vaijfc-y;,^^. W.'=-^ Cornell university Library HD 1206.U5M4D26 The.andregistra|ionacto.Massachuset ALBERT R. MANN LIBRARY New York State Colleges OF Agriculture and Home Economics Cornell University J, // sr'tViyf^^^^<'<--^--oU' ■ ■HE LAND REGISTRATION ACT OF MASSACHUSETTS ITS PRACTI- CAL WORKING, OPERATION AND EFFECT REMARKS MADE AT THE THIRTY-FIRST ANNUAL MEETING OF THE New York State Bar Association lELD AT THE CITY OF NEW YORK ON THE 24th AND 25th OF JANUARY, 1908 CharIvES Thornton Davis judge op the 1,and court (Reprinted from the Thirty-first Annual Report of the Proceedings of the Association) Cornell University Library The original of tiiis book is in tine Cornell University Library. There are no known copyright restrictions in the United States on the use of the text. http://www.archive.org/details/cu31924014063030 THE LAND REGISTRATION ACT OF MASSACHUSETTS— ITS PRACTI- CAL WORKING, OPERATION AND EFFECT REMARKS MADE AT THE THIRTY-FIRST ANNUAL MEETING OF THE New York State Bar Association HELD AT THE CITY OF NEW YORK ON THE 24th AND 25th OF JANUARY, 1908 Charles Thornton Davis JUDGE OF THE LAND COURT (Reprinted from the Thirty-first Annual Report of the Proceedings of the Association) THE LAND REGISTRATION ACT OF MASSACHU- SETTS—ITS PRACTICAL WORKING, OPERATION AND EFFECT. Mr. President and Gentlemen : I suggested to your exceedingly courteous but inexorable secretary that at this late hour I be simply given leave to print, but that request was denied. I shall, therefore, endeavor to be as short, brief and concise in the few extempo- raneous remarks that I have been asked to make to you, as is possible in an attempt to give a practical statement of the actual operation of the land registration act of Massachusetts, a land registration act which actually operates. I am not, therefore, to attempt to deliver before you an essay upon the general subject of land registration. I am not even going to discuss the Torrens system. I am simply going to tell you something about the practical working in its operation and efifect, of the land registration act of Massachusetts. I hold no brief for land registration. I have no advice to offer as to the State of New York. I have no prophecy to make as to Massachusetts. I am merely to make to you a state- ment of fact. Our population, our methods of business, our substantive law, and to a large extent our procedure, are very much the same in Massachusetts as in New York. You are simply larger than we. Your State is larger, your country cities are larger, and your values far greater, but, on the whole, the conditions prevailing in this great State and in our Commonwealth are not materially different. For ten years the subject of land transfer reform was a subject of agitation at our bar, among real estate owners and dealers and in the Legislature. We had a land transfer reform association. It had learned gen- tlemen who went into all the details of the different systems existing in different parts of the world, and who proceeded to make a very elaborate investigation of the whole matter. We had three different legislative commissions appointed to draft some sort of act, and some of the measures suggested by them were very radical. When the last commission finally reported an act, however, it proved to be one that did not effect an immediate and sweeping change in our general and customary methods of holding and dealing with land. The system which has been in vogue in Massachusetts ever since 1634, when the system under which prac- tically all lands in this country are now held, first sprang into existence in Plymouth Colony, is a system which the succeeding years have proved to be on the whole well suited to the methods and purposes of our people. To-day it is, in a great part of our Commonwealth, at least, still admirably well suited to their needs. But as time has gone on, as our cities have become greatly congested, as our records have become exceedingly complicated, as our methods of business have changed, there has come in certain quarters a corresponding change in the method of dealing with land. When I first began practice (not so many years ago) there were very few men engaged in the special work of conveyancing. Land as a whole , was owned permanently. Mortgages were placed almost as permanent investments. Later there sprang up a desire in certain parts of the State to deal with land almost as a chattel real. Transfers became very frequent. A real estate exchange was formed to deal with land as the stock exchange deals with personal securities. A large body of conveyancers came into existence as special practitioners. Land owners and mortgagees who 'operated under these changed conditions thereupon found it necessary to have, if possible, their real estate titles and mortgages in such shape that they could be realized upon in case of need, at once, as quickly as if; they were railroad shares or other personal securities. For such purposes the old system was not adequate. There was also a very marked demand that certain other evils, certain difificulties in the old system which we had outgrown, should be