JurisdictionUnited States
Mineral Title Examination III
(Feb 1992)


William P. Pearce
Pearce & Durick
314 East Thayer Avenue
Bismarck, North Dakota 58501


The primary thrust of this paper will be directed toward the practical matters of actually extracting title data from the records and organizing the information into a suitable format for a mineral title opinion, with emphasis on the use of the computer to expedite this process. At the outset, however, it is useful to take a few moments to consider the goals and purpose of reviewing title data, as this will be helpful in establishing the operating parameters of just what it is that we are attempting to accomplish in putting together a title opinion. With that concept in hand, it is possible to focus more clearly on the practical matter of reviewing title data and preparing a title opinion.


Nature of Title to Land

In order to focus on the methodology of reviewing title data, it is helpful to revisit briefly the theoretical basis underlying title to land. Since we are dealing with "title opinions," the first question that comes to mind is what does "title" itself mean. In order to render an informed opinion about something we need to know precisely what is the subject matter of our opinion. "Title" has been variously defined in Anglo-American law, but the general emphasis is on title as "the evidence of right which a person has to the possession of property."1 The nature of the abstract concept of "right" itself has, of course, been the subject of much jurisprudential analysis over the centuries, but it is fair to say for present purposes that we understand the general meaning of the concept.2 The right to possession

[Page 2-2]

of property stems from the fact that the holder of the right possess some form of ownership interest in the property. In creating title opinions we are focussing on that concept of "ownership" and how it may be divided up among various different persons, since we are seeking to determine what rights of ownership or possession our client may hold which will give him a legally protected right to develop minerals on the property.

The "ownership" of property, and "property" itself, thus connote certain rights.3 These rights do not exist so much between the property owner and some tangible thing or object as they exist between the owner and other persons with respect to that thing or object.4 The common law theory of ownership of private property is premised on the enjoyment by one person of a certain bundle of rights in a thing, such as land, which the law will enforce against other persons.5 The legal foundation of the ownership of private property is the right to exclude others from exercising power or control over, or enjoying the fruits of, some object or thing.6

[Page 2-3]

Good or Bad Title

Having briefly reviewed the theoretical and historical underpinnings of title to land, we may now proceed to some of the practical aspects of examining title.7 We are accustomed to talk about "good title" and to take for granted that we know what that means when we engage in this process. It is worthwhile, however, to examine briefly what that concept actually means. A "title" itself is, of course, neither intrinsically "good" or "bad."8 The question is what legal consequences result when we deem a title to be "good." In this context we are normally talking about what is called "marketable title," that is title which would be deemed to be adequate, or "good," by a person who is contemplating acquiring the title to property or some interest in the property.9 It is basically a business or economic question: If the prospective buyer or investor is convinced that his monetary investment in acquiring an interest in the property, i.e. acquiring a "title" of some sort in the land, will provide him with sufficient protection through the legal system to allow him to reap his

[Page 2-4]

expected economic reward, then the title is "good."10 There is, therefore, a certain amount of inherent subjectivity in the notion of "good title."

That is, "good title", or "marketable title" means that the holder will be able to enjoy the legal protection of his right to the possession and use of the property which has been characterized above as the basis of the concept of "ownership." In the case of the mineral lessee, who has acquired a leasehold interest, or what may be called "leasehold title," if his leasehold title is "good," then he will be willing to invest the monetary resources to develop the mineral interest and reap his reward11 . The legal system will protect his right to ownership.

Nature of the Title Opinion

In preparing a "title opinion," it is well to bear in mind that the finished opinion itself does not constitute proof of "title." It constitutes, rather, a well-founded opinion that the legal system would lend its judicial support and enforcement powers to the recognition that ownership lies where the opinion states that it appears to. We say "appears" because it is fundamental that a title cannot be "perfect," in the sense that there is no possibility that it could be disputed. A perfect title would be one where legal ownership cannot be challenged, that is where the title-holder has the absolute right to prevent entry or interference with his control or possession by any other person. Such ownership may certainly exist, but the title examiner can never state absolutely and categorically, from the record evidence available to him, that it does exist in any specific instance.

For various reasons a deed or other conveyance appearing in the record might not, if all of the relevant fact and circumstances were known, actually be legally valid to accomplish a transfer of a property interest, or, even if presumptively valid, might be voidable. For example, the grantor may have been a minor with no power to convey real property under the laws of the state in question, in which case the purported conveyance is void12 ; the conveyance may have been fraudulently induced and therefore be subject to be

[Page 2-5]

set aside by a court13 ; there may have been a mutual mistake in reducing the parties' agreement to writing, justifying an action for reformation14 ; the instrument may have been executed by a mentally incompetent person15 ; there may have been undue influence placed upon the grantor, justifying rescission16 ;or the deed may have been forged.17

For any of these reasons the "apparent" record title may in fact be different from what the "real" title is.18 In some sense, therefore, a title opinion is only a "best guess" as to where the true title lies, though it is not recommended that you use this kind of terminology with clients in referring to the title opinions you have prepared for them. This "best guess," however, is normally the correct "guess," as no one else can produce a better, i.e. more strongly supported, result and therefore it is entitled to legal recognition and protection. The reason for emphasizing these rather abstract concepts here is to remind

[Page 2-6]

us what a title opinion is and what it is not, and keeping that point in mind will assist the examiner in reviewing the title records and extracting the relevant data.

Recognizing that perfect title is an abstraction that is difficult to locate in the real world, the legal system has established certain presumptions and developed certain standards upon which the title examiner may rely in his search for the next best thing, "marketable title" or "good title."19 It is universally accepted, for example, that in the absence of actual knowledge of fraud or forgery, or knowledge of circumstances that would put a reasonable person upon inquiry as to whether fraud or forgery might have occurred, a title examiner may rely on a recorded instrument of conveyance as having been validly executed by a grantor who had the power to convey and who was not acting under any undue influence or duress when the instrument was executed. Many concepts of this kind have been incorporated into systems of "title standards," a discussion of which is beyond the scope of this paper but whose function, at least in part, is to reassure the title examiner that he may rely upon "apparent" record title as equivalent to "actual" record title.20


Having reviewed the conceptual nature of what we are looking for, the next step is to go to the proper place to find it. Since title is basically evidence of the right of ownership one needs to review that evidence in the appropriate land records and then, after analyzing the evidence, to assemble the conclusions into an opinion concerning the title. Other papers in this Institute will deal with the kinds of records that need to be reviewed and how they are indexed and maintained. For present purposes, we will take it for granted that the title examiner has found the records and is in a position to review them and make notes or copies of instruments from the records so as to be able to determine ownership.

Title is, of course, by its very nature a transitory thing. The ownership of land changes from one person to another by sale, devise, descent, eminent domain, and a variety of other means. What the examiner is seeking in the title records is all of the evidence of these various kinds of transactions over the course of time so that he can create what is usually called a "chain" of title, that is a sequence of transactions by which the title passed

[Page 2-7]

from its original owner, that is the government21 , to its present owner.22 In addition to the evidence of all of the transfers of title by deed or other instruments, one also needs to note all encumbrances, such as mortgages, easements, leases, etc., since all of these represent transactions which impinge on ownership, and...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT