i s nme, but written c o n s e ~ t of the other spouse must be obtained accorr'ing t o Section 57 of t h e k n d T i t l e Lax. I f t h e property t r v l s f e r r e d i s homestead property, both spouses must join i n t h e t r v l s f e r 2s provided bq- Section 56 of the L:nd T i t l e Lax, unless

the homestead has been released or extinguished. The deed must be properly delivered by the grantor t o the grantee. This is an essential step in the conveyance of registered property.(6) T i t l e does not pass, however, on the delivery of the deed as it would when non-registered land i s conveyed. Title to registered land does not pass u n t i l the instrument i s f i l e d and a new c e r t i f i c a t e issued by the registrar. Until such time the only effect the instrument has i s t h a t of a contract to convey.(7) This i s one of the essential differences between the ordinary recording system and the registration (Torrens) system.(8) The next step which must, therefore, be taken i s the filing of the instrument of conveyance. P, in the above example, must present the ~ r x n a l deed to Blackacre given t o him by 0, t o the Registrar. A t the same time he must produce the duplicate c e r t i f i c a t e t h a t had been issued t o 0 when he acquired the property. T h i s may be accomplished by having 0 give P the c e r t i f i c a t e o r having 0 appear a t the Registrar's office with P and give the c e r t i f i c a t e to t h e Registrar directly. Either method i s troublesome since deliveringthe c e r t i f i c a t e t o P involves the possibility of loss, and an actual appearance a t the Registrar's office requires an element of time. In t h i s respect the Torrens System is more cumbersone than the Recording System. (9) I n addition, the grantee (P in t h i s case) must f i l e an affidavit v i t h the Registrar containing the follouing data: (10)

1 . lrhether the trapsferee i s married and if so the name of the husband o r wife and whether o r not the property is community property. This a f f i d a v i t must be signed by the transferee but it i s not necessary f o r the spouse t o sign also i f the transferee i s married. A recent opinion issued by the Attorney General's office c l a r i f i e d this since it had formerly been the practice of Registrars in California to require both the husband and W e to sign the affidavit.(ll) The reason f o r this practice was t o avoid fraud on the p a r t of the spouse who was the transferee. Tie Attorney General's opinion held t h a t a bona f i d e purchaser could r e l y on the s t a t e of the t i t l e in the c e r t i f i c a t e and would be protected i f the spouse had made fraudulent statements concerning the character of h i s o r her ownership aa separate property o r community property.
M t e r these meterials have been f i l e d by the grantor and grantee in proper form, t h e i r duties have ceased. The Registrar then marks as -filed0 the instrument, such as a deed, which has been deposited with hin and marks the day, hour, minute and year it w a s received. This i s done f o r all instrmnents f i l e d w i t h the registrar in the order i n which they are received.(l2) A l l instruments which are f i l e d with the Registrar are required t o be kept by him in the Registrar's office. They shall not be taken out except by a Subpoena Duces Tecum issued t o and served upon the Registrar by a court of recorL(l3)

The Registrar s h a l l i s s u e c e r t i f i e d copies of these instruments t h a t have been f i l e d with him, when demand i s made and t h e proper f e e s have been paid. He must w r i t e across t h e face of these copies i n red ink, "copy," %o r i g h t s conveyed thereby." These c e r t i f i e d copies are admissible i n evidence with t h e same f o r c e and e f f e c t a s the o r i g i n a l instrument.(&) The grantee under a deed t o registered property does not r e t a i n tine deed, but it is kept by t h e Registrar. The grantee may, of course, r e t a i n a duplicate copy of the deed f o r h i s own use. After marking t h e deed a s "filedt1 the Registrar i s s u e s in duplicate

a new c e r t i f i c a t e of t i t l e which c e r t i f i e s the t i t l e t o be in t h e grantee

i n our e x a m p l e ~ b o v e ) .

He then f i n d s the old c e r t i f i c a t e of t i t l e i n h i s book e n t i t l e d "Register of Titles." This c e r t i f i c a t e w i i l be in the name of the grantor (0, in t h e above example.) On t h i s o l d c e r t i f i c a t e and on the duplicate copy of t h i s c e r t i f i c a t e which has been surrendered by t h e grantor, the R e g i s t r a r then makes a notation of the date of the transfer, the name of t h e transferee, and t h e volume and page i n which t h e new c e r t i f i c a t e i s registered. He then stamps across t h e o l d c e r t i f i c a t e surrendered and t h e old c e r t i f i c a t e i n the Register of T i t l e s t h e word nCanceledtl, i n whole o r in part, b u t r e t a i n s them.(lS) Section 55 of t h e Land T i t l e Law'requires t h e Registrar, in addition, to w r i t e the word "Transferred" end the date of t h e f i l i n g of the Instrument of t r a n s f e r on the o l d c e r t i f i c a t e and surrendered duplicate c e r t i f i c a t e and sign the endorsement. The new c e r t i f i c a t e which i s issued contains the same information as i s required when the o r i g i n a l c e r t i f i c a t e of t i t l e - i s issued a f t e r t h e initid j u d i c i a l proceedings required f o r t h e bringing of property under the Torrens System. The data required f o r such c e r t i f i c a t e may be obtained from Chapter 2 of t h i s paper. Section 58, however, expressly s t a t e s t h a t the c e r t i f i c a t e issued in accordance with a subsequent t r a n s f e r must s t a t e u h e f i e r t h e prope r t y is community property o r not. I n addition, if t h e t r a n s f e r e e i s an executor o r administrator Section 58 requires t h e c e r t i f i c a t e to name the deceased t e s t a t o r o r i n t e s t a t e . If t h e transferee i s an essignee o r t r u s t e e , t h e new c e r t i f i c a t e must contain the name of t h e insolvent o r bankrupt. I f t h e p m p e r t y has been s o l d f o r taxes and t h e l a s t c e r t i f i c a t e shows such t o be t h e case, t h e new c e r t i f i c a t e issued upon t r a n s f e r of such property must s t a t e t h a t t h e t r a n s f e r i s subject t o such s a l e f o r taxes. The procedure involved in s a l e of r e g i s t e r e d property f o r taxes i s discussed subsequently. The new c e r t i f i c a t e and duplicate are endorsed with t h e volune and page of t h e r e g i s t e r where t h i s new c e r t i f i c a t e is t o be found. This requirement i s t h e same a s required when p m p e r t y i s i n i t i a l l y registered. The new c e r t i f i c a t e which i s issued i s kept by t h e Registrar in t h e "Register of Titles" and t h e duplicate c e r t i f i c a t e is delivered t o the grantee who i s t h e new owner of t h e property. He must sign a r e c e i p t f o r t h i s a s discussed i n Chapter 2 in connection with the initial r e g i s t r a t i o n

of title. The name of t h e transferee must be entered in t h e book required t o be kept by'the Registrar containing the names of a l l persons to whom c e r t i f i c a t e s have been issued. The number of h i s c e r t i f i c a t e and t h e day, n hour and minute of i t s issuance must also be entered in t h i s book. A e n t r y must also be made in t h i s book of t h e name of the person t o whom the duplicate was delivered and the book and page where t h e o r i g i n a l i s entered o r recorded. This book also contains t h e receipts f o r delivery of duplicate certificates. The new registered owner's name must then be indexed alphabetically An entry vould also have t o be made i n the property index. Chapter 2 contains a discussion of these records kept by the Registrar.

in the index of persons ouning i n t e r e s t s in registered property.

The property i s deemed "Registeredw in t h e name of t h e transferee when t h e new c e r t i f i c a t e i s issued in h i s name i n duplicate and a notation made thereon of t h e volume and page of the Register in which t h e o r i g i n a l may be found.(l6) This i s t h e same method used in registering property when i - L i s brought under the Torrens System f o r the f i r s t time. Registretion Indicates t h e passage of t i t l e from the old owner t o the new owner.

It has been argued t h a t the Registrar in issuing a new c e r t i f i c a t e upon a subsequent t r a n s f e r of registered property o r in making memorials o f encumbrances on e x i s t i n g c e r t i f i c a t e s of t i t l e i s exercising judicial functions which i s a violation of t h e California Constitution Article 1 1 1 , Section 1which prohibits one department of the state from exercising funct i o n s belonging t o another". The basis f o r such an argument i s t h a t t h e Registrar, an administrative o f f i c i e l , must perform a judicial function in determining the l e g a l e f f e c t of instruments f i l e d with him, such as leases, deeds, e t c e t e r a before he isrmes t h e new c e r t i f i c a t e o r enters a memorial of an encumbrance. In t h e issuance of the first c e r t i f i c a t e when property i s o r i g i n a l l y brought under t h e Torrens System no such problem i s involved s i n c e t h e c e r t i f i c a t e i s issued by t h e Registrar under a court order.
The court in the case of Robinson v ~ e r r i ~ a n ( l 7 discussed ) t h i s constit u t i o n a l problem and s t a t e d t h a t every Edministrative o f f i c i a l i s c a l l e d upon f r o m time to time t o exercise some powers which are l e g a l in e f f e c t , but which a r e merely incidental t o h i s administrative m c t i o n s . Since the Recorder i s merely a m i n i s t e r i a l o f f i c e r h i s decision on l e g a l questions i s not f i n a l and he may be ordered by a w r i t of mandamus to a c t properly. This, t h e court f e e l s i s a s u f f i c i e n t safeguard. The provision involving t h e duty of t h e Registrar to i s s u e subsequent c e r t i f i c a t e s has, therefore, been upheld as constitutional. In addition, Section 99 of the Land n t l e Lau provides t h a t t h e Registrar may p e t i t i o n t h e court f o r an opinion on how he should a c t in regard to any subsequent transaction when he i s in doubt. In addition, if t h e p a r t i e s disagree as to the way an i n t e r e s t should appear on a c e r t i f i c a t e they may request a court order giving the proper form t o be used.

The case of In r e Seick(l8) involves the right of the Registrar t o ask the court f o r an order as t o the method of entering various encumbrances on tne c e r t i f i c a t e of t i t l e . The case, however, stresses the point t h a t an appeal may be taken from the court order as in the case of any court order and the decision of the appellate court may hold t h a t the order given t o the Registrar was improper and, therefore, should be changed. The conclnsion is t h a t the Registrar may exercise certain judicial duties on occasion, but there i s a sufficient judicial control over the exercise of these duties. It should be noted t h a t there i s an alternative method of t r a n s f e m h g registered property. This i s as follows: 0, the ouner of Lot A may endorse on his duplicate c e r t i f i c a t e of t i t l e covering Lot A the following statement:

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"1, 0, grant t o P the real property described i n t h i s hand and s e a l this certificate. Witness day of (19)

..., ...." ... ...

... ...

This endorsement must also contain the f u l l name, residence and post-office address of the grantee as provided in Section 54 of the Land Title Law.
This duplicate c e r t i f i c a t e of t i t l e , properly endorsed and acknowledged is then delivered t o the grantee, P. This i s sufficient t o transfer the property without the issuance of a new certificate. When this method is used the c e r t i f i c a t e of t i t l e in the Registrar's office does not show the true s t a t e of t i t l e , but the duplicate c e r t i f i c a t e does. A subsequent purchaser from either 0 o r P a f t e r the transfer t o P u i l l not be misled since he must acquire t h i s duplicate c e r t i f i c a t e in order t o acquire t i t l e and the duplicate w i l l show the true s t a t e of the t i t l e . This is t r u e whether he takes t i t l e by an endorsement on the duplicate c e r t i f i c a t e o r by a surrender of the duplicate c e r t i f i c a t e to the Registrar and the issuance of a nev certificate. This alternative method i s advantageous i n t h a t it saves additional expense of issuing a new certificate.

Generally, when only a part of the land described in a c e r t i f i c a t e is transferred, a new c e r t i f i c a t e is issued t o the grantee covering the part transferred to him and a new c e r t i f i c a t e i s issued t o the grantor f o r the p a r t remaining in him. An exception i s made when a t r a c t is divided into the subdivisions designated by numbers o r l e t t e r s on a p l a t f i l e d ~ 5 t h Recorder. In such a case, if the owner of the t r a c t conveys a subdivision of t h i s tract, the Registrar may issue a new c e r t i f i c a t e t o the grantee but merely enter a memorandum on the original c e r t i f i c a t e and the grantor's duplicate, cancelling the c e r t i f i c a t e a s t o the subdivision t h a t has been conveyed.(20) This, of course, saves the issuance of a new c e r t i f i c a t e t o the grantor eachtime he conveys a subdivision, which involves a considerable amount of time and expense. This process may be continued as long as there i s room on the original and duplicate c e r t i f i c a t e s f o r these notations.

Section 109 of the Land T i t l e L a w provides t h a t the ouner of n g i s tered laud maysubdivide it in the same manner as unregistered land and when t h i s in done new c e r t i f i c a t e s must be issued. When the owner of a subdivision transfers l o t s subject t o building restrictions, he may furnish the registrar with printed forms of c e r t i f i cates of t i t l e to be used by the Registrar and may include the restrictions in the certificates. These forms must be approved by t h e Registrar, but he has no authority over what restrictions s h a l l be included. 1 1 1 .

PROCEDURE INVOLVED IN CREATING ENCUMBRANCE ON REGISTERED

cuss voluntary and involuntary encumbrances separately due to a few major differences in the procedure f o r registering these two types of encumbrances.

cumbrance. A memorial of the encumbrance is generally made on the origin a l and duplicate c e r t i f i c a t e s of t i t l e applicable to the property involved. The procedure vill, however, be discussed below. It is adviseble t o dis-

similar t o t h a t involved in a conveyance of this land. Howeversthe main difference i s t h a t no new c e r t i f i c a t e is issued i n connection u i t h an en-

The procedure involved in creating encumbrances on regbtered land is

Voluntary encumbrances include mortgages, t r u s t deeds, and various charges against the property. The method of registering such encumbrances i s as follows:
.a

The ouner of the registered property fills out an instrument such as i s used when non-registered property i s involved. (8.g. mortgage, twt deed)el) This must contain the f u l l name, address of the person who claims an i n t e r e s t under the instrument, and a statenent t h a t the land is registered land, the name of the registered owner and the n u d e r of the c e r t i f i cate of the let registration thereof.(22) This i s f i l e d with the R e g i s t r a t s office together with the duplicate c e r t i f i c a t e of t i t l e to the property. Section 55 provides t h a t when the instrument such a s a mortgage is f i l e d the property becomes subject to t h i s mortgage. Until this time the mortgage operates merely as a contract to mortgage the property as between the parties. Actually, in s p i t e of the language of Section 55 stated above, the mortgage does not become a l i e n u n t i l such time as it is actually entered on the Register of t i t l e s .

When the instrrunent i s f i l e d the Registrar endorses t h e date of filAfter making a memorial of this instrument on the origii n g thereon.(23) nal c e r t i f i c a t e i n the Register of Titles, the Registrar makes a notation on the mortgage o r other instrument filed, of the volume and page of the Register where the memorial of t h a t document vas made. (2&) This document (e.g. Xortgage, e t cetera) is retained by the Registrar i n his files.(25)

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When a mortgage, l e a s e o r other instrument creating o r dealing with a charge upon registered land i s i n duplicate, t r i p l i c a t e , o r more p a r t s , only one p a r t need be f i l e d with the Registrar. The Registrar notes on t h e o r i g i nal c e r t i f i c a t e i n the Register of T i t l e s whether the mortgage o r other i n S t r U ;nent was f i l e d in duplicate, t r i p l i c a t e , e t cetera. The Registr-r also ma*s on t h e o t h e r copies of the instrument " m o z g a duplicate", n l e s s o r f s dupc e t e r a , and t h e date of f i l i n g and the volume and page of t h e licate", e then delivers Xegister where ~ h memori~l e of' t h a t docment i s entered. H them t o t h e p a r t i e s e n t i t l e d thereto.(26) If a s u f f i c i e n t number of copies has n o t been furnished t o t h e Registrar, t h e Registrar may make c e r t i f i e d copies of t h e instrument f i l e d i n h i s o f f i c e with t h e endorsements thereon and mark then "mortgagee's c e r t i f i e d copy," e t cetera. He enters on the R e g i s t e r a notation of the issuance of t h e s e c e r t i f i e d copies. These a r e then delivered t o the persons e n t i t l e d t o them. These c e r t i f i e d copies then have t h e same force and e f f e c t as duplicates.(27)
A s s t a t e d above, the Registrar makes a nemorial of the mortgage o r other charge f i l e d w i t h him on the o r i g i n a l c e r t i f i c a t e of t i t l e i n the Register of T i t l e s and a l s o on the ormer's chplicate c e r t i f i c a t e which has been surrendered to t h e Registrar.

If t h e i n s t m ~ e n t r a n s f e r s the property in t m z t , upm c o n d i t i m o r upon l i n i t a t i o n the R e g i s t r ~ r must note t h i s f a c t on the o r i g i n a l and duplic a t e c e r t i f i c a t e s of t i t l e . If the t r u s t e e i s given a power of s a l e t h i s must be noted on the o r i g i n a l and duplicate c e r t i f i c a t e s . I f t h e instrument does n o t s t a t e t h a t he has p m e r of s a l e , a court order must be given in o r d e r t o allow him t o s e l l . A c e r t i r i e d co?y of t h i s order must be f i l e d with t h e r e g i s t r a r md a memrisi o : i t entered on t h e c e r t i f i c a t e of title.!28)

.. .