reformed. In the country counties there were also difficulties which needed to be remedied, arising under our old system, which was substantially the same as your present system of recording deeds. In the cities we had too much record title, in the country we at times suffered badly from having too little. We, therefore, went to work to find a remedy for the specific evils under which we labored, and this task was finally placed in the hands, as a com- mittee of one, of one of the most distinguished members of the Massachusetts bar. The act that was drawn by him is not a Torrens act. The very foundation of our land registration system is the one thing which it was the purpose of Sir Robert Richard Torrens to get rid of, namely, a judicial proceeding. The act that was drawn is most distinctly a Massachusetts act. Mr. Hemenway has since stated that were he drafting an act for a new country he would have drawn a very dif- ferent statute. His task, however, was to apply to existing conditions in Massachusetts, under existing forms of law and procedure, meeting existing needs, and with reference to ■ existing prejudices, a system which would give to those who desired it, the reHef which they required. To that extent, and to that extent only, does it go. The system thus evolved and presented was incorporated into an act of the Legislature, and the constitutionality of that act was at once attacked. I think that a slight misapprehension, perhaps, exists in Mr. Pegram's mind as to the final outcome of the liti- gation with regard to the constitutionality of this act. It was definitely and finally determined, so far as the Supreme Judicial Court of Massachusetts was concerned,, in a decision which went into every phase of the ques- tion. When we got to Washington the Federal Court took the ground, in a divided opinion, that the question presented was not a Federal matter. The basis of that opinion was a position which I think the Court had previously taken in a recent Texas case, that of Roller V. Holly (176 U. S. 398). Under the Federal Constitu- tion no one can be deprived of his property without due process of law, whether the form of action in which he failed to receive reasonable opportunity to be heard was in personam or in rem, under a registration case or a probate statute, a suit in equity, an admiralty libel or a tax proceeding. With the general question of the con- stitutionality of a particular act or process the Federal Court may not be in any way concerned. Even where a statutory proceeding is declared to be entirely consti- tutional in itself, as was the case both in Roller v. Holly and in Tyler v. The Judges, yet if the act be mal- administered so as to result in any particular instance in a deprivation of property without reasonable oppor- tunity to be heard, that particular action may be held unconstitutional -for want of due process of_ law, though all other acts under the same proceeding be perfectly valid. There is nothing in this pecuHar to registered titles. Unregistered titles are much more exposed to the same danger. The difficulty with our learned oppo- nent in Tyler v. The Judges was that he had had full opportunity to be heard. In other words the Federal Court, as I understand the matter, held that the general constitutionality of our act is not a proper subject for Federal decision. There has not been any other attempt made to test it, nor in the ten years in which it has now been in operation has any charge arisen that any one has been deprived of any estate or interest in land with- out reasonable opportunity to be heard. The practice under the Massachusetts act has been fully and accurately described to you by Mr. Pegram. Let me simply say that the whole gist of the Massachu- setts act lies in the fact that it provides for a judicial investigation into, and a judicial determination of, the title to the tract of land which forms the subject of a proceeding in rem. That title having been passed upon becomes indefeasible. It is not a matter of title insur- ance. There is an insurance fund intended to reimburse the Commonwealth for any sum it may have to pay out because the treasury has become responsible to any one whose rights may have been cut off by any error of any officer under the land registration act, but the man who obtains a title under a decree of the Court obtains an indefeasible title, a title that is settled, and a title that remains settled. Not only is the title determined, but it is kept determined, because in subsequent proceedings everything that is done with regard to the land must be done through registration; and not only is the title finally determined, but what I think is of really as much value as a practical matter for the future, the boundaries are determined. Indefiniteness of location, as all convey- ancers know, is one of the greatest difficulties with which we have to deal. The boundaries having been once determined, the Court insists upon such a plan being filed, together with such engineering data to accompany it, that if it becomes necessary at any future time the boundaries so determined may be physically