Opinion ID: 1987036
Heading Depth: 3
Heading Rank: 1

Heading: Torrens System

Text: Prior to 1901, all real property in Minnesota was abstract property. Under the abstract system, documents evidencing marketable title may be found in recorded documents or by material outside the recording system. See Lucas v. Indep. School Dist. No. 284, 433 N.W.2d 94, 96 (Minn.1988). Generally, the prospective purchaser of real property looks at recorded documents to determine marketable title of record. Id. at 97. These documents consist of written evidence of transactions that affect the real property and are recorded with the county recorder in the particular county where the property is located. The recorded documents then become public records and operate as an instrument of conveyance as well as a means to appraise title. Typically, a summary of the material parts of these recorded or filed documents  an abstract of title  is prepared to provide a prospective purchaser or mortgagor with a simplified and convenient method to ascertain marketability of title. See id. at 97. In 1901, Minnesota adopted the Torrens system. Act of Apr. 11, 1901, ch. 237, §§ 1-98, 1901 Minn. Laws 348, 348-378, codified at R.L. § 3370-403 (1905). The purpose of the Torrens system was to create a title registration procedure intended to simplify conveyancing by eliminating the need to examine extensive abstracts of title by issuance of a single certificate of title, free from any and all rights or claims not registered with the registrar of titles   . In re Juran, 178 Minn. 55, 58, 226 N.W. 201, 202 (1929). Torrens registration provides a means to determine the state of title through the inspection of a single document, the certificate of title, except for seven specified interests enumerated in Minn.Stat. § 508.25 (1998). See Mill City Heating & Air Cond. Co. v. Nelson, 351 N.W.2d 362, 364-65 (Minn.1984). At the time the Torrens Act was adopted in Minnesota, the Torrens system had a long and established history. As early as the 1850's, Sir Robert Richard Torrens implemented the Torrens system of title registration in South Australia, though a similar system had been in vogue for several years in Europe. Peters v. Duluth, 119 Minn. 96, 98, 137 N.W. 390, 391 (1912). When Minnesota adopted the Torrens system, the goal of the legislature was to clear up and settle land titles and, to that end, a proceeding was authorized by which title could be settled by judicial decree. Id. at 103, 137 N.W. at 393. An officer of the court, the examiner of titles, oversees all stages of registration of title under the Torrens system. See Minn. Stat. § 508.321 (1998). Title registration does not create or transfer a legal interest until the examiner of titles, subject to the jurisdiction of the court, makes a comprehensive assessment of the current state of title. See Minn.Stat. §§ 508.13 (1998), 508.16, subd. 2 (1998). Initial title registration of real property is a relatively involved proceeding that ultimately results in a certificate of title being issued, which shall be received in evidence in all the courts of this state and be conclusive evidence of all matters and things contained in it. Minn.Stat. § 508.36 (1998). The Torrens Act provides in relevant part that: Every person receiving a certificate of title pursuant to a decree of registration and every subsequent purchaser of registered land who receives a certificate of title in good faith and for a valuable consideration shall hold it free from all encumbrances and adverse claims, excepting only the estates, mortgages, liens, charges, and interests as may be noted in the last certificate of title in the office of the registrar   . Minn.Stat. § 508.25 (1998). Unlike the abstract system, where evidences of title are recorded, under the Torrens system there is a judicial proceeding whereby title itself is registered. See Henry v. White, 123 Minn. 182, 184, 143 N.W. 324, 325 (1913) (stating [t]he basic principle of the [Torrens] system is the registration of the title to land instead of registering only the evidence of such title). The conclusiveness of certificates of title is maintained by court adjudication and through statutes of limitations. See Minn.Stat. §§ 508.22 (1998), 508.28 (1998). Accordingly, in order to maintain the reliability of certificates of title, certain subsequent transfers of title and changes to the certificate must be made either by court order or by approval of the examiner of titles. See, e.g., Minn.Stat. §§ 508.58 (1998), 508.62 (1998), 508.68 (1998). Subsequent transfers of title where the old certificate of title is cancelled and a new certificate of title is issued can only occur when the registrar of titles follows specific procedures. See Minn.Stat. § 508.52 (1998). No erasure, alteration, or amendment to the certificate of title can be made except by court order or by approval of the examiner of titles. See Minn.Stat. § 508.71, subd. 1 (1998). The conclusive nature of certificates of title allows real property owners to rely on the certificate of title while disregarding most interests not evidenced on the current certificate of title.