Court Opinion

ID: 6569599
Source: CourtListenerOpinion
Date Created: 2022-07-20 19:22:55.42758+00
Date Added: 2024-06-11T15:56:51.740082
License: Public Domain

Mr. Justice Allen
(dissenting).
According to the majority opinion, parties dealing with registered land or the title thereto, are not affected with notice, actual or constructive, of any unregistered interest, and a judgment creditor need not look further than the certificate of title because he is not affected by any notice, actual or constructive, of any rights not noted on the certificate of title. From that view or holding I dissent.
In Follette v. Pac. L. & P. Corp., 189 Cal. 193, 208 Pac. 295, the supreme court of California said, in effect, that it should not be held that a possessor or occupant of real property under a claim of right, interest or ownership, however well founded, would be defenseless against the holder or transferee of a registered title under the registration act who had acquired the same for a full consideration but without any examination of the premises or any inquiry as to its actual possession and occupancy by another, unless such an interpretation of the law is found to be inevitable. Section 36 of the California act, quoted *376in the case above cited, provides among other things, that no person taking any interest or charge in or upon registered land, shall be affected with notice, actual or constructive, of any unregistered claim, demand or interest. The Colorado act omits any such provision. To me, the omission seems significant. The Illinois act, also, as is seen from Bjornberg v. Myers, 212 Ill. App. 257, includes a provision like section 36 of the California act.
The section of the Illinois act, and section 36 of the California act, above mentioned, appear in the respective registration statutes in those states separately from, and’ in addition to, a provision like or similar to section 30 of our act (section 4956 C. L.1921). Section 30 of the Colorado act, so far as material here, reads as follows: “Every person receiving a certificate of title in pursuance of a decree of registration, and every subsequent purchaser of registered land who takes a certificate of title for value and in good faith, shall hold the same free from all incumbrances except only such * * * as may be noted in the last certificate of title in the registrar’s office, * *
The absence of any provision in our statute similar to section 36 of the California act, or the like section in the Illinois act, makes it possible, if not necessary, to give effect to the phrase “in good faith” according to its usual meaning, as the same is used in section 30 of our act, above quoted.
It is to be observed that it is one who takes a certificate of title for value “and in good faith” who thereafter holds the land free and clear of all charges and interests not noted in the last certificate of title in the registrar’s office. In other words, the purchaser in order to be protected by the certificate must act “in good faith.” A purchaser in good faith has been defined as “one who buys honestly for a valuable consideration and without notice.” 28 C. J. 716. Thus it has been held that under a statute providing that those only who purchase in good faith shall be protected by a prior record of their deed, means to purchase without knowledge of an outstanding incumbrance, or any infor*377mation sufficient to put the purchaser upon inquiry; and the law would not protect one who purchases land with knowledge of an outstanding unrecorded mortgage. Mueller v. Brigham, 53 Wis. 173, 10 N. W. 366, cited in 4 Words and Phrases (First Series), 3120. Therefore, one would not take a certificate of title in good faith if he takes it with actual knowledge of some right against the land which is not noted on the last certificate. Holders of judgment liens stand on the same footing as subsequent purchasers, so far as the matter of notice is concerned. Colburn v. Gilcrest, 60 Colo. 92, 151 Pac. 909; Wedman v. Carpenter, 65 Colo. 63, 65, 173 Pac. 57. See, also, note in 13 L. R. A. (N. S.) 108.
It is generally held that possession precludes anyone from being an innocent purchaser as to such possessor. Janes v. Wilkinson, 2 Kan. App. 361, 42 Pac. 735; Rankin Mfg. Co. v. Bishop, 137 Ala. 271, 34 So. 991; Banks v. Allen, 127 Mich. 80, 86 N. W. 383; Smith v. Reid, 134 N. Y. 568, 31 N. E. 1082; Peterson v. Philadelphia Mortg. & T. Co., 33 Wash. 464, 74 Pac. 585. See, also, note, 13 L. R. A. (N. S.) 53. An innocent purchaser is a purchaser in good faith. 32 C. J. 574. One is not a purchaser in good faith merely because he does not have actual knowledge of the fact 'of possession.
I find nothing in our Torrens Land Law from which it must be held that all the law relating to the effect of notice by possession is abrogated. Only in one way is such law changed. That seems to be by section 34 of the act, section 4960 C. L. 1921, reading as follows: “No title to registered land in derogation of that of the registered owner shall ever be acquired by prescription or adverse possession.”
That section leaves one in possession the right to assert whatever right he has under which he has possession. All that this section does is to prevent such possessor from acquiring title by adverse possession.
The plaintiffs in error rely largely upon section 33 of the act (section 4959 C. L. 1921) the material part of *378which reads as follows: “All dealings with the land or any estate or interest therein after the same has been brought under this act, and all liens, incumbrances and charges upon the same 'shall be made only subject to the terms of this act.”
This section should be read with section 54 (section 4980 C. L. 1921) which provides, among other things, that nothing contained in the act shall be construed “to change or affect in any way any other rights or liabilities created by law and applicable to unregistered land, except as otherwise expressly provided” in the act.
In my opinion, these sections do not necessitate upholding the contention that a subsequent purchaser or a judgment creditor is not affected by the notice given by possession where the land involved is registered land. I do not agree with the majority opinion that the purpose of the act “was to escape from the old rules governing the transfer of real estate,” but think the purpose of the act was to do away with cumbersome abstracts of title, and substitute the certificate of title for the abstract. Under the “old rules” the holder of the abstract could not entirely rely thereon, but was affected by notice given by the possession of another. Under the registration act the holder of a certificate should be in no different position than the holder of an abstract, in this matter.
I am authorized to state that Mr. Justice Campbell and Mr. Justice Sheaf or concur with the views herein expressed.