§ 402. Fraud; notice only by registration. Except in case of fraud and except also as herein otherwise provided, no person taking a transfer of any registered real property or of any estate or interest therein or lien or charge thereon from the registered owner shall be required to inquire into the circumstances under which, or the consideration for which such owner or any previously registered owner had the title registered, nor shall such transferee be affected with notice, actual or constructive, of any unregistered trust, lien, claim, demand or interest whatever; and the knowledge that an unregistered trust, lien, claim, demand or interest is in existence shall not of itself be imputed or treated as fraud. Formerly section 34, chapter 444, Laws of 1908.9 Comment. This section is taken most probably from either the Illinois1o or the Oregon act11 for it is almost identical in phraseology. In the California act it is provided, that in case of fraud any person defrauded shall have all the rights and remedies which he would have if the land were not registered, except as against a bona fide holder to whom the certificate may have been transferred.12 It is claimed in Illinois, that this section is broad enough to protect the title of a purchaser who has knowledge that his vendor has no right to sell.13 We are at liberty to believe that no such interpretation will prevail in this State, with its long-established system of jurisprudence containing abundant canons to the contrary of any such doctrine. No court of this State will ever uphold any doctrine (even if the literal language of a statute permit it) that involves principles repugnant to conscience and good faith. This community is too conservative, and its jurisprudence too settled to admit of any other notion concerning the future. Under all the voluntary "Torrens Laws" one great effort is to cut off all equities behind the certificate of title. Everything that is past is to be wiped out as it were, and the initial registration is intended to make a new point of departure for all time to come. 9 Repealed. See § 460, infra. 10 § 42. 11 § 41. 12 8 37. Under some higher and more effective State system than any this article proposes, the State would resume possession of all lands and simply issue a new patent for them to the old owner, to be thenceforth transferred sub modo and subject to State regulations. To the State there are boundless possibilities which cannot be limited in the same mode that they may be when such proceedings are voluntarily set in motion by private citizens for their own private ends. To make registration of title effective the experience of other countries demonstrates, that it must be compulsory. Even compulsion is insufficient to produce good results to the public, if the act effecting it is unworkable in practice, or expensive in detail, or opposed to the settled habits and customs of the people. Any public man who proposes a compulsory, but unworkable, system will be likely to have a somewhat shortened public career, unless past experience in free governments is a false guide to conclusions. § 403. Memorial to be carried forward. Whenever a mem orial or notation has been entered as permitted by this article, the registrar shall carry the same forward upon all certificates of title until the same is cancelled in some manner authorized by this article. Formerly section 35, chapter 444, Laws of 1908.14 Comment. The memorial referred to by this section is that mentioned in section 394 of this article. It is a note of all the estates, mortgages, trusts, liens and charges to which the owner's title is subject. These are to be regularly carried forward on all subsequent certificates of title. This provision is mandatory and the presumption is that the registrar will execute the duty imposed on him. If he does not, some one must suffer, either the holder of the certificate or the holder of the omitted lien or charge. It is to insure against such acts of omission that the old system of conveyancing requires the services of lawyers trained in the law of real property; or in some of the greater cities the services of corporations, designed to insure titles against the negligence or oversight of those who undertake to transfer good titles to real property. It is very apparent that the theory and practice of the "Torrens Laws" is at variance with the theories and practice of the old common law. Its more perfect administration, therefore, would be promoted by a system of jurisprudence which better harmonizes with the Registration Law. This may be perceived in this State from the section which really abolished the old titles by prescription and adverse possession,15 and in other States from those sections which abolish descent and make the certificates of title pass as personal property.16 Dower also is highly inconsistent with the Torrens acts which make the certificates of title personal property. Yet dower is one of the oldest institutions in this State,17 and it has been more consistently maintained in this State than in the country from which we derive our common law. It is not perhaps wrong to affirm that the inhabitants of this State will dispense with the Torrens system sooner than with the old institution of " dower." 14 Repealed. See § 460, infra. 15 § 401, supra. 16 Supra, p. 114. 17 See Article 6, supra. § 404. Registered property to remain registered. The bringing of property under this article shall imply an agreement, running with the land and binding upon the applicant and all his successors in interest or title, that the property shall be subject to the terms of this article and all amendments and alterations thereof. All dealings with the property so registered, or any estate, right, or interest therein, after the same has been brought under this article, and all liens, incumbrances and charges upon the same after the first registration thereof shall be subject to the terms of this article. Formerly section 36, chapter 444, Laws of 1908.18 Comment. This is a very drastic section if the act makes no provision for taking a title once registered off the registry. It is already manifest that a registered title enjoys certain exemptions from adverse claimants and prescriptive rights, and that its owner and all successors to him has a peculiar legal status different from other owners of land. Suppose that a registered owner finds this a relative disadvantage to his property, in aspects which only time can reveal. Is there no mode by which he can relieve his property from such disadvantages? Is his estate to be always subject to this article and its amendments, whether the registered owner likes or dislikes the result? The foregoing are very practical suggestions, and deserve consideration, where the property to be registered is of great value. No doubt, the Legislature would solve the difficulty in course of time by some amendment of this article. But if this article prove to be not a good working act, a dissatisfied registered owner may meanwhile be greatly embarrassed by his inability to take his land off of the registry. Private relief by act of the Legislature is somewhat difficult often times of fulfillment. There is a popular and proper objection to acts of a private nature.. Whether a court of equity could relieve the owner is, however, very doubtful. 18 Repealed. See § 460, infra. § 405. Registered property subject to same rights and burdens as unregistered property. Registered real property and every estate, right and interest therein shall be in all respects subject to the same rights, burdens and incidents as unregistered real property, except as otherwise expressly provided in this article or any amendment thereof. Formerly section 37, chapter 444, Laws of 1908,19 Comment. This clause, which is absent from some others of the Torrens laws, is conservative and proper, in that it minimizes the differences between the incidents of real property registered and those of real property not registered. But it does not for that reason render the administration of this article the less difficult. This section distinctly preserves all the old law of land, and evidently presupposes a knowledge of its limitations upon the part of all who deal with this article. Theoretically, all other Torrens laws are assumed to dispense with the necessity of employing lawyers. But this section seems to assume, that those who come under this article shall be learned in the old law as well as in the particular learning which alone qualifies a practice under this article. This act proves on the part of the Legislature a laudable desire to benefit the public, by giving it an option to accept or reject the provisions of the Title Registration Law. If the public desires to have titles to land registered, the Legislature has given them the opportunity; but it has very wisely refrained from making the act imperative or obligatory. When the demand for real reform in the methods of transferring and conveying lands arises, as in time it must, it is not an idle vaticination to assume that the reform will be of a very different kind from that provided by this article. 19 Repealed. See § 460, infra. |