Whenever a memorial i s entered on a c e r t i f i c a t e of t i t l e it must be c a r r i e d forward on a l l c e r t i f i c a t e s of t i t l e u n t i l it is cancelled i n the proper manner.(29j There is a danger of e r r o r s i n copying these memorials and references s e v e r a l times. This recopybg a l s o involves a considerable m o u n t of time and labor. The r e s u l t i s t h a t the ger'sonnel of t h e Registrar's o f f i c e must be adequate to meet these demnds both in c a l i b r e of work and in dependability. A s u f f i c i e n t l y l a r g e s t a f f is required t o attend t o tSle many c l e r i c a l d u t i e s involved. I n addition, the p a r t i e s i n i n t e r e s t must check t h e Xegister to s e e t h a t eve@hing has been properly entered on the R e g i s t e r of Titles. (30) The duplicate c e r t i f i c a t e must always be produced in order f o r the R e g i s t r a r t o i s s u e a-new one o r e n t e r a memorial. An exception is made when an order of court i s obtained d i r e c t i n g the Registrar t o f i l e t h e instrument without production of t h e duplicate c e r t i f i c a t e of t i t l e and e n t e r it on t h e Register. This order is given by t h e court only when s u f f i c i e n t cause is shown. A memorial of t h e order of c o u r t nust be made.(l) Also, if t h e owner refuses b~ produce t h e duplicate c e r t i f i c a t e a court order may

be obtained ordering hi- t o produce it in court and present it to the Registrar. (2 j


A f t e r the duplicate c e r t i f i c a t e has been endorsed by t h e Registrar with t h e proper memorials it i s returned to the registered owner who r e t a i n s it as proof of h i s t i t l e . The mortgagee o r other encunbrancer receives a dupl i c a t e copy of t h e mortgage o r other instrument f o r proof of h i s claim against the property.

Before returning t h e duplicate instruments and c e r t i f i c a t e s , the Registrar must make pmper e n t r i e s in the name and property indexes.

It is advisable t o discuss the method of performing these funcleased.(3) t i o n s a t t h i s point.


To assign a charge the holder of such charge executes a written assi&nment thereof. This is f i l e d w i t h t h e Registrar together with the duplicate o r c e r t i f i e d copy of the instrument creating t h e charge. The Registrar then e n t e r s a menorial of t h i s assignment on the c e r t i f i c a t e of t i t l e in t h e Register opposite t h e charge, a statement of whet p r i o r i t y i t has, and a r e f erence t o t h a t f i l e number noted on the assignment.

A mortgage o r charge on r e g i s t e r e d property may be assigned o r re-

The Registrar notes on the i n s t m e n t f i l e d in h i s o f f i c e which created t h e charge and the duplicate of t h i s instrument presented t o him, t h e volume and page *ere t h e memorialof t h e assignment i s entered and the date of . e n t q . (Ir)

..

When property i s soueht t o be assigned the above procedure i s followed. When property i s sought t o be released from the e f f e c t of a mortgage o r other charge the procedure followed is t h e s m e as in t h e t r a n s f e r of regist e r e d property, except t h a t no new c e r t i f i c a t e i s issued. The instrument which created the charge i s then stamped "cancelledn by the Registrar. The memorial of the charge on the Register and tne duplicate o r c e r t i f i e d copy of t h e instrument creating the charge i s a l s o s t a ~ p e d "~ancelled.~(5) B.
PROCEDURE IUJOLV,'?) IN CFEAl'LNC 1NVOLU::TAaY REGISrnZD L A m

ENCWBiiWCTS ON

The procedure involved in creating i n v o l u n t a q l i e n s i s similar t o t h a t followed in c r e a t i n g voluntary l i e n s . The main difference, however, i s t h a t t h e d u p l i c a t e c e r t i f i c a t e need not be presented t o the Registrar in order to authorize him t o e n t e r a memorial of the l i e n on t h e o r i g i n a l c e r t i f i c a t e in t h e Register of T i t l e s . (6) The types of involuntary l i e n s t h a t a r e most often encountered consist of: j u d w n t l i e n , attachment l i e n , mechanic's l i e n , l i e n f o r taxes o r assessments. These w i l l be discussed b r i e f l y at t h i s time.

1 .

JLm:m\ T L r n:

A c e r t i f i e d copy of the j u d p e ~ t must be f i l e d w i t h the Registrar b y the j u d p e i i t creditor. It must contain a notation t h a t r e ~ i s t e r e dl m d is affected, t h e namz of the registered owner, and the n-mter of t h e l a s t cert i f i c e t e of r e g i s t r a t i o n . The R e ~ i s t r a r must then e n t e r a menorial of t h a t jnd@nent on t h e original. c e r t i f i c ~ t e of t i t i e coverin! t h e pr0pert.y of the judgmezt debtor or? which it i s desire? t o c r e a t e a j u d p e n t l i e n . Until This requires a l i e n t h i s memorial i s entered, no l i e n i s i n existence.(7) claimant to determine whether the property against which he d e s i r e s t o c r e a t e a j u d p e n t l i e n i s r e g i s t e r e d land. It also requires additional notations on t h e copy of t h e juc?gment. This caozes an cnddditional burden f o r t h e juegment c r e d i t o r . Vnder t h e o r d k a r y Recording Sy.stem a l l FI, would have t,o do would be t o record t h e copy of the jud-pent i n t h e Recorder's office. Immedia t e l y , t h e j u d p e n t would become a l i e n against a l l property owned by the judgment debtor i n t h a t county. (a)
2.

LI5N O F ATTACE!F&T OH - EXECUTIOX:

When a levy of attachnent o r execution i s made on r e g i s t e r e d land, the o f f i c e r making the levy is required hy Section 92 of t h e Land T i t l e Law t o f i l e a c e r t i f i c a t e of the f a c t of levy.(?) In addition, Section 5h2 of the Co5e of C i v i l Procedxe s t a t e s t h a t when r e a l property subject t o the Land T i t l e Law i s attached a copy of the w~it of attachment, together with a d e s c r i p t i o n bf the Torrens t i t l e c e r t i f i c a t e , a description of the property, and a n o t i c e t h a t it i s attached s h a l l be f i l e d with t h e R e g i s t r ~ rof t i t l e s of t h e county. It should be noted t h a t t h i s section of t h e Code of C i v i l Procedure a l s o requires the i n s t r u c t i o n s t o t h e s h e r i f f t o s t a t e t h a t the r e a l property t 3 be l e v i e d upon e i t h e r i s o r i s n o t registered under t h e Land T i t l e L2w. It can be seen c l e a r l y i n t h i s instance t h a t the Land T i t l e L w c r e a t e s additional work f o r a l l p a r t i e s concerned. The R e g i s t r a r then mdles a memorial of t h i s levy of attachment on tine F t t h r t time t h e o r i g i n a l c e r t i f i c a t e on f i l e in the Reeister of T i t k : . l i e n of t h e a t t a c h e n t becornes effective.

When a Mechanic's Lien i s sou*ht t o be enforced against registered property it i s necessary t o record a notice of t h i s l i e n i n t h e County Recorder's Office 2nd a l s o f i l e a Notice of Lien with the Registrar who makes a memorial of i t on the o r i z i n a l c e r t i f i c a t e of t i t l e t o the property inThis notice of l i e n must s t a t e t h a t the land i s Torrens property, volved.(lO) t h e name of t h e owner, and the number of t h e c e r t i f i c 8 t e of t i t l e covering t h e property. It should be f i l e d within t h e period allowed f o r recording The propriety of requiring t h i s e x t r a s t e p h a s b e e n dissuch l i e n . ( l l ) cussed by t h e c o u r t i n t h e case of Aamond Lunher Co. v Moore.(l2) I n t h i s case a materialman had furnished materials f o r a bui.lding t o be erected on r e g i s t e r e d property. He then recorded a notice of h i s mechanic's l i e n , but

f a i l e d t o f i l e it u i t h t h e Registrar. A s a consequence, he was n o t permitt e d t o enforce a mechanic's l i e n against t h e property.


A mechanic's l i e n i s provided f o r by A r t i c l e N, Section 211 of t h e California Constitution. The method of enforcement of the l i e n i s l e f t t o t h e l e g i s l a t u r e u i t h only the l i m i t a t i o n t h a t t h e l i e n cl2imant i s not t o be unduly hampered in h i s exercise of t h e l i e n . The court in t h e Hammond case did not consider the requirement of f i l i n g t h e Notice of Mechanic's Lien with t h e Registrar a s being unduly burdensome. It i s merely a supplementary s t e p which is i n c i d e n t a l t o the general procedure involved i n the enforcement of a mechanic's l i e n . In addition, t h e court held t h a t the additional notations required t o be put on the Notice of Lien were not unreasonably burdensome. This information can r e a d i l y be obtained from the indexes in t h e R e g i s t r a r ' s o f f i c e and t h e o r i g i n a l c e r t i f i c a t e of t i t l e .

A s a p r a c t i c a l matter, however, t h e s e requirements do put a mechanic I n H e must determine a t his p e r i l whether t h e property i s r e g i s t e r e d property o r not and a c t accordinely.

a d i f f i c u l t position.

Section 93 of the Land T i t l e Law s t a t e s t h a t no l i e n i s created u n t i l such notice has been f i l e d w i t h the Registrar. The c o u r t in t h e Hammond case i n d i c a t e s by dictcm t h a t t h i s p a r t of t h e s t a t u t e i s unconstitutional, since t h e California Constitution provides t h a t the l i e n i s created when t h e materials are furnished. The l e g i s l a t u r e cannot change t h e date of c r e e t i o n of t h e l i e n , but merely i t s method of enforcement. Even if t h i s s e c t i o n i s unconstitutional, t h e court holss t h a t it i s separable from t h e r e s t of Section 93 of t h e . d c t requiring r e g i s t r ~ t i o n of s w h notice before enforcement of t h e lien. The conclusion is, therefore, t h a t the l i e n is created when t h e materials a r e furnished, but i f registered property i s involved t h e l i e n cannot be enforced u n t i l t h e Notice has been recorded and registered. (13)

b.

LIEN FOR TAXE AND ASSFSSZNTS: ----

I n general, t h e procedure followed when t h i s type of l i e n i s involved i s similar t o the procedure outlined above i n connection u i t h other involunt a r y liens. A s p e c i a l procedure i s required, however, when t h e l i e n i s enforced pursuant t o an Ordinance f o r Public Improvement. When an Ordinance of a c i t y , town, o r county i s passed t o l a y out, change o r r e p a i r s t r e e t s , drains, c e t e r a o r make any other public improvement, and t h e expense is to be paid out of assessments made on r e a l e s t a t e , the following s t e p s must be taken.
The Clerk of t h e Board passing the Ordinance must within 5 days a f t e r t h e Ordinance has been passed, f i l e a notice of i t s passage u i t h t h e Registrar and a memorial must be noted on the Register. (Ik)

If the Ordinance i s repealed, t h e o f f i c e r authorized t o c o l l e c t the assessments must within 5 days a f t e r t h e r e p e a l n o t i f y the Registrar in writing. The Registrar w i l l then cancel t h e memorial. (15)

T w o cases, Board of Pension Comnissioners v Huriburt(l6) and Xutledwe v City of ~ u r e k a m x have passed on t h e e f f e c t o f the f a i l u r e of the o f f i c e r These cases both held t h a t t h e to m i v e t h e o m p e r n o t i c e s t o the Repistrsr. . . . requiremeot of f i l i n q t h e special notice was merely- d and f a i l u r e t o f i l e d i d not a f f e c t t h e existence of the l i e n against registered property f o r s t r e e t improvements. The r e s u l t would be t h a t a subsequent purchaser o r encumbrancer of t h i s property would be subject t o t h i s l i e n although it did not appear on t h e o r i 2 i n a l o r duplicate c e r t i f i c a t e of t i t l e . This, of course, i s an i n s t a c e i n uhich t h e c e r t i f i c a t e of t i t l e does not show the t r u e s t a t e of the t i t l e , and therefore, i s not conclusive evidence of t i t l e . For other instances i n which the c e r t i f i c a t e i s not conclusive see Chapter h .

When r e g i s t e r e d property i s under the insolvency, probate, o r equity proceeding, made in t h e manner required by S t a t e law. e t c e t e r a of such property t h e decree must c e r t i f i c a t e of t i t l e o r make a memorial on ever t h e case r e q u i r e s ) in accord w i t h t h e

c o u r t ' s j u r i s d i c t i o n due t o an the t r a n s f e r of such property i s When t h e c o u r t orders a ssle, lease, order t h e Registrar t o issue a new t h e e x i s t i n g c e r t i f i c a t e (whichdecree. (18)

The executor o r o t h e r party involved must f i l e a c e r t i f i e d copy of t k i s decree with t h e Registrar together with a deed o r instrument executed i n accord with t h a t decree and a c e r t i f i e d copy of the order confirming t h e s a l e of t h e property i f one i s required.(l9) .. The R e g i s t r a r u i l l then issue a new c e r t i f i c a t e o r make a proper memori a l on the e x i s t i n g c e r t i f i c a t e a s required by the court decree. The cert i f i c a t e o r memorial i s then stat-ed t o be "conclusive evidence i n favor of ell persons t h e r e a f t e r dependinr thereon."(20) When r e g i s t e r e d property i s sold by c o u r t order t o s a t i s f y a judment, t h e purchaser under such s d e must f i l e a c e r t i f i e d copy of t h e decree of of t h e c o u r t ordering such s a l e , together w i t h a confirmation i f required and a c e r t i f i c a t e of t h e o f f i c e r t h a t the terms of the s a l e have been comp l i e d with. The property i s then t r w s f e r r e d on the r e g i s t e r and a new c e r t i f i c a t e issued t o t h e purchaser. (21) B.

PARTITION:

The owner of an undivided i n t e r e s t i n registered land may bring an action f o r partition. He must include as p a r t i e s in such action a l l persons t h a t a r e shown by t h e - R e g i s t e r to have an i n t e r e s t in t h e property. He must then f i l e a n o t i c e of t h i s action with t h e Registrar who enters a memorial thereof on t h e Register. If the property i s ordered sold by the c o u r t a

c e r t i f i e d copy of t,he decree, a c e r t i f i e d copy of t h e c.onfima?.ion of the s a l e , and a c e r t i f i c z t e of t h e o f f i c e r makin: the s a l e , must be f i l e d wi?.h t h e Registrer. The Registrar then t r e n s f e r t the property on the Register and issues a c e r t i f i c ~ t e of t i t l e t o the purchaser.(22) I f t h e ~ r o p e r t yi s merely a l l o t t e d t o varlous persons, tnosf Dertons must f i l e a c e r t i f i e d copy of t h e court order with the Reeistrar who issues new c e r t i f i c a t e s t o those ~ e r s o n s (23) .
If t h e owner of an undivided i n t e r e s t has given 2 mortgace on t h i s int e r e s t and t h e property i s then partitioned, t h i s mortgage w i l l only a f f e c t t h e i n t e r e s t which t h i s p a r t y nas in t h e property a s s e t off by the p a r t i t i a n . The R e g i s t r a r must make a notation on the instrument creating the l i e n on f l l e i n h i s o f f i c e , s t a t i n g t h a t the property has been so g a r t i z memorial of t h i s lien.(2b) tioned. A new c e r t i f i c a t e i s tner, issued c o i ~ t a i n i n e

hhen any s u i t i n v o l v i n ~ registered : iand i s dismissed o r any judgment s a t i s f i e d , t h e i n s t n m e n t showinc the dismissal o r s a t i s f a c t i o n must be f i i e d w i t h t h e Registrar by the proper o f f i c e r o r clerk of the court and c e r t i f i e s by t h e person f i l i n g tne instrument. The Registrar then cancels tne memorial of such s u i t o r judgment on the c e r t i f i c a t e of t i t l e and enters a memorial of t h e dismissal o r sat.isfaction. 'The same pi-acedure i s followed when an attachment o r execution i s released o r discharged. (25) .

A notice of nendexy of ~ z i deal t in^ w i t h registered iand m u ~ % be f i l e d o notice of penwith the R e g i s t r a r and a menorial made on the r e g i s t e r . N to dency of action i s piven u n t i l t h i s has been done. This does not a ~ p l y attackvent -sroceedings when the o f f i c e r ma!<in~ the levy f i l e s h i s c e r t i f i c a t e a s discussed above i n the section on P.t.%achments.(Zb)

The r i g h t of eminent domain i s not affected by t h e Land T i t l e Law. ?.%en an a c t i o n has been brought t o exercise t h i s r i g h t , a c e r t i f i e d copy of t h e j u d p e n t must be f i l e d and a memoran-h~mmade on the Register. A new c e r t i f i c a t e i s then isaned t o the person, c o r > o r r t i o n o r other body e n t i t l e d t o t h e property taken by eminent domain. (27)

F.

POVIE!: OF -4T'!t~Ii35Y: --

Vhen a person i s i v e n a power of attorney t o a c t f o r another i n conhim such power veying o r dealing with registered land, the instrunent ~ i v i n g

nust be f i l e d w i t 1 1 the FLe~istrer?nd a memrial entered on t h e o r i ~ i n a L and duplicate c e r t i f i c a t e s . The scent ma:f on re!l;ie%t have a certf f i e d copy of t h e p o z r of attorney endorsed by t h e Registrar. Xevcxatlon
3 :

a power of' attorney i s made i n t h e 5.anf: maulrr.

