Chapter 26 - § 26.4 • ACTIONS RELATING TO CLOUDS ON TITLE; ACTIONS TO QUIET TITLE

• Jurisdiction: Colorado

§ 26.4 • ACTIONS RELATING TO CLOUDS ON TITLE; ACTIONS TO QUIET TITLE

§ 26.4.1—Background

Prior to the promulgation of the Colorado Rules of Civil Procedure, and particularly Rule 105, the title actions (as distinguished from possessory actions such as ejectment and forcible entry and detainer) available were those directed toward removing or preventing clouds on title or quieting title. Much of the law pertaining to these pre-C.R.C.P. actions is relevant to actions under Rule 105, and therefore is included here.

Action to Remove Cloud on Title

A lien of record, however invalid, is a cloud on title.¹⁷⁷ For example, an unreleased deed of trust invalidated by a subsequently issued tax deed remains a cloud on title.¹⁷⁸ Nevertheless, it has been held that a mechanic's lien is not a cloud on title where the period allowed for foreclosure has elapsed without action by the claimant.¹⁷⁹

A plaintiff could bring a suit in equity for the specific purpose of removing a cloud on title.¹⁸⁰ The plaintiff in such an action need not have alleged possession,¹⁸¹ and need not have been in possession.¹⁸²

Action to Prevent Cloud on Title

An action to prevent a threatened cloud on title was an action of which courts of equity had jurisdiction under their general powers of jurisdiction.¹⁸³ The action was quite different from the statutory action to quiet title.¹⁸⁴

Action to Quiet Title

Actions to quiet title originated as claims in equity to invalidate claims adverse to the claimant. The equitable proceeding, known as a "bill quia timet" or bill of peace, addressed two types of situations. In the first type, a great number of persons claimed title through some common interest in the property of the petitioner. In the other, one person threatened a multitude of suits against the property.¹⁸⁵ All persons with any claim to the property, or material interests which might be affected, were necessary parties.¹⁸⁶

Colorado established actions to quiet title as statutory proceedings in 1887.¹⁸⁷ An action to quiet title was at least quasi in rem.¹⁸⁸ Under the statute, an action could be brought by a person in possession against any person who claimed an estate adverse to him or her. All rights to the property were to be determined in a single action. A complete adjudication was to address all competing claims of the parties because a defendant could obtain affirmative relief even if a request for such relief was not presented in the form of a counterclaim.¹⁸⁹ A plaintiff who was found to have no title or interest in the property was not in a position to complain of a judgment quieting defendant's title to the property.¹⁹⁰

A decree quieting title under this statutory process was to provide complete relief because the court had full jurisdiction over the controversy of title.¹⁹¹

§ 26.4.2—Parties

Plaintiff

The beneficiary under a deed of trust had sufficient interest in the property to enable him or her to maintain a suit to remove a cloud from title.¹⁹² A trustee named in a deed of trust was not a necessary party in an action to remove the deed of trust as a cloud on title,¹⁹³ but was a proper party.¹⁹⁴

The nature and object of an action to quiet title was to enable the owner of real property to bring into court one who asserted an adverse claim or interest therein, in order that the claim might be determined.¹⁹⁵ An action to quiet title could be brought by any person in possession, by himself or herself or by his or her tenant.¹⁹⁶ One who had conveyed property for the purpose of hindering or delaying creditors could not maintain an action to quiet title to the property.¹⁹⁷ One who had conveyed property in reliance upon fraudulent representations could not maintain an action to quiet title to the property; his or her remedy was to seek relief for fraud.¹⁹⁸

Defendant

An action to quiet title could be brought against any person who claimed an estate in the property adverse to the plaintiff.¹⁹⁹ If a person with a record interest in the property was not made a party, a judgment in the proceeding was not binding on that person.²⁰⁰ Similarly, a judgment against a person made a party but not properly served was void and could be attacked collaterally.²⁰¹ A valid judgment could not be obtained against a person who was dead when the action was commenced.²⁰²

Unknown Parties

One whose deed was not of record at the time of commencement of the action was an "unknown party," even though his or her deed may have been recorded before completion of service by publication.²⁰³ Even though reasonable diligence did not discover the identity of an "unknown party," nevertheless if knowledge of the identity came to the plaintiff, he or she must have made a reasonable effort to make actual service on such party, and failure to do so rendered a judgment based upon publication void.²⁰⁴ One who appeared in response to a published summons naming "unknown parties" was a party and need not have intervened.²⁰⁵

§ 26.4.3—Time to Bring Action

There was no statute which limited the time within which a party was required to bring an action to remove a cloud from his or her title²⁰⁶ or an action to quiet title.²⁰⁷ Similarly, laches was not a defense to an action to quiet title.²⁰⁸ Indeed, if laches were applicable at all in such an action, it would affect the defendant rather than the plaintiff.²⁰⁹

§ 26.4.4—Pleadings

Complaint

A complaint to quiet title must have alleged that the defendant had or claimed to have, or was asserting, a title or claim adverse to the plaintiff, and that the claim was unfounded.²¹⁰ The title or adverse claim could not be simply with reference to possession, but must have been one which resulted from an assertion of an interest in the property of some kind or description; it must have been an assertion of an interest in or an assertion of title to the property; it must have been, in the legal sense, the assertion of an adverse interest or estate in the property.²¹¹

In an action to quiet title, it was sufficient to allege that the plaintiff was the owner and in possession of the premises the title to which was sought to be quieted, and that the defendant claimed an interest or estate therein adverse to plaintiff, which was without any foundation or right whatever.²¹² It was unnecessary for the complaint to deraign the title relied upon, or to set out specifically the character of the adverse claim of the defendant.²¹³

Prior to the promulgation of the Colorado Rules of Civil Procedure,²¹⁴ an action to quiet title could be brought only by a person in possession: "An action may be brought by any person in possession, by himself or herself or his or her tenant, of real property, against any person who claims an estate therein adverse to him or her, for the purpose of determining such adverse claim, estate, or interest."²¹⁵ Under this provision, the plaintiff in a quiet title action must have alleged possession as well as title²¹⁶ and must have proved possession at the commencement of the action.²¹⁷

A plaintiff could maintain an action to quiet title to a water right notwithstanding the fact that actual physical possession of a water right is impossible. The right to have water diverted from a natural stream, coupled with the right to apply the water to the owner's land, though it did not constitute possession of the right in the same sense that the word is used when applied to the occupancy of lands and homes, was equivalent thereto as an element which must have...