Marquette Law Review

Volume 6
Article 3
Issue 3 Volume 6, Issue 3 (1922)

The Torrens System

Joseph Herron Crowley

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Joseph Herron Crowley, The Torrens System, 6 Marq. L. Rev. 114 (1922).
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 MARQUETTE LAW REVIEW

THE TORRENS SYSTEM

BY JOSEPM HERRON CROWLEY, A.B., LL.B.,
Member of the Cleveland Bar, and Associate Member of the Cleve-
land Real Estate Board
[EDIToR's NoTE: This treatise presents, separately, the two sides of the
Torrens System. First, it presents the viewpoint of the Title Companies
who announce the System as "an unnecessary innovation." In the second
part of the article the arguments of the Torrens League are presented,
wherein the Torrens System is called "a great constructive reform." Our
next issue will contain an article entitled "The Torrens System-Con-
clusions of a Dispassionate and Unbiased Inquirer into the System."
Released from The Paper Book.-G. J.B.]

I. AN UNNECESSARY INNOVATION
From a perusal of the material on the Torrens System in the
average library one would conclude that the millenium was at
hand and that all title difficulties were at an end. The utter
absence of criticism and opposing literature would lead one to
suppose that this system must represent the last word in per-
fection of title registration, but to one who disbelieves in un-
mitigated good and to whom panacea is anathema, it serves but
as an impetus to his critical examination.
The first natural inquiry is what is wrong with our present
system and why the need of change. Lawyers, conveyancers,
and title men have built up in this country a system of land
transfers and a recording machinery, under which litigation is
relatively small, title certain and secure, mortgage investments
solid, frauds and errors few and certain of discovery and easily
corrected. This present system is American in spirit, growth,
and development, and is a product of the ideals which formu-
lated our constitution. It is the result of conservative thought
and sound business judgment, covering a long period of time,
adapted to our needs, and while not perfect, as no human agency
is perfect, it has served us well. Why substitute for a growth
of the soil a foreign system adapted to a form of government
different from ours?
The theory of the Torrens System is, in effect, that when a
title is registered, neither a purchaser nor a mortgagee needs
to look any farther than the registrar's roll, and he can rely
absolutely on a clear title shown there. But is this certificate
final and conclusive, or is it any better than the decree of court
 MARQUETTE LAW REVIEW

on which based? Mr. Charles E. Jones of the Department of

Justice in Washington is quoted as saying, "There is no certainty
of a Torrens certified being good; at best it is but prima facie
evidence of title. It must be accompanied by an abstract of
title and a certified copy of all court proceedings under which
the certificate was issued." Necessarily, the Torrens System
breeds litigation, since the initial registration involves litigation,
and the subsequent interpretation of the certificate gives rise to
further contention. In effect, the courts have said that a person
taking a Torrens certificate does so at his peril, the same as one
who bought worthless stock without proper inquiry.
The Torrens System is opposed to the spirit of our constitution,
and the basic principles of our jurisprudence, and is in direct
conflict with the XIVth amendment, which guarantees due pro-
cess of law. The registrar must be given absolute and unlimited
power in order to operate this system successfully. This power
may be given in a country where no such guaranty exists, but
not even the president himself can be given so arbitrary a power
under our constitution. The Torrens System assumes to bind
all parties whether made defendants or not, under the name of
"All whom it may concern," but under our constitution no man
may be deprived of his property without his day in court, and
if a man is known and his name can be ascertained, he cannot
be bound under the description of "All whom it may concern."
It is a compulsory dual system of registration because there
must first be a complete abstract of title made and then an
initial lawsuit. Further, there is compulsory contribution to
an indemnity fund.
Since the abstract is necessary there is no saving in time or
money, but on the other hand, the proceeding is very expensive;
the court costs alone are estimated at about $94.o in an initial
suit, plus the cost of the abstract, ordinarily about $25.oo. At
least 9o days are ordinarily required for initial transfers and for
subsequent transfers usually ten days are required-vastly more
time than is required for a policy of title insurance.
Banks and other investors will not loan on Torrens certificates
unless accompanied by abstracts and legal opinions.
The type of men selected for registrars and assistants has not
been such as the advocates of the system would like to have us
believe. Ordinarily they are politicians with no specialized train-
u15
 MARQUETTE LAW REVIEW