delineated upon the ground. Of course, with responsibility of the Commonwealth for all acts done under the order of the Court, it becomes necessary that everybody who may by any possibihty have an interest in the land shall be given actual per- sonal notice of the petition. It is made by statute, as well as by the decision of the Supreme Court of Massa- chusetts in the case of Tyler v. The Judges, a part of the duty of the Jud^ges of the Land Court to see that actual citation is served, whenever the Court deems it possible, on every person appearing to have any possible claim, whether the Court thinks such a claim can be substantiated or not. It is, therefore, necessary in order to secure such notice that the Court should have all possible information in the matter. Notices are ordered served on all adjoining owners, also citation by publica- tion for three weeks in the local newspaper, by posting on the land, by service upon all persons who are said by the applicant to have any interest in the estate, and finally upon all persons who are found to have any pos- sibility of a claim, upon a careful examination of the title made by an officer of the Court as a part of the judicial proceeding, an officer paid, not by the parties, but by the Commonwealth, and who files not only his opinion of the title, but also under our practice a com- plete abstract of the record. This abstract is carefully read and considered by the Judges, and after all these precautions have been taken further service of actual notice is ordered upon anybody else who may at any stage of the proceeding appear to have any possible interest in the land. To people who object to the land' registration system this would appear to involve so great a delay and so great an expense that it would not be practicable to carry it on. I can only say in answer that such is not our experience. The land registration act of Massachusetts has been made intentionally as lit- tle expensive as can be. In the country coxmties it does cost more to have a title registered than to proceed under the old system, but in the metropolitan district it costs as a rule rather less. There are consequently very few petitions for registration in the country coun- ties. Most of our work lies in the metropolitan district. I do not think, however, that this is due to the matter of expense, I think it is due to the fact that most country titles are still readily marketable under the recording system. Now, a word as to expense. The entire expenses of the Court can hardly be charged to the land registration act for the reason that even the people who object very decidedly to land registration have found the machinery of a special technical Court dealing exclusively with real estate law of value, and have gradually had our juris- diction- extended until we now have exclusive, original jurisdiction over all real actions and practically over all matters involving title to land except actions of trespass, so that the expense of maintaining the Court can hardly be charged entirely to the land registration act. The expense of the land registration act outside of salaries of the Court officials is just about met by the fees. The land registration act and the old recording system are neither incompatible nor inconsistent. The one is simply slowly but perceptibly eliminating the other. They are 10 administered side by side, by the same subordinate officials, and in the same registry offices. The matter of pubUc expense, which is so prominent a feature of the English and some of the Colonial acts, is not present with us. Now, as to the necessity of a special Court. I am i;iot going to say anything on the general subject of special Courts, although it is a very interesting subject to me, especially since it has been brought up by the American Bar Association. Specializing has gone on so long in the profession, at the bar, that the practicability and advisability of extending it to the bench is a matter of a good deal of interest to our profession. So far as the land registration act is concerned, however, it is abso- lutely essential that the Judges should be persons who are in immediate touch with the methods, the laws and the practical details of conveyancing as it is actually practiced. It is also necessary that they should be avail- able at all times for consultation, advice and direction not only by the bar, but by the registers of deeds in the course of their daily administration of the act. I do not believe that it would be practicable to have a system which, under our written Constitution, must of necessity be a judicial system operating, not like the English and provincial acts purely as a ministerial function, but solely through proceedings in Court and by order of a Judge after judicial process. I do not believe it would be prac- ticable to have such an act administered, except under the immediate direction of a special Court. Now, with regard to the practical effect of the act, and when I speak of its effect upon owners and its effect upon the bar, I do not have in mind their opinions as to whether it is advisable or