Opinion ID: 1718602
Heading Depth: 1
Heading Rank: 3

Heading: Applicability of the Marketable Record Title Act.

Text: A. General legal principles. We begin our consideration of this issue with a brief review of the Iowa Marketable Record Title Act, commonly known as the forty-year act. Marketable title statutes are statutes designed to shorten the period of search required to establish title in real estate and give effect and stability to record titles by rendering them marketable and alienablein substance to improve and render less complicated the land transfer system. Chicago & N.W. Ry. v. City of Osage, 176 N.W.2d 788, 793 (Iowa 1970). The act itself states that it shall be liberally construed to effect the legislative purpose of simplifying and facilitating land title transactions by allowing persons to rely on a record chain of title. Iowa Code § 614.30. In furtherance of this goal, the Iowa legislature established a forty-year marketable record title: Any person who has an unbroken chain of title of record to any interest in land for forty years or more, shall be deemed to have a marketable record title to such interest . . . subject only to the matters stated in section 614.32. A person shall be deemed to have such an unbroken chain of title when the official public records disclose a conveyance or other title transaction, of record not less than forty years at the time the marketability is to be determined, which said conveyance or other title transaction purports to create such interest, either in: 1. The person claiming such interest, or 2. Some other person from whom, by one or more conveyances or other title transactions of record, such purported interest has become vested in the person claiming such interest; with nothing appearing of record, in either case, purporting to divest such claimant of such purported interest. Iowa Code § 614.31 (emphasis added). The city concedes that Fencl has a forty-year unbroken chain of record title to the disputed property. Therefore, Fencl has a marketable record title. See id. § 614.29(1) (defining marketable record title). Under the statute, a marketable record title operates to extinguish any interest, the existence of which depends upon any act, transaction, event or omission that occurred prior to the effective date of the root of title ... whether legal or equitable, present or future ... whether such person is natural or corporate, or is private or governmental, subject, however, to the matters stated in section 614.32. Id. § 614.33. Fencl's root of title is the 1950 deed from the Goebels to Ottilie. See id. § 614.29(5) (defining root of title). Clearly, the city's interest depends upon [an] act ... that occurred prior to the effective date of the root of title, that act being the adoption of the original 1854 plat. [2] Id. § 614.33. Therefore, Fencl's marketable record title serves to extinguish the city's interest unless Fencl's title is subject to any of the matters stated in section 614.32. Section 614.32 sets forth the interests and rights to which a marketable title is subject. The city relies on two of these matters: (1) interests that are inherent in the record chain of title; and (2) interests preserved by possession of the owner continuously for a period of forty years or more. See id. § 614.32(1)-(2). In addition, the city claims that the forty-year act simply does not apply to public trust property, a proposition adopted by the trial court. We will address each issue separately. B. Public trust property. While the city concedes that the statute is generally applicable to governmental interests, it nevertheless maintains that the statute was never meant to divest a governmental entity of public trust property. The city relies on dictum in our decision in State v. Sorensen, 436 N.W.2d 358 (Iowa 1989), for the proposition that the marketable record title act does not apply to public trust property. In Sorensen, we considered the scope of Iowa Code section 614.17, a marketable title act known as the ten-year act, which, at that time, barred certain claims to real estate predating 1970. 436 N.W.2d at 360 (citing Iowa Code section 614.17 (1983)). [3] The State sought to quiet title to land that had been formed by accretion to the Missouri River. Id. at 359. The defendant, Sorensen, claimed title to the land and asserted that any interest by the State in the property was lost under the time limitation of section 614.17. Id. at 360. Due to the special nature of public trust property, we held that section 614.17 did not apply to bar claims of the State to such property. Id. at 362. Because the disputed land was public trust property, this court concluded that the State's interest was not subject to section 614.17. Id. at 363. We noted that Sorensen had not preserved error on his additional claim that the forty-year act extinguished the State's right to the property. Id. at 360. We stated, nonetheless, that it is doubtful that the forty-year act would bar claims to public trust property, despite the act's specific inclusion of `governmental' as well as private claims. Id. (citing Iowa Code § 614.33). We do not find it necessary in the case before us to decide whether the forty-year act would bar claims to public trust property because the contested alley does not qualify as public trust property, a conclusion we will now explain. The public trust doctrine is based on the notion that the public possesses inviolable rights to certain natural resources. Id. at 361. The State has very limited power to dispose of such property. In State v. Dakota County, Nebraska, 250 Iowa 318, 93 N.W.2d 595 (1958), this court held that land under the Missouri River was public trust property and could not be sold by the State. 