ing or real qualifications such as should fit them for the duties
imposed on them by this utopian scheme.
If it is a proper governmental function to issue certificates
of title superseding the policy of title insurance why is it not
proper for the government to undertake fire and theft insurance?
The recollection of the government management of railroads is
too fresh in the minds of most of us at this time to think of
increasing the functions of governmental activity.
The indemnity fund is wholly inadequate because a county or
state has no right to enter into the business of guaranteeing or
insuring titles, and a guaranty fund can Gnly be built up by tax-
ing one man to pay a possible defect in another's title. Before
a defrauded property owner can maintain suit to recover from
the fund he must first establish the fact that he has sued the
party directly responsible and has been unable to recover.
Further such suit must be brought within a limited time after
the wrong was committed, and failure to learn of such wrong
until after the time limit has expired would completely bar any
recovery. Ordinarily the total amount in such an indemnity
fund is insufficient to satisfy the loss in any single case.
No provision is made for owners less than in fee, and equitable
interests not subject to registration are wholly unprotected. The
right of adverse possession is wholly destroyed and all posses-
sory interests are jeopardized. The certificate is of no more
value where there are forged or invalid deeds than a mere quit-
claim deed.
It lowers land values because valid restrictions against ob-
jectionable occupants and offensive businesses are evaded without
knowledge of the court or the property owners interested. The
Torrens certificate shows free and clear of all encumbrances,
conditions and restrictions, although under the recording system
certain things have been expressly prohibited.
The system although in effect in nineteen states has not proved
popular. While in 1918-1919 there were 1,476 court cases, 2,795
applicants, 9,651 parcels of property, under Torrens proceedings,
in 1920-1921 there were 748 court cases, 1,846 applicants, 5,121
parcels of property, and in the six months from Jan. 1921 to
July 1921 there were 335 court cases, 431 applicants, and 942
parcels.
 MARQUETTE LAW REVIEW

Summarizing; the defects most patent seem to be, the cer-

tificate is ndt final nor conclusive, it compels a dual system of
registration, it is in flagrant violation of the XIVth amendment,
an abstract is necessary and there is no saving of time nor ex-
pense, there is no protection to grantees under forged or un-
delivered deeds, the indemnity fund is insufficient, banks will not
loan on certificate, the system breeds litigation, it is not properly
a governmental function, the men in charge are not fitted by
experience or training, it depreciates property values, and lastly,
and most important of all there is no demand for it as there is no
necessity for it.

I. A GREAT CONSTRUCTIVE REFORM

It might be well, at this point, to give a brief explanation of
just what the Torrens System is, and what it seeks to do. The
Torrens System is a scheme of title registration devised by Sir
Robert Torrens, for whom it is named, whereby a unit of prop-
erty is first placed on the registry with reference to the land
itself, and the title is registered and established as good by
judicial proceedings. The entry of transactions on the register
is essential to their validity, and the original registration and
entry of subsequent transactions operates as a warranty of title
in the registered owner and as a bar to adverse claims. An
official examiner of the Court examines thoroughly the title, upon
a written application filed by the owner, accompanied by such
usual evidences of title as are required by the Torrens law,
before any decree of registration is made. When satisfied that
the title is good, the Court enters a decree of registration, and
a certificate of ownership is issued by the County Recorder to
the owner, in duplicate, the original appearing on one page of
the Recorder's Register, on which are entered the incumbrances
upon the property. The subsequent transfer of title is accom-
plished by deed or entry on the owner's duplicate certificate, ac-
companied by an entry of the fact in the Registrar's office. One
page of the record in the Recorder's office discloses the owner
and the incumbrances at a glance, and at any time.
In short, then, the Torrens System is a plan of conveyancing
which substitutes certificates for abstracts, and registration for
mere recording of deeds.
 MARQUETTE LAW REVIEW