Khen an appeal i s taken f r o x ,an~ac5ion under the Land P i t l n Lnw o r decree a f f e c t i n g r e g i s t e r e d lands t h e clerk 0:' the court i n which t h e noticc of appeal is f i l e d must n o t i f y the R e g i s t r a r who then e n t e r s a rnemnri~l 3 : t h i s appeal. (29)

When non-registered property i s involved and death of a >oink, tenant occurs, t h e survivor must obtain a c o u r t order t e r n h a t i n u the j o h t tenant o be followec! cy. Probate Code SectFms 1170-3175 provi3e f o r t h e procedure + i n such case. t'hen r e g i s t e r e d property i s involved and the j o i n t tenancy i s t e m i nated by death Section 98 of t h e Land l i i t l e Law requires t h e swvivor t o p e t i t i o n t h e c o u r t f o r an order terminating t h e joint, tenar~cyand orderi n g t h e R e g i s t r a r t o i s s u e a new c e r t i f i c a t e i n the s u r v i v o r l s rime. Notice of t h e pendency of t h i s must, b~ f i l e d with the R e e i s t r a r who note? i t on t n e c e r t i f i c a t e . After notice m d hearin? t h e c o u r t o r d e r s the termination of t h e j o i n t tena?c:r i f it i s proper and orders the Heuist,rar t o i s s u e 9 ne:I c e r t i f i c a t e t o t h e survivor. The survivor must then f i l e i i i t h the Recist r a r a c e r t i f i e d copy of t h e decree and tnf: dnp1ic';ite c e r t i f i c a t e of t i t l e ( i f it i s a v a ~ l a b l e )and a, a!'fiaaTit as t o whether the prnpertg i s t o be h e l d a s c o n v m i t y property sr separate property. The H e g i s t r x w i l l then i s s u e a new c e r t i f i c e t e i n a c c o r d a x e with t h e decr5e of co>lrt, a cony o f which has been f i l e d with hi%.

The same procedure i s folloued when a l i r e e s t a t e o r homestead i s t e r xinated. (29)

Ehen r e e i s t e r e d land i s s o l d f o r d e l i ~ q u e n tt a x . - ~ , tne procedure is t h e sam as t h a t i n v ~ l v e d when non-re?;istered lsnd i s s o l 4 fo- delinquent. taxes. The p r s p e r t y i s declarecl sold t o the %ate, held by t h e :;tats f o r 5 years, a.?d then s o l d a t a tax s z l e t o t.he hiuhest. hi'jder, who receives a deed t o the property a f t e r oa,yine h i s bid. When r o ~ r e n ss r o n e r t y i- involved t h i s purchaser a t the tax s d e must corn217 3 i t . h al+it.ion?l rer,?lirements a s follows:

The ourchaser who buys r e ~ i s t e r e d property a t a tax s a l e nust, within purchase w l t n f i v e days a f t e r t h e purchase, f i l e a written notice of s ~ c h e must f i l e a s u f f i c i e n t n m b e r of copies t o tne R e ~ i s t r a r ' so f f i c e . H send t o persons who have an i n t e r e s t i n t h e pmperty. The R e g i s t r a r then e n t e r s a menorial of t h i s purchase on t h e o r i r i n a l e t h m mails t o :.he persons named i n c e r t i f i c a t e of t i t i e i n h i s office. H tile c e r t i f i c a t e m d memorials, a copy of t h e notice.(3U)

2.

T P X DZED: --

After t h e purchaser pays t h e amount of h i s bid, a deed t o the property This deed must then be presented t o t h e R e e i s t r a r who makes a memorial of it on t h e Register. Tnis f i l i n g of t h e deed is an agreement t o t r a n s f e r t h e t i t l e i n e f f e c t . ( l ) The purchaser does not actua l l y receive t i t l e u n t i l t h e foliowing s t e p s a r e complied with:

i s issued to him.

1 . Tie purchaser who holds t h i s tax deed f i l e s with t h e cierk of the Superior Court an application f o r a decree showing t i t l e t o t h i s land t o be vested i n him. ( 2 )
2. After proper n o t i c e i s given t o a l l i n t e r e s t e d p a r t i e s , and a proper hearing i s held, a decree i s rendered shouing the condition of t n e t i t l e and who i s t h e owner of t h e property.
A c e r t i f i e d cop? of tne decree i s then f i l e d with t n e R e g i s t r a r 3. who i s s u e s a c e r t i f i c a t e i n accordance witin t h e t e r n s and conditions of the decree.(3) The R e g i s t r a r cancels t h e old c e r t i f i c a t e i n t h e usual manner.

A l l these f o r m a l i t i e s a r e required before a purchaser can a c t u a l l y acq u i r e t i t l e t o r e g i s t e r e d property a t a tax sale. These requirements a r e o w n s whose property has been s o l d f o r f o r the protection of the o r i ~ i n a l delinquent tgxes.
%hen t h e pro?erty is f i r s t declared sold t o the S t a t e f o r taxes and before t h e f i v e year holding by t h e S t a t e , a similar procedure i s followed. The t a x c o l l e c t o r must l i i t h i n f i v e dzys f i l e a notice t h a t t h i s property has been declared s o l j t o t h e S t a t e . The R e g i s t r a r than e n t e r s a memorial on t h e Register and mails notices t o t n e i n t e r e s t e d p a r t i e s . ( & ) Section 77 of t h e Land T i t l e Law s t a t e s : "TJnless such n o t i c e i s f i l e d as herein provided, t h e land s h a l l be f o r e v e r released from the e f f e c t of s w h s a l e , The case of I n Fte and no deed s h a l l be issued i n purslane? thereof." Seick(5) declared t h a t the provision f o r n o t i c e within f i v e days i s mandatory snd i f n o t complied with a new s a l e t o the S t a t e would have t o be deciared and a n o t i c e f i l e d v i t h i n f l v e days from t h e date of t h a t s a l e . The f i v e year period during which t h e S t a t e must hold and which i s t h e period f o r rsdemption, begins running from t h e date of the second s a l e .

--

If t h e property a f t e r f i v e years1 holding by t h e S t a t e i s not i s piven t o chased by a p r i v a t e individual, a deed t o t h e p r o ~ e r t y State. This deed must then be f i l e d with the Registrar who issues c e r t i f i c a t e of t i t l e t o the S t a t e and cancels t h e old c e r t i f i c a t e . n o t necessam i n t h i s case t o obtain a decree of court as required t h e purchaser a t t h e t a x s a l e is a p r i v a t e individual.(6)

purthe a new I t is when

If t h e owner of t h e pronerty redeems the oroperty during the period of redemption, a c e r t i f i c a t e of redemption must be f i l e d with the Regist r a r . The Registrar then cancels t h e memorial of the s a l e t o t h e S t a t e upon t h e c e r t i f i c a t e of t i t l e . (7)

Section 97 of t h e Land T i t l e Law requires changes i n a c e r t i f i c a t e t o b e made i n t h e manner provided by Section 98 of t h e s t a t u t e . Section 98 requires a p e t i t i o n t o the court, n o t i c e and a hearing. This i s discussed in more d e t a i l below. The grounds f o r correction, a l t e r a t i o n , o r cancellation a r e a s follows:

1 . 4.n i n t e r e s t appearing on t h e c e r t i f i c a t e has terminated o r ceased.


(see discussion of termination of j o i n t tenancy above).

2 .

N e w i n t e r e s t s have a r i s e n which a r e not shorn on t h e c e r t i f i c a t e . The c e r t i f i c a t e o r memorial has been made by mistake.

3.

.' .

b.
5.

Change of name. Owner r e g i s t e r e d as married i s no longer married. Corporation has been dissolved. Any other reasonable ground.

6.
7.

A person in i n t e r e s t b e g h s the proceedings by a p e t i t i o n t o the court. The c o u r t then i s s u e s ul order f o r a summons t o be issued to a l l persons in-

t e r e s t e d i n t h e property. After service i s made on these p a r t i e s and notice given to t h e Registrar who makes a notation of the p e t i t i o n on the c e r t i f i c a t e , a hearing is held. The court then grants an order to the Registrar t o make t h e correction i f t h e court determines it i s necessary.
A c e r t i f i e d copy of t h e c o u r t order i s then f i l e d with the Registrar vfio makes t h e correction.
An i l l u s t r a t i o n of t h e operation of Section 98 of t h e Land T i t l e Law providing f o r correction of a c e r t i f i c a t e i s a s follows:

Blackacre, w x c h was registered in 0 ' s naqe, was owned by 0 . P judgment and attachment had been obtained against X by a c r e d i t o r of X and had been entered on the c e r t i f i c a t e of t i t l e coverinz Filackacre, by mistake. X was not t h e owner of Blackacre and the property wes not r e ~ i s t e r e din X's nane. Pn a r t i o n was brou-ht by 0 t o have the memorial of t h i s j u d p e n t removed. This i s a proper s i t u a t i o n i n which t o brine an action under Section 98 and the c o u r t would order the Registrar t o remove t h e memorial of t h e j u d p e n t . (8) Nore s e r i o a s nro5lems a r e presented, hmever, when r i p h t s of bona f i d e pumh?sers a r e involved. Section 98 s t a t e s t h a t the court may not impair the r i o h t s of a bona f i d e purchaser even in connection with the correction of a c e r t i f i c a t e of t i t l e . I n addition, Section 98 does not permit the c m r t t o open t h e o r i g i n a l decree of r e g i s t r a t i o n i n a proceedin? to c o r r e c t a c e r t i f i c a t e . It would seem t h a t t h i s section has been overlooked and disregarded by t h e court i n several decisions discussed i n comection with the inconclusiveness of the c e r t i f i c a t e of t i t l e . Section 28 of t h e Torrens Act provides f o r a simpler method of a change of name i n a c e r t i f i c a t e . The owner whose name i n c o r r e c t l y was registered o r becomes changed, may f i l e an application with the court f o r a change of name i n the c e r t i f i c a t e . hben he proves the r e q u i s i t e f e c t s and produces the duplicate c e r t i f i c a t e t h e court orders the new c e r t i f i c a t e t o be issued by the Registrar w i t h t h e necessary chmee i n name. This may be heard and acted on by the c o u r t with o r without notice, i n i t s discretion. This method appears t o be the s o l e method of change of name when marriage i s involved. T f the change of nane i s fir some other reason e i t h e r the procedure in t h i s Section 28 o r the procedure in Section 98 discussed above may te used t o acquire t h e necessary change i n t h e c e r t i f i c a t e . When a deed o r other instrument i s f i l e d with the Registrar, t h e address of the grantee must be contained i n the deed. I f the address i s changed a written stetement of such change, duly acknowledged, must be f i l e d with the Registrar. The Registrar then endorses t h i s change on t h e deed o r other instrument. ( 9 ) When a duplicate c e r t i f i c a t e i s l o s t o r destroyed the owner of regi s t e r e d property may auply + & the court f o r an order d i r e c t i n g the Registrar to i s s ~ e a certifier? cop7 of t h e o r i g i n a l c e r t i f i c a t e . The court grants such order a f t e r proper notice and hearing. A c e r t i f i e d copy of t h e order must be f i l e d with the Registrar who then makes a c e r t i f i e d copy of t h e o r i g i n a l c e r t i f i c a t e and notes on t h e Register the f a c t of the issuance of t h i s c e r t i f i e d copy. (10)
A c e r t i f i e d copy may also be issued by t h e Registrar f o r use a s evidence upon c o u r t order. Similar notations a r e made a s described above. (11)

Prior t o Novenber 1950, property could not be withdrawn from t h e '?wrens System. Due t o the d i f f i c u l t i e s connected with r e ~ i s t e r e dproperty a measure (proposition EL) w a s passed i n November 1950 pemLttin5 r e ~ i s t e r e dovrners t o withdraw t h e i r property. Sections b 8 . 1 t o L8.9 were added t o the IanC T i t i e k w and provide f o r the followin,: procedure f o r urithdrawal: The registered owner f i l e s with he He!;istrar of t i t l e s a v e r i f i e d p e t i t i o n f o r withdrawal stating:

1 . The names of t h e r e g i s t e r e d owners.


2.

The name of the person i n whose name t h e property was o r i g i n a l l y registered.

3- Description of t h e property.

Ir.

Nvmber of l a t c e r t i f i c a t e of t i t l e . ' b e and address of a l l persons with an i n t e r e s t i n the property a s shown on t h e lsst c e r t i f i c a t e . provisions of t h e general record in^, laws.

5.

6 . Request t h a t the property be wishdrdwn and put back under t h e


The duplicate c e r t i f i c a t e of t i t l e must be presented t o t h e f i e f i s t r a r f o r cancellation. Xben the above p e t i t i o n i s f i J e d t h i s c e r t i f i c a t e must be f i l e d with it. The Registrzr then cancels t h e o r i g i n a l anc duplicate c e r t i f i c z t e s and issues a c e r t i f i c a t e of t h e cancellation of these c e r t i f i cates and withdrawal of t h e land. The Registrar then mkes a notation of t h e f a c t of issuance of t h i s c e r t i f i c a t e of withdrawal in t h e Register of T i t l e s and notes t h e same in t h e *r;e and propzrty indexes. He then files a copy of t h i s c e r t i f i c a t e Kith t h e docuaents ttiit have been f i l e d i n connection with the last cert i f i c a t e of t i t l s . The last c e r t i f i c a t e of t i t l e and c e r t i f i c a t e of withdrawal a r e then recorded xLth t h e County Recorder of t h e county i n which t h e land l i e s and a r e returned t o the R e g i s t r w t o be f i l e d with a notation of t h e f a c t and place of recording endorsed on then. The iiecorder then indexes the c e r t t f l c a t e of withdrawal and t h e c3nc e l l e d c e r t i f i c a t e of t i t l e under t h e nane of each p r s o n s h a m on t h e cert l f i c a t e of t i t l e t o have an i n t ~ r e s t i n the property and under tho n : x s of the last r e g i s t e r e d m e r and t h e f i r s t r e g i s t e r s 3 m e r .

When these c e r t i f i c a t e s a r e recorded the property i s again subject t o t h e recording a c t s and all subsequent p a r t i e s dealing with the property a r e deemed t o have c o n s t n ~ c t i v enotice of a l l documents f i l e d previously with the r e g i s t r a r i n connection with t h i s property. Withdrawal does not a f f e c t t h e o r i e i n a l determination of t i t l e by t h e court i n the initial r e g i s t r a t i o n proceedings. All instrwments f i l e d with the Reqistrar in connection with t h a t property a r e then p a r t of the record chain of t i t l e . I f any person has not consented to t h e withdrawal he s h a l l continue t o have any r i g h t s against the Insurance fund which he had before withdrawal.

Land T i t l e Law, Section LL. --Ibid, Section 110. Ibid, Sections &8 and

53.

Ibid, Sections &7 and 53. Ibid, Section 5&. Ibid, Section &8. Fitzsimmons v - Raiche, 63 C a l App (2) 398. Land T i t l e Law, Section 55, Section 32. --Thompson, Real Property (Perm. Ed.) Vol. 8, Sec. &&15. See 7 Celifornia -Law Review, p. 75 f o r f w t h e r items i n connection with the Torrens System t h a t a r e time consuming. Land T i t l e Law, --1 0. * A Genl's Section 58.

Q. &2.

Land T i t l e Law, Section 50. Ibid, Section &8.

Ibid, Sections 51 and 52. Ibid, Ibid, Section &8. Section 32.

LO. This case declared the 1897 S t a t u t e which was t h e forerunner of t h e present Lmd T i t l e Law constitutional. The 1897 S t a t u t e was e n t i t l e d % Act f o r the c e r t i f i c a t i o n of land t i t l e s and the simp l i f i c a t i o n of t h e t r a n s f e r of r e a l estate," Cal. S t a t s . 1897, p. 138. This case of Robinson v Kerri an has subsequently been considered a s applicable t o the l a t e r 1 9 1 s t a t u t e which i s our present Land T i t l e Law i n Frances Investment Co. v Superlor Court, 189 Cal 107 and also in 1 0 Atty. Genlts ! 4 2 , G t h of these cases assumed i t s applic a b i l i t y wit-uch discussion. The question of c o n s t i t u t i o n a l i t y has never been r a i s e d i n any d e t a i l since t h e Robinson case. See Chapter 1 of t h i s paper f o r a more thorough discussion of the constit u t i o n a l i t y of the Land T i t l e Law (Torrens Act). See a l s o Powell,

151 C a l

--

-7-p-

w.

Richard R., "R&strrtion 3f the T i t l e t o Land i n the S t a t e of N e w York 7 " (1538), prepared f o r the hew York Law Society Under a G r a n t From the Carnegie Corporation, Supplement A, p. 89. See 7 California Law Review p. 75 f o r a consideration of the question of t h e r i ~ h of t the Recorder to determine the e f f e c t of documents deposited w i t h h i n , which i s a c o n s t i t u t i o n a l question.

- --

18.

&6 Cal App 363.


Land T i t l e Law, Section

1 9 .
20.
21.
22.

53.

Ibid, Section &9. Ibid, Section 53. Ibid, Sections S & ' and &7.

23. 2L.

25-

w, Section 50. I b i d , Section 60. Ibid, Section 51. I b i d , Section 61.


G, Section
62.

26.
27.

28. 29.

Tbid, Sections 67-70.


Ibid,
Section &3.

7 California Law Review, p. 75.


Land T i t le Law, -

See Chapter 1 f o r a f u r t h e r discussion of the defects i n the Torrens System. (Part IV) Section 60.

=*

2.

Drexler v Hufnasel, 76 C a l App ( 2 ) 606.

3.

k.
5.

w, Section 63.

Land T i t l e Law, Section 63.

6 . B i d , Section 60.

7.

w, Sections 95 and 91.

Ibid, Section 6&.

9 .

7 --Ca1ifom.ia Law Review 75.

9 . Lend T i t l e Lav, Section $2.