inadvisable, successful or unsuccessful, but rather the way and manner in which II it affects them. One great trouble with many titles is the fact that while they may be really good titles as matter of fact, there is often something lacking of record. Again, while there are many titles that as a matter of law are perfectly good, nevertheless in many instances they present some possible question or ground for divergence of professional opinion. So long as it is merely a matter of opinion, Mr. A may be of opinion that the title is good, while Mr. B may raise a perfectly arguable point in regard to it, and if Mr. B thinks it is of advantage to his client or that he can obtain better terms thereby, he is pretty certain to do so. So long, therefore, as it remains simply a matter of opinion, there is no way, except by the very inconclusive method of a bill for specific performance, by which the matter can be brought to an immediate issue. It is no longer possible for us, as it was but a few years ago, to pass a title on the mere statement that Mr. So-and-So, a well-known conveyancer and leader in the profession, considers it good and has passed it. The mere fact that somebody raises a legiti- mate question, however fanciful or far fetched, makes the title unmarketable. Those questions may now be brought, under the land registration act, by petition to the Land Court for immediate and definite conclusion and determination. A great many titles also depend upon the construction of some instrument in the chain of deeds or wills of which they are composed, and it is not always an easy matter to secure a conclusive construc- tion of a deed or will by any of the ordinary processes of law or by any form of action in personam. The value of a decree in rem, which absolutely and permanently determines the question so far as that tract of land is con- cerned, will readily appeal to you gentlemen of the pro- fession. The land registration act therefore offers a 12 quick, cheap and definite method for the settlement and final determination of questions of this sort. Our own Courts, like yours, are very much blocked to-day with an enormous number of negligence cases. Under the land registration act any controversy of any sort, . char- acter or description in regard to land titles can be brought to an almost immediate determination. If there is a question of fact to be settled, the parties are entitled to an immediate jury trial, if a question of law, the case goes at once from the Land Court to the full bench of our Court of last resort. A real action cannot wait, as an action of contract or an action of tort can safely do. Rents, perhaps, can wait, but repairs and taxes, like time, wait for no man, and this furnishes another reason for the use of the land registration act by many of those who apply for registered titles. Now, with regard to the profession. At first it was feared that the land registration act would be a serious menace to established conveyances. We did not have the problem with regard to its possible effect upon title insurance companies, which I understand presents so marked a feature of the problem of possible land registra- tion in New York. So far as the profession itself is con- cerned, the act at first met with very bitter and hostile opposition from quite a large portion of our conveyanc- ing bar. I think that to-day, however, this opposition has been not only largely reduced, but almost eliminated. There are still one or two leading firms of conveyancers who are strenuous in their opposition to land registra- tion, but, on the whole, the change of sentiment in so short a time has been quite surprising. Among those who to-day insist on registration of title in matters in which a very large amount of money is involved, or in which business corporations are acquiring or building 13 plants, or estates are being purchased, as to which there- is likely to be a rapid change in title, or who, under such circumstances, advise their clients to register, will be found many who a very few years ago would have noth- ing to do with a registered title. The fact is that a con- veyancer is seldom adequately paid for the work which he is obliged to do in the course of the examination of a title in the registry of deeds. He is compensated really more with regard to the amount of responsibility involved than in proportion to the actual labor or pro- fessional skill expended. We deal with registered land in exactly the same way as with unregistered land, except that the title passes by the act of registration. It is a popular fallacy that a layman can take a registered cer- tificate of title and deal with it with perfect safety. He cannot. Counsel do not, it is true, have anywhere near as much work to do, and they incur nowhere near as much responsibility, but they do have to deal with the important phases of the matter immediately before them. A deed has to be properly drawn, instruments of trust carefully considered, a mortgage transaction has to be properly attended to, and the matters excepted from the certificate of title looked up before the title is passed in the registry of