That there is need for the Torrens reform can be learned

from a consideration of the defects of the present system.
In the first place the Recording System fails to protect pur-
chasers in the case of undelivered deeds. infancy of grantor,
and in cases where, although the grantor has been declared in
the deed to be single, he was in fact married and had a husband
or wife living entitled to curtesy or dower. Further, there is
no protection for purchasers where the owner of land died in-
testate and proofs of heirship were made upon his death.
Secondly, and a more serious difficulty has been the ever-in-
creasing cost of transfers. Foreclosures, partitions, quiet title
proceedings, transfer by devise or intestacv make abstracts of
title very expensive. Chains of title have grown long and in-
volved and have entailed the necessity of examination by com-
petent and skilled attorneys at increased expense. The Recording
System causes an accumulation of an ever-increasing mass of
public records of deeds and liens affecting land which tends to
create delay and expense in the examination of titles.
The Recording System has necessarily given rise to the Ab-
stract Company and the Title Guaranty Company, whose business
has tended to become a monopoly occasioning in many cases ex-
cessive charges. In the event the Title Guaranty company makes
a fatal mistake the owner's recovery is limited to the face value
of his policy, usually much less than his actual loss. Ordinarily
the amount of time required to close a real estate transfer
through a title company is considerable. There is also, usually,
a gap between the date of the company's opinion and the date of
passing deeds and purchase money, because of which the seller
either has to take the chance of subsequent conveyances or in-
cumbrances or else stand the expense of an escrow charge. So
long as the owner still has the right to file all sorts of papers,
becoming involved in litigation, die intestate or leaving a com-
plicated will, between the date of one title policy and another,
the necessity of an expensive search may arise for a single
transfer. Further, title may be found so defective that it would
necessitate a quiet title action before the title company would
insure the title. Titles may thus become a matter of the judg-
ment or caprice of the title officer, and the mere indemnity
against actual loss provided by a title insurance policy can never
make a defective or doubtful title marketable.
xz8
 MARQUETTE LAW REVIEW

It is frequently charged that the Torrens System is un-Ameri-

can and diametrically opposed to the fundamental law of the
land. In American Land Co. vs. Zeiss, 219 U. S. 47, the late
Chief Justice White said,
"To argue that the provisions of the statute are repugnant to
the due-process clause, because a case may be conceived where
rights in and to property would be adversely affected without
notice, being actually conveyed by the proceedings, is in effect
to deny the power of the state to deal with the subject. The
criterion is not the possibility of conceivable injury, but the just
and reasonable character of the requirements, having reference
to the subject with which the statute deals. . . . On the
contrary, the provisions of the due-process clause only restrain
those arbitrary and unreasonable exertions of power which are
not really within lawful State power, since they are so unreason-
able and unjust as to impair or destroy fundamental rights."
Justice McKenna in Ballard vs. Hunter, 204 U. S. 241, said,
"It should be kept in mind that the laws of a State come under
the prohibition of the fourteenth amendment only when they
infringe fundamental rights. . . . A precise definition of "due
process of law" has never been attempted. It does not
always mean proceedings in court. Its fundamental require-
ment is an opportunity for a hearing and defense, but no fixed
procedure is demanded. The process or proceeding may be
adapted to the nature of the case."
The question of the validity of service by publication upon
unknown persons, resident or non-resident, minors and those
under disability has been decided in Twining vs. New Tersey,
211 U. S.78, Orndt vs. Briggs, 134 U. S. 316, and in 219 U. S.
47, supra.
The Torrens System settles definitely and finally the validity
of title. James Edward Hogg of London, in his book entitled,
Registration of Title to Land Throughout the Empire, says,
"The register, however, operates not merely by declaring good
a title found to be so, but confers the title stated, notwithstand-
ing that, but for the registration, the registered owner would have
no title at all. This operation of the register in actually con-
ferring title resembles that of limitation statutes. But there is
much more than a bar of legal remedies, for the title (if any)
of the hostile claimant is completely abrogated and in effect
"19
 MARQUETTE LAW REVIEW