10. O@en, PI. B., Outline of Land T i t l e s (l?h,li:), Chapier XY.

---

1 1 .
12.

7 California Law Review, p. 87, footnote 829.

lo& C a l

App 528.

13.

See 7 California Lzw Review, p. 75 f o r a conclusion contre t o the H m o n d case. This, of course, was written before the court had passed on the c o n s t i t u t i o n a l i t y of t h i s p a r t of t h e Torrens Statute. Land T i t l e Law, Section 5%. ---

fi.
15.

Ibid, Section
195 Cal LO&.

9L.

16. 7 Cal App ( 2 ) 568.

17.
18.

Lvld T i t l e Law, Section 72. In 1931, Probate Code Section 1723 re--q u i r * , ~ t h e c o u r t t o include i n the decree an or6er t o t h e R e y i s t r a -

19.
20.

t o i s s u e a new cel-tificate when r e e i s t e r e d ~ i s orderec! sold - ro -perts in a probate proceeding. This is t h e same as required by Land T i t l e Law, Section 72. Sections 7l.1 and

--

Land T i t l e Law, Sections 71, 72, 73. when a confirmation i s required. Land T i t l e Law, Sections 7& and --Ibid, Section 88. Ibid, Sections 811, 10L, 86.

75 indicate

76.

21.

22.

23.

--, Ibid

Section 85.

2&. I b i d , Section 87.

25.
26. 27.
28.

Ibid, Sections 90 and 94. Ibid, Section 89. I b i d , Section 101. Ibid, Section 107.

29.
30.

T i t l e Insur~,nce & 7r;l~t Compu;yts Handkook ?or T i t l e Ken (19LH)


- - A

p. lir5 2nd i&6.

Lznd T i t l e Law, Section 30. --h z s been made a trulsf'er of

Section 56 s t a t e s t h a t when stch notatlon t h e property must s t a t e t h ~ it t i s snt;ject t o ',he t a x s s l e and t h e new c e r t i f i c a t e issued must so s t e t e .

1 . Tbid, Section 78. 2.

Ibid, S w t i o n 78. -

3.

Ibid,

Sections 75, 80, 82. Section 77. Discussed i n case note, 8 California Law Review,

k.
5.
6.

Land T i t l e Law, ---

kh C n l App 363. p. h50.

Ibid,

Sections 78, 81.

7.
8.
7.
10.

Ibid, Section 83.


1 Cal App 278 i s a case involving Pioneer Abstract Etc. Co. - v Fereud, 9 fac:,s similar t o t h i s i l l u k s t i o n although complicated by other factors.
Land T i t l e Law, Section

--

Ibicl, S e c t i m 27.

.. 5b.

1 1 .

x, Section 27.

Chapter

&:

-E?'FECT

OF XGISTXATICX OF F'F"?EEiZ UNTEK TO3REXS SYSTEl (By University of Southern California;

-----

The advocates of the Torrens Registration System claim t h a t i t has These consist of ( 1 ) a simplified method of conveyancing of r e a l property and (2) a conclusive determination of t i t l e to property. The uay in which these two objectives a r e to be carried out has been discussed in d e t a i l in foruer chapters. The findL question of whether e i t h e r of these two objectives has actually been carried o u t in p r a c t i c e to ar5p. & r e a t extent i n California remains to be analyzed in t h i s chapter. The question can b e s t be i l l u s t r a t e d by t h e following example:

two primary objectives.

A i s t h e r e g i s t e r e d owner of Blackacre, which he desires t o s e l l to P . A executes a deed covering t h e property, corneying i t t o P . The deed, together w i t h A ' s duplicate c e r t i f i c a t e of t i t l e to the property i s given to the r e g i s t r a r . The r e g i s t r a r a f t e r making appropriate e n t r i e s , issues a c e r t i f i c a t e of t i t l e to t h e property t a P. Theoretically, P has a t i t l e to t h e property which i s s u b j e c t only to t h e encumbrances and i n t e r e s t s l i s t e d on h i s c e r t i f i c a t e . These encunbrances and i n t e r e s t s i n t u r n would be based on t h e encumbrances and i n t e r e s t s appearing on the o r i g i n a l c e r t i f i c a t e of t i t l e which is f i l e d in t h e r e g i s t r a r ' s office. P is, t h e o r e t i c a l l y , allowed to r e l y completely on the s t a t e of the t i t l e a s it appears i n t h i s c e r t i f i c a t e . This elin5nates long, tedious t i t l e searches and any off-the-record matters such as fraud, mn-deliver?. of a deed i n t h e chain of t i t l e , e t cetera, which have been noted a s serious defects connected n i i h t h e recording system. The p i c t u r e a s painted in t h i s way i s very satisfactory. It provides a method of a c q u i r i w p e r f e c t t i t l e protection similar to the r e g i s t r a t i o r . system used in connection with the t r a n s f e r of motor vehicles. In addition, the Torrens System makes provision f o r a n Assurance Fund to p r o t e c t against l o s s from t h e operation of t h e System. The outward simplicity of t h e system i s very appealing. It appears to answer a l l t h e problems t h a t a r e present in the recording system and f u r n i s h insurance against loss.

In a c t u a l practice, however, it has been found, p a r t i c u l a r l y i n California, that t h e purchaser does not receive t h e p e r f e c t protection outlined above. I n f a c t , on a closer s c r u t i q of the Torrens System i n California, it is discovered t h a t he i s a c t u a l l y subject to many i n t e r e s t s which do n o t appear on t h e c e r t i f i c a t e and many of which could be discovered only by a thorough investigation of the o r i g i n a l proceedhgs i n which t h e property was i n i t i a l l y brought under t h e Torrens System. Wherever the purchaser is, i n f a c t , subject to i n t e r e s t s not appearing on t h e c e r t i f i c a t e , t h e Torrens System breaks down and f a i l s to achieve i t s main purpose of providing a conclusive c e r t i f i c a t e of t i t l e .
The purchaser i s subject to various i n t e r e s t s (not appearing on t h e c e r t i f i c a t e ) by reason of s t a t u t o r y provisions. These include various s h o r t

term leases, tax l i e n s , & cetera, l i s t e d in t h e Land ntle Ian and discussed below. Other i n t e r e s t s not shown on t h e c e r t i f i c a t e a f f e c t t h e subsequent purchaser by reason of judicial decisions. These include i n t e r e s t s of p a r t i e s not properly notified in t h e o r i g i n a l proceeding f o r r e g i s t r a t i o n o r i n t e r e s t s o f parties fraudulently omitted from the o r i g i n a l proceedings, cetera.

I n addition to these matters, a purchaser must always guard his c e r t i f i c a t e of t i t l e against loss. This is important a s i s shown by t h e f o l l o w illustration:

P, t h e purchaser of Blackacre, loses h i s duplicate c e r t i f i c a t e . X, a t h i e f , finds t h e c e r t i f i c a t e , forges PIS name b the c e r t i f i c a t e and t r a n s f e r s it to B, a bona f i d e purchaser. P has no r i g h t against B, since t h e c e r t i f i c a t e represents t i t l e and B has acquired it in good f a i t h . P i s l e f t w i t h recourse against the Assurance Fund, which is a t best, merely a nmnetary s u b s t i t u t e f o r t h e Land which he purchased. The f i n a l disillusionment in t h e California situation, i s t h a t the Assurance Fund has been bankrupt, leaving P w i t h a worthless claim. This appears to be r a t h e r a severe hardship when t h e owner had not been careless o r negligent i n losing h i s c e r t i f i c a t e . O f course, in order to msintain the system of a conclusive c e r t i f i c a t e B nust be protected and must receive t i t l e to the property. However, i t seems that some s a t i s f a c t i o n should be allowed P f o r his loss.
These defects w i l l be discussed i n greater d e t a i l below under the following h e x 3 ngs :

(1) I n t e r e s t s not apijearing on t h e c e r t i f i c a t e to which a'purchaser


i s subject by s t a t u t e .

(2) I n t e r e s t s n o t appearing on the c e r t i f i c a t e due t o defects i n the initial proceedings f o r registration.

I n t e r e s t s not appearing on the c e r t i f i c a t e which r e s u l t from defective t r a n s f e r s in t h e chain of t i t l e . Events subsequent to purchase of registered land which cause l o s s of t h e purchaser's t i t l e (e.g. fraud and forgery).

(k)

0 WHICH A PURCHASER:IS 1 1 . IBTERESIS NUT APPE;ARING ON THE CERTIFICATE 1 SUEJFCT FYSTATLTTE.

--

---

Section 31, of t h e Land T i t l e Law s t a t e s t h a t a registered ouner holds h i s property subject t o such estates, mortgages, l i e n s , charges and i n t e r e s t s which are noted in t h e l a s t c e r t i f i c a t e of t i t l e EXCEPT:

" 1 . Any subsisting l e a s e o r agreement f o r a l e a s e f o r a period not exceeding one year, where t h e r e is a c t u a l occupation of t h e land under lease. The term "lease" s h a l l include a verbal l e t t i n g .

2.

All land embraced i n the description contained in the c e r t i f i c a t e which has theretofore been l e g a l l y dedicated a s o r declared by a
competent court t o be a public hi~hway.

3. A q y subsisting r i g h t of way o r other easenent, created within one


year before i s s u e of the c e r t i f i c a t e upon, over, o r i n respect of t h e land. been had a t the d a t e of the c e r t i f i c a t e of t i t l e . ( l ) Such r i g h t of -action o r clain! a s is allowed by t h i s a c t . Liens, claims, o r r i g h t s a r i s i n g under t h e l a w s of t h e U ~ t e d States, which t h e s t a t u t e s of California can not require to appear of record upon t h e register."

.
5.
6.

Aq- tax o r s p e c i a l assessment for. which a s a l e of the land has not

Although section 36 of t h e Land T i t l e Law requires section 3k to be printed on t h e c e r t i f i c a t e of t i t l e as a memrandum to the holder, it does not require s p e c i f i c d a t a t o appear there. This means t h a t a purchaser map be forced to investigate p e r s o ~ a l l y to determine whether arq s h o r t term leases, ft cetera e x i s t which would a f f e c t h i s i n t e r e s t i n the property but which do not appear on the c e r t i f i c a t e of t i t l e f i l e d with the r e g i s t r a r and which would not, therefore, appear e i t h e r on t h e duplicate c e r t i f i c a t e which h i s c a n t o r surrendered o r t h e duplicate c e r t i f i c a t e issued to the purchaser himself.

111.

INTEXES'l'j NOT APPEARING Oh THE CETIFlCATE DUE TO DEFECTS IN THE: INITIAL P?DCE!aiNtiS -FUR B'c'GISmTiOid.

--

-..

--

The magoriiq of cases a r i s i n g under this section have been the r e s u l t of l a c k of j u r i s d i c t i o n of the court in t h e o r i g i n a l r e g i s t r a t i o n proceedings. This may have been caused by f a i l u r e to serve p a r t i e s who had i n t e r e s t s i n t h e property a t t h e time of the r e g i s t r a t i o n proceedhgs; it nay have been caused by the court's l a c k of j u r i s d i c t i o n over t h e property which uas the s u b j e c t of t h e action; o r by various other considerations. I n cases where t h e r e has been such a l a c k of j u r i s d i c t i o n the courts in California have allowed the decree of r e g i s t r a t i o n to be attacked and s e t a s i d e regardless of t h e f a c t t h a t the property had been transferred t o a bona f i d e purchaser and regardless of t h e provisions in t h e Land T i t l e Law making t h e decree of:regist r a t i o n and the c e r t i f i c a t e of t i t l e issued t h e r e a f t e r conclusive a s to t h e status of t h e t i t l e . m e following case affords an i l l u s t r a t i o n of the above discussion:

0, owner o f Blackacre, brought an a c t i o n t o have h i s property r e g i s t e r e d under t h e Torrens System. He f a i l e d to name X, (who was occupying a small s e c t i o n o f Blackacre) i n t h e p e t i t i o n and X was n o t given persondl s e r v i c e of t h e p e t i t i o n and summons. The Land T i t l e h w

requires personal service to be given to all occupants of the property sought to be registered. X, having no knowledge of the registration proceedings f a i l e d to appear and consequently the property was decreed to be registered in the name of 0, with no mention of X ' s interest which uas based on a boundary agreement previously made with 0. Several years l a t e r the property was sold to a bcna f i d e purchaser, P, who had no actual notice of X ' s interest. X brought an action to quiet t i t l e and s e t aside the decree of registration so t h a t he could assert his i n t e r e s t i n Blackacre against P. The court i n Swartzbaugh v. Sargent(2) under f a c t s similar to those outlined above, held t h a t X was-entitled to s e t aside the decree of registration and a s s e r t h i s i n t e r e s t i n the property. The court held t h a t f a i l u r e to give the notice required by s t a t u t e in t h i s instance meant a t no due process had been given to X.(3) This holding was given in s p i t e of no person taking a Section 36 of the Land Title Law which states ' I . . shall be held to inquire i n t o the transfer of registered land, circumstances under uhich, o r the consideration f o r which, such owner or any previous registered otmer was registered, o r be affected with notice, actual o r constructive, of any unregistered t r u s t , lien, claim, demand, o r unregistered trust, lien, demand, o r interest; and the knowledge t h a t i n t e r e s t in existence s h a l l not of i t s e l f be imputed a s fraud." This decision, of course, violates the principle t h a t the decree and certificate of registration are to be considered conclusive evidence of t i t l e and breaks down the operation of the Torrens System to a considerable extent.(ir) The r e s u l t i s t h a t the purchaser must check the records prior to the initial registration and. investigate the premises to find any outstanding interests of parties who were not properly notified in the i n i t i a l registration proceedin~so r run the r i s k of losing the property uhich he has purchased, perhaps years later.

...

When there has been a lack of jurisdiction in the original registration proceedings, there i s no limit on the time w i t h i n uhich the decree m y Ee s e t aside. It wwld seem, however, t h a t a person who deliberately failed tc bring such action vlthin a reasonable time a f t e r discovery of his rights, might be precluded by laches from asserting his interest.

When the original decree of registration has been rendered and there has been mistake, fraud, o r inadvertence connected therewith, the decree may be s e t aside within a stated period.(S) This, however, would not affect the rights of a subsequent bona f i d e purchaser of the registered property. His rights would be affected only i f there were a lack of jurisdiction in the original registration proceedings.

IV.

INTERESTS NOT APPEPRING ON THE CERTIFICATE IJHICH R E S U L TF m M ~ I OFB TITLE ~ F P E C T I V E~ ? % E X I N?

-----

---

In the repart on the California RecordFn,~ Syste-. it w a s shown that defective t i t l e s often resulted from f l a w s appearing in the .chain of t i t l e . For example, P purchases Blackacre from 0, the record owner. The record does not, however, indicate t h a t 0 acquired Blackacre from the former

omer X, by means of fraud o r forgery. P, although a purchaser i n good f a i t h would lose the property to X, s b c e no t i t l e had passed to 0, and thus P had acquired no t i t l e . There are various other flaws in the chain of t i t l e which a f f e c t a purchaser's t i t l e under the ordinary recording system, but of which he would have no notice fron the record.

The priAla~ypurpose of the Torrens System i s to eliminate such s i t u a tions. A bona f i d e purchaser who r e l i e s on a c e r t i f i c a t e of t i t l e coverkg the property he is purchasing would be protected against a forgery, fraud, cetera, in his chain of t i t l e . For example: f a i l u r e of consideration, X steals the duplicate c e r t i f i c a t e of t i t l e to 0's property, forges 0 ' s , and registers the name to it and to a deed transferring the property to X property in h i s own name. X Lben transfers the property to P, a bona fide purchaser, relinquishes the c e r t i f i c a t e of t i t l e and a new c e r t i f i c a t e is issued to P. 0 on leanring of this forgery attempts to recover the property f r o m P. The Torrens System in such a situation protects P, vhereas under the recording system 0 wuld be protected. The reason f o r this is t h a t the c e r t i f i c a t e of t i t l e in the registrar's office m y be relied on by a purchaser to show the t i t l e to the property, a t l e a s t to t h i s extent.(6)
This i l l u s t r a t e s the major difference between the recording and the registration systems in t h e i r operation i n California. A purchaser w i l l not be subject to defects in the intermediate transfers occlnring in the o this extent he i s protected under the registration system, chain of t i t l e . T h e r e no protection w u l d be afforded under the recordim system.

B .

EVENTS SUBSEQUENT K3 P U R C H A S E OF REGISTERED LAND WHICH C A U S E USS O F TIEE P U K C H A S E R l STIFLE(~.~.~ r z d and f o r g e n T

----

The above paragraph stressed the protectiongranted by the Torrens System to a subsequent purchaser. This section w i l l emphasize the d r a s t i c e f f e c t such a r u l e uill have on the owner of registered property. For example, 0, who has purchased Blackacre, loses his c e r t i f i c a t e of t i t l e to the property. X finds it, forges 0 ' s name to a deed and transfers the property to P. According to the above discussion P i s given f u l l protection. 0, on the other hand, i s given l i t t l e or no protection. His t i t l e has been n assurance lost and he has no recourse against P to recover the property. A fund is s e t up by the Land T i t l e Law to permit him to recover money damages, but as discussed in a former chapter t h a t fund i s presently bankrupt.(7) H i s r i g h t of action against X, the thief, would be a technical one, since X would probably have departed immediately a f t e r the s a l e of the property to P. To this extent the Torrens System has created a hardship f o r ouners of registered property. They must guard t h e i r certificates with utmost care o r run the risk of loss.
Ths same result would occur in many types of fraud cases, where the owner of registered property would lose his property due to fraudulent actions on the part of h i s vendee.