deeds. The elaborate labor of going over and over the same old ground and the same old title, which I suppose only those of us who have suffered under it can appreciate, and which has formed the chief cause of expense and annoyance both to the profession and to our clients, has, however, been eliminated, and, on the whole, the compensation which can fairly and properly be charged for passing a registered title is as a net result larger than under the old system. In conclusion I want to say a word with regard to some of the objections to land registration. In the first 14 "place, it has had to encounter with us, and will always have to encounter wherever it is tried, the great oppo- sition of conservatism both in and out of the profession. The Massachusetts act was made very little use of until it had been in operation long enough to have demon- strated what its results are, to have tried out such ques- tions as were likely to arise in regard to it, and to have convinced conservative and careful real estate owners, mortgagees and conveyancers that it provided a prac- ticable, simple and inexpensive procedure. Any land registration scheme will have to encounter that same opposition. Another and still more formidable difificulty has been that of entire indifference on the part of the general public. In addition there are many purely theoretical objections. Gentlemen, I could think of ■endless theoretical objections to land registration besides those suggested and very well and fairly stated by Mr Pegram. The only thing I can say in regard to them, however, is that as a practical matter of fact they do not exist, they do not happen. Land registration with us is speedy. Land registration with us is cheap. Land registration with us is workable. The Court is not a very large Court. The amount of work that we do makes a very small impression upon the total amount of conveyancing done throughout the State of Massachu- setts. It is hardly fair to contrast the number of cases pending in the Land Court with the number of cases brought in the Superior Court, which is our one great Court of nisi prius jurisdiction, because every case that comes into the Land Court is tried. Whether it is a contested case or an uncontested case, it must be as thoroughly gone into by the Court, and is as much a case which calls for and receives judicial determination as those that haVe been contested, sometimes a good 15 deal more so than if it was contested, because the respon- sibility of guarding the treasury of the Commonwealth, rests upon the Judges. The number of cases that we- dispose of, however, compares more than favorably with, the number of cases disposed of by any two sessions of. our Superior Court. The character of our work has- changed very much since the act first went into opera- tion. At first we had very small and unimportant and usually defective titles. I should say that to-day the- great bulk of our work is in titles involving a very con- siderable amount of money and in which no real defect, is presented. We do not make bad titles good. We- simply adjudicate upon titles as- they are presented or finally proved. As to the great majority of titles as now existing and dealt with in Massachusetts, I think that there is no particular reason at the present time for their registration. I do not believe in a compulsory act. I should be exceedingly sorry to see ours made compul- sory in any respect. An act which forces nothing upon either an unwilling citizen or an unwilling public, which- simply supplies a remedy for existing and admitted' evils to those who desire it, and which grows in pro- portion only to the pubUc demand for it, practically pay- ing its own way, and eventually effecting a large and very real saving in the enormous and rapidly increasing- expense of the present recording system, is free from a large, if not the greater, portion of the objections which have been urged against an adoption of the Torrens- system in general. Some of the most essential merits of the Torrens system as applicable to new countries, and' especially to communities unhampered by the require- ments of our Constitution, are not available to us. In- Toronto, for instance, I understand from a friend who. i6 has a very large conveyancing practice there, it is pos- sible for a single practitioner to examine and pass two thousand titles a year. Every title can be, under the recording system, readily traced to the crown, and the registration of possessory titles might well be both safe and practicable. Moreover, they are able to operate without judicial process, through Recorders 'or Masters of Title. These conditions differ radically and essen- tially from those which obtain with us. On the other hand most of the. deficiencies which Mr. Hodgkins has considered in his very thoughtful paper are supplied under the Massachusetts act. Our titles are indefeasible, and the entire title is racked. Land may, if it proves desirable and it often does, be voluntarily and intention- ally registered subject to an easement or other right, the precise extent of which is not then determined, but every