CHAPTER 8 USE OF CURATIVE STATUTES, STATUTES OF LIMITATION, MARKETABLE TITLE ACTS AND ABSENT MINERAL OWNER STATUTES

• Jurisdiction: United States

Mineral Title Examination II
(Apr 1982)
CHAPTER 8
USE OF CURATIVE STATUTES, STATUTES OF LIMITATION, MARKETABLE TITLE ACTS AND ABSENT MINERAL OWNER STATUTES
Richard H. Bate ¹
Denver, Colorado

Having paid careful attention to the instructions contained in the previous paper, the neophyte title examiner now reviews the chain of title which he has carefully prepared and realizes to his horror that it is replete with notations concerning defectively executed instruments, name variances, unsatisfied mortgages, defective tax and foreclosure sales, and all of the other errors Murphy's Law has dictated will occur in midnight real estate closings in the offices of real estate brokers across the West in the past hundred or so years. The examiner realizes that if he attempts to write an opinion requiring that all of these title defects be cured, he will never be asked to prepare another title opinion. Is there any escape?

One of the comforting aspects of title examination is that one never really feels alone. In the history of development of the art² of title examination, the examiner will have been preceded by many others, who though now long dead, faced the same messy title chains, and, not being slaves to the demands of monthly billable time minimums, decided to do something to avoid the repeated ordeal of wrestling with technical defects in titles.

The something which has been done in the western states at various times is to cause the state legislature to adopt statutes which are intended to have the effect of validating defective instruments and proceedings, extinguishing stale claims and giving evidentiary effect, sometimes conclusive, to recitals in instruments and affidavits which have been of record for a specified period of time.³ These various statutes are often collectively referred to as curative statutes, but it is helpful in the understanding of the purpose and function to divide them into subclassifications for discussion purposes. The subclassifications which I have adopted for this paper are not recognized elsewhere and differ from those generally accepted.⁴ This departure from accepted terminology is intended to emphasize the distinction between statutes which validate claims and statutes which extinguish claims and to permit emphasis on statutes of particular interest to mineral title examiners.

I. DEFINITIONS AND DISTINCTIONS

A. Curative Statutes

In the context of this paper, curative statutes include those which have as their purpose, and hopefully

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as their effect, the carrying out of the presumed purpose of the parties to the defective transaction. Thus, included in this classification are statutes validating instruments defectively executed, as where signed by mark without witnesses, or by corporations without required attestation, and instruments defectively acknowledged, as where the notary seal was not affixed or the expiration date of the notary's commission was not indicated. Also included are statutes creating presumptions of regularity after the passage of time, such as statutes creating a presumption of delivery after an instrument has been of record for a period of time and statutes giving evidentiary effect to recitals or statements of fact in instruments of record for a specified period.

Also included in this category, even though such statutes might more properly be regarded as statutes of limitation, are statutes validating defective foreclosure proceedings, execution sales, tax sales and sales under powers of sale. Since these statutes are usually claimed as limitations of actions attacking such proceedings, they might also be classified as statutes of limitation, but they are classified by me as curative statutes because their purpose is to validate defective proceedings and thus carry out the presumed intention of the parties to the transaction.

This category also includes statutes giving evidentiary effect to recitals or statements of fact in recorded instruments or affidavits after the passage of a specified period of time. Such statutes are intended to provide a means for validating instruments in the chain of title.

B. Statutes of Limitation

This category, in my classification, is limited to statutes intended to impair or extinguish claims of various sorts to interests in land. Such statutes are usually based on presumed abandonment of the claim but are true statutes of limitation in that they create a valid affirmative defense against the claim which will prevail even if the claim has not been abandoned. Included are statutes barring actions to enforce the lien of mortgages and deeds of trust after a specified period has elapsed following the due date of the obligation secured, statutes similarly barring the enforcement of judgment and tax liens, statutes barring the remedy of specific performance under contracts for deed and options after a lapse of time following the time for performance, and statutes barring actions for ejectment or other remedies against persons who have been in possession of land for specified periods. The applicability of many of these statutes is dependent on the history of possession

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of the lands involved.

C. Marketable Title Acts ⁵

While Marketable Title Acts might be classified as statutes of limitation, they are considered separately in this paper because of their drastic apparent effect, their deemphasis of the importance of possession and the fact that they operate to extinguish fee titles as well as nonpossessory interests. Included in this category are statutes which impair or extinguish claims to interests in land of all types, which are not evidenced by instruments recorded within a specified period prior to the attempted application of the statute.

D. Absent Mineral Owner Statutes

These statutes are of two basic types, one of which could be classified as a statute of limitations or as a marketable title act, but they are treated separately because of their specific application to mineral interests and because one type functions by providing a means of acquiring tax title to severed mineral interests. The separate treatment is also for the purpose of facilitating a discussion of the constitutionality of such statutes, which are particularly susceptible to attack on due process and equal protection grounds.

E. Statutes Defining Scope of Conveyances or Reservations

In North Dakota, and in other states with respect to mineral leases, statutes have been enacted defining what minerals are affected by mineral conveyances and reservations. These are distinguished from curative statutes because they often contravene, rather than carry out, the intention of the parties to the conveyance.

F. Statutes Limiting the Effect of Mineral Leases

These are statutes designed to eliminate the constructive notice afforded by recorded mineral leases which are beyond their primary terms. They are statutes of limitation in a sense, but they do not terminate the interest.

G. Statutes or Rules Authorizing Quiet Title Proceedings

While perhaps not usually thought of as curative statutes, statutes or rules of procedure which authorize quiet title proceedings provide a means of curing title defects which was not so directly available at common law. These actions will be mentioned, but not exhaustively dealt with.

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H. Scope of Paper

The treatment of title curative statutes in this paper is limited to state statutes in the Rocky Mountain States which are major mineral producers. The treatment is not exhaustive but rather an attempt to explain the typical array of curative statutes which will be found on the books of such a state, and the proper use of such statutes by a title examiner. Excluded from coverage are statutes which apply only to mining claims, federal statutes and recording acts.

II. CONSTITUTIONAL LAW ISSUES

The statutes which are the subject of this paper affect property rights and contract rights. They can also result in the taking of the property of one person, without actual notice to him and without compensation, and giving to another. It is not surprising that questions have been raised from time to time whether the effect of such a statute violates one or more provisions of, or amendments to, the state or federal constitution. What is, perhaps, surprising, is the ease with which many of these statutes have survived such challenges. The reasons appear to be historical. In some ways, the most drastic in effect of the statutes which we will consider are the statutes of limitation barring actions to recover possession of real estate, or adverse possession statutes; but the transfer of title to land by adverse possession was recognized at common law and accepted long before the federal and state constitutions and Bill of Rights came into existence. The sanction for the attendant involuntary conveyance was the fiction of the lost grant. It does not appear that the constitutionality of such statutes was ever seriously questioned. In historical sequence, the first serious departure from common law norms was the curative statute, which was, for the most part, merely an attempt to excuse the requirement for formalities which were themselves created by statute and unknown to the common law.⁶ These statutes were treated with considerable sympathy by the courts because their purpose was to give validity to attempted conveyances that the parties had intended to be effective. Nevertheless, the statutes were attacked in several cases on constitutional grounds, but because of the nature of these statutes, they were usually attacked by someone whose claim was inequitable. A grantor who sought to avoid the consequences of a conveyance executed by him on the basis that the conveyance was not executed with the required statutory formalities, or a subsequent grantee of such a grantor, was almost always coming into court with dirty hands. In the case of statutes of...