A purchaser o r owner of registered property is, therefore, subject to a number of i n t e r e s t s not appearin,: on h i s c e r t i f i c a t e and must i n

h i s c e r t i f i c a t e of t i t l e carefully i n order t o ? r o t e c t his addition ~ i c h t s . ,Ibis makes t h e operation of the Torrens Systen i n California f a r from ideal.

It would seem t h a t some of these problems might be solved by the f a c t t h a t the o r i g i n a l owner i s in possession and the subsequent purchaser i s not then a bona f i d e purchaser and should be given no protection. The courts have apparently not explored t h i s p o s s i b i l i t y t o an) great extent.
VI.

=FECT

OF F A I L T ~TO REGIS,TER INTERESTS IN TORRENS ~ P Z R T Y

This subject should be b r i e f l y considered before concluding the discussion of California's Land T i t l e Law.
A s shorn above, a subsequent purchaser is generally n o t s u b j e c t t o i n t e r e s t s &ich a r e unregistered. There a r e a few s i t u a t i o n s in which t h i s is n o t h e , a s discussed formerly, but f o r t h e moment l e t us omit any consideration of those factors.
The following exanple w i l l i l l u s t r a t e t h e e f f e c t of f a i l u r e t o r e g i s t e r i n t e r e s t s in registered land:

0, owner of l o t A, mortgages the property t o M. Lot A has been !, however, f a i l s t o s e e r e g i s t e r e d under t h e California Torrens System. 4 t h a t this mortgage is properly registered and entered a s a memorandum i n t h e c e r t i f i c a t e of t i t l e in t h e r e g i s t r a r ' s office. 0 l a t e r conveys t h e property t o P, a bona f i d e purchaser with no notice of the mortgage which had been given to E. The California courts have held t h a t in such a s i t u a t i o n t h e mortgage is v a l i d between the p a r t i e s thereto (namely, 0 and N) but t h a t it cannot be enforced against P, a bona f i d e purchaser.(8) T h i s is, of course, i n keeping with the m l e t h a t a purchaser merely takes s u b j e c t to i n t e r e s t s appearin; on the c e r t i f i c a t e of t i t l e , with few exceptions.

If P were not a bona M.de purcl~asrr t h a t i s if he had n o t paid value, i n good f a i t h , and wii.bout 11ot.ice of tine mortgage, he would not

then be protected under t h e California decisions.(9) This i.s, a s shown above, in contracliction of Section 36 of the Land T i t l e Law, which apparently- would p r o t e c t even a subsequent purchaser $ & notice. The courts have n o t indicated t o what, extent purctxsers H i l l be charged with notice as f r o n possession o r suspicious f a c t s and circumstances which would a f f e c t t h e i r bona f i d e character. A purchaser shouls, however, t o be s a f e i n v e s t i g a t e t h e character of tine premises and determine who i s in possessico. CONCLUSION

VII.

This concludes the analysis of t h e stat.ctory and case law r e l a t i n g to the California Torrms System. The f i n a l chapter which fnllnws summarizes the apparent flaws i n t h i s systert. (See Fart. TV, Chapter 1 . )

of Fensior, C o m ~ s s i c n e r sv Kurlburt, 7 Gal App ( 2 ) 56E; 1 . See Board 0 e cases both provide Rutled&e _v City of Eureka, l 9 m 5 i l l u s t r a t i o n s of t h i s orovision of t h e Torrens System. 8 Califo:nia Law Review p. &0 contains a case note uhich emphaslz,es t h e necessity f o r checlring tur records to 6eterniin.e d e l b q u e n t taxes. See also, Newcomb v City of Newport Beach, 7 Cal ( 2 ) 343 regardi1.g land dedicated as a public highway.
2.

3C C a l App ( 2 ) &57. The court r e l i e s heavily on F o l l e t t e v P a c i f j c L & P 189 C a l 193. --

*.,

3.

See Chapter 2 f o r a discussion of the prorJer requirments f o r s e r v i c e of part.ies with ir.terests in property sought t o be registered..

4.

For a d d i t i o n a l cases with s W a r r e s u l t s see: of Xewport Beach, In re Xercereau, 126 C a l App 590; Newco~bv 7 C a l -cited footnoteplf F e t i t i o G f ~urness,-62 Cal App 753; Moakley v 9 . Pacific 3.g., 99 Cal ~ ~ p T b .

B ,

5.
7.
8.

For discussion of t h i s r e f e r t o Chapter 1 of t h i s paper.

6 . h n d T i t l e Law, Sections 37 and 36.


G i l l v Johnson, 2 1 Cal App ( 2 ) 649.
i

---

EITC~~TO~.
-)-329;

Land T i t l e Law, Sections 36 and 29; Carlson

1 Carlson,

9.

Warden v %andotte, &7 Cal Rpp ( 2 ) 352- Johnson v Warden, Fawell v Lo_op Bl6g. 16 Cal A~~-(-.

- s.,

L?J

Cal

A.

VOUJ1.E A h 3 COSTS

--

A survey w a s coxiucted by the Eivisiorr r.f SLzte k n c s i~1 S j G of t:ie o p e r a t i o r s i n each county &ere t h e r e had been arly a c t i v i t y relaze6 t o the rezj.str;rtioli of t i t l s s red proprrty untier the L a d T i t l e Law. O f the 2 1 counties having any r e c o r l of e x ~ s r i e l x e with registration, sevent e e n were v i s i t e d i n person. The o r ~ a n j z a t i o nin the Coilnty ~~~~~~6er'r Office assigned t.o these activi1:ic-s ?,-as s t u d i t 4 , and recol.c?r; were obtainec as t o the v o l m of work perfornnd and of the c c s t s involved, i r s o f a r a s the l a t t e r were av2ilable; also, of t h e f e e s collected.

The f ~ l l o - t~ ab ~ l er c ~o n t d ~ s pertinent data re la tin^: t o tiie seven counties of the S t a t e i n k?lich over 95<. of all land t i t l e r e e i s t r a t i o m have been handled:

Comty

Certificates Issued t o

m/w

Fees Irstrunerhs Coll~cted "led

l%9

~YLP

---

ikber I n Staff l9L9

Salaries Paid 19L9

The wide discrepancy between the amount of f e e s collected and the portion of the costs of administration represented by "Salaries Paid 1949" i s of importance, indicating t h a t the Land T i t l e System i s a substantial expense t o the public. The r e s u l t s of a more detailed examination of t h i s f e a b x e f o r Los Angeles County are shown below.

REGISTRATION OPERATIONS I N LOS ANGEIES COLTNTY 19W-1951 inclusive


Fees Received

Salaries
Paid

Year

Instmnts Filed

Income per Instrument

Salary Cost per Instmnt

ll-year Average $23,174.31

$76,631.L5

26,652

$0.87

$2.88

A similar situation e x i s t s i n the other counties. San Bernardino County estimates the average cost of processing each document a t $ h . 1 5 as against an average fee of $0.92. The records i n Orange County show costs ranging between $3.50 and 85.35 per document, with fees averaging between On the basis of t h i s information i t would appear t h a t $ 0 . 7 3 and @ & 6 . the fees being charged skould be increased threefold t o fourfold t o put the system on a self-supporting basis. The following extract from Section100 of the Land Title L a w of California governs the size of the fees required: "Subdivision 1 . For f i l i n g decree directing land t o be brought under the operation of this act, including original registration and issuing original c e r t i f i c a t e of t i t l e and duplicate and the f i l i n g of a l l instruments connected therewith, f o r each separate parcel of lanil affected, on? dollar. "For each subsequent declaration and issuing of c e r t i f i c a t e of t i t l e , including one duplicate and the f i l i n g of all i n s t m n t s connected therewith, f o r each separate parcel of land affected, ore dollar. "For f i l i n g c e r t i f i e d copy of any petition f i l e d i n the superior court of another county i n probate proceedings o r any notice of any action i n another county wherein registration of land i s asked for, om dollar. "or the entry of '6ach memorial on the register, including the f a n g of all instruments and papers connected therewith and the indorsement upon the duplicate certificate, f o r each separate parcel of land affected, f i f t y cents. "For f i l i n g copy of will w i t h l e t t e r s testamentary or f i l i n g copy of l e t t e r s of administration with or without w i l l annexed and entering memorial thereof, one dollar. "For the cancellation of each mmorial or charge, appearing on one c e r t i f i c a t e , twenty-five cents. "For each c e r t i f i c a t e showing the condition of the t i t l e to all land appearing on one certificate, three dollars. *For f i l i n g any instrument or furnishing a c e r t i f i e d copy of any instrument or Kliting on f i l e not herein specially provided for, the same fees which are allowed by law t o recorders f o r l i k e services."

Fees f o r similar senrices i n Iiassachusetts a d i n Cook County, I l l i n o i s , are generally substantially greater. This i s apparent i n the following tabulation: CO;-!PARISON O F FEES Operation Original Registration Entry of Petition Entrg of Decree Entry of Certificate of Title Subsequent Certificates

- REGTSTRATION SYSTEM
Illinois: Cook County $lY.OO (1) $5-00 $10-$lCDO (2) 5.00 2.00 2.00 $1.00-$3.00 I.lassachusetts

California

$ 1 . 0 0

1.00 1.00 0.50

h . 0 0
Not Applicable 4.00

Filing Notices of Action i n Another County


Entry of Each lkmrial on Register

Filing Will o r Copy of Letters Testamentary and Entering k m o r i d Thereof


Cancellation of Each Memorial or Charge on One Certificate Certificate Showing Condition of T i t l e t o A l l Land on One Certificate
F i l i n g or Furnishirg Certified Copy of Any Other I n s t m n t

1.00
0.25

h.00 2.00

2.00 1.00

. . .
3.00 $0.10 per f o l i o plus $0.50 2.00 $0.15 per 103 words plus $0.50
0-1.0%(Id

2.W

$1.MT$3.00

Assurance Fund Fee

0 . 1 0 % (3)

0 . m (3)

NOTES : 5 . 0 0 . (1) I f value of land exceeds $1500; i f less, $


exao;illerls serPices.
(2)

Both include

0.25% of assessed value; payment t o be a t l e a s t $10 and not to exceed $1000.


O f assessed value a t time of registration.

(3)
(4)

Of value as ascertained by Registrar.

Section 100 of m e Land T i t l e Law provides f o r tne establishment of a S t a t e Assurance Fund, a s follows:

, llSubuiv~slon 2. I n addition t o the f e e s provided i n subdivision 1 f o r services performed by the r e g i s t r a r , tnere s h a l l be paid t o him the following fees: Upon t'ne o r i g i n a l r e g i s t r a t i o n of any land, a sum equivalent t o one-tenth of one per cent of the assessed value of t h e land including permanent improvements thereon a s me same were valued f o r county taxation the last t i m said land anG permanent improverents o r e i t h e r thereof were assessed f o r county taxes next preceding the f i l j n g of the petition."
After having been i n existence f o r about twenty years there had By 1936 over accumulated i n t h e Assurance f i n d approximtely &7,000. 1(X),000 c e r t i f i c a t e s of t i t l e , both o r i g i n a l and subsequent, had been issued, and the assessed valuation of the property involved a t tne time of r e g i s t r a t i o n amounted t o approximately $l17,000,000. One claim, referred t o elsewhere i n t h i s report, was decided i n 1936 i n favor of the claimants by the S t a t e courts, and the e n t i r e Assurance Fund was wiped out i n p a r t i a l payment thereof ( G i l l vs. Frances Investment Co.). Since then ?a;mr?tr; Lnto t h e f w d have p r a c t i c a l l y ceased, and t h e d e f i c i t continues t o increase since the court allowed i n t e r e s t a t 7 ; on the unpaid balance. A s of June 30, 1952, the t o t a l d e f i c i t vas $7,931.21.

To understand the s t a t u s of t i t l e to r e a l property i n California and the e f f e c t of the recording a c t i t i s necessary to review the early history of land t i t l e s i n California. Czlifornia was taken in the name of the Spanish King i n 1542 and part i a l l y s e t t l e d by missionaries in 1769. From 1769 to 1822 ( t h e date of the iilexican evolution) r i g h t s to use the land were given t o individuals by the Spanish monarchs, but no ownershi? was given. These were not grants of t i t l e , but mere* r i g h t s to use t h e land f o r grazing and a g r i c u l t u r a l purposes.(l) I n 1822, the pIexicans revolted against Spain and established an independent Republic. Welcico governed California during this period, encouraging colonization of the area. The Mexican rmvernors made many grants of land t o the s e t t l e r s i n California which were approved by the Mexican Legislature. A formal document evidencing the grant xas f i l e d in the government archives. This, however, did not c o n s t i t u t e a recording system a s we have today. It was merely a method of preserving the o r i g i n a l documents evidencing the grants. *&en t h e g r a n t was made, -monuments were s e t up to coincide with t h e boundaries of the a r e a given to the individual by the State. ( 2 )

In t h e 18301s, American s e t t l e r s came to California and chaotic condit i o n s resulted. Since there was no system of recording land t r a n s f e r s and s i n c e possession was d i f f i c u l t to maintain during t h i s period due to the fighting between the Americans and the Mexicans, i t wds' necessary f o r the owners o r claimants of land to keep the muninents of t i t l e in t h e i r possession. The culmination of t h i s disorder w a s the Bear Flag Republic, the Mexican W a r , and f i n a l l y t h e Treaty of Guadelupe Hidalgo in 18b8. California became p a r t of the United S t a t e s with t h e understanding t h a t Mexican property r i g h t s would be upheld if they were valid.(3) Since the Spanish and Heldcan grants were i n confusion due to the uncertainty t h a t had existed under the Spanish and Mexican monarchs and governors, it w a s decided t h a t a n adjudication of a l l claims to land should be made. I n 1851, Congress passed a n a c t f o r the Appointment of Land Commissioners to which a l l private claims had to be submitted.(b) After a determination of t i t l e by t h i s Board, a?peals could be taken to the D i s t r i c t Court and thence to t h e Supreme Court of the United States. Patents were issued t o the claimant,= who proved t h e i r r i g h t to the property and these have been held conclusive- as to the v a l i d i t y of the Spanish o r Meldcan grants as to t i t l e and boundaries specif id. ( 5 )
There have been repeated criticisms of the a t t i t u d e of Congress i n requiri n g all claims to be a d j u d i c a t d . Many of the claims were v a l i d and perfect i n all respects and actually needed no j u d i c i a l determination. These claimants, however, were forced to spend as long a s t h i r t y years i n l i t i g a t i o n of theiz t i t l e s , which involved a considerable amount of money. I n addition, t h i s litigation c a s t a cloud of suspicion on a l l t i t l e s t o Calif0rnj.a properbj, which to

a cert-zin extent e x i s t s today i n s p i t e of t h e repeated docisions of t h e Unit-d S t a t e s Supreme Court t h a t t h e decisions of the Board were concl~isivs. Hor~evsr, a s a r e s u l t of these h o a r i n ~ s , the t i t l e to a l l land in California became absolute and indefeasible and a l l question' of the sowdness of t i t l e s were disposed of a t the time California w a s a d m i t t 4 i n t o the linion.(6) -&en California became a S t a t ? i t inherited some principles of law from t h e Spanish and Nexicm law concerning r e , d pro pert:^, but most of the princip l e s were derived fron t h e E.;nplish comon lair. Since there was no requirenent cf recording land t r a n s f e r s p r i o r to tile adndssion of California i n t o t h e Union, one of t h e first r.cts of t h e California. Legislature was to fonmllete a recording .vstern and adopt it as p a r t of the California lsw.(7) Before discussing this recordjnr: a c t uhich was adopted i n 1850, it i s e s s e n t i a l to review the common law principles governin.; the t r a n s f e r of r e a l changes property without regard t o the e f f e c t of a recor.ding s t a t ~ ~ t e The . which recordin& m&e w i l l then be discussed. Finally, tine p e c u l i a r i t i e s found in t h e California r e c o r d i q system w i l l be discussed i n d e t a i l .

The e s s e n t i a l problem involved i n any discussion of recording i s t h a t of That is, a s between two successive purcLhasers, mortgagees, o r credi@orit.. t o r s , of the same piece of lard, which claim w i l l be s a t i s f i e d f i r s t . The conmmn l a w developed tine well-known & n t h a t "first i n time i s f i r s t i n right." That mean. t h a t - i f A s e l l s and conveys h i s property t o 8, and l a t e r attempts to convey to C, B w i l l p r e v a i l over G since he i s f i r s t i n time t o receive a conveyance. Notice t o C of t h e p r i o r conveyance was h u t e r i s l and d i d n o t a f f e c t the r e s u l t i n any m y . T h i s comon law m a x i m is founded on common sense, since once A has disposed of h i s t i t l e t o the land, he cannot again t r a n s f e r it to a second par@ regardless of t h e f a c t t h a t the second p a r t y purchased f o r value and i n complete good f a i t h vithout, notice of t h e forhe can convey no t i t l e , and since A mer conveyance. I f a vendor has no ti'le, had no t i t l e l e f t a f t e r h i s conveyance t o B, he could convey no t i t l e whatsoever to C.(8)

This r u l e was folloired a t co.mon law xhen t h e m wrs a qiv?stjon of p r i o r i t y between tvo c l a i m n t s o f t h e l e g a l e s t a t ~ o r hetween two f nimrnts of the equita b l e e s t z t e . An example of two l e e a l 5nterest.s would b- t.vo s;~scess:ve conveyn exaznple of two equitable i n t e r e s t s w w l d be two .e13ccessive ances i n fee. A contracts of s a l e m d e by t h e same grantor coverin.: t,he s m e property t o two separate individnals. The equitable i n t e r e s t acquired under t h e f i r s t contract vendee since t h e of s a l e would give the f i r s t vendee p r i o r i p ? over tiis s e c ~ n d first one was p r i o r i n point of tjme. Of course, t h i s m l e i= n?ly t.ru.? whwe t h e e q u i t i e s a r e equal. If the f i r s t vendee were guil.t:r of a?y bad C O P ~ C ~ , it connected with t h e tramnction he would not be given such should be emphasized again t h a t notice on tbe par* of &he second vendee o r lack of notice would not change t h s r e s u l t i n aqr w2:~.