250 Iowa at 325, 93 N.W.2d at 599; accord Sorensen, 436 N.W.2d at 362 (noting the stringent limitations on the state's power to alienate such property). The doctrine in Iowa has a narrow scope: We do not necessarily subscribe to broad applications of the doctrine, noted by one authority to include rural parklands, historic battlefields, or archaeological remains. In fact, we are cautioned against an overextension of the doctrine. Sorensen, 436 N.W.2d at 363 (citations omitted). The doctrine was originally applied [in Iowa] to the beds of navigable waters, but has now expanded to embrace the public's use of lakes and rivers for recreational purposes as well. Larman v. State, 552 N.W.2d 158, 161 (Iowa 1996) (citing Robert's River Rides, Inc. v. Steamboat Dev. Corp., 520 N.W.2d 294, 299 (Iowa 1994); Sorensen, 436 N.W.2d at 363). Clearly, the alley in question is not a navigable or recreational body of water; nor does the alley provide access to a river or lake. Thus, the question becomes whether we should extend the doctrine to encompass this type of public property. [4] Such an extension, in our opinion, would be inconsistent with the rationale underlying the public trust doctrine. The public trust doctrine is based on the notion that the State is a steward of our natural resources. See Sorensen, 436 N.W.2d at 361. Consistently with this basic proposition, the United States Supreme Court has prohibited a state from conveying important natural resources to private parties. See Ill. Cent. R.R. v. Illinois, 146 U.S. 387, 452-53, 13 S.Ct. 110, 118, 36 L.Ed. 1018, 1042-43 (1892). We think these underpinnings of the public trust doctrine have no applicability to public streets and alleys. Simply stated, an alley is not a natural resource. Unlike the unique nature of the Missouri River, an alley exists merely where the governmental entity chooses to place it. Moreover, it is clear that the government has the power, albeit subject to some limitations, to alienate property originally dedicated for streets and alleys. In fact, that is exactly what the city proposes to do in the present case. If we were to hold that the alley is public trust property subject to the public trust doctrine, the city's plan to sell the alleyway would be in jeopardy. See Dakota County, 250 Iowa at 325, 93 N.W.2d at 599 (holding public trust property could not be sold by the State). In summary, we conclude that the alley is distinguishable from public trust property with respect to the uniqueness of the land as well as the limitations on its alienability. Therefore, we decline to extend the public trust doctrine to encompass the alley in question. C. Exception for interests inherent in the muniments of title. Iowa Code section 614.32 states that a marketable record title is subject to all interests ... which are inherent in the muniments of which such chain of record title is formed. Iowa Code § 614.32(1). See generally Black's Law Dictionary 1019 (6th ed.1990) (defining muniments of title as [d]ocumentary evidence of title). This statute further provides, however, that a general reference in such muniments ... to ... interests created prior to the root of title is not sufficient; the muniments must contain a specific identification ... of a record title transaction which creates such... interest. Iowa Code § 614.32(1). To determine the applicability of section 614.32(1) in this case, we must answer three questions: (1) Is the city's interest in the disputed property inherent in the muniments of titlein this case, deeds forming Fencl's chain of record title? (2) Was the city's interest created prior to Fencl's root of title? and (3) If so, do the deeds specifically identify the record title transaction that created the city's interest? It is helpful at this point to again review the property descriptions contained in the deeds that form Fencl's chain of record title: Lot 63 of Original Plat of the Town of Harpers Ferry, Iowa, and the part lying immediately South of that Lot which was originally platted as an alley and 15 feet immediately East of said Lot which constitutes a vacated portion of Second Street. (Emphasis added.) The specific reference in the deeds to that part of the property originally platted as an alley satisfies the requirement that the interest be inherent in the documents forming Fencl's chain of record title. This reference would alert anyone examining Fencl's record title that the city, at least at one time, had an ownership interest in that portion of the property. As for the second issue, the parties agree that the 1950 deed from the Goebels to Ottilie is Fencl's root of title. See id. § 614.29(5) (defining root of title). Because the city's interest in the alley property was created prior to 1950, the deeds must specifically identify the record title transaction creating the city's interest in order for that interest to be preserved. See id. § 614.32(1). As noted earlier, the city's record title document is the original 1854 plat for Harpers Ferry. We think this document is sufficiently identified by the deeds' reference to the Original Plat of the Town of Harpers Ferry, Iowa. Therefore, the prerequisites of section 614.32(1) are met. Not only do the facts before us satisfy the literal requirements of section 614.32(1), but a conclusion that the city's interest was not extinguished is also consistent with the underlying purpose of the act. The statutory exceptions to marketable record title should not be interpreted and applied in such a way as to undermine the purpose of the act, which is to simplify title transactions by shortening the period that must be searched to establish marketable title. See Chicago & N.W. Ry., 176 N.W.2d at 793 (stating purpose of marketable record title acts). In the case before us, a person searching the chain of record title for the obligatory forty years would be alerted not only to the fact that the town of Harpers Ferry had platted a portion of the property as an alley, but would also be informed of the document creating this interest, namely the original plat of the city. Under these circumstances, the title transfer process is not unduly burdened by a focused search to determine whether the city's interest in the alley had ever been vacated. Such a search was not undertaken here because Fencl did not have an abstract of title prepared until after his dispute with the city surfaced. Based on the foregoing analysis, we hold that Fencl cannot rely on the Marketable Record Title Act to extinguish the city's interest in the disputed land. This conclusion makes it unnecessary to determine whether the exception for continuous possession found in section 614.32(2) applies. We now consider Fencl's alternative argument that the city is estopped from claiming an interest in the platted alley.