right, estate or interest not expressly excepted is extin- guished. Registered land is also free from the subse- quent acquirement of easements or estates by prescrip- tion. This in itself is a priceless boon to the owner of sea shore and country estates or of manufacturing prop- etties. And, finally, a title once established remains established both as to record and as to boundaries. If any question arises, it arises at once, and is adjudicated at once, No re-examination of a registered title is ever made. The owner of a tract of registered land, after hav- ing found a purchaser, can place a mortgage for him, pass all the papers, and have the purchase money in his pocket, all within twenty-four hours. This is the testi- mony of dealers who have handled hundreds of registered lots. Where a transaction happens to involve a very large sum of money, this saving of time and interest is a matter of very real importance. 17 The great, though somewhat general, objection urged against land registration appears to be that it is not \\ anted and is not used. This objection would seem from Mr. Pegram's report to be, as to many of the systems he has examined, well taken. It' is perfectly possible, as has been demonstrated, to draft an act that will neither work in practice, nor even begin. As to the Massachusetts system, I simply desire to say that thus far, at all events, it is wanted and it is used. If the same evolution and change in business methods that has brought about the present demand for land regis- tration with regard to certain classes of title in the metro- politan district continues, as apparently it is continuing, to extend beyond these limits, then the legitimate field for the operation of the land registration act will cor- respondingly gradually and naturally widen. The growth of new business has thus far shown a moderate but abso- lutely steady increase, both in the number of applica- tions filed and in the assessed valuation of the property registered. In 1899 it was $626,000; in 1902, $1,991,000: in 1907, $3,643,000. People who once apply for registra- tion of title come back again. No suit has ever been brought against the Commonwealth, nor have I ever heard of any claim being suggested that anybody has ever been cut ofif from any right or interest in land dur- ing the ten years in which the land registration act has been in operation. We have registered the title to over twenty millions of dollars' worth of property at assessed valuations, and to a vastly larger amount of actual valua- tion as the same property stands to-day. We have some 8,000 instruments in existence in the metropolitan dis- trict alone. No claim, as I said, has been made, and no litigation of any kind has ever been brought that I have ever heard of by or against anybody because of his title i8 having been registered. Nobody has been involved in any of those many theoretical difficulties which we have just. heard described because he has had a registered title. There has never been a suit, there has never been a petition, there has never been even a question, as to the meaning of a single clause of the land registration act as originally drawn by Mr. Hemenway; a singular tribute to his professional skill, and a marked illustra- tion of the force of the interesting and valuable advice which we had the great privilege of listening to last night from Mr. Bryce. Finally, let me repeat that we have not attempted to reform or change in any respect the methods of our people in dealing with their land. We have not attempted to change our law. We have not attempted to change our forms of deeds or other legal instruments. We have not attempted to dictate to any man what he shall do, or how he shall do it. We have simply provided, for those who wish to make use of it, a method of escape from certain evils which otherwise affect the transfer of land in our locality. To that extent, and so far as it has been used, in spite of all the doubts that have been expressed as to the possibihty of the successful opera- tion of a land registration act, in spite of the failures in other jurisdictions that have attempted it, in spite of the constant assertions of those who have disliked to see the oldest and most conservative branch of our pro- fession upset by any new ideas whatever, in spite of all these things, it is true that there is a land registration act in Massachusetts, and that, so far as it purports to go, it is operating with entire success. I cannot tell you, gentlemen, how greatly I appreciate not only the honor and privilege of the invitation to address you, but the attention you have given to me at 19 this very late hour, and the courtesy with which you have remained to hear me upon what is at best a topic that appeals to bvit very few except the real estate special- ists in our profession, and then pertains not so much to your own particular problems, as to the distant, even if interesting, experience of a sister Commonwealth. (Applause.) PAMPMLET BINDER M Manu/aclunJ hi IGAYLOROBROS. IncJ Syracuse; N. Y. Stockton, C>lif. W^'' - -1 , '-t" m S>(J^P^>-;, 5^^ .H^^^*% %, >i^*«V>!!- '/. '^.