transferred to the registered owner, conferring on the latter a

title good against the world."
Alfred G. Reeves, an acknowledged authority upon realty law
says,
"One of the splendid features of the Torrens system-a feature
which realty interests should emphasize-is in its supplying a
method whereby the owner of property may have his title tested
and adjudged, even though no attack is being made thereon.
Without this law a landowner whose title is questioned, how-
ever improperly or unsubstantially must often wait for a direct
attack upon it, or a rejection of it, when it has been contracted
to be sold, before he can get into court to settle the questions
involved. But a registration action entitles him to proceed affirma-
tively and compel all who might gainsay his ownership, to come
in and successfully assert their claims or have them forever
barred and extinguished."
By means of the Torrens System protection is afforded to all
interested parties. The danger of a bad title being registered
under the Torrens Act is, undoubtedly considerably less than
under a decree in a quiet title proceeding as greater degree of care
is exercised in the examination of titles under this system than
under ordinary court proceedings.
The state of title is always a matter of record under the Tor-
rens System. Since it can only be changed by act of the
registrar, the exact status of title is known at all times. Mis-
descriptions are practically impossible under this system.
Under the Torrens System the rapid transfer of titles is
greatly facilitated, and in fact, transfers subsequent to the ini-
tial registration can be made in twenty-four hours.
The cost of transfers is greatly reduced where this system
prevails. In Chicago, the average cost of the initial registration
is about thirty-five dollars. Each new certificate costs three
dollars, no matter how difficult or involved. William C. Niblack
of the Chicago Title and Trust Company, one of the ablest and
best informed opponents of the Torrens System, says on this
score,
"It is undoubtedly true that the Torrens System is cheaper in
the long run than the system of procuring an abstract of title
to land and having it examined by a lawyer on each dealing
with the land. . . . In large communities the latter system
 MARQUETTE LAW REVIEW

has become expensive and unscientific enough to attract atten-

tion. . . . The progress of the Torrens System in this
country is not to be impeded by mere adverse opinion as to its
adaptability to our laws. A large part of the people in the
several states desire to have it tried and the trial is now on.
. . . This trial is to be a fair one, to be conducted patiently
and slowly, and it will not be concluded until the success or
failure of the system is demonstrated."
Summarizing: the advantages of the Torrens System which
make it a great constructive reform and a consummation devoutly
to be wished are-
i. Title is warranted, whereas under the recording system
the record is no bar to adverse claims, and carries no warranty
prior to the record.
2. Registration shows at a glance, all former dealings affect-
ing a particular parcel of land.
3. An ample assurance fund is provided as indemnity to cover
any loss or damage.
4. Registration protects against fraudulent signatures since
the owner's signature is always on file. Protection is afforded
against clouding title by judgments against persons of the same
or similar names.
5. Adverse possession does not run against Torrens titles.
6. The physical boundaries of land are determined and kept
fixed by registration.
7. Defective titles are cured by registration whereby defects
are wiped out even though no attack is made thereon.
8. Ordinary transfers of registered property can be made in
twenty-four hours.
9. The Torrens System substitutes at every step official acts
for private acts.
io. The Torrens certificate abolishes secret liens and hidden
equities.
ii. By means of the Torrens System endless expense of ab-
stracts and extensions thereon is eliminated.
12. Torrens registration stops the accumulation of public
records of deeds and liens affecting land and eliminates the con-
sequent delay and expense of title examination.

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