The common law v a r i e s from t h e r u l e of f i r s t in time in one very importmt i n t e r e s t and one s be~tweena p a r t y who acquires a p r i o r ~ 2 u i t a b l e situation. A w i m acquires t h e f u l l & @ t i t l e to the propertr, t h e comon l a w gave p r i o r i t y t o the p u r c i a s s r of t h e l e g a l t i t l e , provided he purchased t h e property f o r value, in ~ o o d f a i t h and without notice of the p ~ i o r The b a s i s f o r such a rulr. is t h a t t h e purchaser of t h e l e g s 1 t i t l e has t h e " b e s t r i ~ h t "to t h e pro pert^. Tine court i s in e f f e c t refusing t o deprive t h e o-mer of h i s techt property in such a case because i t i s not unconscienn i c a l l y b e t t e r r i ~ h of A. a t common law where Tinis i s t h e only s i t 7 ~ a t i o n ~ 3 . 0 1 1f ~o r him to r e t a b i t . ( 1 0 ) p i o r i t ? i s made t o depend on notice r a t h e r than tiroe of a c q u i s i t i o n of t h e i n k r e s t. (ll)

m.

111.

TAX X?ZXDIIG ----STATUTE

-E P F E X T- O N TfiS CCji:iXlX
ill>!

The e a r l i e s t r e c o r d i n ~ a c t was t h e S t a t u t e of Anne adopted i n England in t r a n s f e r e e s t o re1708.(12) Ti19 only e f f e c t t h i s s t a t u t e had was t o r e ~ l i r e i " A were f i r s t cord in order to maintain t h e i r cornox l a w p r i o r i t y . That :is, i t o receive a deed, hut f a i l e d t o record, and the grantor subseqaently conveyed t o B who recorded h i s deed, ?. wodd be nrotected by t h e c o ~ x a t s against the c l a i n of A. A, b;r f a i l i n ? t o recqrd hi5 deed, l o s t h i s c o m n law p r i o r i t y . ( l 3 ) This method of maintainins prior it^ has been used i n a l l of the United S t a t e s . Gf c m r s e , t h e varions s t a t u t e s d i f f e r i n d e t a i l s . For emxple, t h e s t a t r i t e may r e f e r t o c e r t s i n types of i n s t r m e n t s only, and may he f o r t h e generallv, bona f i d e pwchasers f o r value b e n e f i t of c e r t a i n p a r t i e s on*, exi31anation of t h e e f f e c t withoat notice of the f i r s t convzpnce. A ~ e n e r a l of recordhg s t a t u t e s has been offered by Professor Aigler as follows:(lb) ",The e f f e c t oE the s t a t u t e r e a l l y i s t h a t thg.person clsirning under t h e instriunent i n question by h i s f a i l u r e t o o b s e r ~ et h e d i r e c t i o n of tile S t a t u t e confers upon t h e party who executed the instrument, t h e moviqy party, a s o r t of statlitol?. power t o d i s p l a c e the i n t o ~ e s vested t by t h e execution of tine instrument. This power may be e f f e c t i v e l y exercised only i n favor of those s p e c i f i e d i n t h e S t a t u t e , usually subseallent purchasers and i n c:mbrancers. The recording o r d i n x i l y has no e f f e c t so far as t h e vesting of t h e intended i n t e r e z t i n ' h ~ t r s n s f e r e e i s concerned; t h e i n t e r e s t v e s t s as f u l l y and comgletely without as wit'n recording. The f a i l u r e t o record simply puts soneone i n t o p-,sition t o divest t h a t interest." The e a r l y English statlute of Anne d i d not provide f o r the d o c t r i n e of cons t r u c t i v e notice. It was l i n i t e d mereb L 'O preservation of a common l a w p r i o r i t y . If a t common l a w a party f i r s t i n time did not have l e g a l p r i o r i t y , he w o u l d n o t gain anytien? bv recor6in.s h i s instr'ment. For e x a q l e , a s s e e n above, a person with a p r i o r c o n t r a c t n l eq~uityhad no p r i o r i t y a t comon l a x 3.q a_iaini-t a s~~'x=o;lent. horn f i d e u r z h a s e r of t:?e l e g a l e s h t e . I f t,;?e holder or' t h e c r i o r e m i t y recorderi hi.s ; r ~ s t n m e n tit vould not giv;. constroctive noti-ce to tile subsevent. rjurchzser. r woi~lds t i l l t a k e f r e e of t i e p r i o r e.:ui:.y 1mlcr:s h-c h i acti~al notice of i t s e x i s t m c e .

The American s t a t l t e s have departed from the English i n t e r p r e t a t i o n and provide t h a t recordigg an instnunent operates t o give c o n ~ t r u c t i v e notice of Tile result. i n the above emple wodd i d , - contents to subsequent purchaser'. be t h a t the subsequent purchaser of the l e g a l e s t 2 t e would be charged with constr~~ctiv notice e of t h e outstanding equity since it flad been recorded prior to h i s a c q u i s i t i o n of t i t l e . He could, therefore, not c l a h t o be a born f j t e purchaser without notice, since the record gave him notice whether he a c t ~ a l l y read the record o r not.(l5) To summarize t h i s discussion, the purpose of the recording a c t s in the United S t a t e s i s twofold:

1 . Recording operates to m a i n k i n a comwn law p r i o r i t y and the f a i l u r e to record r e s u l t s in l o s s of t h i s p r i o r i t y a s against c e r t a i n designated persons.
2.

Recording operates t o give constructive notice from the record to subsequent purchasers, thus preventing them f r o m claiming t o be born f i d e purchasers.

A s seen above, t h e constructive notice phase is peculiar to the United S t z t e s and i s limited only t o s p e c i f i c s i t u a t i o n s i n which notice a s such wj.11 be the determining f a c t o r . I n most situations, it i s unnecessary t o discuss constructive notice, since the question i s merely one of recording t o maintain a common l a w p r i o r i t y . However, the courts i n most instances have f a i l e d to recognize t h i s d i s t i n c t i o n and decide m ~ s cases t on t h e question of whether t h e subsequent purchaser had-actual m t i c e o r constructive notice from the record preventing him from being a bona f i d e purchaser.(l6) These cases could. be disposed of simply by showing that the f i r s t purchaser had a common law p r i o r i t y and t h i s was maintained by recording. The second purchaser can claim no r i g h t s as a g a i n s t t h e first purchaser and whether he had notice o r not i s irmnat e r i a l .

IV. OPERATIVE EFFECT OF THE CALIFORNIA RECORDIKG ACT

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The California recording s t a t u t e applicable t o t r a n s f e r s of i n t e r e s t s i n r e a l property provides f o r both the maintenance of the common law p r i o r i t y and f o r the doctrine of constructive notice. C i v i l Code Section 1213 i s the provision covering constructive notice and makes e x p l i c i t t h e time t h e notice begins to run and to whom an instrument properly recorded i s notice. "Every conveyance of r e a l property acknowledged o r proved and c e r t i f i e d and r e c o d e d a s prescribed by law from the time it. i s f i k d w i t h t h e recorder f o r record i s constructive notice of the contents thereof t o subsequent purchasers and mortgagees;..." C i v i l Code Section 121h provides f o r t h e e f f e c t of f a i l u r e to record. That is, t h e p r i o r i t y which was erant,ed by the common l a w t o the parity f i r s t .

i n time may be l o s t by f a i l u r e to record. It is important to d e t e r r h e from t h e s t a t u t e who can a s s e r t t h e i n v a l i d i t y of t h i s p r i o r unrecorded conveyance. is C j v i l Code Section 1 2 f i s t a t e s "Every conveyance of r e a l proper@, void a s a g a i n s t any subsequent purchaser or mortgagee of the same pro pert,^, o r any p a r t thereof, i n good -faith . and f o r a valuable consideration, whose corThis requirement t h a t the second conveyveyance i s first duly recorded, ance be recorded makes the California s t a t u t e d i f f e r e n t from s t a t u t e s i n f o r r e in the majority of s t a t e s .(l7) It puts a burden on t h e subsequent pufchaser to prove n o t only h i s good f a i t h , payment of a consideration, and lack of notice, b u t a l s o t h a t he recorded his instrument in the proper manner.

...,

..."

It should be pointed out t h a t f a i l u r e to record does not a f f e c t t h e val i d i t y of instruments as between t h e p a r t i e s o r against p a r t i e s with notice. C i v i l Code Section 1 2 1 7 has codified this doctrine a s follows: "An unrecorded instrument is v a l i d as between the p a r t i e s thereto and those uho have n o t i c e thereof .'I
These provisions of t h e code apply t o c e r t a i n instruments only. Code Section 1215 defines t h e types of instruments as follows: "The term 'conveyance,' a s used in sections twelve hundred and t h i r t e e n and twelve hundred and fourteen, embraces every instrument in writing by which any e s t a t e o r i n t e r e s t in r e a l property i s created, aliened, mortgaged, o r encumbered, o r by which t h e t i t l e to any r e a l property may be affected, except wills. Civil

"

In addition t o these s t a t a t e s applying to ltconveyances,'l t h e r e a r e various s t a t u t e s throughout t h e codes providing f o r k c o x l a t i o n of other instruments which a r e not s t r i c t l y "conveyances," but which do a f f e c t an i n t e r e s t in r e a l property. These include a b s t r a c t s of judgment, attachnents, execut i o n s , notices of non-responsibility, notices of completion, mechanics' l i e n s , and other instruments. Although these a r e not instruments as defined by C i v i l Code Section 1215, in most instances recording of them provides constructive n o t i c e e i t h e r as a r e s u l t of a specific s t a t u t e o r by court decision. For t h e purposes of t h i s paper, the discussion w i l l involve t h e general recording s t a t u t e r e l a t i n e to "conveyances" of r e a l property, but where it i s necessary f o r a complete understanding of the recordizg system a s it exists today, r e f e r ence will be made t o t h e s t a t u t e s r e l a t i n g to the s p e c i f i c l i e n s and documents n o t included under t h e term rtconveyance.fl
V.

DEFECTS I N THE CALIFO3NI.A RECORDING SYSml Theoretically, the purpose of the requirement t h a t instruments be recorded,

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is t h a t an intending purchaser of land may examine t h e record and discover what encumbrances a r e outstanding and whether h i s grantor had a c l e a r t i t l e ' t o transf e r to him. Since he has t h i s means of acquiring knowledge, he is t r e a t e d a s i f he had read the records and i s charged with notice of what appears on the
record.

I n actual practice, however, s i b l e t o t r a c e 'the complete chain of keepint: records, in6exinq, end meet t h e needs of a l a r g e c o m i t t r a n s f e r s of land.

it w i l l be seen t h a t it i s v i r t u a l l y Lxposof t i t l e from the record books. The methods searcking a r e outmoded and insuffj.cient. t,o y where there a r e so many and such rapid

I n addition, there a r e many matters which a f f e c t t h e chain of t i t l e , i m t which a r e n c t deducible frorn a search of t h e public records. These int:lnde adverse possession, forgery, c e r t a i n types of fraud, incapacity, infancy, and countless other defects wilich do r,ot appear on the record, but a f f e c t tile t i t l e t o the property. (18) These defects 'hen consist of deficiencies i n the method of keepint; records, i n t e r n a l defects, rat! nati.ers off t h e record which c o n s t i t z t e external defects. Both types of defects w i l l be Ciscussed i n more d e t a i l since the:; c o n s t i t u t e t h e basis f o r the c r i t i c i s m of the California system.

The recording system i n use i n California i s t h e p a n t o r - g r u l t e e system. The Government Code provides f o r t h e d e t a i l s of i t s adminjstration--types of books t o be kept, d u t i e s of the recorder i n indexing and copying the instrdments, t h e manner i n which instruments a r e recorded, and types of instrument,^ perrritted t o be recorded o r required to be recorded.(l?) The a c t u a l recording procedure i s carried on in t h e follouin5 mnner:

1 .

The instrument is f i l e d . with the County Recorder's o f f i c e of the county within which the r e a l property affected thereby i s situated.(20) The Recorder is then required bg to endorse on t h e instrument t h e which it i s deposited, the year, of its reception, and the amount Government Code Section 27320 f i l i n g number i n t h e order i n month, day and hour and minute of f e e s f o r recording.

2.

3.

Government Code Section 27322 requires the Recorder to c o w t h e instrument i n handwriting, by typewriting, o r photography o r other reproduction process i n t o the prcper book of records., The Government Code lists the books which must be kept f o r the various instruments and re?uires separate books f o r d i f f e r e n t classes of instruments. For example, a book of deeds, a book of mechanics1 l i e n s , attachments, j u d p e n t s , etc. Bouever, i n l i e u of these separate books, t h e code allows t h e Recorder to record any o r a l l of these instrumen-bs i n one general. s e r i e s of books caI.1.ed " o f f i c i a l records." 1n a c t v a l practice, t h e County Recorder i n most c o w t i e s of California uses j u s t the one s e r i e s of lloffjcial. records."(21)

&.

When the instrument is copj.erf i n t o the reccrd, t'ne Kecod.er is required t o note a t t h e f o o t of t h e record t'ne f i l i n g number, t h e exact time of i t s reception, and the nzmn of t h e person a t whose request it i s recorded, together with a notation t h a t it has been conpared.!22) The instrument, must, then be endorsed with the ti.~?.e and book and ,?age in which i t i s recorded and delivered t o the party leaving it. f o r record o r upon h i s order.(2?) The final. duty of the Recorder i n the recorc?in_~ process is t o index t h e in~trumeni;. P a r t 111, Chapter 6, A r t i c l e 2 of t h e Government Code contains a l i s t of t h e type of indices required t o be kept and what data is required to be recorded i n t h e index. The code provides t'nat separate indices should be kept f o r each c l a s s of instrument. For example, index of graritors, index of grantees, index of mortgagors, index of mortgagees, index of mechanics' l i e n s , index of pendency of actions, etc. kiouever, Government Code Section 27257 and Section 27260 provide t h a t in l i e u of these separate indices, t h e County Recorder may keep two indices only, llGeneral Index of Grant o r s " arid "General Index of Grantees." The majority of Recorders' o f f i c e s maintain only these two types of in?exes.

5 .
6.

It i s important t o notice what information i s put in t h e indices by the Recorder. The t i t l e of the instrument is first s t a t e d , followed by the date of f i l i n g , t h e name of the grantor, t h e name of the grantee, the volume, book and page where the instrument was copied. '6e l i s t i s kept i n alphab e t i c a l order under the names of the grantors i n the grantor's inc?ex and under t h e name of t h e grantees i n t h e grantee's index.(24) There i s absol u t e l y no mention of the l e g a l description of t i e property which i s affected by t h e instrument so t h a t it makes it necessary to zo to the instrument i t s e l f o r the record thereof in t.he record books t o f i n d out what property i s involved. A s will be shown l a t e r , t h i s makes it very inconvenient f o r a person searching the t i t l e to a p a r t i c u l a r piece of pro pert^.
+%en t h e instrument subsequent purchasers a s Recorder f o r record.(25) subsequent purchaser can search which is followed

i s properly recorded i t w i l l operate a s notice t o of the day the instrument was deposited k i t h *he The problem which is then presented i s how t h i s find t h i s recorded instrument. The method of u i t h a grantor-vantee system i s a s follows:

The purchaser checks the grantee indices t o f i n ? a reference t o the instrumen' by which h i s vendor acquired t i t l e ; then he checks the prantee ind i c e s under t h e name of the party from whom h i s vendor acquired t i t l e , and i n similar manner back to the original source of t i t l e , whi.ch i s generally a patent. from t h e United S t a t e s government. The purchaser must t!!en check t h e g a p t o r index to f i n t aqv conveyances, mortgages, liens, o r other i n s t ~ - m e n t s

which have been created by any of t h e grantors in the chain of t i t l e . This must be done f o r each grantor to discover any instruments recorded subsequent t o a c q u i s i t i o n of ownership, which may a f f e c t t h e land the purchaser i s i n t e r ested in. It is not necessary to check f o r conveyances made before t i t l e was acquired by any party. The purchaser must check, however, f o r i m t r ' m e n t s recoirJe~ia f t e r a grantor parted with t i t l e uhich may have been recorded bef o r e a subsequent purchaser from t h e grantee acquired t i t l e . ( 2 6 ) Tinis s i t u a t i o n w i l l be d e a l t with i n d e t a i l in a l a t e r chapter, but requires a search of a l l deeds made by a l l grantors in t h e chain of t i t l e down t o the date of purchase by t h e individual searching the records.

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purchasing. Such requirement makes it impossible f o r an individual t o search t h e records where t h e grantors i n the chain of t i t l e have made hundrecls of conveyances. It would take an extremely long time j u s t to c o l l e c t the instruments which a r e recorded and determine which a f f e c t the land the purchaser i s i n t e r e s t e d i n buying. If, however, he f a i l s t o make such a search he i s s t i l l t r e a t e d as if he had read and interpreted every document involving t h i s land. Such a s ~ s t e m i s primitive and makes i t impossible f o r a purchaser t o f i n d out the s t a t e of t h e record t i t l e . The system of recording and searching used i n California can be b e t t e r understood by an i l l u s t r a t i o n :

The index contains only an alphabetical l i s t of the grantors and grantees. it does not contain any statement of t h e l e g a l description. This means t h a t a purchaser w i l l have to go to the books i n which t h e deeds a r e recorded and read through almost every deed made by a grantor in t h e chain of t i t l e t o s e e i f t h e r e i s anything i n it which a f f e c t s the property which he i s i n t e r e s t e d i n

X d e s i r e s to purchase alackacre f r o n Jones, who claims to be the owner of t h e property. I n order t o deter-mine the s t a t e of t h e t i t l e he i s about to purchase, X must check t h e records t o discover any encumbrances outstanding and to deterrnine whether Jones had received t i t l e to t h e property. He must then determine whether Jones conveyed p r i o r to the time X purchases and records his instrument.

X f i r s t takes the index of grantees in which t h e names of a l l g a n t e e s a r e alphabetically arranged. He t r a c e s down t h i s l i s t u n t i l he f i n d s the nane, Jones, a s the grantee of Brown. The index shows t h a t on a c e r t a i n date Jones took a deed from Brown and t h a t it was recorded on page 5 of book 30. This index, however, does not give a l e g a l description of the property which &own conveyed to Jones. X must, therefore, go to page 5 of book 30 and read t h e deed. It m a y be the deed by which Jones acquired Blackacre, b u t it may be a deed by which Jones acquired 'Aiteacre o r arq other piece of property. If Jones had purchased a considerable number of l o t s from time to time it would be necess a r y to read a l l the deeds on t h e record by which Jones acquired property i n order to determine which one transferred t i t l e to Blackacre. O f course, Gones may have a copy of h i s deed with the

book and page endorsed on it and. t h i s would save some of the work i n searching. After X has found the deed f r o n Yrown to Jones and assumins t h a t it covers Blackacre he a b s t r a c t s it. He then mast find the instrument by which Brown acquired t i t l e . This means he must search the alphabetical index of grantees u n t i l he f i n d s Yrown's name as ?rantee. Again he may f i n d t h a t Srown had purchased several l o f s a t d i f f e r e n t times and he must take out t h e books i n which a l l deeds t o these l o t s were recorded, u n t i l he cones to the one by which Srown acquired Slackacre. The next t a s k i e t o fhd t h e instrument by which Brown's vendor acquired t i t l e to Blackacre. This requires tine sane search under h i s name. This must be continued f o r a l l the vendors i n the chain of t i t l e back t o the o r i g i n a l government patent. The ne-xt s t e p i s t o check f o r any encunbrances o r conveyances which any of t h e p a r t i e s i n t h e chain of t i t l e ;nay have m d e from t h e time of a c q u i s i t i o n of ownership by each party down t o the d a t e X ' s instrument i s recorded. This means t h a t X must check t h e grantor index f o r Jones' nane and read every instrument t h a t Jones executed f o r t h a t period of time. This is necessary since t h e index does not give a descript i o n of t h e property involved. There i s no way of discovering whether a p a r t i c d a r mortgage referred to t h e piece of proper:y : i i s i n t e r e s t e d i n buying except to look a t t h e record of the mort. gage.

Y then mst do t h e same thing f o r Brown and Brown's vendor and back t o t h e o r i g i n a l source of t i t l e .
This is, of course, only p a r t of t h e task, since, t h e records of some encumbrances a r e kept i n other o f f i c e s besides the County Recorder's o f f i c e . This requires searching in several places. (27) From t h i s example, it can e a s i l y be seen t h a t t h e method of keeprecords and searching i s impossible. A t i t l e cannot be e f f i c i e n t l y searched and even a f t e r search t h e r e is no guarantee t h a t a l l outstanding encumbrances have been discovered s i n c e some o f f i c e may have been overlooked.

In a c t u a l practice, t h e purchaser i s usually able to obtain an old C e r t i f i c a t e of T i t l e , Guarantee of T i t l e o r Policy of T i t l e Insurance, which he can use a s a s t a r t i n g point. This w i l l avoid t h e necessity of checking everything back t o t h e beginning. It w i l l only be necessary t o bring t h i s c e r t i f i c a t e down t o date. That such a technique i s necessaryshows t h e glarinp, i n e f f i c i e n c y of t h e recording system a s i t e x i s t s today.
Sane of t h e a d d i t i o n a l o f f i c e s i n which t h e search must be continue3 include :

1 .

County Clerk's Office search f o r actions which a f f e c t t i t l e to property o r capacity of p a r t i e s to execute v a l i d instruments. Probate indices - search f o r incompetency proceedings o r pro-b a t e proceedings. County Tax Collector's Office and Assessor's Office - search f o r taxes, bonds and assessments. bonds.

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2.

3.

! + Bureau

of Assessnent

of the

city

- search f o r assessments

and

Bankivptcy indices

- search f o r adjudication of

bankruptcy. investigated wants to find and what to existence.

These are i l l u s t r a t i v e of the types of things which must be t o a purchaser wbo b u t t h e r e a r e nugy others. It i s bewildero u t t h e s t a t e of t h e record t i t l e to discover j u s t where to look look f o r t o determine a t outstanding encumbrances there a r e i n

When t h i s material i s f i n a l l y assembled it is necessary t o i n t e r p r e t what t h e documents mean and r e a l l y requires the services of an attorney. The res u l t is that a purchaser would be taking a very great r i s k in relying on q search t h a t he himself had made, because he probably cannot obtain a l l the information without assistance, and because he does not have t h e a b i l i t y t o analyze t h e instruments properly and evaluate them.

B.

EXTERNAL 3EFECTS

..

The e f f e c t of t h e recording system is t o give a purchaser t h e means of inv e s t i g a t i n g t h e s t a t e of t h e record t i t l e . T h i s may in some instances be very d i f f e r e n t from the a c t u a l s t a t e of t h e t i t l e . The t i t l e m a y be subjected to various e q u i t i e s in p a r t i e s which do not appear of record. For example, there nay be a r i g h t to reform an instrument on grounds of mistake, o r a r i g h t to rescind f o r fraud o r mistake. Numerous e q u i t i e s which cannot be discovered by any method of search may l a t e r be asserted by grantors o r grantees i n t h e chain o f t i t l e and may cause a purchaser to take a very defective t i t l e . I n some instances, t h e a c t u a l t i t l e may not even be i n t h e record owner. Under the law o f adverse possession, t i t l e may be acquired by someone in possession and it i s never p u t on t h e record. A purchaser is then required to investigate t h e premises and decide f o r himself whether o r not anyone has been occupying t h e property f o r a s u f f i c i e n t length of time t o acquire a t i t l e by adverse possession. Sometimes t h i s may be a very d i f f i c u l t determination to make f o r a purchaser esp e c i a l l y where property i s being purchased by investors in t h e East who a r e not a b l e t o make a personal survey of every parcel of land purchased. The recording system w a s never intended to show a purchaser anything more It never purported to indicate defects which did n o t appear on t h e record, and never protected a purchaser against such defects. There has been a c o m n b e l i e f t h a t a record t i t l e gives a comp l e t e v e r i f i c a t i o n of the t i t l e which a purchaser receives. This i s not t r u e

than t h e state of t h e record t i t l e .

since no t i t l e can be deduced completely from an examination of the public records. The ownership of land depends not only upon f a c t s of record, b u t also upan a l a r g e body of extraneous f a c t s not present on the public records.(28)
A List of some of the r i s k s outside tine record which a f f e c t the record s not intended to be a complete l i s t . Some r i s k s mentioned follows. This i would depend upon a b i l i t y to prove c e r t a i n f a c t o r s such a s good f a i t h , payment of consideration, l a c k of notice, and other matters.

1 . Adverse possession. 2. Rights obtained by prescription. 3. Fraud in t h e inception of documents. 4 . False personation. 5. Forgeries. 6 . mrital s t a t u s of parties. 7. Problems of descent and heirship. age and mentality. 8. Capacity 9. Errors in recording. 1 0 . Errors in d e s c r i p t i o m in t h e instruments. 1 1 . Special l i e n s mechanics' l i e n s . 12. Non-delivery of deeds. 13. Void judgments and decrees, due t o no jurisdiction, l a c k of service, o r defective proceeding. lb. Authority of agent o r corporate o f f i c e r . 15. Validity of j u d i c i a l procedure under foreclosure s u i t s . 16. Violation of usury laws.

I n some cases, a bona f i d e purchaser uho takes t h e l e g a l t i t l e w i l l not be subjected t o e q u i t i e s in other parties. For e'hmple, a r i g h t to rescind f o r fraud unless it is fraud in t h e execution of t h e instrument, may not be asserted against a bona f i d e purchaser. This cuts down the e f f e c t of t h e o f f the record r i s k s to a c e r t a i n extent, b u t it i s still not s u f f i c i e n t to answer t h e problem. The doctrine t h a t a purchaser may take a c l e a r t i t l e i f he takes through a bona f i d e purchaser regardless of whether he has notice of defects i n the t i t l e is another safeguard. Again, t h i s has only a limited e f f e c t and does not do away with t h e defects i n t h e recording system.(29) When t h e defects a r e analyzed it seems inconceivable that a purchaser could ever f e e l secure t h a t h i s t i t l e i s clear. He has serious d i f f i c ~ l t y in dlscoverixg t h e existence o f t h e encumbrances, i s unable to i n t e r p r e t them properly, and is then possibLv subjected to defects which a r e off the record and cannot be discovered by aqy method of search.

It i s the recognition of these problems which f a c e a purchaser of r e a l property, that has caused consistent c r i t i c i s m of the recordinz system as archaic, primitive, and unable t o achieve t h e purpose f o r which it was o r i g i nally adopted. It i s because of these problem t h a t at'empts have been made t o rernodel t h e method of recording by use of a p l a t s p t e m o r by consolidation of the various o f f i c e s in wnich encmbrances may be found.

FinaQv, it is t h e r e a l i z a t i o n t h a t a recording system as operated in California i s unsatisfactory t h a t l e d to t h e adoption of t h e Torrens System in t h e 1R901s.(30) J u s t how far t h a t system i s able to avoid these d i f f i c u l t i e s uill be discussed subsequently.

VI.

LEGISLATIVE HISTORY OF THE RECORDING ACT

--

- - CALIFORNIA

The provisions of the recording a c t as it e x i s t s today in t h e codes had t h e i r o r i g i n i n an 1850 s t a t u t e e n t i t l e d "An Act concerning Conveyances," passed by t h e California Legislature Aprjl 16, lRSO(1). Discussion of t h e l e g i s l a t i v e history from 1850 to the present w i l l be divided i n t o two sections: 1850 to 1872 ( t h e date of t h e adoption of the codes) and 1872 t o present.

The provisions i n t h e 1850 s t a t u t e which r e l a t e d to recording of instruments affecting r e a l property were chiefly contained in Sections 24, 25, 26 with some minor sections r e l a t i n g to definitions, powers of attorney and discharges of mortgages. These sections provided as follows: Section 2b: "Every conveyance whereby any r e a l e s t a t e is con~rqed, o r may be affected, proved, o r acknowledged, and c e r t i f i e d i n t h e manner prescribed i n t h i s Act, to operate a s notice t o t h i r d persons, shall be recorded in the o f f i c e of the Recorder uf the county in which such r e a l e s t a t e i s situated, but shall be valid and binding between the p a r t i e s thereto without such record." "Eveq- such conveyance, c e r t i f i e d and recorded i n the manner prescribed in t h i s Act, s h a l l , from the time o f f i l i n g t h e same with the Recorder f o r record, bpart notice to a l l persons of t h e contents thereof, and a l l subsequent purchasers and mortgagees s h a l l be deemed to purchase with notice." "Every conveyance of r e a l e s t a t e within t h i s State, hereafter made, which s h a l l not be recorded as providea in t h i s Act, s h a l l be void as against any subsequent purchaser, i n good f a i t h and f o r a valuable consideration, of the same r e a l estate, o r a q portion thereof, where h i s own conveyance shall be f i r s t duly recorded."

Section 25:

Section 26:

Section 36 defined the term nconveyance" as including "every instrument in writing by which any r e a l e s t a t e o r i n t e r e s t i n r e a l e s t a t e i s created, aliened, mortgaged, o r assigned, except wills, leases f o r a term not exceedi n g one year, executory contracts f o r the s a l e o r purchase of lands, and powers of attorney .'I

The first amendment to t h i s s t a t a t e , occurring in 1855, changed Sections 2L and 25 allowing the recording of an agreement to convey r e a l property. The amendment provided that such agreement when recorded would operate a s cons t r u c t i v e notice to t h i r d persons.(2) Prior to t h i s , the s t a t u t e gave no authority to record executory agreements to convey. (3) I n 1860, an amendment to t h e 1850 s t a t u t e provided tinat in.ctruments recorded p r i o r to that d a t e would c o n s t i t u t e constructive notice notwithstandi n g defects i n acknowledgment. ( b ) The reason f o r such a s t a t u t e was t h a t the courts had previously held that t h e record of a defectively acknowledged instrument was void and did not impart notice to anyone. Curative a c t s s i m i l a r to t h e 1860 s t a t u t e have been passed from time to time and a t present Civil Code Section 1207 contains such a provision.(S) Section 25 of the a c t was anended in 186h t o provide f o r t h e recording of patents to land, duly executed and v e r i f i e d according to law. Wen prop e r l y recorded, t h e record would constitute notice to subsequent persons.(6) I n 1866, Section 25 was again amended to c l a r i f g h a t persons a r e charged with notice from t h e record. A s noted above t h e 1850 s t a t u t e provided t h a t "subsequent purchasers, mrtgagees, and l i e n holders shall be deemed to purchase and take with notice." )hen instruments have been properly recorded t h i s e f f e c t occurs, but not otherkise. The 1866 amendment added a provision t h a t t h e records would not be notice to a purchaser a t a foreclosure s a l e if notice of t h e pending of t h e a c t i o n had been properly f i l e d unless an i n s t r u ment had been recorded prior to t h e cornencement of the action i n which the decree and order of s a l e were entere2. ( 7 )

3 . 1872 to present

Tne l C S O s4~.t,uteconcerr~ingconveyances MS completely superseded by the codes, but G?ie code comaissio~~ers incorporated the basic recording provisions of t h a t s t a t u t e i n t o the 1872 code w i t h very few c h a q e s . (8) The provisions of Sections 2h, 25 and 26 of t h e e a r l y s t a t u t e a r e now found i n C i v i l Code Sections 1 2 3 3 , 12&, 1215, 1217.

T h i s code s e c t i o n a s adopted in 1872 included the constructive notice provisions of Section 2L and 25 of t h e 1850 a c t . The only change that was made was a c l a r i f i c a t i o n of what persons would be charged with notice of t h e record. The s t a t u t e before t h e code was ambiguous since it s t a t e d a conveyance properly recorded imparts notice t o a l l persons of the contents thereof. The s t a t u + then modiPied t h i s by declaring tinat " a l l subsequent purchasers and mortgagees s h a l l be deemed t o purchase with notice." The court before 1872 had resolved t h i s ambiflity by holding t h a t tine notice was limited to subsequent purchasers and mortgagees. It did not apply to & persons l in s p i t e of the language of t h e s k t u t e . ( 9 )

C i v i l Code Section 1213 was amended i n 1997 and again ?.n 1919 t o provi?~e f o r recording of c e r t i f i e d copies of instruments t h a t have already been recorded.(l0) C i v i l &de Section 1213 was adopted i n 1905 and amexled i n 1 9 1 3 ( l l ) cover;= recordi:ng of c e r t i f i e d copies t o amplify the addition to Section 1213. With t h e exception of these s l i c h t changes, Section 1213 i s i n tile same c o n d i t i m a t t h e present time t k t i t was in when adopted by Kle l e g i s l a t u r e i n 1872, and only s l i g h t l r changed from the o r i g i m l s t s t u t ? of 1850.

This code section a s adopted i n 1872 combined Sections 2$, 26 and 36 of t h e 1850 s t a t u t e . It provided t h a t "Eve?y conveyance of r e a l property other any sahthan a l e a s e f o r a term not exceeding one year, i s void a s a ~ a i r i s t sequent purrchaser o r mortgagee of the same propert:-, o r any p a r t thereof, i n good f a i t h and f o r a valuable consideration, whose conveyance i s f i r s t duly recorded." P r i o r to t h e code there had been a problen a s t o what p a r t i e s could a s s e r t t h e i n v a l i d i t y of an unrecorded i n s t m n e n t . T h i s was ca7:sed by the f a c t t h a t Section 2h of t h e Conveyances Act s t a t e d t h l t i t was necessary t o record i n order to give notice to t h i r d p a r t i e s . The i m p l i c a t i m from t h a t m u l d be t h a t a n unrecorded deed would not be notice and could not he asserted against t h i r d party. iiowever, an exception ?$as expressly made t h a t a s v a l i d between t h e p a r t i e s . I n addition, Section 26 of the 1 S ! 3 t h e deed w s t a t u t e provided expressly t i a t an ilnrecorded deed was voi4 a:ainst a s=bf a i t b and f o r a valuable c o n s i d e r a t i ~ n -where h i s sequent purchaser, in v Xatson!l?) own conveyance was f i r s t duly recorded. I n t h e case of iii~nter it was held that Section 26 was i n k n d e d t o modify ~ e c t i n n x a n d therefore t h e i n v a l i d i t y of an unrecorded instrument could : * o be asserted a subsequent bona f i d e purchaser who f i r s t records. When t h e code was adopted, followed and C i v i l Code Section i s void as a g a i n s t a subsequent a valuable consideration, whose
-

the position taken i n -Sunter .v Xatson - - - was l2lb emresslv " states t h a t the instrument purchaser o r mortracee - i n s od -fait,h and f o r conveyance i s f i r s t duly recorded.
--%-

It should be noted, of course, t h a t t h e code added "mortgagees" t o the persons who could a s s e r t t h e i n v a l i d i t y of an unrecorded instrument.
C i v i l Code Section 12Ur was amended i n 1895 to provide t h a t an instrument would a l s o be i n v a l i d against any judgment a f f e c t i n g the t i t l e unless it w a s duly recorded p r i o r to t h e record of notice of action. This prov i s i o n i s similar t o t h e 1866 amendment t o Section 25 of the 1850 s t a t u t e , b u t it i s m r e i n c l u s i v e since i t i s not limited to foreclosure decrees a s t h e 1866 amendment was. (13)

N o other changes have been made i n C i v i l Code Section 121& and it stands today v i r t u a l l y as i t did in 1P72 with t h e one exception mentioned above.

3.

CIVIL WDE SSCTI3iI 1215: ------

Tinis s e c t i o n provides f o r the types of i n s t r u ~ e n t sthat, nay be recorcled under Sections 1213 and 121L and i s based on Section 36 of the 1853 s t a k i t e . The e a r l y s t a t u t e provided t h a t the term "conveyance" included every instrument i n writing by which any r e a l e s t a t e o r i n t e r e s t i n r e a l e s t a t e i s created, aliened, mortgaged, o r assigned, with c e r t a i n exceptions. Section 1215 of t h e C i v i l Code adopted i n 1872 and which has not been amended since t h a t time contains p r a c t i c a l l y the i d e n t i c a l language. It i s in t h e exceptions t h a t the s t a t u t e s d i f f e r . I n t h e 1850 s t a t u t e the except i o n s were "wills, l e a s e s f o r a t e r m not exceedins one year, executory cont r a c t s f o r tine s a l e o r purchase of lands, and powers of attorney." The code makes only t h e exception of "wills."

&.

CIVIL -CODE --

SECTISN 1217:

T h i s s t a t u t e adopted i n 1672 and never anended s t a t e s t h a t an instrument i s v a l i d a s between the p a r t i e s thereto and those who have n o t i c e thereof. It

i s based on the provision in Section 2$ of the 1850 s t a t u t e that an mecorded conveyance i s v a l i d and binding between the p a r t i e s thereto.

N o pmvision was contained i n t h e 1850 s t a t u t e f o r purchasers who had a c t u a l notice of an unrecorded conveyance. It was l e f t t o court decision to determine whether such an instment would be void against a purchaser w i t h a c t u a l notice. I . i r . J u s t i c e Baldwin i n the case of Hunter v Watson reviewed t h e a u t h o r i t i e s i n other jurisdictions and concluded t h a t t h e i n t e n t of the l e g i s l a t u r e was t'nat only bona f i d e purchasers would be protected by the s t a t u t e . He s t a t e d t h a t one who had a c t u a l notice was not a bona f i d e pvchaser and c o d d not a s s e r t the i n v a l i d i t y of an unrecorded deed. (lh) Other types of notice were recognized before the code and these prevented a purchaser from claiming a s a bona f i d e purchaser. These included notice from adverse possession and notice from f a c t s and circumstances which would lead a reasonable man to make an inquiry.

In 1872, the code commissioners included the statement t h a t the unrecorded


instrument was v a l i d a g a i n s t those w i t h notice. This codified t h e view expressed i n Hunter Vatson. The problem of what notice consists of i s s t i l l l e f t t o t h e courts, however. Actual notice, notice from possession and notice from c e r t a i n f a c t s and circumstances w i l l prevent a purchaser from a s s e r t i n g t h e i n v a l i d i t y of an unrecorded instrument.
G.

MISCELLAIUEOUS PROVISIONS I N TH3 C I V I L CODE RELATING 1U RECO?JlINS

----

1 . -M O D E OF i t W O R D I a
Sections 1169 t o 1172 inclusive of the C i v i l Code cover i n a very general manner the place where instruments a r e required t o be recorded, the types of

books used by t h e Aecordpr, and th? d a t e when an i n s t r u ~ e n tis deexec! t o brecorded. The d e t a i l s on t h e duties of t h e County Recorder were o r i g i n a l l j l i s t e d i n t h e F o l i t i c a l Code, but i n t h e 19b9 session of t h e California Lezisl a t u r e t h e s e provisions were t r a n s f e r r e d t o t h e Government Code.(l5) C i v i l Code Sections 1169 t o l l 7 2 were enacted i n 1872 and have not been e w York C i v i l Code. Srcamended. Sections 1169 and l l 7 1 were based on t h e N tion ll70 w a s based on "An Act e s t a b l i s h i n e Recorders Off k e s , and defining t h e l t i e s of t h e Recorder and County Auditor," passed April h, 1850. (16 j This provision d e a l s with t h e time when an instrument is deemed t o be recordec! and must be construed with Code Section 1213 discussed above.

'

Civil Code Sections 3b56-3li66 prescribe t h e recording requirenients when These provisions were ori;:lproperty i s t r a n s f e r r e d f o r b e n e f i t of creditors n a l l y based on t h e New York C i v i l Code and enacted in California i n 1872.

Recording i s required f o r a v a l i d declaration of homestead and t h i s i s covered by C i v i l Code Sections 12h2, 1262, 126h, 1263,1269. These s t a t u t e s were put i n t h e code i n 1872 and were o r i g i n a l l y based on vzrious e a r l y s t a t u t e s on honestead property. (17)

. Tor t h e purposes of t h i s paper t h e h i s t o r y of homestead provisions is not pertinent, except f o r t h e requirement of recordiqg f o r t h e v a l i d i t y of a ho2estead.
The provisions on recording mortgages of r e a l property and discharces o l nortgages a r e contained in C i v i l Code Sections 29% t o 2953. These sections were rainlg based on t h e New York Civil Code and en?.cted in California i n 1672. Of course, t h e 1850 s t a t u t e concerning conveyances m a s applicable t o mort&ages and t h e r e f o r e t h e C i v i l Code sections can be s a i d t o be based p a r t l y on t h e 1850 s t a t u t e . (18 1
C i v i l Code Section 293% w a s added t o t h e code i n 1895, providing f o r a s p e c i a l procedure for f o r e i g n executors, administrators, and guardians t o s a t i s f y mortgages on t h e county records.

For t h e purposes of t h i s paper nconveyances'l u n l e s s required f o r c l a r i t y .

generally be considere6

as including mortgages and, therefore, t h e b a s i c r u l e s regarding recordinc apsl:' l not be necessary t o discuss recording of mortgages separates t o them. It f

Although t h e 1850 s t a t u t e expressly s t a t e d t h e term "comreyance" did not include powers of attorney, Section 27 of tkt a c t provided f o r recording of

powers of a t t o r n e y to convey r e a l e s t a t e . This has been carried over t o a c e r t a i n e x t e n t in t h e codes. Government Code Section 27322 permits powers of attorney t o convey r e a l property t o be recorded and the exception made in the 1550 s t a t u t e i s n o t contained in the Civil Code d e f i n i t i o n of "conveyance." S e c t i m 28 of the 1850 s t a t u t e reqyaired revocation of recorded powers of attorney t o be recorded a l s o . This provision has been incorporated i n t o C i v i l h d e Section 1216 and remains t h e r e in the same form today.
A n express provision covering powers of attorney to execute m r t g a g e s i s in l i k e contained i n C i v i l Code Section 2933. This provides f o r record* This s e c t i o n was manner as a p z e r of attorney f o r a grant of r e a l property. enacted in 1872 but n o t based on any s p e c i f i c provision of the 1850 s t a t u t e on conveyances. The Code Commissioners probably thought i t would be b e t t e r to make s p e c i a l provisions covering mortgages, although the term includes mrtn keeping Kith the option given t o t h e regages as discussed above. This i s i corder t o keep separate books f o r m r t g a g e s and deeds.(l9)

There a r e other provisions in t h e C i v i l Code and Code of C i v i l Procedure involving r e c o r d i ~ of various types of l i e n s , such a s Mechanics' l i e n s , Judgment l i e n s , A t t a c h e n t s , Lis Pendens, e t c . These a r e based on s t a t u t e s ena c t e d i n t h e 1850's. For t h e purpose of t h i s stlldy, however, i t i s advisable to limit t h e l e g i s l a t i v e h i s t o r y and d e t a i l e d analysis of cases a& s t a t u t e s to t h e b a s i c recording provisions covering r e a l property and to give only s l i g h t mention to these s p e c s i c l i e n s covered by the codes. D. GOVEUvPENT CODE PROVISIJNS - INVOLVING DUTIES OF Ki3 COUNTY RECOWE

--

Title 1 1 1 , Chapter 6, A r t i c l e s 1, 2, 3, b, 5 of t h e Government Code now consolidates the provisions on the Duties of the Recorder. It describes h i s d u t i e s in general, the books which he must keep f o r indexing and recording, t h e documents which he must record, the manner of recordation, and the f e e s which he must charge. These sections were formerly in t h e P o l i t i c a l Code Sections W 3 0 - w . The majority of t h e Government Code Sections regarding the d u t i e s and t h e types of books which the recorder i s required to keep were o r i g i n a l l y based on t h e 1850 s t a t u t e establishing Recorders' Offices. The sections involving t h e manner of recordation and the punishment f o r neglect of duty a r e a l s o based on the 1850 s t a t u t e mentioned above.(20) Some of the s t a t u t e s were added later, however. For erample, Government Code Section 27327, providing f o r n o t i c e when instruments a r e i n c o r r e c t l y recorded, b u t properly indexed w a s added i n 1909.(21) F i l i n g of l i e n s f o r i n t e r n d l revenue taxes is another statute added a t a later date.(22) For the most part t h e provisions have been preserved in p r a c t i c a l l y the sane condition they were in when adopted by t h e code wnnaissioners in 1812 and very similar to the o r i g i n a l s t a t u t e s of t h e 1850's on which they a r e based.

The s e c t i o n s involvine what instmments m y be recorded were formerly i n t h e C i v i l Code as discussed above. Some of these provisions hzve been amendes r e c e n t l y t o provide f o r a d d i t i o n a l types of instruments vibich m y be recorded. Government Code Sections 27280 t o 272% now contain t h e l i s t of types of instruments which m y be recorded. Section 27322 lists instrvments which t h e recorder must accept f o r recordation.

It w i l l not be necessary t o go i n t o more d e t a i l a s t o t h e various amndments t o t h e s e s e c t i o n s which have been pzssed from time t o time. it is s u f f i c i e n t t o s t a t e t h a t t h e policy of t h e l e g i s l a t u r e has chzngea very l i t t l e collection of from 1850. The purpose of recording remains t h e sane-the instruments which nay be inspected by purchasers f o r t h e purpose of determining t h e s t a t e of t h e t i t l e they a r e receiving. The courts have been l i b e r a l in allorring i n s t n m e n t s t o be recor6ed t h h t a r e not expressly mentioned in t h e code, so t h a t protection w i l l be accorded t o both purchzsers and owners of i n t e r e s t s i n r e a l property.

Rice. L. J . . "Land T i t l e s i n CCLifonia," Real Estate tbndbook of ~ali~ornia~'(l92 99 . ) 332 e t seq. Og<ea, !?elvLn B., "Escrox and Land T i t l e Law i n California," (1933) " S t a t e of California 3 i v i s i o n of 3 e a l Estate Reference h o k and Guide," Thkd Revision Published by Division of Zeal Estate, Clarence Urban, Com$ssion?r, Sacranen<o, California. Ogden, i4. B . , 9. G., Cnai?ter 1b. Eeal 3stat.e Xefereace Book and Zxide,

2.g .

Act of &rch 3, 1851, c. W, 9 S t a t . 631. xogan v U ~ t e d states, 72 Fed ( 2 ) 799; p e t i t i o n f o r w r i t of c e r t i o r a r i denied by United S t a t e s Supreme Court, 295 U S 752, 9 L. Ed 1494. Rice, L. J., 03.

g . ,p.

338 e t seq.

Cal. S t a t s . 1853, c. 101, 2 . 2L9, A n Act concerning Conveprrces, passe* A p r i l 16, 1653. T i f f a n y on 3 e a l Propert]-, Tsird Zdition, Section 1257 (1939) Aigler, "Tne Operation of the Recording Acts," 22 1,lichigan h w Review LO5 (192&). T i f f a v , 9. G., Section 1260. Tiffany, 9. g . ,Sections 1258 and 1261.

..

S t . 7 Anne, c. 20, 1708. Aigler, 9. Ibid, Aigler . I b i d , Aigler. Cac& v. Rrrser, -

&.,

p. &05 e t seq.

Burby on Real Property (19W) p.

h ! t~ .

131 C a l 552 (1901).

Patton on T i t l e s (1938) Section 10, p.

h&.

Gage, D. D., "Land T i t l e Assuring Agencies", (1937) p. 3h seq. See footnote i n Gage's book on page 36 f o r discussion of the authority on t 5 e California defects.

19.

T i t l e 111, Chapter 6 of t h e Government Code contains t h i s information. P r i o r t o this r e v i s i o n of t h e code much of t h e prsterial nas found in the C i v i l and P o l i t i c a l Codes. C i v i l eode Section l l 6 9 . Government Code Section 27323. Governatent Code Section 27320. Government Code Section 27321. Government Code Section 27257.

20. 21. 22. 23. 2h. 25. 26. 27. 28.

This result i s arrived a t by construing C i v i l Code Sections l l 7 0 and 1213 together. See Cady v Purser, footnote #16 supra.

MaJx v Middleton,
Hoine, W. S.,

hl C a l hl(1919).

n%crou and Land-Title Proceduren (l9ir8 ), p. 219 e t sen..

H-nd, T. W., " T i t l e Insurance . Gage, D. D., op cit., p. 3h & 3 Risks of Which t h e Public Records Give No Notice," Southern California Law ELwiew, 1, (1928) p. h22. Tiffany,

29. 30.

2.G., Section 1263.

"An A c t f o r t h e ~ e r t i f ' i c a t i o nof Land T i t l e s and f o r the Simplification of t h e Transfer of Real Estate," C a l . S t a t s . 1897, p. 138. This s t a t u t e was replaced by the "bnd T i t l e LausYn an i n i t i a t i v e a c t , which became e f f e c t i v e i n December, 1915. Gal. S t a t s . 1915, p. 1932.

1 . Cal. S t a t s . 1850, c. 101, p. 2h9.

3.

Hesick

Sunderland, 6 C a l 298. S t a t s . 1860, c. 366, p.

h. Amend.
5.

357.

Added by Code Amends. 1873-7h, p. 228; Amend. S t a t s . 1897, p. 6lr; S t a t s . 1901, p. 398 (unconstitutional); S t a t s . 1903, p. 108; S t a t s . 1909, p. 45; S t a t s 1913, p. 75; S t a t s . 1915, p . 12I.l; S t a t s . 1919, p. 2 a ; S t a t s . 1921, p. 9h; S t a t s . 1927, p. 828.

6. Amend. Stats. 1863-k, c. 85, p. 85.

7.
8.

bend. S t a t s . 1865-6, c. 620, p. 8118.

"Indax t o t h e Laws of California, 1850-1920, prepared by Legislative


Counsel (1921) Sacramento, p. 78.

The C a l i f o r ~ a C i v i l Code uas approved Farch 21, 1872 and vent into e f f e c t Januery 1, 1872. Dennis v Eurritt, 6 Cal 670. See discussion of t h i s problem i n the annot a t e d G a f t of the C i v i l Code prepared by Haymond and Burch, F i r s t ECition, Sacramento, S t a t e 1872, p. 333. Amend. S t a t s . 1897, c. 68, p. 59; Amend. S t a t s . 1919, Added by Stats. 1905, p.
C.

179, p. 278.

604; Amend. S t a t s . 1913, p. 335.

12 Cal 373. and Burch.

Annotation p. 334 of 1872 Draft of C i v i l Code by Hgpmond

Amend. S t a t s . 1895, p. 50.


C i v i l Code prepared by Haymond and Eurch, p. 334 e t s q . See footnote #9 supra. Also s e e e a r l y cases discussing the problec: Pix1 v Hug-, C a l 127; Chamberlain v Bell, 7 Cal 292; Rose v Nmie, d 1 7 3 ; Dennis v B u r r i t t , 6 Cal 5 7 c

1s

Gal. S t a t s . 1947, c. &&, p. 1039.

C a l . S t a t s . 1860, p. 3l.l; Gal. S t a t s . 1860, p. e8.


C a l l v Hastings, 3 Cal 179, held conveyances include mortgages. For in-fornation as to t h e various sections of t h e N e w Pork C i v i l Code which the

California Code Conmissioners used f o r rnodels.see Revised Laws of t h e S t a t e of California, Civil Code, Sacramento 1@71, prepared by Lindley, Burch & Haymond, Cormnissioners. See C i v i l Code Section 1171 and Government Code Section 27322.

~ a l .S t a t s . 1R.50,

C.

58, P.

151-

Added by Cal. S t a t s . l9k7, c.

&4,

sec. 1 . Added by. Gal- S t a t s . 1947,

Government Code Sections 27330 and 27331. c. &4, sec. 1.